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Showing posts from February, 2013

Pandora on Mobile Illustrates Service Provider Bandwidth Paradox

Pandora says it is introducing a 40-hour-per-month limit on free mobile listening for its users, something that Pandora says will "affect less than four percent" of its total monthly active listeners. The average listener spends approximately 20 hours listening to Pandora across all devices in any given month.

The direct issue for Pandora is licensing fees. The key issue for access providers is more complicated. By definition, "interesting and valuable apps" are the reason people want to use the Internet. So apps create the demand for Internet access services, especially broadband access.

But with the advent of video as the dominant media type affecting global Internet transmission requirements, access revenue and profit margin are an obvious key issue for access providers, who argue they are not being compensated properly for the value of their access and transmission facilities. 

It might be correct to say that access providers worry they will not be fairly compensa…

No Consumer Demand for 1-Gbps Internet Access?

Time Warner Cable's Chief Financial Officer Irene Esteves continues to get coverage every time she speaks in an investment or other conference about the state of consumer demand for 1-Gbps access, seemingly prompted in virtually every case by Google Fiber's Kansas City 1-Gbps network and service. Esteves repeatedly has said that Time Warner Cable does not see the demandfor such speeds. 

Some will be tempted to argue this is a typical effort by a quasi-monopolist to dismiss a competitor's better and disruptive offering, and rather incorrect, since people in Kansas City do seem to be buying Google Fiber. 

A few might say the statement is an effort to stave off, as long as possible, or perhaps indefinitely, the need to invest major new sums in access technology. 

Others will note that since Time Warner Cable faces Google directly in Kansas City, the question is rather an obvious question for investors to ask. There is some truth to all such interpretations. 

On the other hand, to…

More than Half of Global Internet Users Rely on Mobile

Application providers, device manufacturers, policy makers, service providers and policy advocates all have clear interests where it comes to the actual state of broadband access “supply.”

And mobile access now complicates all evaluations of “access supply.” For example, a new study sponsored by inMobi found that 50 percent of the average global mobile web users now use mobile as either their primary or exclusive means of using the Internet.

That can have important implications for any evaluations of “unserved” or “under-served”  populations, for example. If significant percentages of people prefer to use mobile access compared to fixed network access, that could skew analyses of “problems” in the broadband access arena.

In other words, it is not necessarily a “problem” if many users prefer to buy one product rather than another. At the same time, the state of any nation’s broadband access infrastructure properly would have to entail both mobile and fixed network access in any meaningf…

Will Mobile Disrupt "Search?"

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Search's future depends, many would say, on how consumers behave on mobile, especially on whether "search" changes as users adapt to smart phones. One key issue, for search applications, is "what" people search for. 

Already, behavior on mobiles has shifted in the direction of "information I need right now" related to commerce (shopping, restaurants, directions to a place) and present location. For Google and other search engines, that is a potential problem. Yelp or Amazon.com become new ways to search. 

In other ways, social networks becomes new ways to "search," as well. 


How Big a Problem are Roaming Charges?

High gross revenue and high profit margin services are both good and bad for service providers. Though it is obvious why service providers might like service that offer high gross revenue and high margin, those conditions are all the incentive competitors need to enter a market. 

And, in many cases, such circumstances drive regulators to take the margin out of a business by regulating it away.

Roaming services are such an issue, even if currently representing only about six percent of total service provider revenues. Also, roaming is a bigger problem in some regions than others. The European Union and roaming between Australia and New Zealand are some examples of regions that are taking steps to curb bill shock and roaming charges.

Juniper Research predicts mobile roaming will represent more than $80 billion worth of revenue by 2017, compared to over $46 billion in 2012, despite a general trend to lower roaming charges. In 2017, roaming will represent about eight percent of operator bi…

Smart Phones Will be Half of All Devices Shipped in 2013: Ericsson Says

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“By the end of 2013, more than 50% of phone shipments will be smartphones smart phones, driven by more affordable models,” says Ericsson President and CEO Hans Vestberg. Vestberg also predicts there will be more mobile Internet users than fixed Internet users in 2013, an easy prediction to make, as virtually all observers have been calling for more mobile than fixed subscribers by about 2013 to 2014.

And some might note that mobile broadband adoption has been more robust than expected just a few short years ago. 



Source: Morgan Stanley Mobile Report


Mobile Operator Data Revenues to Surpass Voice Globally by 2018

Mobile service provider data revenues will overtake voice revenues globally by 2018, GSMAforecasts.

In 2012, Japan became the first country where data revenues exceeded voice revenues. In 2013, Argentina’s data revenues will exceed voice revenues.

The United States and United Kingdom will reach the tipping point in 2014. while Kenya will reach data "majority of revenue" status in 2016. 

According to the latest report published by Machina Research, in 2020 the total number of connected devices will grow from today's nine billion to 24 billion, with half of those devices incorporating mobile technology.


440 Cities Might Drive Communications Growth by 2025

Anyone familiar with communications network economics also knows that the “easiest” places to build networks are dense urban areas, where the highest degree of resource sharing is possible. So it is noteworthy that researchers at McKinsey & Company now predict that four billion people deemed “consumer class” will live in “developing” regions by 2025, up from around one billion in 1990. According to McKinsey, the new members of the “consumer class” will have incomes high enough to classify them as significant consumers of goods and services, and around 600 million of them will live in 440 cities, largey in “emerging markets.”  

McKinsey suggests just 440 cities, only a few of which will be “megacities,” will account for “close to half of expected global GDP growth between 2010 and 2025.”

Likewise, 600 cities globally will generate nearly 65 percent of global economic growth by 2025.

But observers of the communications business also will know something else. As it will make sense for …

Mobile Trends as Seen by TIA

The Telecommunications Industry Association’s “Mobile World Congress Primer” is a video about current mobile trends by John Jacobs TIA SVP. It looks, as you would guess, at device innovation, prospects for growth of mobile services, machine to machine services and estimates for revenue growth in various segments of the industry.

A video about the findings from the 2012 forecast will likely serve as a reasonable way of guessing what the 2013 forecast might reveal.

Access Recedes into the Background

To the extent that Google search term activity tells you anything important, one might argue that telecom, Internet, VoIP, 4G, mobile broadband are not “top of mind” these days. Instead, subjects such as WiFi, tablets, smart phones and apps are driving more search activity, and might therefore be said to be more “top of mind” than those earlier subjects.

Searches for the term “telecom" have steadily declined since about September 2004. Similarly, interest in VoIP, as judged by searches, peaked in 2005. Also, interest in “4G” peaked in June 2010. Searches for mobile broadband peaked in 2009.

Queries related to “Internet” also have declined about 25 percent since 2004.  

On the other hand, searches related to ‘smartphone” have risen since about March 2010. Searches based on “android” have grown steadily since about 2008.  

Searches related to apps also have grown since 2007. Likewise, interest in the term “WiFi" has steadily grown since 2004. Also, searches for tablet have risen …

17 Mobile Service Providers to Launch FireFox OS Smart Phones

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The complicated smart phone ecosystem, which as participants constantly maneuvering for advantage within the ecosystem, will get a bit more complicated in 2013, as Mozilla releases its new Firefox smart phone operating system, and as European mobile service providers start selling devices using the new operating system. 

Mozilla says the Firefox OS will in initially be used by devices sold by 17 mobile service providers, interested in seeing an OS and device alternative to Apple and Google.

Those service providers include América Móvil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telefónica, Telenor, TMN and VimpelCom and Telstra.

Manufacturers of the phones so far include Alcatel, LG and ZTE, with Huawei joining later in 2013.



WebRTC Winners and Losers

Mozilla, AT&T and Ericsson are demonstrating a Web Real-Time Communication (WebRTC) proof of concept at Mobile World Congress 2013. The demonstration uses Ericsson's Web Communication Gateway, the Mozilla Social API and WebRTC support in Firefox, and the AT&T API Platform to enable the Mozilla Firefox browser to sync with a user's existing phone number and provide calling services without any plugins to download.

WebRTC is an open Web framework that is being standardized by the World Wide Web Consortium (W3C), and is intended to support communications functions such as voice,  video calls and text messaging using only a Web browser. It includes the fundamental building blocks for high quality communications on the web such as network, audio and video components used in voice and video chat applications.

And that probably provides all the information you might require to figure out why varous contestants might disagree about the value or role of WebRTC.

Among other things…

PBX Market Dipped in 2012

"Following two years of modest growth, the PBX market had a tough 2012,” says Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research, part of a report to be released in early March 2013. It appears economic conditions played a role, as sales were depressed 10 percent in the Europe Middle East Africa region, which has been suffering from a recession.

Overall, the global PBX/KTS (private branch exchange and key telephone system) market represented $8.1 billion in 2012 sales, down four percent from 2011.

In 2012, the related unified communications segment grew eight percent, year-over-year, however. And IP PBX licenses (not including the value of hybrid licenses) grew 11 percent in 2012

North America and the Asia Pacific region saw net positive revenue gains in the PBX market in 2012, though, growing a modest two percent in North America and one percent in Asia Pacific, over 2011 levels.       

Cisco maintains its lead in global PBX/KTS revenue for the sixth consec…

Kenya-Based Safaricom Will Halt Feature Phones Sales to Focus on Smart Phones

Safaricom, the Kenyan mobile service provider, will soon phase out sales of feature phones to concentrate on selling smart phones.

“Safaricom is soon going to stop selling the cheap feature phones in all our retail outlets, as we try to skew the Kenyan market towards smartphones," said Nzioka Waita, Safaricom director.

The move shows increased confidence that cheaper smart phones will change end user demand preferences. 

On a larger level, the move provides one more illustration of how fast advanced mobile technology mobile technologyhas changed the communications landscape globally, in just a few short years. 

Consider that as recently as 2008, some estimates had fixed broadband connections outnumbering mobile broadband by about a four to one margin.

In 2012, the ratio was reversed, and there were four mobile broadband connections in use for every fixed connection. That sort of change--that fast--does not happen in the communications business very often.

The number of mobile broadban…

IBM to Double Investment in Mobile, as Part of "Mobile First" PlanI

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International Business Machines Corp., the world’s biggest computer-services provider, will double its investment in mobile technology in 2013, not including acquisitions it could make. IBM also has dubbed the initiative "MobileFirst," a move that, at this point, should not surprise anybody.

According to analysts at the Yankee Group, enterprise workers rank smart phones and notebooks about equally, as key tools for their work. 




To be sure, the direction does not mean "mobile only." And some firms will not design their strategies around "mobile first," either, where it comes to content creation


Content consumptionis another matter, though. Consumers are migrating away from PC-based Internet usage and are increasingly using mobile devices as their default gateway to the Internet, according to  International Data Corporation. That shift to "mobile first" Internet access is especially pronounced in the U.S. market. 

In fact, perhaps for the first time…

What Happens When a Problem is Solved?

Among serious broadband scholars, the broadband rankings argument is as much dated as it is silly, argues economist George Ford of the Phoenix Center for Advanced Legal and Economic Policy Studies.  

The defects of such rankings have been analyzed over the years, many times, by the Phoenix Center Ford says, hereherehereherehereherehereherehereherehereherehereherehere and here

Most serious scholars of broadband policy have long abandoned the discussion, he says. "Nevertheless, those more interested in revolutions than facts keep hanging on to these comparisons," says Ford.

All of that raises a question: what happens when a public policy problem actually is solved? Does institutional momentum simply propel organizations along, even if the original problem is solved, or being solved, or solved well enough that we should spend time on other pressing problem?

One sees this rather frequently in other areas, where government programs, for example, continue t…

Is Value of Mobile Broadband Destined to Decline?

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The hands-down value of a mobile network, compared to a fixed network, is mobility. And given the dramatic surge of mobile adoption over the last four years, at least some fixed network executives naturally will be worried about the long term value of any fixed broadband network.

As recently as 2008, some estimates had fixed broadband connections outnumbering mobile broadband by about a four to one margin.

By 2010, just two years later, the number of mobile broadband subscribers around the world surpassed that of fixed broadband.  By 2012 mobile broadband subscriptions outnumbered fixed subscriptions about three to one.

By 2015, it is anticipated that there will be 3.1 billion mobile broadband subscribers compared to 848 million fixed broadband subscribers, meaning mobile will outnumber fixed about five to one.

One might argue that change has happened so fast that most people have not yet had a chance to figure out what it means. For one thing, mobile now has become the dominant way peo…

Users Now Create Their Own Access

In the latest sign that the distinction between public and private networks has blurred, the Federal Communications Commission now has decided private use of consumer signal boosters requires service provider approval for operation.

Signal boosters are used indoors, typically, to boost indoor mobile phone signal strength. Sometimes they are used in cars for this purpose, as well.

But the FCC now has decided that the signal boosters can interfere with wireless networks and cause interference to a range of calls, including emergency and 911 calls. So the FCC now has adopted new rules stipulating that use of such devices is contingent on non-interference to licensed mobile service provider signals.

Under the FCC’s new rules, users will need to register their booster with the customer’s wireless provider. Unless the mobile service provider agrees, the booster cannot be used.

Though aimed at preventing signal interference, the new rule illustrates the changing nature of access. Increasingly,…

Is 100-G About to Drive a New Wave of Core Network Spending?

"After ending 2012 on a flat note, things are looking up for the optical market in 2013," says Andrew Schmitt, Infonetics Research principal analyst for optical at Infonetics Research. "Our conversations with equipment providers continue to trend positive, particularly in North America where 100 Gbps spending is about to ramp. The general consensus remains that an optical cycle for equipment in the core is emerging, what we call the 'optical reboot.'"

"Meanwhile, there are positive rumbles in the EMEA region, where 2012 ended with a spending flourish and carriers are cutting dividends to plow capital into general capex," Schmitt says.

The preliminary indication for China is that 2013 also will be a huge year for 100G as well. China is about half of the global 40 Gbps wave division multiplexing equipment market, and 2013 will be the peak year for 40G worldwide, Schmitt says.

The global optical network hardware market grew two percent in the fourth …