BT is apparently throttling some video download traffic to optimize experiences overall, in the words of the company. The news shouldn’t be a surprise given that operators worldwide are facing shrinking margins on broadband, demands for more capacity that would drive the need for incremental capex, and no clear opportunity for new revenue.
BT is also reportedly looking for content providers to share some of the costs of broadband media delivery, which again is no surprise given that it’s been a behind-closed-doors topic for almost a year now. We think the juxtaposition of these two items is no coincidence; access providers want everyone to understand that somebody is going to pay in some way; it’s just a question of the who and how.
As providers consider what to allocate capex dollars to for 2009/2010, they’re finding it harder to justify much of anything in wireline broadband, and certainly can’t do anything aggressive. The signs of this problem will be very clear in the second half of this year and through 2010, in our view.