Greater Scale Leads to Lower Prices, Even in a More Concentrated Mobile Business?

If telecommunications really is a business with scale characteristics, then additional scale should lead to lower retail prices. And there is evidence that higher concentration levels in the U.S. mobile business have happened at the same time that retail prices have dropped. 

Post a Comment

Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

Image
You can see where this is going. Younger users text more than they talk, and though today's users 25 and above still talk more than they text, the usage pattern is uniform: younger age cohorts text more than older age cohorts.

So as each age cohort advances, one might predict that texting behavior will grow over time. How much it grows is the only real question.

Users 18 or younger actually"talk" about as much as users 55 to 64. One suspects an awful lot of "voice" activity is of the coordination and collaboration sort, so that younger and mid-life workers might be in work groups that require more coordination than workers 55 to 64.
Read more

Spectrum Fees, High Incremental Capex, Lower Value in Ecosystem Mean Historic Changes Might be Necessary

Mobile operators in India pay fees for use of spectrum. For spectrum acquired in the upcoming 2016 auctions, the spectrum usage charge will be three percent of of service provider adjusted gross revenue (AGR) on spectrum acquired in forthcoming auction in 700, 800, 900, 1800, 2100, 2300 and 2500 MHz band.
Bharti Airtel, India’s largest telecom operator will pay 3.8 percent. Reliance Jio Infocomm will pay about 3.05 percent.

Those charges might be seen as a small part of a much larger problem: high capital investment and regulatory risk that makes the business model unsustainable.

And at least some now question whether there is truly enough potential revenue in at least some emerging markets to sustain robust investment in traditional mobile network bandwidth. An open question: whether a dramatic reduction in access network costs is feasible.

By the same token, one might question whether there is enough demand to support gigabit Internet access in many countries without key subsidies fr…
Read more

For Ting, Operating Costs are Key to Business Model

Low overhead, and low operating costs--rather than any special capital investment advantages-- appear to be a key element of the business plan for Tucows mobile and Internet access businesses.

But picking the right market might be even more important. A delay in Google Fiber construction plans in Portland, Ore. might provide an example. Where Google Fiber might once have hoped to be the only provider of gigabit Internet access in Portland, both major suppliers Comcast and CenturyLink already are moving to do so.

No matter how attractive an offer Google Fiber might supply, it could be only the latest of three major ISPs to offer gigabit services in that market.


And that likely will be the case for any successful new facilities-based independent Internet service providers, as well. That has been the case for cable TV operators, who now are the market leaders for high speed Internet access in the U.S. market, and likely is true for Google Fiber.

New gigabit Internet access operations, bui…
Read more