So slow! Do you make much use of 3G? When you are out, and you need to log onto the Internet, do you use 3G, or connect to a local wi-fi network? Either way, you will get your data so slowly that it might be cheaper to run down the road, and buy your product or a paper newspaper, than use the Internet. That is set to change, and implications for certain businesses are profound. This is a new opportunity of which investors need to be aware.
Three pieces of research and announcements form the basis of today’s thought for the day.
There is research from eBay that says – thanks to 4G – online shopping is set to increase by 113 per cent a year, eventually adding £1.8 billion to the market place. See: 4G take-up could boost online retail market by £1.8bn, says eBay
Then there is research from Jupiter projecting that revenues from 4G mobile broadband could exceed $100 billion a year by 2014. Supporting research from Jupiter predicts that the number of subscribers to 4G will double over the next 24 months from 105 million to 220 million.
Finally, a company called Hyperoptic has started making noises over its new product which it says will offer broadband speeds of one gigabit per second. To put that speed into context, it is ten times faster than the already very impressive fastest offerings from BT and Virgin media. One gigabit per second strikes me as really incredibly fast.
In fact so fast is the service to be offered by Hyperoptic that its boss admits that people don’t need all that power right now. It’s like driving a formula one racing car in a 30 mile per hour zone. Hyperoptic says that customers will grow into the service in time; that applications will be developed which make use of all that speed.
But for me the real significant of Hyperoptic type services are the implications for wi-fi. The more people who are attempting to share Internet access, the slower it is. It is surely not long before coffee shops, cafes and retailers start offering wi-fi at speeds that keep all visitors to their stores happy.
The implications of all this raw power for companies that are good at selling their wares online are dramatic. Expect the companies that can master online shopping to increase revenues significantly, and much faster than the markets have anticipated. I would imagine there are important implications here for online entertainment businesses, such as TV companies, too.
There are also implications for the network providers. The pricing model that the industry is likely to adopt for 4G is not clear. But Jupiter says there is scope for greater revenues if providers offer premium services for high usage customers.
The Hyperoptic service does come at a price. It is talking about a £50 a month charge. Such will be the benefits of faster Internet access via superfast broadband or 4G that I expect many business users will be willing to pay extra for the service.
Above all, I think that these are the types of disruptive technologies that markets don’t get. Much faster interest access will mean a whole new generation of apps offering services that that would recently have been considered impossible to deliver. Online shopping, business to business applications on the Internet, the business model of network providers, makers of smart phones and tablets, and the app providers are set to see massive changes. Fortunes will be made and lost.
These views and comments are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees