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17/04/2013 by

Strategy Beyond 4G Quadruple Play: Is Cable Hot Or Not?

What should be your strategy beyond 4G Quadruple Play, and is cable hot or not due to new high speed mobile broadband technologies? How about broadcasters and their multi-screen strategy?

The Strategy Beyond 4G-Quadruple Play: Is Cable Hot Or Not?

It might seem a strange question, because 4G technologies are just being released. But will the cable (guys) survive or suffer?

Strategic questions that are heating up my brain?

Being a business and marketing strategist with a background in the telecom industry, the following questions are heating up my brain:

– What should a cable company do the coming 10 years?
– What should broadcasting and media companies do?
– What multi-screen strategy should broadcasters play?
– When will 5G be introduced and what will be its impact?
– What would Google do?

You might be thinking: Come on man, relax. Let us try 4G first.

Sorry, I can’t stop thinking about it so I have to share my thoughts with you. Yes, I guess you are right: I am obsessed. Very obsessed and a (tech) freak.

I might be. However, I have 2 very good, or very lame excuses.

One: I write for ViralBlog. It would be strange if would not be on my mind. It was curiosity killed the cat. My keyboard and mouse are alive and kicking. No way out.

Two: A strategist needs to be skating to where the puck is going to be, not where it has been. My clients demand scenarios based on trends and insights. Again no way out.

But first I will take one step back, so you can jump into my freaky mind.

What is 4G and 4G-Quadruple Play anyway?

The Strategy Beyond 4G-Quadruple Play: Is Cable Hot Or Not

Remember 3G and the very expensive auctioning of UMTS licenses? Leading telecom companies paid billions to get them, over a decade about ago.

The first European pre-commercial network was an UMTS network on the Isle of Man by Manx Telecom, the operator then owned by British Telecom and o2, my employer at that moment.

What did we learn from the 3G promise?

3G would enable high speed mobile internet, enabling us with services like: wireless voice telephony, video calls, mobile video and mobile TV.

Did it work? Well together with smartphones and tablets, 3G brought mobile internet way beyond its tipping point. Long science fiction, finally reality.

We now all realize that mobile is indeed the next gateway. The new gateway to: Content, brands, friends, communities and commerce.

The Strategy Beyond 4G-Quadruple Play: Is Cable Hot Or Not?

How about 4G?
What will it bring us?

4G or the 4th generation technologies promise the full mobility with even higher speed internet data rates.

4G technologies like Mobile WiMAX and UMB (Ultra Mobile Broadband) are emerging strongly to provide the industry best and fastest mobile broadband technologies to the end users.

The rest of this story I will focus on 4G and the era beyond 4G technologies. And the impact of even faster technologies (like 5G) on cable, broadcasting and media companies.

What should be their long term strategic direction and investment?

5G to enter the Commercial Market by 2020?

5G high speed mobile internet

4G could already make fixed broadband cable internet and TV a nice to have. Or an unnecessary need. If not, 5G probably will.

Most large players expect that 5G might be entering the commercial market around 2020.

Could also be a few years later, but the velocity of new technologies is phenomenal nowadays.

The 5G impact on Cable Companies & Multi-Screen Strategy

<h3>The 4G and 5G impact on cable companies and multi-screen</h3>

For decades the majority of cable companies, broadcasting and media companies were sure about one thing: The TV or Home Cinema Center would be the epicenter in all households.

Well in Asia we saw the first actionable insights and Meta trend already: They skipped fixed internet and jumped right away to mobile internet.

Today we are way past the tipping point and even the masses and laggards have embraced mobile internet: tablets and smartphones.

We tend to call mobile the next gateway and second screen, in fact tablets and smartphones are becoming the first screen.

Toddlers and Screenagers see Mobile as the First Screen

<h3>Toddlers and Screenagers see Mobile as First Screen</3>

If you don’t believe me how big the former second screen is, just look at the media behavior of toddlers, kids and teenagers.

I tend to call them the screenager generation.

They spend more time on tablets and smartphones than TV or the PC. 50% of 3-year olds in The Netherlands uses a tablet or smartphone frequently.

Most kids and teens don’t even know the difference anymore, between a smartphone and devices like the Nintendo DS.

To screenagers it is just portable a device on which they watch content, movies, animations, play games and chat with friends via Facebook or Whatsapp.

Making a phone call? That’s for the old generation.

Screenagers hardly know that you can call with a smartphone. To them any portable device (including smartphone or tablet) is a multi-media or entertainment device.

Gamers and their Multi-Screen approach?

 <h>Gamers and Multi Screen</h3>

And the growing group of hardcore gamers? They might be using their large flat screen TVs. But mostly not to watch TV on it.

The core purpose of their TV screen is to display their Xbox or PlayStation games.

Other hardcore gamers or casual gaming moms they use their PC or tablet as gaming screen.

If we take a look at one of the BRIC markets, Brazil shows us that 50% of adult internet users are now gamers.

The average amount of time spent playing online, video and mobile games in Brazil increased to 4 hours per week, and more than 33% of the online gamers play over 4 hours a week.

China is the most socially-engaged market in the world, followed by Russia, Brazil and India. QQ/QZone, with 700+ million monthly active users is the largest social gaming platform in China. Nearly half of China’s population is on QZone!

My Opinion on Trends, Strategic Choices & ROI?

multi-screen: The Strategy Beyond 4G-Quadruple Play: Is Cable Hot Or Not?

The TV or Home Multi Media Center, might no longer be the epicenter in the near future.

The so called second screen, might become the first screen.

That will mean the need to make a huge strategic shift for many cable companies. Same for broadcasters and media companies.

Were all cable companies betting on the wrong horse for two decades? Do they stick to cable or jump on the 4G and 5G bandwagon as welll?

Or are the cable companies able to play a two or three way strategy? Some telecom companies have already paid over a billion or more to acquire their 4G license. The estimated ROI time? 12-16 years.

Who’s to blame for the high costs of the 3G and 4G licenses? The telecom companies with a wrong ROI calculation? Or the governments that have been driving up the prices with their license auctions?

Strange investment by telco’s and probably a wrong bet again? What if 5G indeed enters the commercial markets around the year 2020? Then it’s bye bye ROI.

Strange because we learned from 3G that most acquired UMTS licenses had a ROI of 7-10 years. Most telecom companies did not achieve that ROI in that period.

For the broadcasting and media companies and their multi-screen strategy?

The explosion of tablets and smartphones combined with 4G and next 5G high speed mobile internet: second screen might be first screen sooner than you think.

If a long term strategic choices beyond 4G are too is difficult? Just watch your kids! They will show you the future.

What would Google do? Skip cable and go for 4G, WiMax and 5G. They don’t suffer from legacy and have the vision, guts and cash to place one bet.

Long term, I say bye bye to the cable guy.

What About You?

What should be the long term strategy for telecom and cable companies? How about broadcasters and media companies? Is cable the right play? What is first and what is second screen in your opinion? Now and by 2020?

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About the Author
Igor Beuker was CMO at 3 listed companies, chairman at the IAB, jury member at Webby, AMMA and Esprix awards, founder of 3 digital agencies (sold to WPP) and global chief social officer at Mindshare. Now he is freejack consultant and still a sought after keynote speaker.


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