by ANJAN                                 
ZeeNetwork                                 

Previous page... Features of bandwidth commoditization Implications of bandwidth commoditization: Working with the scenario assumption that bandwidth will indeed become a commodity (much as energy has become today), the following will emerge as potential implications: Retail bandwidth pricing will head southwards and will align itself with the market supply and demand situation. Charging a premium on bandwidth will not be possible. Bandwidth providers will increasingly have to look to provide value added services to offer differentiation or indeed to retain competitiveness. These value added services could be in the form of providing Voice over IP services or other forms such as integration with wireless media. In such a situation, last mile control will play a vital role and carriers will need to work towards the objective of consolidating the last mile control. It can be loosely suggested that strategic alliances for providing value added services to the consumer would be of vital importance. An example of this would be that if Orange has significant presence in the West and the East, then a partnership with them should be considered for bundling together the services offerings. Eventually we will move towards a scenario where bandwidth will be traded on open exchanges. The technical possibilities have already been outlined; it will be possible to switch/buy and sell and trade bandwidth like any other commodity. A futuristic scenario will be the financial trading of futures on listed exchanges wherein bandwidth will be underlying asset. While that may sound far fetched for the Indian financial markets at this juncture, it is worthwhile to note that such futures trading has recently been initiated in the US capital markets and the mechanisms are slowly being evolved. Conclusion: Two principal conclusions emerge from our viewpoint. One is that bandwidth will become a commodity and bandwidth providers will need to have strategic alliances in place to provide value added services to the customers to retain their competitive advantage. Along with this, last mile control to the customer premises will assume significance. The second factor of importance is that one will need to have technical capabilities in place to participate in an exchange mechanism scenario wherein bandwidth will be freely sold and subsequently routed, based on the demand-supply situation. Concluded.