Summary: Infracapital co-founder Ed Clarke and director James Harraway argue fibre networks are the new utilities and explain why the explosive demand driving growth in the broadband sector is unlikely to die down any time soon.
Q Telecoms is a sector that has evolved quite rapidly from a technological perspective, but also in terms of its role in consumers’ lives. What is driving demand in the sector?
JH: It helps to delineate between types of user, specifically between consumers and businesses. Consumer demand, historically driven by communication, is now primarily driven by entertainment, which is increasingly being satisfied by ‘over-the-top’ services such as Netflix or Amazon Prime. Major content owners are also seeking to monetise their content assets by distributing directly to consumers, for which a fast and reliable broadband connection is critical.
Consumer demand is also supported by growth in the ‘Internet of Things’. As homes become smarter, domestic functions such as heating and security systems, as well as appliances such as washing machines, are always connected, adding up to a sizeable demand for data. Finally, as working patterns have changed, people are working from home more and more, which is facilitated by high-speed, reliable broadband connection.