Showing posts from May, 2012

U.S. Cable Operators Get 75% of First Quarter 2012 Broadband Adds

The seventeen largest U.S. cable and telephone providers acquired 1.3 million net additional high-speed Internet subscribers in the first quarter of 2012. 

The top cable companies have more than 45.3 million broadband subscribers, and top telephone companies having over 34.6 million subscribers.
The top cable companies added about 980,000 subscribers, representing 75 percent of the net broadband additions for the quarter, compared to the top telephone companies.
The top cable broadband providers have a 57 percent share of the overall market, with about 10.7 million more subscribers than the top telephone companies, compared to 8.9 million more a year ago
Broadband Internet ProviderSubscribers at End of 1Q 2012Net Adds in 1Q 2012Cable CompaniesComcast18,582,000439,000Time Warner^11,136,000227,000Cox*4,530,00030,000Charter3,802,000147,000Cablevision3,007,00042,000Suddenlink982,60031,200Mediacom887,00036,000Cable ONE463,44312,361Other Major Private Cable Companies**1,941,00016,000Total Top C…

Netflix Enables Wi-Fi-Only iOS Mode

The latest version of the Netflix mobile app for iOS devices allows users to disable mobile network use to watch Netflix content. The new video player for iPad, iPhone, and iPod Touch has a more consistent look and feel across PC and mobile devices.

Netflix also has added an option to its features settings menu so users can choose to allow streaming from Netflix only when connected to a Wi-Fi network.

That feature will help users manage their bandwidth buckets, while also allowing mobile use of the Netflix streaming feature.

People are smart enough to figure out they should watch streaming video when at home, using their fixed network bandwidth.

That is increasingly congruent with user behavior, as more users are watching their tablets and even smart phones during the standard "prime time" video viewing hours.

Will 25% of U.S. and Western Europeans be Paying with NFC by 2017?

Juniper Research projects that more than 25 percent  of U.S. and Western European mobile phone users will use their near field communications-enabled mobile phones to pay for goods in-store by 2017, compared with less than two percent in 2012. 

That might strike some observers as a bit aggressive, given the "glacial" progress Isis and Google Wallet seem to be making with their NFC mobile wallet efforts. And those two initiatives are not the only NFC-based efforts. Nor can anyone be sure other potentially-powerful efforts will not emerge.

Some might argue other marketing-related applications are likely to achieve that sort of usage, though. 

In other markets, Telefonica and consortia of Western European mobile service providers also are trying to get regulatory clearance to launch their own programs. Project Oscar in the United Kingdom, owned by Everything Everywhere, Telef√≥nica UK (O2) and Vodafone UK, is among them.

Consortia in Germany, Sweden, Denmark and Hungary are working …

Apple's Supply Chain Becomes a Weapon

The way that Apple has fostered its relationships with suppliers and manufacturers over the past few years has led to this moment, a time where products like the iPhone, iPad and MacBook Air are not only made using the best materials and manufacturing processes available in the world, they’re also less expensive to make and generate far more profit than competing devices, TNW argues.

That's an important observation. In past decades, one might have argued that Apple makes above-average profits because of its brand. In other words, users paid an "Apple tax" that corresponded to the perceived higher value of an Apple product.

Now, Apple might actually be able to sell at high margin, using the best materials, and set prices at retail that take advantage of a decade-long effort to optimize its supply chain. 

So now Nokia finds it has to price its latest smart phone at $200 less than the iPhone, even when its cost of components is higher than Apple's cost for components, the 

How to Model Broadband Consumption With Few Data Points

“Nearly all communications traffic, including Internet traffic, can be approximated with high accuracy by the log-normal distribution,” says Phoenix Center Chief Economist Dr. George S. Ford. That’s important, as it means we generally can predict overall end user behavior when we actually know only a couple of key data points.

Among the practical implications are estimates of what is likely to happen when  a broadband service provider imposes a monthly usage cap of 250 gigabytes. The log-normal distribution suggests how many customers would hit the limit.

The log-normal distribution also generally allows some estimation of how consumption will vary across the entire customer base, knowing only the consumption of the top one percent, and the consumption of the top 10 percent of users, an analysis by Dr. Ford suggests.

The point is that “averages” (the arithmetic mean) don’t tell an observer very much when any service has an asymmetric distribution, as always seems to be the case for In…

Twitter Use Highly Correlated with Smart Phone Use

Twitter usage is highly correlated with the use of mobile technologies, especially smart phones, according to the Pew Internet & American Life Project.

About 20 percent of smart phone users also are Twitter users, with 13 percent using the service on a typical day. 

By contrast, Internet users who own more basic mobile phones are roughly half as likely to use Twitter overall (nine percent do so), and just three percent of these more basic phone owners are “typical day” users.

Indeed, this correlation between Twitter adoption and smart phone ownership may help to explain the recent growth in Twitter usage among young adults. 

Those ages 18 to 24 are not just the fastest growing group when it comes to Twitter adoption over the last year, but also experienced the largest increase in smart phone ownership of any demographic group over the same time period.

Marketers Think Tablets Will Change How Content is Presented

A survey of 212 global marketers showed that popular belief holds that there will be some big changes in all aspects of content over the next 12 months, from design, to copy, right though to delivery.

Of those interviewed, 45 percent think tablet consumption will have a very high impact on design of content, while 35 percent think it will have high impact, theIDG Connect surveyfinds. 

Experiences that were once almost exclusively the preserve of the consumer space are suddenly applicable to the business landscape.  Now everything has the potential to become three dimensional. This trend is already impacting the world of fiction publishing. Take Papercut for example; available through the App Store, this is being billed as an “enhanced reading experience” for iPad and includes three short stories interwoven with animation, interactivity and sound. As readers proceed through the text additional text appears without the need for page turning

Europe Risks Becoming a "Digital Desert"

Alcatel-Lucent Chief Executive Officer Ben Verwaayen said Europe’s phone companies risk turning the region into a “digital desert” by shying away from investing in networks.

Verwaayen says a combination of regulatory barriers and economic crisis are contributing to the problem.

In an interesting twist, given the "warnings" about the United States "falling behind" in some key communications capabilities, be that broadband access, the speed of broadband access, smart phone ownership, messaging or other advanced applications and services. 

But innovation and technology leadership changes over time, whether the issue is consumer behavior, supplier prowess or advanced technology adoption. 

Telecommunications companies in the U.K., Germany, Italy and France have been reluctant to invest as much as their counterparts in the U.S. and Asia in faster mobile-phone and fixed-line networks because of Europe’s sovereign debt crisis and regulatory decisions deemed unfavorable by Verw…

Cricket Will Test Consumer Willingness to Forego Subsidies on iPhones

We are about to get a clear test of consumer willingness to pay full retail prices for “hot” devices such as the Apple iPhone. Cricket Communications will be the first prepaid service provider in the U.S. market to offer iPhone to its customers.

Beginning on Friday, June 22, 20012, Cricket will offer iPhone 4S and iPhone 4 with its $55 per-month, all-inclusive unlimited talk, text and data plan. The issue is that consumers will have to pay full retail prices for their devices.

The Apple iPhone 4S will be available for $499.99 for the 16GB model and iPhone 4 will be available for $399.99.

That is significant as mobile service providers just about everywhere are looking for ways to reduce the amount they spend on handset subsidies, hopefully without placing themselves at a disadvantage in the continual task of attracting new customers, most of whom have to be taken away from another service provider.

So Cricket’s sales volume will be a key indicator of consumer willingness to buy device…

Cloud Adoption in Europe Will Slow Because of Euro Crisis, Other Issues

Sometimes end user demand and supplier readiness are not the primary near-term issues that can accelerate or delay adoption of new technologies.

European privacy rules, multi-country business processes, a deep euro crisis and a lingering recession will conspire to delay cloud computing adoption in Europe by at least two years when compared to the U.S., according to Gartner analysts. 

Gartnersaid that although interest in cloud is high in Europe, the diversity of Europe’s 44 different nations will result in slow cloud adoption in this region.

"The opportunities for cloud computing value are valid all over the world, and the same is true for some of the risks and costs," said Paolo Malinverno, vice president at Gartner. "However, some of cloud computing’s potential risks and costs — namely security, transparency and integration — which are generally applicable worldwide, take on a different meaning in Europe.”

The continuing economic crisis within the countries using the sing…

How Big Will M2M, Connected Device Markets Be?

So what precisely does this forecast by the GSM Association actually mean? It isn't obvious. The GSMA uses a definition of the "machine-to-machine" (M2M) market that includes "sensors" such as meter readers with mobile broadband connections used by tablets and other non-phone devices.

Some say tablets, though "connected devices," are not M2M connections, which should properly include only sensor applications where machines literally are talking to other machines. 

The revenue per connection implications are fairly significant. Where a tablet connection could represent $10 to $60 worth of incremental revenue, a true M2M connection might represent $2 for each connection. 

Revenue Impact of Multi-Device Data Plans is Not Yet Clear

“Multi-device” or family data plans, which allow numerous devices to share a single bucket of broadband access, are coming to the U.S. market. Precisely how consumers will react is not yet clear.

In the case of family voice plans, there was a net increase in users per account, so even if average revenue per user declined for the additional lines, service providers earned more revenue overall.

What will happen in the case of multi-phone households is not so clear, since there is a strong likelihood users will sign up for plans to support their tablets, especially single-user accounts.

What might happen in existing multi-device accounts is not so clear. Depending on how the plans are constructed, there could be some revenue losses if the subsidiary devices on an account were moved to a family data plan, instead of separate data plans for each device.

The big trade-offs will likely come in the multi-device family accounts, where the upside will come from additional new devices, especially ta…

Globally, Mobile IS Telecom

Mary Meeker's "Internet Trends" presentation always contains interesting graphical nuggets. 

This one simply illustrates the extent to which mobility now has become "the telecom business." 

Three years ago, there already were about 4.5 mobile lines in service for every fixed line, and that ratio no doubt has continued to tip in the favor of mobile in the intervening years. 

Observers who casually chide fixed network operators for not investing more heavily in fiber to wherever those firms can make money are not paying attention to the fundamental realities that further investment in fixed network assets will be much more risky than it ever has been in the past, simply because "everybody" knows the revenue and growth are in the mobile networks.

"Stranded assets" are investments that aren't generating any revenue. These days, a good percentage of any further fixed network investment is going to be stranded. That makes companies nervous, and it…

S&P Wonders How Long U.S. Telecom Companies Can Maintain Current Dividends

Standard & Poors believes many U.S. telecommunications companies, traditional wireline
companies in particular, face industry trends that will ultimately hurt free operating cash flow generation and could make it challenging to maintain their aggressive financial policies.

"Returning cash to shareholders through dividends and share buybacks and the pressure to satisfy equity investors lessens their ability to pay back debt and maintain or reduce leverage," said Standard & Poor's credit analyst Allyn Arden. 

"These companies may need to adopt more conservative financial policies and reduce leverage to be able to maintain their current ratings down the line," Arden warns.

An "uh oh" Moment for Online Advertising Proponents

The standard argument about online advertising volume, for decades, has been that, over time, "eyeballs" (audiences) lead to advertising. It's a reasonable argument. So the next challenge is that, if online audiences and proportional advertising to those audiences begin to hit a 1:1 relationship, it is hard to argue that lots more revenue growth is possible, in the near term.

To get more ad revenue, online sites would have to grow their audiences. According to Mary Meeker, online share of advertising spend now is very close to online's share of media audience. 

That would suggest it is unreasonable to expect online advertising revenues to grow very fast, or much more beyond present levels, unless audience attention really shifts lots more. 

The one place where there is a clear gap is the mobile venue, where advertising dramatically lags attention, by about an order of magnitude.

It takes no special insight to predict that attention now will be focused squarely on mobile …

Internet Will Be Four Times as Large in Four Years, Cisco Says

Annual global Internet traffic in 2016 will be four times the volume of 2011, Cisco says.

The annual Cisco Visual Networking Index Forecast predicts annual global IP traffic of 1.3 zettabytes – (a zettabyte is equal to a sextillion bytes, or a trillion gigabytes). 

The projected increase of global IP traffic between 2015 and 2016 alone is more than 330 exabytes, which is almost equal to the total amount of global IP traffic generated in 2011 (369 exabytes). 

The growth will be driven by:
An increasing number of devices: The proliferation of tablets, mobile phones, and other smart devices as well as machine-to-machine (M2M) connections are driving up the demand for connectivity. By 2016, the forecast projects there will be nearly 18.9 billion network connections―almost 2.5 connections for each person on earth, ― compared with 10.3 billion in 2011More Internet users: By 2016, there are expected to be 3.4 billion Internet users ― about 45 percent of the world's projected population accor…

Tim Cook Talks About Apple

Portions of Tim Cook, Apple CEO, talk at "AllThingsD" conference.

Skype Carries 100 Billion Minutes a Quarter

Cheap and free Internet calls have driven Skype usage in the first quarter of 2012, jumping 40 percent to 100 billion minutes of calls in the first quarter, up from the first quarter of 2011, according to Microsoft. Skype also has about 250 million registered users. 

What isn't so clear is how much gross revenue Skype makes, though it is reasonable to guess it now is in the low single-digit billions per quarter. Skype never has made much in the way of profit, and that probably hasn't changed.

Skype illustrates a major issue for service providers, namely that new Internet-enabled products displace traditional usage, but do not come close to generating the same level of revenue or profit as the older services. Essentially, the legacy market essentially becomes an important feature or capability, but not a "business" in the same sense. 

Mobile service providers now worry about the health of their messaging business, which in some markets is showing the same trend as was se…

Amazon Will be a Mobile Service Provider in Japan

Amazon is set to enter the Japanese mobile service provider market, selling prepaid 500 MByte SIM cards for a flat rate of about $25, Nikkei reports.

The cards will be usable on NTT Docomo’s LTE network. The news comes as Facebook is said to be considering building its own smart phone.

Facebook also is rumored to be looking at its own browser as well.

To be sure, the move is probably more aimed at helping Amazon sell  mobile content than anything else.

But that alone shows that a new segment could open up in the mobile business, namely lots more entry by application providers into the mobile virtual network operator business, bur as specialized content providers, not traditional voice and data access providers.

Microsoft's recent investment in the new company that will own the Nook tablet and content business illustrates a couple of important strategic shifts now happening in the mobile device and application markets.  The biggest shift is the growing importance content, advertising…

New Chromebooks Coming June 15, 2012

Samsung has just announced a new Chromebook and the first Chromebox

The newest Chromebook is a fast and portable laptop for everyday users, but most people don't use one.

Google seems to be focusing its adoption efforts on several verticals, including schools, retailers, call centers and airlines.

These focus areas probably build on areas where Google has had success so far. 

Google says more than 500 schools have used these devices. Retailers such as Dillards are planning to deploy Chromeboxes in more than half of its US stores, while others such as Kaplan are moving their New York-based call center to Chromeboxes.

Chromebooks will be available online June 15, 2012, in the United States,  United Kingdom, France, Germany, Netherlands, Italy and Spain. More countries will follow in the coming months. In the U.S., Chromebooks will be available from Amazon and Best Buy  and internationally from leading retailers.

The new Chromebook and Chromebox, based on Intel Core processors, are near…

66% of U.K. SMBs Have Adopted Cloud Services, or Plan to

The ability to work in a more mobile and flexible way was identified in an IBM study as the number one reason for small and mid-size businesses to use cloud-based apps. IBM says the survey shows interest has moved from cost savings to more-strategic advantages.

About two thirds of the senior managers surveyed had either already implemented cloud services or intended to in the future, with 45 percent of U.K. businesses looking to do so within the next two years.

The increased ability for employees to work with greater mobility and flexibility was identified as the most popular reason to move to cloud services (39 percent of respondents), with cost efficiencies named as the second most popular reason (33 percent of respondents).

Multiple Fixed Networks "Make No Sense"

Multiple networks make no sense, TM Forum’s Founder and Chairman, Keith Willetts argues in “Unzipping the Digital World.” In some markets, including Singapore, Australia, Malaysia and New Zealand, that is the way regulators have decided to use as the framework for fixed network broadband services. 

He shares his views in this video interview.

OTT Destroys Voice, Text Business, Isn't Just Share Shifting

Mobile operators’ SMS revenues may be under pressure from mobile messaging apps such as WhatsApp, iMessage and others. The only real issue is where, when and how much over the top apps will reduce mobile service provider revenue.
To be sure,  Informa Telecoms & Media still forecasts that mobile operators will still generate a total of $722.7 billion in revenues from text messaging revenues between 2011 and 2016.
Third-party providers of over the top (OTT) messaging services will earn about $8.7 billion in 2016. That disparity in revenue illustrates the issue.
The big problem is not that OTT providers take so much revenue from mobile service providers, so much as OTT messaging essentially destroys the existing business, rather than shifting share to new contestants.
Text messaging revenue could decline 40 percent over the next three or four years in the European and Middle East markets, many executives predict. About 84 percent of respondents to a Telco 2.0 survey thought the main reas…