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Showing posts from February, 2014

Telco Capital Investment: Running Harder to Stay in Place

Competition has negatively affected the potential return from any major capital investment in carrier networks. One recent illustration is a warning by Fitch Ratings that telcos will have to invest more network capital than they used to, just to maintain earnings where they are.
“While investment in data networks is still economically justified, weakening cash flows from traditional services means that telcos have to spend more capital simply to maintain EBITDA at the same level,” said Fitch Ratings.
That actually is not a new problem. Fixed network telcos have had to face the problem for a decade, and is easy to understand. In a monopoly environment, either a cable company or telco could safely assume that “cost per home” and “cost per customer” were about the same, when evaluating a network upgrade.
In a highly-competitive environment, “cost per home” and “cost per customer” diverge sharply, depending on customer penetration. If a service provider makes an investment, passing three …

Unlicensed Spectrum Now is Essential for Licensed Mobile Networks

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Unlicensed spectrum has become a central, and arguably essential part of mobile service provider network economics, even if mobile service providers generally favor licensed spectrum.
That vital role for unlicensed spectrum is likely to become even more important as video content dominates network demand in the future.
In 2013, 45 percent of total mobile data traffic was offloaded onto the fixed network using Wi-Fi or a femtocell in 2013.
By 2018, more data will be offloaded to Wi-Fi from mobile networks than will remain on mobile networks, according to Cisco.
Without offload mechanisms, mobile data traffic would have grown 98 percent rather than 81 percent in 2013, Cisco notes. Mobile video is the driver. 
Mobile video traffic was 53 percent of total data consumption by the end of 2013, and by 2018, mobile video will represent 69 percent of global mobile traffic, according to the Cisco’s Visual Networking Index (VNI) Global Mobile Forecast, 2013-2018.
The other observation is that such…

In Wholesale Business, Customer Satisfaction Follows Revenue and Profit

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One would expect service providers to focus their sales and customer efforts in market segments where telecom industry revenue growth is highest, or where profit margins are highest, in both retail and wholesale portions of the business.
In the wholesale telecom business, that should mean attention to buyers of IP data capacity rather than voice, mobile buyers instead of fixed network buyers, large buyers rather than smaller buyers and content providers and “new customer verticals” more than some traditional customers, for example.
Findings of a survey conducted by Atlantic-ACM of global wholesale buyers suggests that principle is at work in the wholesale telecom business.
Though overall buyer satisfaction has remained stable since 2010, it appears smaller wholesale customers are less satisfied than they once were, while large customers are more satisfied than they used to be.
Early in 2014, satisfaction among large customers virtually leaped five percent among large customers. On the …

Globally, LTE is Faster than Wi-Fi, Study Finds

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With the caveat that Long Term Evolution speeds are directly related to the amount of bandwidth to support the network (it makes a big difference whether 10 MHz or 20 MHz or bigger channels are available), Long Term Evolution now offers faster speeds, on an average global basis, than fixed connections using Wi-Fi for local distribution, according to an analysis by OpenSignal.  
If speed is a key driver of usage, then users are going to rely more on LTE than Wi-Fi, much as they traditionally have used Wi-Fi instead of the mobile network because Wi-Fi offered a better experience.
There is some evidence of that. A study by Mobidia in 2012 suggested that South Korean users actually were reducing their Wi-Fi usage in favor of the LTE network.
But a Devicescape analysis suggests that Wi-Fi Wi-Fi usage doubles for consumers on 4G networks at a similar rate to how their mobile data usage increases. In other words, consumers increase mobile and offload consumption in proportion to their current…

AT&T Adds "No Incremental Cost" International Text Messaging

Starting February 28, 2014, AT&T's Mobile Share and Mobile Share Value plans will include unlimited text messaging from the United States to more than 190 countries worldwide and unlimited picture and video messaging to more than 120 countries around the globe. Both new features come at no extra cost.
In doing so, AT&T joins T-Mobile US and Verizon Wireless, both of which had added “no incremental cost” international text messaging on some popular plans. Verizon More Everything plans and T-Mobile US Simple Choice plans feature no incremental cost global text messaging.
T-Mobile US also features no incremental cost Internet access when roaming, on it Simple Choice plans.
The new capabilities illustrate the trend of declining revenue opportunities for mobile and fixed network service providers in the voice and messaging application areas, as well as the growing use of substitute products such as WhatsApp.
As recently as 2005, voice revenues represented 73 percent of total rev…

Millennials Watch Lots of "TV," Just Not So Much on TVs

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Though some studies indicate that Millennials watch less linear TV than older consumers, some research suggests they consume more video, just not on linear TV services, a study sponsored by YuMe suggests.

Over a recent three-year period, Millennial women watched about 10 percent less linear TV since 2010, while Millennial males who dropped TV usage seven percent since 2010. The YuMe survey used an 18-24-year-old group (born in 1989-2000) as the “Millennial” definition, a narrower definition of Millennials than others would use.
Millennials also use their smartphone and tablets more than any other demographic, for the purpose of watching video. Also, Millennials did not use digital video recorder features at all, YuMe suggests.

Millennials do report watching a lot of TV shows and user-generated content. What they don't watch, is news, with only 13 percent saying they watch it.
About 49 percent of Millennials reported watching web videos on smartphones, 44 percent said they watched w…

4.3 Billion People Do Not Have Internet Access

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Of the world’s seven billion people, 2.7 billion have access to the Internet, while 4.3 billion do not. 
Most of them live in developing countries.
Though it still is possible to argue about whether the high adoption of Internet access and higher degree of economic development are causal or correlated, even those who might tend to think high Internet access and higher economic development are correlated, not causal, might support fastest possible adoption of Internet access everywhere, for the same reasons it was deemed important to provide voice communications to everyone.
If developing countries were to catch up with levels of internet access in developed economies today, they would reach a penetration level of around 75 percent, more than tripling the number of present “global south” Internet users from 800 million to three billion.
Of the new global south Internet users, some 700 million would be in Africa, 200 million in Latin America and 1.3 billion in Asia.
Public policy makers …