LTE-U Small Cell Capital Investment $2 Billion in 2020

By the end of 2020, mobile operators will be investing nearly $2 billion on Long Term Evolution-Unlicensed small cells, Signals and Systems Research forecasts.

Assuming the forecast is directionally correct, the prediction might also suggest that concerns about fair access to Wi-Fi spectrum in the 5 GHz range have been resolved.

LTE-Unlicensed (LTE-U) technology uses unlicensed spectrum bands, bonded with LTE channels.

For example, Korean wireless carrier LG Uplus has demonstrated twice the speed of its commercial LTE-Advanced  service by combining 60 MHz of unlicensed 5.8 GHz spectrum with 20 MHz in the licensed LTE spectrum.

LTE-U shipments are expected to grow at an 80 percent compound annual growth rate between 2016 and 2020.

EC, European Parliament Agree on End to Mobile Roaming Fees

Though the rules still must be approved by nations within the European Union, the European Parliament has voted in favor of an end to mobile roaming fees across the EU in 2017. 

That move is likely to put pressure on mobile service provider revenues, even as it lowers retail costs for mobile customers.

The new rule also ban paid prioritization, but do seem to allow for zero rating, though officials say they will be watchful about that practice.

Prior to the agreement, European Union and European Parliament members had disagreed in some respects about the specific rules and the implementation dates.

Under the new agreement, roaming surcharges in the European Union will be abolished as of June 15, 2017.  The Parliament had wanted a 2016 effective date, while RU officials were willing to wait until 2018.

However, roaming providers will be able to apply “fair use” policies that limit the total amount of foaming usage.

Roaming fees will start to drop on April 30, 2016, when the current retail caps will be replaced by a maximum surcharge of €0.05 per minute for calls, €0.02 for SMSs and €0.05 per megabyte for data.

Under the EU-wide open internet rules, operators will have to treat all traffic equally when providing internet access services as well, though mobile operators may use reasonable traffic management measures.

Blocking or throttling of apps will be allowed only in a limited number of circumstances, for instance to counter a cyber-attacks and prevent traffic congestion.

Agreements on services requiring a specific level of quality will be allowed, but operators will have to ensure the general quality of internet access services

The new rules do not allow paid prioritization, the practice whereby app providers pay ISPs for packet acceleration, in exchange of payment.

At the same time, end-users and providers of Internet access “will continue being able to agree on different access speeds and data volumes as they do today,” the EU says. That means mobile operators can lawfully sell different-sized buckets of usage, or even speed tiers.

Notably, the new rules do not forbid managed services, such as entertainment video or carrier voice services.

The EU says it will continue to monitor zero rating practices, so one presumes zero rating might still be lawful.

“Zero rating does not block competing content and can promote a wider variety of offers for price-sensitive users, give them interesting deals, and encourage them to use digital services,” the European Commission says. “Regulatory authorities will therefore have to monitor and ensure compliance with the rules.”

European Parliament Agrees on Roaming Rules and June 15, 2017 Implementation

Though the rules still must be approved by nations within the European Union, the European Parliament has voted in favor of an end to mobile roaming fees across the EU in 2017.

Prior to the agreement, European Union and European Parliament members had disagreed in some respects about the specific rules and the implementation dates.

Under the new agreement, roaming surcharges in the European Union will be abolished as of June 15, 2017.  The Parliament had wanted a 2016 effective date, while RU officials were willing to wait until 2018.

However, roaming providers will be able to apply “fair use” policies that limit the total amount of foaming usage.

Roaming fees will start to drop on April 30, 2016, when the current retail caps will be replaced by a maximum surcharge of €0.05 per minute for calls, €0.02 for SMSs and €0.05 per megabyte for data.

Under the EU-wide open internet rules, operators will have to treat all traffic equally when providing internet access services as well, though mobile operators may use reasonable traffic management measures.

Blocking or throttling of apps will be allowed only in a limited number of circumstances, for instance to counter a cyber-attacks and prevent traffic congestion.

Agreements on services requiring a specific level of quality will be allowed, but operators will have to ensure the general quality of internet access services.

India Moves Closer to Banning Zero Rating

The Indian Department of Telecommunications, one report suggests, will recommend that zero rating (sponsored apps) should not be lawful in India.

The agency apparently will adopt a policy banning zero rating under network neutrality rules that ban all paid prioritization or app throttling.

The committee report still must be accepted, but some observers believe it will be adopted as policy.

Up to this point, Bharti Airtel had raised questions with its proposed and then withdrawn “Airtel Zero” program that would have allowed application providers to underwrite usage of their apps.

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.

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.

“Zero rated apps” such as provided by Internet.org  have proven effective ways of introducing non-Internet users to the benefits of using the Internet. Under the Internet.org program organized by Facebook, mobile customers can use apps without paying for a data plan.

But such policies are viewed as a violation of network neutrality principles by some.

So here we have an issue of “good things” in conflict. One is the notion that innovation is promoted when every app has an “equal chance” of being discovered and used (even if, in practice, that rarely is true, or possible).

The other good thing is the ability to provide people access to useful apps without those people having to pay. That is especially useful for encouraging non-users to sample the Internet, and useful for people who have not, in the past, purchased mobile Internet access plans.

And it appears one or the other of those good things will not be lawful, eventually.

Should such a framework remain in place for a long time, more new apps are going to move away from “Internet” delivery, though. Some apps work better when quality of service measures are available. And some apps might have life-threatening consequences if absolute low latency or bandwidth is unavailable.

Such apps will move away from the public Internet and into “walled gardens.” That might be useful, in some instances. Medical apps, driverless cars and other automated processes arguably would benefit from higher performance guarantees than can lawfully be provided using the consumer Internet.

Microsoft Gets Out of Mapping, Uber Gets In

It isn’t yet entirely clear what Uber will become, assume it remains an independent and successful company.

But Uber’s new spending on maps and mapping capabilities suggest it might not always be a simple  ride-sharing service.

Microsoft, which has been spending internally to develop and sustain its Bing maps service, will no longer collect mapping imagery, and has sold a data center and associated image collection assets to Uber.

As many as 100 engineers who worked on Bing maps might also wind up working for Uber as well.

Uber has committed to spend perhaps $10 million per year just to hire the engineers, assuming that each of them had a $100,000 salary.

Uber earlier had reportedly bid as much as $3 billion for Nokia’s “Here” mapping and navigation business.

In addition to ridesharing, Uber is thought to be angling for a new role in logistics and possibly other businesses as well, possibly including self-driving vehicles that could operate with several different business models.

Connected Car Market to Grow as Fast as 45% on an Annual Basis

By 2020, Business Insider Intelligence estimates that 75 percent of cars shipped globally will be built with the necessary hardware to connect to the internet. In other words, those vehicles will be connected cars, equipped with internet connections and software that allow people to stream music, look up movie times, be alerted of traffic and weather conditions, and even power driving-assistance services such as self-parking.

The overall connected-car market is growing at a five-year compound annual growth rate of 45 percent, Business Insider researchers say.

In 2020, that will mean 69 million connected vehicles, and an installed base of perhaps 220 million total connected cars on the road globally in 2020.

Perhaps 88 million of these vehicles will represent sales of connected services to vehicle-based systems, rather than tethering in the cars to user smartphones or other devices.

Embedded connections will win, Business Insider Intelligence argues, since those sorts of capabilities also allow auto companies to collect data on cars' performance and send updates and patches to cars remotely, avoiding recalls related to the car's software.

Separately, Research and Markets has forecast the connected car machine-to-machine services market in the United States will grow at a compound annual growth rate of 14 percent.

The firm also forecasts the connections (access) market for the U.S. connected car M2M will grow at a 28.5 percent compound annual growth rate between 2015 and 2019.

The connected car M2M services market includes driver assistance, safety and security, infotainment, vehicle management and on-drive management, for example.

Perhaps 14% of U.S. Homes Actually Have Usable Line-Powered Voice Service

Fewer than one percent of U.S. households make phone calls through traditional line powered landline service using only corded telephones, and also have no mobile service, a study by RVA has found.

About 58 percent of U.S. homes now subscribe to fixed network voice services.

Of those landline voice accounts, less than half subscribe to line-powered copper service.

More than half of those customers use a VoIP service that is interrupted by a local power outage.

So perhaps 28 percent of homes buy line-powered voice service, while 28 percent buy VoIP services that, by definition, do not work when Internet access is disrupted by a local power outage.

But only about half of the customers with line-powered service have a corded phone, according to the Fiber to the Home Council. That likely includes both VoIP and line-powered homes, though.

So perhaps 14 percent of U.S. homes might have line-powered phone service that works during a local power outage, if corded phones are attached. But perhaps only half of those homes actually use corded phones.

The fixed voice service abandonment rate also is quite high.  Some 17 percent of fixed network copper consumers said there were “very likely” or “somewhat likely” to drop the service over the next year.

The RVA study also suggests that 75 percent of consumers are likely to turn to their mobile devices in an emergency when the local power is out.

The key implications, in terms of continuity of service, are important. Even when the network itself is working, a loss of local electrical power will disable phone service for the overwhelming percentage of U.S. households subscribing to voice services that promise they work even when local electrical power is lost.

RVA  conducted 2,000 online interviews in February 2015.

The RVA study also illustrated the growth in use of mobile phones as the preferred way of using voice services. The percentage of households with mobile service stands at 89 percent and is growing, RVA says.

"Rent Rather than Own" is One Consequence of Network Shift; "Enable Not Own" is the Other

“Today, the largest taxi company in the country doesn’t own any vehicles, the largest overnight lodging company doesn't own any hotels, and the fastest growing of the top-10 retailers has no showrooms,” said Federal Communications Commission Chairman Tom Wheeler.

That is a good statement of the fundamental issue faced by traditional telecom service providers: businesses can exist and thrive, wringing value out of existing assets, without paying for or owning those assets.

Contrast that with the traditional interconnection framework, which is that “if you use my network, you compensate me for that use.”

In many ways, those comments made by Federal Communications Commission Chairman Tom Wheeler at the Brookings Institution illustrate the challenges traditional communications service providers face, in their business models.

With the advent of all-IP networks, the old managed services model breaks. Apps of almost any sort can be delivered over an open IP network, without permission. Granted, that creates the value of Internet access business.

But most of the new value, services, apps and business models develop “outside” the access network, and therefore outside the control of the access providers.

Likewise, the financial benefit also accrues outside the access business.

Simply, the ability to wring new value out of high speed access and the Internet arguably benefits app providers more than access providers, even if Internet access services now underpin all telecom, cable TV, mobile and satellite revenue models.

“What they do have is easy access to a broadband network, which enables them to assemble resources in new ways, present them to the public in new ways, and define an economic future that is task-based as opposed to the production-based economy of the pre-broadband era,” Wheeler said.

In other words, the “dumb pipe” broadband access network enables many other business models, applications and revenue streams. To be sure, that has been the architecture of Internet Protocol, by design.

Access is separated from application, and therefore app revenue from network access revenue. In many ways, that is a very good thing. It is a platform very well suited to innovation.

But the framework also ensures that most of the new value, economic and financial benefits will accrue to third parties. About the best any traditional service provider can do is operate efficiently in the access business and own--or have an equity interest in--some of the apps used over the network.

SK Telecom, Nokia Networks Embed SDN in 5G

SK Telecom and Nokia Networks announced they have successfully verified a co-developed core 5G technology, and have established their joint 5G research and development center in South Korea.

The companies have verified the performance of a user plane and control plane separation technique, which restructures core network architecture into a hybrid network model. That is another way of saying 5G will be build on software defined network principles.

Among other things, that means the ability to populate a network with many “dumber and cheaper” appliances, while retaining control on a centralized basis.

That is supposed to lead to lower overall capital costs, more comprehensive network control and greater ability to use any available transport or access mechanisms.

The separation of control and user planes  is behind the notion that 5G mobile networks will be able to mix and match access networks.

South Korea Wants to Destabilize its Mobile Service Provider Market

In a change of policy dating to 2010, the South Korean government plans to allow issuance of a fourth mobile service provider license. Between 2010 and 2014, applicants have asked for permission to enter the market, and been rebuffed.

The licensing of a fourth mobile operator, by increasing competition, is likely to increase consumer benefit almost as certainly as it leads to revenue and margin pressure for SK Telecom Co., KT Corp. and LG Uplus Corp.

At the moment, the South Korean mobile operator market has an oligopolistic and relatively stable structure, with SK Telecom having about 51 percent share, Korea Telecom about 32 percent and LG Uplus about 17 percent. The three providers collectively have 100 percent market share.

As a general rule, mobile markets with four or five leading contestants are “unstable,” compared to markets with just three leaders.

The mobile business arguably trends over time towards an oligopolistic structure with three leading providers .

As a rule, such markets will tend to be stable when market shares follow a general pattern of 40 percent, 30 percent, 20 percent market shares held by three contestants.

Some might argue that relative stability occurs because, at about that pattern, all contestants might reasonably believe that launching destabilizing attacks will not lead to a significant change in market share, while ensuring lower gross revenues and profit margins.

In a typical oligopoly pattern, 90 percent of total market share is held by the three providers.

South Korea’s market is even more concentrated than that.

By way of comparison, the U.S. and U.K. markets arguably are “unstable.”

Up to this point, the U.K. mobile market has featured EE and O2, each with 29 percent market share, followed by Vodafone with 23 percent share, trailed by Hutchison’s 3 at 12 percent. That could change.

Hutchison is trying to acquire O2, which would create a new market leader with 41 percent share, followed by EE at 29 percent and Vodafone at 23 percent. That is quite close to the theoretical 40-30-20 pattern.

The U.K.’s present four-provider structure is roughly similar to the U.S. mobile market, where AT&T and Verizon each tend to have 30 percent share, while Sprint has about 17 percent and T-Mobile US has about 14 percent share.

If one assumes a stable oligopoly market structure has the leading provider with about 40 percent share; the number-two supplier with about 30 percent share and the third player a share of about 20 percent, the U.K. market would, with a Hutchison acquisition of O2, be functionally stable.

The South Korean government’s move to license a fourth mobile provider, in principle, transforms a stable market into an unstable market, and that is the outcome the government apparently prefers.

Space X Rocket Launch Fails

Launching rockets remains dangerous. A Space Exploration rocket blew up on launch, two minutes and 14 seconds into its flight on June 28, 2015.  It was traveling about one kilometer per second at an altitude of 40 kilometers.

Eventually, as new constellations of low earth orbit satellites begin to happen, there is some risk of failure as well. The fact that dozens of LEO satellites can be launched from one rocket ensures the potential destruction of a large number of satellties from any single launch failure. 

Historically, a reasonable forecast might be a two percent failure rate for launches. Others might estimate failures at five percent. 

84% of U.S. Adults Use the Internet

Not everybody uses the Internet, but 84 percent of U.S. adults now do so, a study by the Pew Internet and American Life Project says.

As you would expect, there are some continuing adoption differences by segment.

Older adults have lagged behind younger adults in their adoption, but now a clear majority (58 percent of senior citizens uses the Internet.

As has been the pattern historically, people with college educations are more likely than those who do not have high school diplomas to use the Internet.

Likewise, people who live in households earning more than $75,000 are more likely to be Internet users than those living in households earning less than $30,000.

But all gaps have narrowed over the past 15 years, Pew says.

In fact, the biggest gains have come from the segments that historically have used the Internet less, namely older users, less-educated users and lower-income users.

Gaps in other areas also have narrowed. Today, 78 percent of blacks and 81 percent of Hispanics use the internet, compared to 85 percent of whites and 97 percent of English-speaking Asian Americans.

Those who live in rural areas still are less likely than those in the suburbs and urban areas to use the Internet. But rural Internet use rural Internet use has grown to 78 percent.