Monday, April 27, 2009

100 Mpbs--Latvia's new (lower) speed limit?

There haven't been any real dramas in the Latvian telecommunications market, so I have been remiss in blogging. However, these past few weeks it has become apparent that the new internet speed benchmark is soon going to be 100 Mbps. IZZI and Baltkom have already started offering cable internet with such speeds in parts of Riga. Lattelecom has completed a pilot project of 100 Mbps fiber to the home (FTTH) in the Zolitude district of Riga and hopes to replace most of the DSL network in most of Latvia with FTTH in three years.
100 Mbps is starting to feel like a commodity even as only a few hundred users are actually getting it, so that the operators are launching marketing campaigns to make their products stand out. IZZI has adopted a peculiar sado-masochistic tone to its ads, offering "internet speeds that spank you" and even conducting a marketing action at the Forum Cinemas Parex Plaza multiplex feature models in leather(vinyl?) with whips. Baltkom called its 100 Mbps offering a "Next-Generation-Network" (NGN), although elements of NGN (Lattelecom's use of MPLS) have been around for a while. The interesting thing one can read into the emphasis on NGN is an implied warranty of quality of service (QoS). In other words, Baltkom is saying that it will deliver a consistent "best effort" close to 100 Mbps.
IZZI talked a lot about delivering excellent customer service, which sounds to me like another promise of  QoS. What is the point, after all, of having a customer service rep pick up after three rings if he/she cannot fix a complaint about a slow or lagging connection? 
Lattelecom notes that its 100 Mbps FTTH offering is only the start-- it hopes to jump to 500 Mbps by the end of the year or early 2010 (for some users at least). What you do with 500 Mbps in the home (unless you have a small data center in the basement) remains to be invented. 
Both Baltkom and IZZI are offering combined internet and digital cable packages. But if the connection carrying both is going to offer such high bandwidth, what will you fill it with? Both operators have a handful of high-definition (HD) channels (two or three at most). Big deal...
Meanwhile, Lattelecom is said to be part of a project to transfer many Latvian films (both classic Soviet-era favorites and newer films) to HD for streaming on demand.  Having a wide collection of HD movies (Latvian and international) for rent on demand makes sense, assuming there is a audience with the equipment to watch it. With the present economic crisis, and the price of HD flat-screen televisions falling (including obscure brands sold at hypermarkets), it remains to be seen whether a substantial HD audience will develop. With salaries falling by 20 % or more, I don't see an 40 inch HD TV set at the top of most family shopping lists. Indeed, insofar as many HD sets may have been bought during the wild credit boom of recent years, one can only hope that these luxury goods are low on the list when the banks start repossessing the chattels of an increasing number of Latvians who are delinquent or in default of their loans. 


Anonymous said...

"MPE" is not a big player but also have 100Mbit plan now, btw.

Edgars Šmits said...

Yup, IZZI was in our building on Miera street last weekend handing out signup notices. At present we are using Lattelecom, and for the same price we can go to 100Mbs AND (more importantly) get BBC World - Lattelecom doesn't offer it. It'll be interesting to see what the real rate of transfer ends up being...

BTW: did you take up their offer of a spanking at the movies?