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Showing posts from January, 2014

Inq Mobile Shuts Down

A couple of years ago, it seemed as though a few viable ways to optimize a smartphone existed. Blackberry was optimized for email.
And some tried to optimize for social media. Years earlier, some devices were optimized for sports content (ESPN).
One might argue that none of those approaches yet has proven sistainably viable. Inq Mobile is the latest casualty.

Will Consumers Welcome a Digital Wallet from Apple or Starbucks?

Perhaps we will find out, if both Apple and Starbucks do introduce retail payment systems. One might speculate that the firms will take different tacks. 
Apple might be thinking about creating a mobile point of sale system using iPads. Starbucks already has an investment in Square, so that approach seems less likely for Starbucks. 
Instead, Starbucks might only be thinking about ways other retailers can be incorporated into the Starbucks mobile payment environment. 

Google Did Not Make Out Badly With Motorola Mobility Buy

Maybe it was not a slam dunk. But neither was it a huge mistake. I don't know whether Google will keep tax loss carry forwards or not. But if Googlemanaged to do so, the simple financials will be even better than they appear.
We'll find out when the next quarterly earnings report is released. 

Rationality is a Virtue When Discussing Communications Policy

So is civility, even when people disagree about communications policy in fundamental ways. 

Tata Communications Selling to Vodafone?

Tata Communications reportedly is in talks with Vodafone about a deal that would have Vodafone buying all of Tata Communications, though talks are said to be at a preliminary stage.

Vodafone had been expected to go on a buying spree after selling its stake in Verizon Wireless to Verizon Communications, and the rumored Tata Communications deal is the first evidence that Vodafone is moving.

Tata Communications is the number one global international wholesale voice operator and number one provider of international long distance, enterprise data and Internet services in India, earning about $3 billion annually.

Apple' Sales Volume Drops In Two Biggest Markets

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Lots of people are waiting for Apple's next launch of new products, or are finding other alternatives, it appears.



Apple revenue from its two biggest segments -- Europe and the Americas -- have begun to contract, Fortune reports.



In the first quarter of 2014, Apple's combined Asian sales were $17.4 billion, more than Europe ($13 billion) and closing in on the Americas ($20 billion).





2008 was Inflection Point for Mobile Broadband

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Global mobile connections will grow from 6.5 billion connections in 2013 to nine billion in 2018, according to researchers at iGR. And that probably is not the most-significant change likely to happen between 2013 and 2018.
Instead, the big change is the overwhelming role mobile will have in bringing Internet access to end users. As recently as 2008, broadband Internet access remained a primarily fixed network service.
Oddly enough, 2008 also was the year mobile broadband subscriptions reached an inflection point.




Business Segment Drives Time Warner Cable Growth

Despite continuing challenges in its consumer segment, namely net customer losses, Time Warner Cable managed to grow full-year 2013 revenue 3.4 percent year over year.



Business customer revenues grew 21.6 percent, while consumer high speed Internet access revenues grew 14.4 percent. 



Fourth-quarter 2013 average monthly revenue per residential customer relationship (ARPU) grew 2.2 percent to $106.03, the highest rate of growth since the first quarter of 2012, Time Warner Cablesays.



Residential high-speed data ARPU increased 12.4 percent to $46.21. Time Warner Cable says it  now offers residential high-speed data speeds of 100 Mbps in several cities and regions, including Los Angeles, Kansas City and Hawaii. 



Residential wideband high-speed data subscribers (which includes the 30, 50, 75 and 100 Mbps tiers) more than doubled year over year to 910,000 subscribers. 



But consider that Time Warner Cable has 11.08 million total residential high speed Internet access customers, meaning that just e…

Telecom Industry is Backwards Looking: Government Makes it So

Mobile networks have experienced four complete transitions of network technology in a few decades, doing so about once every 10 years.



The fixed network has been through a couple of network eras, without completely revamping the whole platform.



Looking at switching, it moved from simple crossbar switches to analog electronic switches to digital switches. In access technology, it has begun to move from copper wires to optical fiber. 



The biggest single transition, though, is the move from time division multiplexing to Internet Protocol, a subject the Federal Communications Commission will address at its Jan. 30, 2014 meeting, taking up an AT&T request to run trials related to the transition from TDM to IP.



Many of the issues are largely "social" rather than "technical" in nature, relating to how universal service and consumer protections are maintained. Emergency calling and preservation of competition likewise will have to be addressed, though none of those issues …

Amazon to Enter Retail Payments Business

Amazon, the Wall Street Journal reports, is hoping to sell retailers a Kindle-based retail checkout system, likely positioned like Square and other providers of mobile credit card reader systems. 



The attraction would seem to be the access to customer data, not so much the lucrative payment terminal business. 



But Amazon might also be thinking it can bring other "value add" to the systems, compared to existing offers from other established payment system providers. The immediate inducements could relate to offers, promotions or discounts, especially related to retailer sales on Amazon.com



Longer term, Amazon might eventually leverage other assets. Amazon Web Services could come into play, or possibly logistics support. 



Amazon also reportedly is considering a mobile wallet service that would be used by consumers. 




Google Selling Motorola Mobility

Google says it is selling what remains of Motorola Mobility--while retaining the patent portfolio, to  PC maker Lenovo for $2.9 billion.



Google, which bought Motorola Mobioity for $12.5 billion in May 2012, already had sold off the part of the business building cable set-top boxes, and seems now to retain what it really wanted: the patent portfolio. 



The move does not completely address the channel conflict of Google being in some parts of the device market, such as it now is with Nest, the home automation supplier. But the move does ease the channel conflict potential to a significant extent.

U.S. Justice Department "Skeptical" About Possible Sprint Acquisition of T-Mobile UA

Sprint's Possible T-Mobile US acquisition, to nobody's surprise, is viewed "skeptically" by U.S. Department of Justice officials, Sprint board members Masayoshi Son and Dan Hesse apparently have been told at a meeting. 



But nothing is ever as it appears on the surface, where it comes to key communications developments. AT&T, in formally announcing it has no plans to make an immediate bid for Vodafone, might trigger thinking that AT&T does not want to make such a bid.



That undoubtedly is the wrong way to view the declaration. By law, AT&T, when asked by U.K. authorities, whether it planned to make such a bid in the next 30 days, had to answer "no," and thereby wait at least six months before making any such bid. 



But AT&T would not have made such a bid within the next 30 days. Too much depends on how European regulators treat other pending deals, in particular consolidation in Germany. AT&T had no choice but to respond the way it did.



Likewis…

AT&T Pays $100 Credit for Every New Line Added

Market observers who were worried about the implications of a new marketing war in the U.S. mobile business have new reason to worry. 



AT&T now is offering all new and existing AT&T customers  a $100 bill credit for each new smartphone, tablet, feature phone, mobile hotspot or Wireless Home Phone line of service they add.



The offer is said to be good through March 31, 2014. 



The latest incentive comes on top of rival offers by T-Mobile US and AT&T that pay off any early termination fees customers might face when changing service providers before the end of a contract term. 


Retailer Mobile Card Readers are the Acknowledged Success in Mobile Payments Field

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The usefulness of mobile payment services, as used by consumers, might be hard to ascertain.
But it is clear that retailer adoption is accelerating
Dunkin’ Donuts is launching its own mobile app, hoping to mimic the success Starbucks has had with its mobile payment app (and loyalty program).

Mobile transactions will account for about two percent of all credit and debit card volume in the United States in 2013 and four percent globally, according to BI Intelligence.
Just what percentage of small retailers have adopted mobile card readers such as Square is a matter of debate. What is not debatable is that mobile card readers such as those offered by Square have become a big deal.
By some estimates, 40 percent of retailers already are using mobile card readers.


U.K. Market Illustrates Rule that Household Spending on Communications is Highly Stable

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Consumer spending on communications and video entertainment tends to be stable. In other words, households tend to spend about the same percentage of household income on communications and video entertainment services every year.
The variables are changes in household income, and changes in prices for the purchased items.
That implies any increase in household spending in one category likely is balanced by reduced spending in some other category, unless the prices of purchased goodds decreases.
In the U.K. market, households spend between three percent and four percent of household income on communications and video entertainment services. The sole exception is the highest 10th of U.K. households, ranked by household income, where spending is between two percent and three percent.
That is what one would expect. Households with higher incomes can buy a fixed set of services for a smaller percentage of total household income.

Over the years 2001 to 2013, U.K. households began spending mor…

Text Messaging Decline Can Be Slowed, in Many Mobile Markets

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Most observers would agree that over the top alternatives are cannibalizing direct carrier revenues to some degree, though reasonable observers might disagree about the extent of such shifts of end user spending.
At the same time, most observers would agree that those alternatives also can stimulate carrier revenue, principally by increasing spending on Internet access services.
Yet others might argue that cannibalization happens, but that it is not such a threat to carrier revenue as one might think, in part because carrier text messaging is a large revenue stream, while over the top messaging is a comparably small revenue source.
The point is that the revenue impact of substitute products is complex, with some potential losses offset by indirect revenue from other sources (people need data access plans to use OTT messaging).
At least so far, text messaging is a business with direct carrier revenues two orders of magnitude greater than OTT messaging.
Informa Telecoms and Media forecast…

Over the Top Video Now Generates $11 Billion in Subscriber Fees Globally

The global OTT video market reached nearly US$ 11 billion in 2013 revenue. The global video subscription business (cable, satellite, telco TV) is an order of magnitude larger.



Netflix now has 40 percent of the United Kingdom over the top streaming video market, according to ABI Research. 






Net Neutrality Isn't Dead, Because Religion Isn't "Dead"

Some think the network neutrality rules promulgated by the Federal Communications Commission are "dead." That actually is not true.

Whether one believes it is a good idea or not, the U.S. Congress gave the FCC (and also state public utility commissions) broad powers to regulate Internet access in the name of encouraging broadband deployment. 

If the FCC can reintroduce net neutrality rules on the ground that they  “encourage the deployment … of advanced telecommunications services,” as the Telecommunications Act permits, then the rules could be reinstituted.

That not so fine point is just one overlooked fact surrounding the whole debate. The other mostly overlooked fact is that even the old rules had little if anything to do with "blocking" lawful content. The FCC has made abundantly clear all lawful content is permitted. 

The issue at hand for network neutrality is whether any quality of service mechanisms are possible, or whether the only form of Internet access is &…

Deutsche Telekom Finds Carrier Wi-Fi Does Not Reduce Mobile Network Demand

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Deutsche Telekom, like other mobile service providers, hopes that carrier Wi-Fi will reduce demand on its mobile networks. The problem: it doesn't seem to work. 

In other words, the technique doesn't work: demand on the mobile network is not reduced, at least in tests conducted in Rotterdam and Hamburg, where carrier Wi-Fi, it was hoped, would reduce demand on the 3G and 4G networks.

In fact, the test showed very little change in mobile network demand, and in some cases an increase in demand on the mobile data network.


The reasons require some application of economics principles, namely that behavior (demand) changes when there is a change in supply. It is likely people behaved differently, consuming more data, when they knew Wi-Fi was available, but also did not reduce their mobile usage.  

Also, it appears applications and devices behaved differently when WiFi was available, conducting app updates, for example, when in the Wi-Fi zones, without affecting mobile network usage. 

Deu…

$15 a Month Discount for Unbundled Mobile Service Plans is the Right Number

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You might wonder why AT&T gives customers who choose not to buy bundled phones a $15 a month discount on recurring costs of service. That amount fairly closely tracks the amount of the device subsidy for a customer on a bundled plan.
A report by the Organization for Economic Cooperation and Development suggests that, in those those countries where both bundled and “buy your own device” options exist, such as in France or the United States, the bundled option (including discounted smartphone) was, on average, between $10 and $20 a month more expensive than the “buy your device separately” option.
Looking at recurring costs, one can see the potential impact of device subsidies on recurring costs. A $600 device, sold at $200, implies a $400 subsidy. At $20 a month, that further implies 20 months to recoup the cost of what is in essence an installment plan.
Take that $20 out of the monthly cost and U.S. service plans cost the same as European plans. AT&T’s $15 a month discount for …

Will U.S. Mobile Price War Survive a Sprint Acquisition of T-Mobile US?

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Some observers now are worried about a "price war" in the U.S. mobile industry, with T-Mobile US launching cost of service attacks that AT&T, Verizon Wireless and Sprint have responded to in different ways. 

All the carriers have matched T-Mobile US no-contract plans to some extent, and all have embraced forms of "faster device upgrade" programs.

Given the generally robust revenue growth Verizon Wireless and AT&T Mobility have seen in recent years, some equity analysts naturally fear a protracted price war will harm earnings for Verizon and AT&T, even if T-Mobile US currently seems to be benefiting. 

What SoftBank will do at Sprint is the big unknown. Virtually all observers have expected that Sprint would launch its own attack on the U.S. market, presumably involving an assault on prevailing pricing.

But with T-Mobile US now doing the attacking, with success, the room for SoftBank to do so is made more difficult. Some might argue that is why there is talk …

Comcast, Charter Probably Will Team to Buy Time Warner Cable

With Charter Communications maneuvering to buy Time Warner Cable, Time Warner itself has signaled a preference for an acquisition by Comcast.



But that would be risky, in regulatory terms, as Comcast already is the largest U.S. cable company, with market share just above 30 percent, and gobbling the number-two U.S. operators would likely trigger a negative antitrust response.



So Charter Communications hopes Comcast will join Charter in a joint bid, with a prior agreement on how Time Warner Cable assets would be divided. 



Cable operators have experience with joint bids, and have in the past done precisely that. 



For Comcast, such an approach has benefits. For starters, Comcast would not acquire all of Time Warner Cable, just the New York assets. So while Comcast would get bigger, it would not get substantially bigger. That might mollify regulators and antitrust authorities.



Also, the New York market would have strategic value for Comcast, which would then be able to expand its business custo…

Will Apple Transform Mobile Payments?

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I have in the past argued that the one technology company that could really shake up mobile payments was Apple. At least so far, though, Apple has not made a move, for sensible reasons. 



Apple's services approach has always been structured in ways that help Apple sell devices in the consumer market, and it hasn't been so clear how an industry-leading mobile payments capability necessarily would create a new device market. 



One might argue such a capability would help Apple sell more iPhones and iPads, but that is a different matter, something more incremental, and not the foundation for a whole new product category Apple can re-imagine and reinvent. 



But that might be changing, as there now are reports Apple is looking at creating a service handling payments for physical goods and services on its devices. Apple's iTunes and Apple Store already process remote payments, though indirectly, linking credit or debit cards to iTunes accounts. 



But Apple perhaps senses the growing rol…

One Good Reason Why Disruption of Any Media or Communications Business Still is Possible

Incomplete knowledge makes rational decision making quite difficult. In fact, some would say incomplete knowledge means it is not possible for people to behave completely rationally, even when they want to do so. 

But since it is a statement of fact that nobody can know everything, there always is the possibility that somebody, with a particular set of domain knowledge, can "see" something other practitioners--with different domain knowledge--cannot perceive. 

For that reason, disruption of any market in media or communications remains possible.

Hola: Peer to Peer Virtual Private Network

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Hola, a new peer-to-peer virtual private network service, is bound to be used by people who want to watch content they are not able to access because that content is not licensed in the nation where they reside.

On a larger level, though, Hola is a way to provide the benefits of a content delivery network without actually using a CDN. It makes the Internet more efficient as well. 

Perhaps intriguingly, Hola also makes it harder for government authorities to track your IP address. 

With the disclaimer that I am not advocating anybody violate copyright rules, the networking approach, and the ability to change an IP address, might in some cases be quite useful, particularly in countries where governments are heavy handed, and where dissent is considered a crime.

Hola is the latest practical implication of P2P techniques historically used by content sharing apps and services, but which have other important ramifications. 

Asia Regulators: Flexibility Now Key in Regulating Spectrum

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There might just be growing recognition among national communication regulators that spectrum policy requires much more flexibility than in the past.
“Old approaches are ill suited to quickly changing environments,” said Chinese Taipei National Communications Commission Commissioner Dr. Shin-yi Peng, who also is a professor of law at National Tsing Hua University.
As one example, Peng noted that when Taiwan finalized its 4G license rules, it chose a technologically neutral approach that does not specify what technologies must be used, allowing operators to move quickly.  
“Stakeholders asked us whether the licenses would be tradeable,” and Peng said that will be possible. “A secondary market will exist.”
And though large incumbents traditionally have dominated spectrum auctions, Thailand is looking at ways to help smaller and local Internet access providers, for whom free Wi-Fi is most important.
But backhaul is an issue, said Jesada Sivaraks, National Broadcasting & Telecommunicatio…