The challenges of convergence

One of the major business challenges associated with the process of convergence will be intensified competition with new competitors, often from outside the sector. More than 78% of broadband experts believe to a high or very high degree that the competition between network providers in particular (telephone/cable/satellite/terrestrial) will increase significantly as a result of convergence.

This intensive competition will force changes that can be summed up under the term "integration". In the future broadband network providers will need to offer integrated packages for VoIP fixed network, WLAN and mobile radio. More than 78% of broadband experts agree with this view to a high or very high extent. However, convergence also means that applications which were formerly regarded as security-uncritical will be targeted - for instance, set-top-boxes for Internet TV. In the future these will have to be made virus proof - that is what about 74% of the experts believe.

This technological convergence will also mean that consumers will have access to the same broadband services and content over Internet-based telephone, cable or satellite networks (more than 70% high-to-very-high agreement among broadband experts). According to expert predictions, these changes will inspire enhanced cooperation among broadband, access, content and service providers to deliver service packages (more than 80% high/very high agreement of broadband experts).

The consequences for businesses and consumers are considerable. More than 81% of the experts believe that in the process of convergence, media formats will be created that unite the features and characteristics of hitherto separate media (e.g. by the integration of TV and online products).

Integrated media formats are particularly suitable for directly addressing younger target groups (92% expert consensus). Targeting consumer groups with integrated media formats opens up new opportunities in online advertising with a very high broadband user reach - almost 60% of broadband experts concord with this view.

The changes driven by convergence will have a tangible impact on business revenue models. On the one hand a broader spread of revenue sources will develop. Sales will depend more on a mix of access services and content (almost 63% concordance). On the other hand convergence will mean that the importance of content and service revenues will grow substantially on the broadband market (about 78% concordance).

There are many indicators that sector convergence will change market structures and products. In other words: competitor positions will shift.