It’s no surprise that the major content players – Facebook, Twitter, Skype, Yahoo, etc. – continue to capture front page news and headlines every day for their strategic moves and announcements in the United States and other major markets across the world. However, when it comes to emerging markets, while their moves might not garner the same level of attention, the content giants are equally as aggressive.
As we look at the changing landscape in global communications, it’s essential to examine the impact global content players are having and their approach to operating on emerging markets. Whether it is bandwidth capacity investments, B2B strategy, or submarine cable network builds, the challenges need to be addressed now.
Most American and Western European carriers have not continued to invest in international bandwidth capacity due to capital expenditures (CAPEX) constraints caused by a need to focus investment on wireless LTE upgrades. In many cases, this has been at the expense of continuing to expand their international connectivity needs.
This has the potential to leave the operators vulnerable in their ability to service their existing wholesale and enterprise customers, whose backbone requirements typically consist of three diverse routes providing ‘meshed’ coverage into and out of a country from a network planning perspective.
While most content players appeal to consumers, it is the B2B strategy that is essential to their success. The big questions being asked in emerging markets right now is will content players sell B2B services by 2020? Will their goals be similar to what Amazon has done with Amazon Web Services? Will they have better cost economics, greater coverage, and resiliency than traditional telecom operators?
Transmission as a Service and web-defined software defined networks, things aren’t on consumers’ radars, are a reality and could easily be commonplace when it comes to content giants’ approaches to emerging markets. If they do become commonplace, consumers will feel the differences.
Content players will own up to 75 percent of new trans-Atlantic capacity between New York and London in the very near future. This is largely based on proposed new builds, which amounts to the ‘non-carrier’ group of international bandwidth buyers contributing roughly a quarter of a billion dollars in CAPEX. Carriers have not invested and are starting to fall critically behind in mature markets, compared to their over-the-top content (OTT)/content player counterparts.
Emerging markets in Asia, Africa, the Middle East and South America remain the exception where carriers have invested, and kept, a certain degree of control, albeit with OTT players coming, this will be challenged in the next five to seven years. But we can’t wait that long and we need to drive awareness around solutions today.
Many emerging markets are critically important for content players, as American and Western European markets become overloaded and growth prospects start to come from BRIC (Brazil, Russia, India and China) and MAVIN (Mexico, Angola, Vietnam, Indonesia and Nigeria) markets. These are the specific countries to monitor closely to ensure efficiencies are met and there is no oversaturation.
One of the most essential aspects of global market growth involves data centers and the search for low-cost power and efficiency. This remains especially paramount with the amount of data expected to be stored and processed by 2020 and beyond with the Internet of Things.
The need to drive economies of scale remain important for (machine to machine) M2M transactions and OTT. As a consequence, content players will require lower-cost storage with greater reach globally to meet end-customer latency needs. Content players understand this, hence the drive to own more international capacity when compared to their carrier counterparts.