Memory and Voice Costs Declined 3 Orders of Magnitude Since 1993?

The retail cost of memory, like the retail cost of texting, calling or messaging, is a fundamental reality for nearly any business or industry where product creation distribution and consumption has significant "information" content. 

The price of a product (a gigabyte of storage) falls from $9,327 to $2.48, a decline of three orders of magnitude over two decades. 

Nothing that dramatic has occurred for most carrier-provided voice calls. From 1965 to 1985, for example, U.S. originated international call prices dropped by about half, or about one order of magnitude ($10 for a three-minute call to $5 for a three-minute call). 

Between 1993 and 2013, the cost of a mobile-initiated voice call in the U.S. market dropped about one order of magnitude. 

Of course, it is hard to compare carrier voice with the cost of Skype-to-Skype calls or instant messaging services, which might have "zero incremental cost." 

But it would not be hard to attribute a three ordes of magnitude effective price decline, if one used an attributed cost model, where some percentage of the cost of Internet access was used as the indicator of incremental cost of usage. 

 

Asia Pacific Mobile Devices Will Consume 2.2 GB per Device by 2019

In the Asia Pacific region, mobile data traffic will grow 10-fold from 2014 to 2019, a compound annual growth rate of 58 percent, according to the Cisco Mobile Visual Networking Index.

In 2014 there were 2.2 billion mobile users in 2014, representing 56 percent of Asia Pacific's population.

By 2019 there will be 2.8 billion mobile users representing 69 percent of Asia Pacific's population.

In Asia Pacific, mobile data traffic will reach an annual run rate of 114 Exabytes by 2019, up from 11.7 Exabytes in 2014, growing three times faster than Asia Pacific fixed IP traffic from 2014 to 2019.

In Asia Pacific, mobile data traffic will account for 17 percent of Asia Pacific fixed and mobile data traffic by 2019, up from four percent in 2014, while 53 percent of mobile connections will be “smart” connections by 2019, up from 24 percent in 2014.

In Asia Pacific, mobile traffic per mobile-connected end-user device will reach 2.2 GB per month by 2019, up from 273 megabytes per month in 2014, a compound annual growth rate of 51 percent.

Trends are similar in many countries. In Indonesia, there were 155.1 million mobile users in 2014, representing 61 percent of Indonesia's population. By 2019 73 percent of Indonesia’s population, some 195.3 million people will be using mobile devices, according to the Cisco Mobile Visual Networking Index.

Perhaps significantly, mobile data traffic will grow an order of magnitude (10 times)  from 2014 to 2019, a compound annual growth rate of 59 percent.

Mobile data traffic will account for 41 percent of Indonesian data traffic by 2019, up from 17 percent  in 2014.

By 2019, 46 percent of mobile connections will be “smart,” up from 14 percent in 2014.

In Indonesia, mobile traffic per mobile-connected end-user device will reach 1.7 GB per month by 2019, up from 185 megabytes per month in 2014, a CAGR of 55 percent.

Mobile Data Traffic Will Grow 10X from 2014 to 2019

In Indonesia, there were 155.1 million mobile users in 2014, representing 61 percent of Indonesia's population. By 2019 73 percent of Indonesia’s population, some 195.3 million people will be using mobile devices, according to the Cisco Mobile Visual Networking Index.

Perhaps significantly, mobile data traffic will grow an order of magnitude (10 times)  from 2014 to 2019, a compound annual growth rate of 59 percent.

Mobile data traffic will account for 41 percent of Indonesian data traffic by 2019, up from 17 percent  in 2014.

By 2019, 46 percent of mobile connections will be “smart,” up from 14 percent in 2014.

In Indonesia, mobile traffic per mobile-connected end-user device will reach 1.7 GB per month by 2019, up from 185 megabytes per month in 2014, a CAGR of 55 percent.

Will Google Project Loon Launch Internet Access Service in 2016?

Mesh networks might be a significant new factor in the Internet access business across much of the Global South.

By linking it “Project Loon” balloons together in a mesh network, where ground signals can be relayed directly between balloons, Google can now provide coverage for an entire region such as  West Africa using only about eight ground stations, according to Bloomberg.

In the past, Project Loon balloons used for delivering Internet access had to have a direct link to a mobile cell tower on the ground. Given Project Loon’s objective of providing service to “hard to reach areas” where such towers are in short supply, that was a constraint.

Now traffic can be relayed from balloon to balloon, allowing any single balloon to remain connected with any single cell tower 400 kilometers to 800 kilometers distant.

Other new contestants in the Internet access and transport business, including LeoSat, plan to use a mesh network as well, and for similar reasons, allowing a single uplink and downlink for traffic, no matter how far it has to travel across the face of the earth.

The new mesh configuration solves an existing problem, namely the fact that single balloons, communicating with single base stations, can provide only intermittent service.

Project Loon is conducting trials in Australia, Chile, New Zealand, Brazil, and other countries,

But it is conceivable Project Loon will be able to provide commercial service by the end of 2016, in Africa, Latin America, and Southeast Asia.

The other noteworthy angle is that use of cell towers makes some mobile service providers potential partners for Project Loon, in either a wholesale or retail capacity.

Zero Rating: Philippines and Pakistan Say "Yes," India Might Say "No"

The controversy over zero rating in India might also be affecting Google, in the sense of raising potential hostility neither Facebook nor Google wants to incur.

Google has a similar zero rating initiative called Google Free Zone that has been offered in a handful of countries like Kenya, Sri Lanka, Thailand and the Philippines.

Especially after positive results in the Philippines, it would have been logical for Google to introduce the concept in India.

But some reports suggest the controversy, which also has seen app providers in India pull back from participation in Internet.org, a zero rating program for India, is causing Google to wait, as well.

Separately, Telenor Pakistan has launched Internet.org in Pakistan, making available to Telenor Pakistan's customers free access to 17 basic online services including Accuweather, BBC, BabyCenter &MAMA, Malaria No More, UNICEF Facts for Life, Bing.com, ESPN Cricinfo, Mustakbil, ilmkidunya, Telenor News, Urdupoint Cooking, OLX, Facebook, Messenger, Wikipedia and Telenor WAP MobilePortal, using either the 2G or 3G platforms.

Consumers can use Internet.org aps directly from Internet.org or by downloading the Android app.

Internet.org is a Facebook-led initiative bringing together technology leaders, nonprofits and local communities with the goal of making internet access available and affordable to the two-thirds of the world that is not yet connected and bringing the same opportunities to everyone that the connected world has today.

Internet.org was first launched in July 2014 in Zambia and in less than a year it made valuable online services accessible without data charges for millions of people in Tanzania, Kenya, Colombia, Ghana, India, Philippines, Guatemala, Indonesia, Bangladesh, Malawi and now in Pakistan.

The M Hotel Singapore  |  10-11 September 2015

India possibly says no, Philippines and Pakistan say yes. What is the right way to view zero rating and sponsored data? What is the impact on rapidly growing Internet access? REGISTER NOW Spectrum Futures 2015 will examine zero rating, sponsored access and other ways of rapidly increasing Internet use by billions in South Asia and Southeast Asia. Spectrum Futures 2015 will bring together regulators and service providers from throughout the Asia-Pacific region to allow the exchange of ideas about key policies to help emerging markets like India, the Phillippines, Thailand, Indonesia, Cambodia and Myanmar connect to their populations to the Internet within the next decade. Join the conversation at Spectrum Futures 2015.

VISIT THE SPECTRUM FUTURES WEBSITE FOLLOW US ON

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Smart in Philippines Launching Sponsored Data Program

PLDT,through its mobile subsidiary Smart Communications, is launching a sponsored data service initially available to subscribers of Talk ‘N Text, the value brand of Smart, as well as Sun Cellular, a wireless unit of PLDT. Smart is the Philippines' leading wireless services provider with 54 million subscribers.

It is possible that the Philippines and India could be moving in opposite directions where it comes to zero rating and sponsored data. Philippines mobile operators already have proff that zero rating lifts use of mobile Internet.

In India, regulators might bar the practice, despite its apparent usefulness.

PLDT saw  mobile Internet revenues increase 19 percent year-over-year in the to P2.2 first quarter of 2015, based on free access programs.

“The uplift of our mobile Internet revenues underscores the success of our Free Internet offer,” said PLDT and Smart president and chief executive officer Napoleon L. Nazareno.

From September 2014 to February 2015, Smart ran a “Free Internet” promotion giving Smart, Sun Cellular, and Talk ‘N Text subscribers 30 MB of free data per day.

Over six million mobile phone subscribers of Smart, Sun, and Talk ‘N Text signed up for the promo, 70 percent of whom were first-time mobile Internet users.

Mobile data usage in the Smart network surged by 188 percent in the first quarter of 2015.

Subscribers now get 30 MB of free Internet access per day whenever they buy prepaid packages for voice and text messaging.

The sponsored data service is powered by Aquto, which supplies a platform for giving mobile consumers  free access to mobile data whose usage is sponsored by third-party app publishers, advertisers and marketers.  

PLDT is Aquto’s first customer in Asia and also is used by AT&T, Verizon Wireless and Vodafone.  

The M Hotel Singapore  |  10-11 September 2015

"Zero rating" and "sponsored data" have boosted Internet use in the Philippines. But some want to ban its use. Is that a good idea? REGISTER NOW Spectrum Futures 2015 will examine zero rating, sponsored data, business models and other accelerators or roadblocks standing in the way of connecting billions of new cusotmers to the Internet in 10 years. Spectrum Futures 2015will bring together regulators and service providers from throughout the Asia-Pacific region to allow the exchange of ideas about key policies to help emerging markets like India, the Phillipines, Thailand, Indonesia, Cambodia and Myanmar connect to their populations to the Internet within the next decade. Join the conversation at Spectrum Futures 2015.

VISIT THE SPECTRUM FUTURES WEBSITE FOLLOW US ON

914 Coolidge Street | Honolulu, HI 96826-3085 | +1.808.941.3789 | spectrumfutures.org |spectrumfutures@ptc.org

Would a "Level Playing Field" Save Voice?

Former Vodafone India CEO and Managing Director Martin Pieters says over-the-top apps could be “fatal,” noting that 85 percent of mobile operator revenue is earned from voice services at risk from OTT alternatives.

On the other hand, there is a solution: data and other revenue sources. That will happen, according to the Cisco Visual Networking Index.

IP traffic in India will grow 400 percent from 2014 to 2019, a compound annual growth of 33 percent.

More to the point, smartphones will account for 40 percent (651.4 million) of all networked devices in 2019, compared to 13 percent (139.8 million) in 2014, representing a 36 percent compound annual growth rate.

The point is that, in India, as elsewhere, mobile Internet services will replace voice revenues.

“We are not denying the new reality but we are just saying give us some more time to adjust,” he said.

That, in essence, is the framework for the current debate in India about whether OTT voice apps should be subject to the same rules as carrier voice faces.

However the matter is resolved, the basic issue is a common one in the communications business. Whenever incumbents have faced new competition, or a major new replacement industry, such regulatory conflicts have developed.

That now is true of TV broadcasting and linear TV, which will necessarily spar over rules related to online video. Broadcasters fought to make use of videotape recorders and cloud storage devices illegal.

Huge fights over the regulatory treatment of VoIP services were fought in the 1990s.

As difficult as it seems, Indian mobile operators will simply have to move faster to create new revenue streams from mobile data and other sources. That is the strategic direction happening everywhere in the mobile business.

It will not be a comfortable transition. But there is no other strategic choice. So far, the history of attempts to outlaw OTT apps, when consumers want to use them, has broken down, in the end.

But Pieters is right about one thing: where regulatory treatment of carrier voice and VoIP has been more equivalent, the transition has arguably been more gradual. But nothing has prevented the cost of using any form of voice gone any direction but down, anywhere.

Voice in India is not going to be saved by “leveling the regulatory playing field.”

The M Hotel Singapore  |  10-11 September 2015

In India, as Elsewhere, Only Mobile Internet Access Can Replace Lost Voice Revenue REGISTER NOW Getting billions of new consumers connected to the Internet is not just the right thing to do: it is necessary. Near term, mobile Internet revenue and high speed access generally is the only way service providers will replace lost voice revenue. Spectrum Futures 2015 will bring together regulators and service providers from throughout the Asia-Pacific region to allow the exchange of ideas about key policies to help emerging markets like India, the Phillipines, Thailand, Indonesia, Cambodia and Myanmar connect to their populations to the Internet within the next decade. Join the conversation at Spectrum Futures 2015.

VISIT THE SPECTRUM FUTURES WEBSITE FOLLOW US ON

914 Coolidge Street | Honolulu, HI 96826-3085 | +1.808.941.3789 | spectrumfutures.org |spectrumfutures@ptc.org

In Latin America, Facebook and Google Represent 60% of Mobile Traffic

You probably are not too surprised to find out that Netflix accounts for 36.5 percent of North American downstream traffic in the peak evening hours.

But you might be more surprised to learn that, In Latin American, just two companies--Facebook and Google--now represent more than 60 percent of total mobile traffic in the region, according to the Sandvine’s Global Internet Phenomena Report: Latin America & North America

“Network traffic in the Americas seems to be getting increasingly concentrated,” said Dave Caputo, CEO, Sandvine.

Cable TV Leads in Consumer Markets; How Long Before it Leads in Business Market?

Regulatory structures are hard to change, especially when they have been in place for a long time, even when markets have changed.

Consider the amount of time, money and effort devoted to all manner of rules applied only to some legacy telephone companies presumed to the carriers of last resort, with obligations to “serve everyone,” even when most contestants are not required to do so.

More shocking is when the actual leading providers in markets are unregulated, when the less dominant providers are so regulated.

And we soon will face an anomaly: the supposed “leaders” of the consumer communications market will clearly have lost their leadership, yet still be highly regulated, while the new leaders, continuing to grow faster, are lightly regulated and bear no “carrier of last resort” obligations.

Should the Charter Communications bid to acquire Time Warner Cable pass regulatory muster, and some of us would bet it will, more light will be shed on the relative roles of cable TV and telephone companies in the fixed network high speed access market, and also of market power generally.

The perhaps surprising result would be that In the fixed network Internet access segment, Comcast would be number one, Charter number two, AT&T third.

Think about that: the two largest legacy telcos would rank no better than third and fourth in the core service provided by the fixed network.

Verizon would rank fourth. CenturyLink would rank fifth, Cablevision Systems sixth and Frontier Communications seventh.

In the top five spots, cable TV companies would be number one and two providers, with even the largest U.S. telcos ranking third, fourth and fifth.

That would make cable TV operators the leaders for consumer services, though telcos would continue to lead in enterprise and business services.

Keep in mind, however, that business services are the big growth leaders for cable TV companies.

One way of illustrating the potential value of Comcast’s entry into the mobile business can be gleaned from looking at current revenue contributors, with their growth rates.

Of total 2014 Comcast revenue of $68.8 billion, $44.1 billion, or 64 percent, was generated by the cable communications business. Operating cash flow contribution from the cable communications segment was about six percent.

The consumer part of the cable communications business (triple play services) is growing primarily because of high speed access.

Video revenue for 2014 was up about one percent. Voice revenue was static at about 0.4 percent growth. High speed access was where the gains primarily were made, with growth of 9.5 percent.

Business services contribute about nine percent of cable communications segment volume, at about $4 billion in 2014.

But business services grew at a 22 percent rate in 2014. In fact, it might be correct to say the newest product segments in the cable communications segment (business services in general, and mid-market services in particular) have the highest growth rates.

Comcast estimates it has reached about 25 percent penetration of the small business addressable market, but only about five percent of the addressable mid-market opportunity, according to Neil Smit Comcast Cable president and CEO.

The point is that, having taken the lead in consumer services, cable TV operators are preparing to take the lead in the small and mid-sized business segment. And some might argue it is only a matter of time and experience before cable TV operators build on their success in the smaller business segment to move up to enterprise services.

  source: Telco2research.com

Net Neutrality is Industrial Policy

All communications regulatory frameworks--indeed all regulatory frameworks without exception--have direct business implications, in addition to any number of foreseeable and unforeseen indirect implications.

So you might ask what it means if “strong” network neutrality rules are instituted in the U.S. market, while Europe, which many would have predicted was more likely to do so, seems clearly to be backing away from the concept.

By “strong” we mean not simply the principle that lawful apps cannot be blocked but that all consumer applications are delivered “best effort,” with no packet prioritization permitted in the access network.

It can be suggested that network neutrality is no longer on the agenda in Europe for one simple reason: regulators understand there is a connection between network neutrality and capital investment, in the European setting.

Strongly desirous of high levels of new investment in communications networks--fixed and mobile--European regulators are willing to take a relaxed view of net neutrality in hopes of spurring higher investment levels.

And the reason higher investment levels are expected--when there are no net neutrality rules--is that a whole range of business models and revenue streams are available to service providers.

Such models might include various quality of service options, sponsored app usage, peak and off-peak bandwidth pricing or quality plans, or even app-specific plans based on bandwidth consumption.

European regulators are making an explicit choice to create incentives for faster and more robust capital investment in access networks, by allowing service providers to potentially create new revenue streams based on those investments.

U.S. regulators arguably are less concerned about investment, as multiple facilities-based providers compete across the fixed and mobile segments of the business, and many more third party entrants are getting into the new business of gigabit connections.

U.S. regulators, at some level, might also have concluded that innovation will come from the application side of the business, and that if app providers say network neutrality is required for high innovation, then even if access providers are disadvantaged, app providers should be favored.

That might be an indirect form of industrial policy, but presumably has the effect of aiding app firms to thrive. If one believed the health and financial growth of U.S.-based app firms was important, then network neutrality, aside from its immediate communications industry impact, is an indirect form of industrial policy.

European regulators might be said to do the same.