The battle for spectrum Telecom vs. Media: who will win?

Media companies have been granted spectrum for broadcasting, initially for the broadcasting of radio and later for the broadcasting of television. Over half a century improved the audio and video quality, increased the number of channels, which resulted in the use and saturation of the assigned spectrum. The landscape changed since the middle of the 90s, and we can distinguish two trends. The first trend, the technology of broadcasting evolved from analogue to digital (which resulted again in an increase in quality), and additional channels were added within the same spectrum. Most important is that less spectrum is needed to provide the current services. Examples of digital broadcasting technologies used are DAB for radio and DVB-T for television. The second trend, the telecom industry moved to wireless communications and therefore was in need of spectrum. Initially, the spectrum was used to provide voice and texting services. Nowadays, this evolved to IP-based wireless connectivity services. Examples are 3G and 4G networks providing broadband wireless connectivity. The telecom industry paid to the government large amounts of money for the use of the spectrum, something highly welcomed by many governments in difficult economic times.

Nowadays, broadcasters fear to loose (again) additional spectrum to the telecom industry. The main reasons are (a) new digital technologies require less spectrum for the same number of channels, (b) consumers are now connected via the wired network and receive broadcast content through the wired network, and (c) broadcasters did not come forward with new needs of spectrum. On the other hand is the telecom industry keen to get additional spectrum, mainly to extend the wireless offerings towards broadband services. Thus, increase the business by creating more dumb pipes. In parallel tries the telecom industry to protect the wired connectivity that is in place by maintaining a walled garden approach for the services provided through the wired network, for example with video-on-demand or gaming-on-demand services.

We remark that neither the local media industry, nor the local telecom industry offers new services that create new exceptional consumer experiences. Both leverage to a large extent the existing consumer relationships. On the other hand invest over-the-top providers and consumer electronics manufacturers in ways to provide new consumer experiences to capture the consumer's attention. Continuously are new services pushed to the market that drags the consumptiom from local providers to international providers. Although the total consumption increases, reduces this shift the consumption of content and services from local providers. International providers try to capture the profile of every individual and use this information to improve the relevance of the provided content and services. International service providers turn mass data about behaviour into business value and exploit this information.

Being able to consume the same content everywhere around the globe from the same provider is great thing, for example BBC or CNN can be watched nearly everywhere. But, consumers have a deep interest in content relevant to his own local environment. The time has come for local media companies and for the local telecom players to innovate their role and the current business model. Both still have an access to the consumer, with relevant local content and local connectivity, but are in an urgent need to handle this relationship with the consumer in a much smarter way. Capturing consumer behaviour on an individual basis becomes a necessity, as this is the basis to improve the consumer experience and to bring business value for the industry.

We are evolving to an urgency, either the industry swiftly moves to a smarter way of doing business (called smart commerce) or the local media industry risks to become dumb content providers, the local telecom industry risks to become dumb pipe provider, both being dominated by new players in the market and international service providers.

Spectrum