Showing posts from April, 2013

Obama to Name Tom Wheeler to Head FCC

President Barack Obama is expected to soon nominate a former head of the largest U.S. cable TV and mobile trade organizations to be chairman of the Federal Communications Commission, reports. 

Some policy advocates will decry Wheeler's nomination, but he is an acknowledged subject matter expert on both the cable and mobile industries. Others might say an FCC chairman intimately familiar with the funding of new entities should have views about innovation and regulation that could be helpful as the FCC grapples with how to adapt its regulation to a non-monopoly world where innovation can outrun regulatory understanding.

Mexico Telecom Deregulation is Coming

Mexico's telecom and TV markets are about to be disrupted, as the Mexican Senate has passed a bill to create a new communications and media regulator with the power to break up any firms with 50 percent or more market share in either the communications or TV broadcasting markets.

The legislation also ends the current limits on foreign investment in fixed network telephony and television. The law also creates a state-owned wholesale telecom network that would allow rival companies to bypass America Movil, which controls 75 percent of the country's fixed telephone lines and 70 percent of its mobile telephones and broadband accounts.

Televisa is the other target the new regulator will be looking at. Televisa, has around a 70 percent share of the TV market,

The new regulatory body, called the Federal Telecommunications Institute, is expected to be in operation by the end of 2013, with its first actions occurring in the first half of 2014.
Just how much impact the new law will have in…

OTT App Traffic Now Higher than Text Messaging

Over the top messaging now is costing mobile service providers in Spain about €341 million annually.  Text messaging revenues in Spain have declined from €1.1 billion (US$1.4 billion) in 2007 to €758.5 million in 2011 (US$991.8 million), says Pamela Clark-Dickson, Informa Telecoms analyst.  Significant losses also have occurred in other markets such as the Netherlands and South Korea. 

Region P2P Messaging Traffic (In Billion) 2010 2011 2012 2013F 2014F 2015F 2016F 2017F Worldwide P2P SMS 5,812 6,546 6,623

What Openreach Fiber to Home Prices Suggest About Infrastructure Cost

“Cost” is not “retail price,” but new fiber-on-demand retail prices from Openreach shed at least some light on the costs of a 330 Mbps fiber to premises network.
Openreach requires a fixed installation fee of £500.  But most of the connection fee is variable, and is based on distance.
Openreach estimates more than half of premises (55 percent) will incur a distance based charge of between £200 and £1000. Virtually all other premises will face a charge of between £1,400 and £3,500.
It is hazardous to compare costs or retail prices between countries, but the Openreach retail prices translate to U.S. prices of $775 for the fixed install cost. Some 55 percent of locations also would have to pay between $310 and $1551 to get a fiber to home connection, which suggests a gigabit connection might cost somewhat more.
The other 45 percent of locations can expect to pay between $2171 and $5428 to get a fiber to home connection.
So for 55 percent of potential locations, costs might range from $108…

Gigabit Networks Will Destabilize the ISP Market

There are times in the global communications business when stability is the main trend. The first 125 years of telecom history were such times of fundamental stability.
But there are other times when instability and change are the main trends. That might have been said to be the case when global privatization and deregulation happened in the 1980s and 1990s. And instability now is growing with the maturation of voice and the rise of Internet access and mobility as anchor services.
Some might argue growing instability is what we will see over the next decade. Consider only the impact of symmetrical gigabit Internet access service. Quantitative change is not the only issue. Qualitative competitive implications will exist for contestants using different network topologies and access media.
Consider cable operator frequency plans and use of hybrid fiber coax, for example. Executives typically argue that HFC can be upgraded incrementally to support future bandwidths of that sort.
To support…

Wi-Fi as Substitute for Mobile Networks: Internet Access is the Difference

Wireless networking is at an inflection point where it can completely replace wired networking everywhere but the data center," said Robert J. Pera, Ubiquiti Networks CEO. 

Allowing for a bit of hyperbole, we are probably once again at a point where observers are going to speculate about whether Wi-Fi networks can compete with or displace mobile networks. That debate is not as robust as it once was. 

It might not be too early to suggest that such displacement does not make as much sense for voice networking or messaging as for Internet access, where use of fixed access by mobile devices primarily for Internet access is a rather common occurrence. 

In fact, Cisco has speculated about the growing relevance of Wi-Fi for several years, in particular because the ways people use the Internet on mobile devices makes Wi-Fi a preferred and normal access method, something that is not quite so true for voice and messaging communications. 

Cisco has predicted that Wi-Fi IP traffic will represent…

Vermont Telephone Sells $35-A-Month Gigabit Internet Access

Though the offer does not have many implications for other Internet service providers not able to get $5371 per home in free money, Vermont Telephone has begun selling 1-Gbps Internet access for $35 a month.

Vermont Telephone serves 17,500 homes, and has gotten $94 million in "broadband stimulus" funds (about $5371 per home) to upgrade its network. It's interesting, but not an example of sustainable nationwide gigabit access precisely because it is built on huge subsidies. 

The really important developments are any new ways ISPs can build networks delivering gigabit speeds, without subsidies, with clear and sustainable revenue models.

Will LTE Reset Consumer Price Expectations?

The cost of mobile phone service in Europe has fallen by 15 percent since 2007, even as they have risen by 25 percent in the United States, at least as measured by “average” monthly phone bills. That is one reason why service providers in Europe hope Long Term Evolution will provide a chance to reset pricing expectations.

European users now spend an average of just 24 euros a month on their mobile phones, according to Sanford Bernstein. Americans spend about two thirds more. Some attribute the difference to the higher phone subsidies in the U.S. market, but at least some of the reason for lower European phone bills is greater erosion of voice revenues.
Voice represented more than 80 percent of revenue in 2007 and now accounts for 62.6 percent of revenue for European firms, according to  Informa. And gross revenue is only part of the problem.
Profit margins on that earned revenue also is falling, in most markets, for most providers in Europe, North America and Japan. To be sure, one ad…

Does Bandwidth Once Again "Want to be Free?"

What is the key implication of Google Fiber selling 1-Gbps symmetrical access for $70 a month? Granted, such offers pose destabilizing and disruptive challenges to any ISPs competing in the markets where Google Fiber exists, or could exist. At the very least, Google Fiber will push other major ISPs to speed up the volume and tempo of their bandwidth upgrades.
But Google Fiber raises, in a new way, an older argument about the impact of Internet technology in a broad sense.
About a decade ago, Bill Gates irritated executives in the communications ecosystem by arguing that “bandwidth wants to be free? ” Others at the time quipped about whether “computing wants to be free?” Others might argue that data wants to be free. And some have been arguing that content wants to be free.
To be sure, Gates meant that bandwidth would not be a constraint to creating new services and apps, as computing cycles and storage had ceased to be a fundamental problem in the software business.
Nor, as it turns o…

12% of Internet, App Activities Occur on Mobiles

The amount of time people spent using mobile devices for activities such as Internet and app use, gaming, music and others has more than doubled in the past two years, according to eMarketer.

As a result, 12 percent of total time spend consuming media, using apps and the Internet now happens on mobiles. 

In 2012, the amount of time U.S. consumers spent using mobile devicesexcluding talk time, grew 52 percent to an average of 82 minutes per day, up from just 34 minutes in 2010, eMarketer says. 

Time spent with "online" (non-mobile) apps and activities grew 3.6 percent to an average 173 minutes per day, compared to 7.7 percent growth in 2011 to 167 minutes per day.

Mobile will have the higher growth rates, in part because mobile usage starts from a low installed base, and in part because more mobile devices are being used for Internet and mobile app activities.

U.K. to Test White Spaces in Third Quarter of 2013

Ofcom, the U.K. communications regulator, plans to test “white spaces” technology in the United Kingdom in the fall of 2013.

White spaces are frequencies otherwise used for digital terrestrial TV broadcasting and wireless microphones, but which for reasons of frequency planning are not actually used in particular areas. Think of the way a cellular network is built, reusing frequencies by spatially dividing them.
The actual amount of available spectrum will be available in rural areas, if U.S. experience holds. In urban markets, it is possible that only a few 6-MHz channels will be available. Perhaps perversely, it also is possible that tens to scores of 6-MHz channels will be available in isolated or rural areas.
But progress probably will be relatively slow, as a full ecosystems of end user devices and infrastructure has to be built, meaning relatively high prices for devices and infrastructure in the near term.
White spaces takes advantage of similar interference protection schemes …

AT&T Digital Life Launches in 15 Cities

AT&T Digital Life puts AT&T into the home security and energy and water management businesses in a big way, launching in 15 U.S. cities, with a plan to serve 50 cities by the end of 2013. 

Presumably the service will work anywhere AT&T's wireless network reaches, and also uses any broadband connection as well. 

It's a big test of market demand for machine-to-machine services, especially with Comcast and Time Warner Cable offerings slated for commercial launch as well. 

8% of Canadian Households Have Cut Video Cord

About eight percent of Canadian households no longer watch either over the air TV or buy a video subscription, according to Media Technology Monitor. The percentage of homes without a TV subscription service or off-air TV rose one additional percentage point in 2012 to eight percent, after doubling in 2011 to seven percent, apparently as a result of the transition to digital TV formats. 

As other analysts have noted, perhaps the bigger problem is people and households that simply never sign up for a video service when they set up their households. Such households might not own a TV. But even some households that own a TV do not use it, Nielsen estimates

In fact, perhaps 75 percent of homes that no longer watch over the air or video subscription services actually own at least one TV. 

Global Smart Phone Sales Top Feature Phones for First Time

In the first quarter of 2013, global sales of smart phones outpaced feature phones for the first time, according to International Data Corp.
In the worldwide smart phone market, suppliers shipped 216.2 million units in the first quarter of 2013, representing 51.6 percent of the total phone shipments the quarter.
In fact, some might say smart phones now are simply a device that should be tracked with other computing devices. "Phone users want computers in their pockets,” said Kevin Restivo, IDC senior research analyst.
The days where phones are used primarily to make phone calls and send text messages are quickly fading away," he said. "As a result, the balance of smart phone power has shifted to phone makers that are most dependent on smart phones."
Top Five Total Mobile Phone Vendors, Shipments, and Market Share, 2013 Q1 (Units in Millions) Vendor Shipments Market Share 1Q12 Shipments 1Q12 Share Change Samsung 115.0 27.5% 93.6 23.3% 22.9% Nokia 61.9 14.8% 82.7 20.6% -25.1% Apple 37.4