Tuesday, March 31, 2015

Messaging Apps are Really Sticky

“Stickiness” long has been among the important features of any app or site. “Stickiness” means new users stick around and become regular or habitual users, while regular users become engaged users that do not churn out for another rival app or experience.

By those measures, messaging apps are highly sticky, meaning new users tend to become regular users, and regular users are engaged enough that they are “loyal.”

Retention rates of messaging apps outperform the average of all apps, according to Flurry.

In fact, messaging app retention is 1.9 times better than the average app after one month and 5.6 times better than the average app after one year. After 30 days, some 36 percent of people continue to use a new app, compared to 68 percent of people using a new messaging app.

After six months, just 18 percent of people who first used a new app continue to use it. By comparison, about 62 percent of people who started using a messaging app continue to do so.

After a year, just 11 percent of people who tried a new app still use it, compared to 62 percent of people who tried a new messaging app a year ago.  

Messaging apps’ daily use is 4.7 times higher than the average app, Flurry says, while the average daily use of an app across all categories is 1.9 times.

Messaging apps are used, on average, almost nine times every day. Most other apps get used less than twice a day.

Verizon Dismisses Wi-Fi-Based Mobility. But Just Wait

It never is unusual when a major incumbent dismisses a new rival offering a lower-end product without all the features of the existing product. That happened when Skype and other VoIP products started appearing, or when instant messaging services arose.

Cable TV operator business communication services arguably were “not as good” as service supplied by the historic suppliers.

More than 45 years ago, MCI’s long distance service was not as good as AT&T’s service.

So it will come as no surprise that Verizon argues any Wi-Fi-only mobile service, or even a Wi-Fi with default to mobile service offered by cable operators might not “be as good” as Verizon’s arguably industry-leading service.

One present issue is the seamlessness of transitions between Wi-Fi networks and mobile networks. But it seems only a matter of time before that capability improves dramatically. Seamless use of any available network is, in fact, a design goal for coming fifth generation networks.

So it would not be surprising is a present weakness disappears over time, as it has in many other segments of the business, when new technology, networks and platforms are used to attack a legacy business.

India Mobile Prices are About to Rise

It is a truism that consumers (buyers) ultimately pay for all supplier costs of doing business. So it is that Indian mobile consumers are going to pay for all the spectrum recently purchased by the leading Indian mobile service providers.

That means retail prices are going to climb.

“We believe that telcos are likely to raise prices in response to high spectrum prices,” said Fitch Ratings. Also, “most telcos will report negative free cash flow in 2015 as they need to pay a quarter of the committed amount up front.”

At the same time, the spectrum acquisitions will put pressure on balance sheets and cash flow, limiting supplier ability to invest in networks and compete. That, in turn, means the Indian mobile market will consolidate from about 10 contestants to six in the wake of the recent spectrum auction, says Fitch Ratings.

India's spectrum auction raised US$17.7 billion, a sum that now will have to be raised or shifted from other uses, and will prove too heavy a burden for some contestants, Fitch believes.

The biggest four mobile companies--Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications--won 82 percent of the licenses. Bharti spent about US$4.7bn. Vodafone invested US$4.2 billion.

Idea Cellular committed US$4.9 billion, while Reliance spent  US$693 million.

As logical as it might be for governments to view spectrum auctions as a way to raise money, spectrum costs ultimately are paid for by consumers who buy mobile services.

As mobile operators seek to recover the sums spent on spectrum, they primarily will have to turn to retail buyers of mobile service. On the other hand, consolidation might help the surviving carriers raise prices.

One Way or the Other, U.S. Cable TV Market Changes

Bright House Networks might be called a consolation prize for Charter Communications if the Comcast bid to buy Time Warner Cable is approved by regulators. As structured, a Charter offer to buy Brighthouse is contingent on regulator acceptance of the Comcast offer.

Charter had made a bid of its own to buy Time Warner Cable, but its offer was topped by Comcast’s own offer. The $10 billion offer for 2.5 million subscribers values Bright House at about $4,000 per subscriber, a valuation metric not used in the broader telecom business.


U.S. cable TV operator rankings will change, in almost any conceivable set of decisions and deals. Comcast, which became the largest U.S. cable TV operator when it acquired the assets of AT&T Broadband, was trailed by Time Warner Cable as the clear number two cable company, ranked by number of subscribers.

If Comcast is successful in gobbling up Time Warner Cable, Charter gets Bright House, creating a new number-two provider for the first time in decades. For decades, Time Warner has been the second-biggest U.S. cable TV provider, behind either Tele-Communications Inc., which sold to AT&T, or AT&T Broadband itself, which then was purchased by Comcast.

Charter has held the number-three spot in the rankings, but with a wide gap between it and a Comcast that has added Time Warner Cable.

If the Comcast bid is scuttled, observers expect Charter to reemerge with a bid to buy Time Warner Cable. That would also create a new number-two provider, but far larger than a Charter that had purchased Bright House.

Monday, March 30, 2015

AT&T Launching Gigabit Service in Cupertino, Calif.

AT&T will launch its “GigaPower” 1-Gbps Internet access network in Cupertino, Calif. The symmetrical network is the first to be supplied by AT&T in California. AT&T also said it is considering other San Jose areas, including Campbell, Mountain View and San Jose, as candidate municipalities for the service, as well.

In April 2014, AT&T announced it was evaluating deployng GigaPower in as many as 100 communities.  AT&T already has deployed the service in neighborhoods in Austin, Dallas and Fort Worth, Texas.

GigaPower networks also are being deployed in Charlotte, Raleigh-Durham, Greensboro and Winston-Salem, N.C.; Houston and San Antonio, Texas;  Jacksonville and Miami, Fla.; Nashville, Tenn. and Overland Park, Kan.

CenturyLink, for its part, is building symmetrical gigabit service now to residential and business customers in select locations in 17 cities, serving residential and business customers in 11 cities, including Columbia, Mo., Denver, Jefferson City, Mo., Las Vegas, Minneapolis-St. Paul, Omaha, Orlando, Portland, Salt Lake City, Seattle and Platteville, Wisc.

CenturyLink is selling gigabit services to business customers in Albuquerque, N.M., Colorado Springs, Colo., Phoenix, Sioux Falls, S.D., Spokane, Wash. and Tucson, Ariz.

Google Fiber Files Paperwork to Support Operations in Colorado

Google Fiber has filed paperwork for Google Fiber to operate in Colorado, though Google Fiber says it has no immediate plans to construct a gigabit network in Denver. 

The filing only means Google Fiber could base equipment and employees in Colorado, some note.

CenturyLink might not be so sanguine, as that firm has ramped up gigabit Internet access offerings in a number of Colorado communities, including Denver

"Bandwidth Doesn't Matter Much"

There are lots of reasons why Internet access headline speed and actual end user experience vary so widely, and why, for a typical user, higher speeds (capacity) do not translate into enhanced experience.

In fact, some would argue that more bandwidth doesn't matter much.  

The amount of resource sharing can be affected by headline speed, as when multiple users share a single access connection, either at work, home or a public hotspot.  

Ofcom, the U.K. communications regulator, has found that, for any single user, speeds below 5 Mbps do affect end user experience, on the local access link. Speeds above 10 Mbps, however, have negligible or no impact on end user experience.

The caveat is that experience can benefit if a single connection is widely shared.

On the other hand, one might well argue that latency is the bigger problem for most users, accessing most applications, most of the time. That means better latency performance is an important objective for ISPs and app providers.  


The larger point is that headline speeds mostly are about marketing platforms, not end user experience, once per-user local connection capabilities reach 10 Mbps per user.

Saturday, March 28, 2015

Mobile Traffic Gets Asymmetrical

Oddly enough, for networks designed for symmetrical traffic, Internet traffic now drives bandwidth demand on mobile networks, and that traffic is highly asymmetrical, one reason access to Wi-Fi and other non-traditional networks has become so important.

Telef√≥nica O2’s customers, as an example, are using 60 percent more data than they were 12
months ago, and 600 percent more than at the end of 2010, according to Real Wireless.

The uplink:downlink ratio, on a mobile network supporting 3G or 4G, is now about 1:7, and much of the downstream traffic is bandwidth-intensive video.

Eventually, most believe, new Internet of Things sensor traffic will add other types of load, namely demand for smaller messages of lower bandwidth, but requiring low power performance and high reliability.

LTE was not optimized for this type of usage, so Wi-Fi and other specialized connections
will likely be important.

That is why spectrum sharing, and the move towards dynamic spectrum allocation, are cornerstones of Ofcom’s plan to open up more spectrum for mobile broadband. Currently, around 29 percent of spectrum is shared between public and private sector users, and increasing that percentage is vital to achieving the government goal of opening up 500 MHz of new sub-5 GHz frequencies.

Cloud-based services featuring constant streaming of data and content, rather than
more periodic application and data downloads, also are affecting thinking about the design of networks.

The GSMA believes that mobile cloud traffic will account for 70 percent of total by 2020, as compared to 35 percent in 2013.

While the dominant design of a mobile network will continue to be based on support for roughly symmetrical traffic, future requirements will be for support of asymmetrical traffic.

AT&T "Harvest" Strategy is Not New; DirecTV Buy Makes Sense

Some have questioned the wisdom of AT&T’s bid to acquire DirecTV, the argument being that the capital is better invested elsewhere, while the linear video business is declining.

AT&T thinks differently, and perhaps partly because of its historical legacy and business culture. Keep in mind that AT&T (the former SBC) grew primarily by acquisition, organic growth notwithstanding.

Also, AT&T contains many executives who remember vividly the former independent AT&T’s strategies related to a declining business (long distance calling). While attempting to create new replacement revenue streams, AT&T harvested its declining, but substantial long distance business.

That is what AT&T sees in linear video, a mature business that throws off enough cash flow to be interesting, as the legacy business slowly erodes. Yes, there are risks. If the business declines precipitously, the gambit will not play out so well.

But AT&T is betting it will see what it has seen in the past: a major legacy business declining at a predictable rate.

Precisely what happens to the linear video subscription business once over the top streaming alternatives proliferate is as yet uncertain. But it is hard to imagine aggregate revenue increasing, and a stretch to think revenue will be no worse, but no better, than at present.

The best scenario for AT&T is gradual revenue descent, at predictable rates.

And there is reason to believe new alternatives will have incremental impact. Though a full-blown transition to “every channel is available, a la carte” would be more damaging, that does not seem to be the general pattern for developing streaming services.

Instead, the general pattern is smaller packages of channels, not full a la carte sales.

The economics of full streaming access of a la carte channels, should that be the dominant model, arguably would be worse for the ecosystem than a linear model.

Consider the Sling TV package of 20 streaming channels. That “skinny” bundle includes ESPN.

In a full a la carte regime, where a channel such as ESPN could be purchased by itself, the implied cost, at a revenue neutral outcome, would be more than $36 a month, MoffettNathanson analysts have estimated.

Obviously, Sling TV is being sold for far less than the implied cost of ESPN alone, on a revenue-neutral basis.

The same problem is faced by other less-popular channels. Disney might cost more than $8 a month. but HGTV’s implied cost might cost only $1.42 a month.

Many observers believe fewer channels will be viable once on-demand and a la carte content viewing becomes easy and affordable. The reason is simply that the implied cost of a single channel is more than a reasonable consumer would pay.

So the context for AT&T’s bid to buy DirecTV is not that linear video is a growth business; it is not. The expectation is that DirecTV will throw off huge amounts of cash flow, despite a shrinking overall business, long enough to help AT&T make a transition of revenue sources.

Yes, there are risks. But AT&T has done it before.

Friday, March 27, 2015

Sling TV will Cannibalize Dish Network Linear Video, says CEO Charlie Ergen

A recurring phrase used by Dish Network CEO Charlie Ergen, when asked about his plans for monetizing Dish Network’s spectrum holdings, is that “we are not suicidal.” In other words, Dish Network does not intend to deploy or monetize those assets in ways that destroy shareholder value.


“Wireless is an oligopoly,” he noted recently. So that means “we see working with others, not AT&T or Verizon.” In other words, should Dish Network decide to create a retail or wholesale network, it is not likely to build its own facilities, but lease them.


“Optionality” is a concept Ergen has relied on it the past, as well. In other words, get spectrum and then see what can be done to monetize it. “Short term, we had to get the licenses,” Ergen said. “Then we need to get handset compatibility.”


“We will see where it goes from there,” he said. But Ergen also said he will wait to see what happens “with the two big mergers,” referring to Comcast’s bid to acquire Time Warner Cable, and AT&T’s effort to buy DirecTV.


When Ergen says “we don’t know for sure what we’re going to do,” that likely is quite accurate. “Our dream is to compete with AT&T and Verizon, but we’re not suicidal,” Ergen said. “Whatever we do, it is long term value enhancement.”


Ergen also was honest about another thing: “without our spectrum, we would have had to sell.” In other words, like DirecTV, Dish Network would have been in an untenable situation as a stand-alone satellite TV company.


But Ergen has been more willing to cannibalize his legacy revenue streams to remain a leader in the new business he sees emerging, much as Disney has been in the forefront of streaming, when other peers are more hesitant.

That’s a somewhat unusual strategy for any firm that is a leader in its space. And Ergen does believe even Sling TV will cannibalize Dish Network’s linear subscription business. But it is the future. In the past, Ergen has said that if he were starting in the video entertainment business today, he might not use satellite delivery.

25 Annoying Phrases to Avoid at Work

Here are 25 cliches or "annoying phrases" we all should try not to use. I suppose the phrases are annoying because they are almost value free throw aways. 

I've been working on avoiding "at the end of the day" for some months. But "touch base" and "ping me" are on my list.

At the end of the day
Back to the drawing board
Hit the ground running
Get the ball rolling
Low hanging fruit
Thrown under the bus
Think outside the box
Let's touch base
Get my manager's blessing
It's on my radar
Ping me
I don't have the bandwidth
No brainer
Par for the course
Bang for your buck
Synergy
Move the goal post
Apples to apples
Win-win
Circle back around
All hands on deck
Take this offline
Drill-down
Elephant in the room
On my plate

Johnson and Johnson, Google to Create Surgical Robotics System

Johnson and Johnson says Ethicon, a medical device company in the Johnson & Johnson family of companies, will work with Google to develop a surgical robotics platform.

Robotic-assisted surgery is a type of minimally invasive surgery that uses technology to give surgeons greater control, access and accuracy during the surgical procedure while benefitting patients by minimizing trauma and scarring, enabling accelerated post-surgical healing, Johnson and Johnson said.

Cable TV Unbundling Coming to Canada, in 2016

Cable TV channel unbundling--though not complete unbundling--is coming to the Canadian market. By the end of 2016, subscription TV customers in Canada will be able to buy many channels they want, one by one or in small packages, the Canadian Radio-Television and Communications Commission has ruled.

By the end of 2016, TV subscribers will have the option to add those networks to a “skinny” basic cable package that will cost no more than $25 a month. But consumers can buy a traditional bundle of channels if they choose.

Distributors must have the “skinny” basic service announced Thursday in place by March, 2016.

That tier must include all local and regional stations, public interest channels such as the Aboriginal Peoples Television Network (APTN), education and community channels, plus provincial legislature networks.

If distributors wish, they can add national over-the-air stations such as CTV, City and Global, or U.S. networks ABC, CBS, NBC, FOX and PBS. But they cannot raise the price beyond $25 a month.

By December of 2016, other channels must be available a la carte. But those channels also can be sold in a small bundle of perhaps five or 10 channels, which might be built by the viewer or the distributor.

It isn’t yet clear what the impact will be, as consumer can buy the traditional bundles or the skinny bundles, plus a la carte channels. At some point, the traditional bundle is cheaper, so many consumers will not switch.

One issue might be how many non-subscribers will find the skinny bundle--with or without a la carte channels--attractive. Another issue is the extent of downgrades to the skinny bundle.

Some of us would not expect significant changes in subscription rates. But to the extent there are changes in average revenue per account, the pressure has to be to the downside.

Thursday, March 26, 2015

AT&T Boosting High Speed Access to 75 Mbps, Prelude to Gigabit

AT&T has boosted consumer Internet access speeds to 75 Mbps in parts of Houston ; Baton Rouge, La; Grand Rapids, Michigan, Milwaukee, Wisconsin; Mobile, Alabama; New Orleans, Louisiana; and South Bend, Indiana.

Those speeds also are available in Augusta, Ga.; Charleston, S.C.; Cleveland, Columbus and Toledo, Ohio; El Paso, Texas; Fort Lauderdale and Miami, Fla.; Monterey and Sacramento, Calif.; and St. Louis, Mo.

Those efforts are part of AT&T’s broader effort to enhance speeds in markets across the country, including gigabit access networks in a number of metropolitan areas across the United States.

AT&T invested nearly $1.4 billion in Houston between 2012 through 2014, and about $1.5 billion in Los Angeles over the same period and $2 billion New Jersey, among investments across the United States.  

AT&T announced a major initiative in 2014 to expand the availability of U-verse with AT&T GigaPower in up to 25 markets nationwide, including Houston. The upgrades to 75 Mbps are a first step in that process.

Will History Repeat for Major New Satellite Constellations?

The assumption made by a number of would-be operators of brand-new satellite constellations designed to bring Internet access rapidly to users across the globe is that there is a sizable untapped market.

That is true today. How true the assumption might be in several years is the issue. That has been a market-opportunity killer in the past. An earlier generation of entrepreneurs argued new satellite constellations would supply huge unmet demand for mobile telephone use.

Instead, mobile operators moved dramatically to fill the demand before a couple of the ventures could launch, while Iridium, which did launch, went bankrupt.

That scenario is at least conceivable, once more.

Consider Thailand. Though details are yet unsettled, Thailand wants to launch a national high speed access program to reach literally all villages in Thailand, and provide affordable Internet access for all,  within about 18 months.

If implemented, the initiative could affect the addressable market for new providers, as well as market share of mobile and fixed service providers in rural areas of Thailand. Replicated more broadly across South Asia and Southeast Asia, the market opportunity for affordable Internet access provided by satellite could shrink dramatically.

It is unlikely mobile Internet service providers, for example, will do nothing, and wait for the demand to be filled by rival suppliers. In Thailand, the government itself has ambitious plans.

"Infrastructure  is the fundamental factor of the digital economy,” said Deputy Prime Minister MR Pridiyathorn Devakula.

The focus on digital-economy policy is touted as the key foundation of the country's economic development. To be sure, previous governments have made the same argument.

Thai Internet access adoption currently is about 26 percent of households.

Thailand also is preparing for an auction of spectrum to support fourth generation Long Term Evolution networks in Thailand.

Just how much spectrum will be made available is yet unclear.

NBTC Secretary-General Takorn Tantasit announced that a 50 MHz spectrum cap would be put in place for private sector bidders in Thailand's upcoming 4G auction and would take into account current spectrum holdings.

That move is intended to stimulate competition by ensuring that smaller bidders can acquire spectrum.

Two licenses of 12.5 MHz each in the 1800-MHz band will be available, as well as 20 MHz of 900 MHz spectrum, the bulk of which is currently being used by AIS under concession from state-owned TOT.

The Thai government also has asked the Information and Communication Technology Ministry to reclaim 100 MHz of unused 2.3 GHz spectrum from state-owned operator TOT for re-bidding as part of the upcoming 4G auctions.

At a meeting of the digital economy committee last week, deputy prime minister Pridiyathorn Devakula asked the National Broadcasting and Telecommunications Commission (NBTC) to look at including additional spectrum bands in the auction as well as the planned 900 MHz and 1.8 GHz bands.

The ICT minister has suggested that in return for giving up spectrum, TOT might be allowed to keep the 17.5 MHz of 900 MHz spectrum now used by market leader AIS.

At issue is whether some 2.6 GHz spectrum will be part of the auction. That seems unlikely, as use of 2.6 GHz for Long Term Evolution is not a global standard. Those frequencies were previously used by state-owned broadcaster MCOT.
Though Thailand is free to do so if it chooses, costs of handsets would be affected, as suppliers would have to create special Thai versions of their devices. Some other infrastructure implications, such as cell site planning, also would be affected.

National Broadcasting and Telecoms Commission (NBTC) the freedom to choose which spectrum bands it will auction and what format the sale will take. It has 900 MHz, 1800 MHz and 2.6GHz frequencies at its disposal. http://www.totaltele.com/view.aspx?ID=489415
The 1800 MHz spectrum the state has earmarked for 4G was previously used by True Move and AIS unit Digital Phone Co (DPC) for 2G services.
Some would argue the 50-MHz spectrum cap is specifically intended to help Dtac, a smaller provider in the market.

The larger point is that the market for consumer Internet access across South Asia and Southeast Asia seems to be entering a more-aggressive phase. ISPs will have to move faster to take advantage of the opportunity.

Global Average Internet Access Speeds Increase 20% in 4Q 2014

In the fourth quarter of 2014, the global average Internet connection speed increased 20 percent to 4.5 Mbps, while the global average peak connection speed increased 16 percent to 26.9 Mbps, according to Akamai.

In the Asia-Pacific region, South Korea had the highest average overall connection speeds at 22.2 Mbps, while Indonesia had the lowest at 1.9 Mbps.

Hong Kong had the highest average overall Internet peak connection speed at 87.7 Mbps, while Indonesia had the lowest at 13.4 Mbps.

In the fourth quarter of 2014, average mobile connection speeds ranged from a high of 16 Mbps in the United Kingdom to a low of 1 Mbps in New Caledonia in the fourth quarter of 2014. China had an average mobile speed of four; Hong Kong about 5.7 Mbps. India had average mobile speeds about 1 Mbps.

In the fourth quarter of 2014, China had an average mobile Internet access speed of about 4 Mbps; Hong Kong about 5.7 Mbps. India had average mobile speeds about 1 Mbps, according to Akamai.

Sri Lanka and Malaysia had average mobile speeds of about 2 Mbps, while Thailand average speeds were a bit lower, at about 1.8 Mbps. according to Akamai.

Wednesday, March 25, 2015

In 2019, 79% of U.K. Households Will Buy a Bundle

By the end of 2019, 79 percent of U.K. households will be buying a bundle with two or more services such as telephone, high speed access, subscription video or mobile service,  from the same provider, according to CCS Insight.

That pattern would not be unusual. In the U.K. market, some 60 percent of U.K. consumers buy a bundle of some sort, the “typical” bundle is a dual-play bundle of fixed network voice and high speed access, according to Ofcom, the U.K. communications regulator.

In 2014, about 43 percent of U.K. consumers purchased triple-play bundles.

U.S. Streaming Spending Flat Last 3 Years, But Change Coming?

Most would agree the subscription video business now is unstable, with major changes looming. On the other other hand, consumers tend to o...