Android Support of RCS Gets Google Boost

Some of us might argue the biggest boost to next generation carrier messaging (Rich Communications Services) could well come from a commitment to support RCS by Google, across its Android platform.

Google says Jibe Mobile is joining Google to help us bring RCS to a global audience. Jibe is a leading provider of RCS services and they’ll continue helping carriers easily deploy RCS to their users.

Deploying RCS to create an even better messaging experience on Android will take time and collaboration throughout the wireless industry, says Mike Dodd, Android RCS

software engineer. “We’re excited to team up with mobile operators, device makers and the rest of the Android ecosystem to support RCS standards and help accelerate their deployment in a more consistent way.”

Carrier OTT VoIP Has Been a Modest Success, At Best

By 2020, mobile voice services sold as part of fourth generation Long Term Evolution services will generate about $100 billion in revenue, according to Juniper Research estimates. By that time, over the top voice services on 4G networks will generate about $10 billion, up from about $2 billion at present.

Most of that revenue--about $4.4 billion--will be earned in China and northeast Asia.

If those projections prove correct, we can reasonably conclude that mobile operator efforts to enter the OTT voice arena have been modest successes at best. By about 2018, mobile revenue globally will be about $816 billion, according to Spirent.

Carrier voice still will represent about 48 percent of total revenue at that point, or about $392 billion. OTT VoIP revenues globally might be about $25 billion by 2018, according to Spirent.

The larger trend is simply the diminution of voice revenues, down 30 percent to 50 percent in Western European markets since about 2010, for example. In fact, Juniper Research says, voice revenues peaked in 2005 in Japan, and by 2008 in most developed countries.

In many cases mobile carrier call volumes actually have grown, however, as traffic shifts off the fixed network to mobile and as competitive pressures force mobile operators to provide bigger voice usage allowances.

Most mobile VoIP services now are offered as a free or low cost service, only a small minority of OTT players had generated a significant revenues from the service.

The more successful service providers have indirect revenue models.

The point is that, so far, few service or app providers have been largely unable to create a significant  mobile VoIP revenue stream, and most of the successes rely on indirect monetization.

Verizon Launches Hum for Connected Vehicles

Verizon Telematics has launched hum, an aftermarket vehicle technology and subscription service providing roadside assistance, diagnostic features, parking tools and other features of connected cars.

Subscribers install hum using an onboard diagnostic (OBD) reader that is plugged into the vehicle’s OBD port, and a Bluetooth-enabled device that is clipped to the visor.

The monthly subscription also includes a smartphone app allowing subscribers to monitor their vehicle health, contact help, and manage maintenance needs, even when they are not behind the wheel.

Hum helps users dispatch advanced roadside assistance, alerts emergency personnel of a car’s location if a crash is detected, and assists authorities in locating a vehicle that has been reported stolen.

Two year subscription plans start at $14.99 per month plus taxes, fees and equipment for the first vehicle (including the hardware, valued at $120) with the option to add other vehicles for less.

New Front in Net Neutrality Wars?

Whatever the eventual implications widespread ad blocking might have on Internet app and content variety and openness, it is within the realm of possibility that new forms of net neutrality debates will emerge, with the focus on device suppliers rather than app providers or access providers, which up to this point have taken the brunt of criticism.

The reason is simply that Apple’s move to enable ad blocking by developers on iOS 9 devices creates the potential for gatekeeping on Apple’s part. That is not to say Apple would take such steps; only to note that it could.

The potential form of control would be an Apple-sponsored “fast running” version of iOS, with integrated ad blocking, or a standard version that allows apps to block ads if they choose to do so, or allows consumers to add their own ad blockers, but does not come automatically designed to run faster because ad blocking is more efficiently integrated into the operating system.

In a hypothetical case, Apple’s “fast browser” option would eliminate all ads, by default. The “slower” version would allow all ads by default, while allowing each app or each user the ability to add such features.

Of course, the “fast” version might use a subscription model, generating direct revenue for Apple.

As many have noted, that would lead to many apps and sites becoming less sustainable, or not sustainable at all. But such fast and slow operating systems might lead to yet another wave of debate and action around network neutrality.

If fast lanes or favored apps are violations, why not fast or slow browser operation?

Huge Chunks of the Internet Could Disappear, Eventually, Because of Ad Blocking

The Internet is a loosely-coupled ecosystem, it often is helpful to remember. Unlike a vertically-integrated business or industry, unless all key elements are aligned, the value chain does not work very well.

That technical architecture also is a business architecture, underpinning and limiting the possible major business models. So when a key element of the value chain shifts, there is impact across the ecosystem.

We seem to have arrived at point where the existing value chain is under stress from any number of forces and trends. Observers do not agree, but strong forms of network neutrality (including the notion that all bits must always be treated alike) and now ad blocking are emerging as issues.

To be sure, even strong forms of net neutrality do not fundamentally change today’s value chain and business models. But they could be quite important forces over the long term, ironically as ad blocking increases.

The fundamental issue is that advertising and quality of service are two methods by which lower cost or “no incremental charge” services and apps have been provided to end users and customers (both retail end user customers and business-to-business customers).

If existing revenue models get stressed, as ad blocking eventually will do, either new models will be discovered or much content, and many services, will disappear, as will many present and potential suppliers of content and services.

Most people nowadays probably understand that if an app or service is “free,” then the users (or, more precisely, their personal data) are the product.

Part of that cost comes from surreptitious tracking of your browsing habits by outfits that sell that information to advertisers.

The other cost comes from ads that are placed on webpages. The rise of ad blocking flows from that latter fact. One test showed an ad blocker improved page load time from 18 seconds to less than 4.5 seconds, when using a number of ad blockers.


As helpful as advertising is to defray the cost of free or low-cost apps and services, there now is growing end user experience impact.

Webpages load slowly. Videos pop up unannounced and – worse still – start to play without your consent, consuming bandwidth on accounts that typically have usage caps of some sort. That arguably is a bigger problem for mobile users than fixed users, but that is the issue: more use of the Internet comes on mobile devices.

Ooyala’s Q2 2015 Global Video Index showed that nearly half of all video plays and ad impressions for publishers occurred on mobile devices.

Ooyala said 44 percent of all video views in the quarter were on mobile devices, an increase of 844 percent since the second quarter of 2012, and a compound annual growth rate that exceeds 110 percent.

Ooyala also found that 49 percent of all ad impressions for publishers were on mobile devices during the quarter, a jump of some 11 percent from the previous quarter.

So it’s not surprising that use of ad-blocking software is growing. That might not be a good thing, beyond the benefits end users derive from the practice. If revenue models are premised on advertising, then the death of advertising is going to have severe repercussions on the rest of the ecosystem.

Improved user experience is one thing. It is hard to argue that is a bad thing. But business model collapse is probably not a great thing. Huge chunks of the ecosystem could disappear.

Jana Builds Sponsored Data Business

Let us be clear: Facebook does not participate in sponsored data or zero rating programs. Its Free Basics program does not involve any financial transfers from Facebook or its apps to Internet services providers, nor do ISPs pay anything to Facebook.

source: Jana

On the other hand, others might wish to do so. Jana, for example, has done so successfully, in multiple markets, offering airtime in exchange for taking some action desired by sponsors, such as trying an app.

Clients like LINE  pay Jana to get their apps in front of users who spend more than ten minutes a day on WhatsApp, for example.

The idea is not new. Entrepreneurs have tried to launch various ad-supported services for decades. Jana might be succeeding because of its ability to use billing systems more affordably than ever before, and because it can mine data better, at low cost.

Think of the issue with micropayments. Generally speaking, it has been difficult to sell products at cents when billing costs represent dollars of cost.

The same problem holds for rewards of usage that are relatively limited, when the cost of authorizing and then fulfilling a specific transaction is not very low.

Internet.org Rebrands "No Data Plan" Service as Free Basics

Internet.org has been rebranded as Free Basics, a mobile app and website which provides no-charge access to some 60 apps without the need for buying a mobile data plan. The new name obviously better describes what the service entails.

The organization also is helping third parties create new Wi-Fi services in rural areas of India. Called Express Wi-Fi, that initiative provides support for entrepreneurs who want to sell Wi-Fi access.

The initiative aims to enable Wi-Fi  at lower retail prices than has been possible before. Part of the effort might well entail stripping out bandwidth-intensive elements such as advertising and video.

Facebook has already set up such hotspots in partnership with Internet service providers in parts of Uttarakhand and Bangalore.

Mobile Web Audience Grew 42% Year over Year

Mobile media now is driving growth in digital media business, underscoring mobile’s role in just about every important trend in Internet access, content consumption and value of the Internet overall.

Mobile web audiences grew 42 percent over the past year, while use of mobile apps grew 21 percent, year over year, comScore says.

Fixed Network Business Case Remains Challenging

No single access platform ever is the “best” or “only” solution for a communications objective. Though mobile widely has become the key enabling platform in much of the world, there are times when satellite or fixed wireless is the only economically-viable option.

Likewise, despite the bandwidth advantages of a fiber-backed fixed network, the business case

is severe, in many cases.

By some estimates, fiber to the home or fiber to the curb has a positive business case in less than 50 percent of instances, and far less than that in the developing world, according to the International Telecommunications Union.

70% of People Globally Will Have Internet Access by 2020, ITU Says

Of an estimated 9.2 billion mobile subscriptions expected to be in service by 2020, 7.7 billion will have mobile Internet access, according to the International Telecommunications Union. At that point, about 70 percent of the world’s population will be using a smartphone.

If those forecasts are correct, then dire warnings about the global digital divide will be a sharply less important reality. We likely still have some ways to go in terms of supplied bandwidth, and there still will be coverage gaps.

In Europe, Higher Capex, Lower Revenue is a Trend

It might not be the case in every market, but in Europe, legacy carrier revenue is down, capital investment is up. Revenue gains are being made by attackers, including some that find they are earning more revenue on less capital investment.

That is not the case for the cable TV, mobile and fixed network service providers, all of whom are seeing increased capital spending. Cable is seeing a one percent increase in revenue, but telcos and mobile service providers are seeing negative four percent to five percent revenue trends.

Linear Video Subscriptions Drop 1%

A slow decrease in linear TV viewing, accompanied by an equally slow increase in mobile viewing are among the findings of the latest Nielsen Total Audience Report, measuring consumer use of various forms of media.

According to Nielsen, the number of homes with linear video subscriptions is down 1.2 percent to 100.4 million, over a one-year period. 

The number of broadband only homes rose 52 percent to 3.3 million from 2.2 million, over the same period.

We should not expect the slow changes to continue forever. At some point, an inflection point will be reached and the balance will tip much faster.

U.S. ISPs, Linear Video Providers Get Higher Satisfaction Ratings

It never has been easy for providers in some industries, including telecommunications or airlines, to earn high marks in consumer satisfaction surveys.

There might be some improvement on the part of fixed network communications providers though, according to the latest J.D. Power surveys. A separate study by the American Customer Satisfaction Index shows some Internet service providers are doing better, some worse.

But linear video subscription services and Internet service providers score at the bottom of industry rankings.

Overall satisfaction with television service providers has increased by 12 points to 723 in 2015 from 711 in 2014 (J.D. Power uses a zero to 1,000 scale).

Satisfaction with network performance and reliability improved 22 points from 2014. This follows a 17-point increase between 2014 and 2013.

The danger of low scores can be illustrated by a couple of facts. Lower potential churn rates are associated with scores of 900 or higher.

About 53 percent of highly-satisfied residential television customers (overall satisfaction scores of 900 or higher) say they “definitely will not” switch providers in the next 12 months.

When scores are below 550, 90 percent of respondents indicate they definitely plan to leave their current provider.

Scores in roughly the same range (700s) were earned by Internet access services as well.

Satisfaction with ISP network performance and reliability improved 16 points in 2014.

Mobile Internet Usage Now About 33% of All Usage

Globally, more people get access to the Internet using a personal computer or tablet, according to Global Web Index. 

But the percentage doing so using a mobile phone is growing steadily, and currently represents usage about half the level of PC or tablet access.

People 16 to 24 are the most-frequent mobile Internet users, spending 3.25 hours per day online on their smartphones, about 43 percent of their total internet time.

Mobile Ops Need to Maximize Customer Touch Points

Aside from the assertion that mobile service providers can do a better job of upselling products and services to customers who have interactions with the mobile websites, a new Allot Communications report indirectly points out some of the core challenges faced by mobile service providers.

The report points out that service provider websites are very rarely accessed on daily basis by subscribers.

Most of you would not find that a contentious observation. The most-used apps and sites are those of third party providers, and likely always will be. That is simply a reality for an application architecture that divorces apps from access.

Most people, most of the time, are going to go to third party apps and sites. But Allot also notes that such low engagement makes it harder for mobile operators to foster higher uptake of their

own applications and content.

On average it appears that only 0.7 percent of subscribers access their CSP website on a daily

basis. So service providers must do better at maximizing the value of touch points they do get, including subscriber use of the third party app and websites.

In fact, service providers that implement smart engagement solutions involving their own websites have been successful in increasing the subscriber engagement by about 70 percent on average, Allot argues.

The challenge of leveraging customer behavior across all mobile-accessed activity, though, points out an inescapable fact. The unique role of any access provider in the Internet or mobile ecosystem is, in fact, “access.”

All other value within the ecosystem successfully created by the access provider will be an uphill, difficult task that has access providers stepping out of the area where they have unique advantage in the ecosystem.

And some would argue that the access function itself is becoming more challenged, and “less unique,” as new competitors enter the market.

It is quite easy to argue that telcos and other access providers must “move up the stack,” or “add more value.” The challenge is that doing so on a scale basis requires moving out of the unique role within the ecosystem, to fight on territory arguably not within an access provider’s  core competence.

It can be done, to be sure. App providers are learning how to become access providers, for example. Someday, device suppliers might become access providers. As a matter of defense, access providers almost inevitably have to try and become app providers.

We can argue about which is harder: an access provider becoming an app provider, or an app provider becoming an access provider.

Both are likely to prove essential, long term. It isn’t exactly a complete vertical integration strategy, as might have been possible before the Internet era. But contenders can create integration strategies. That, after all, is what Google has sought when it began producing Nexus devices, attempting to showcase ideal integration of Google apps with Android hardware.

Apple has taken a different, and arguably more closed approach, to achieving the same end. The point is that even when an access provider cannot recapture its former dominance at integrated apps and access, each contestant can aim for some forms of integration.

It generally is not easy, but the effort is no less vital. It is hard to see a prosperous future for most access providers if that is all they do.

Study Finds Public Wi-Fi Assets are Wasting Capacity

XCellAir conducted an analysis of 250 live Wi-Fi access points around its offices in Montreal, Canada and found that 92 percent of access points do not adjust their operating frequency, no matter how badly performance is degraded by interference.

It also found that on average, two channels worth of bandwidth is unused at any given time, despite congestion and interference. Each channel equates to 50 Mbps of idle bandwidth totalling 100 Mbps unused.

The study, conducted in partnership with independent telecoms analyst Real Wireless, shows that poor management of Wi-Fi assets severely limits such assets' usefulness in dense urban environments.

To quantify the impairment, Real Wireless modeled the impact on a capacity-constrained mobile service provider, over a five-year period.

In New York city, for example, the net present contribution of operational savings and new service revenues was estimated to be $374 million over five years. Some of that value came in the form of avoided mobile network upgrades and investments, worth perhaps $71 million.

New services made possible by efficient use of Wi-Fi assets represented $303 million in value. Quality of experience and lower capacity costs presumably could be used to add price-sensitive users, the analysts assumed.

When scaled to the top ten financial centers across the globe, the opportunity for all operators equates to $17.9 billion over five years. Cities considered include New York, London, Tokyo, Singapore, Hong Kong, Shanghai, Paris, Frankfurt, Beijing and Chicago.

Much of the revenue lift comes from the ability to add price-sensitive new customers, as a result of lower investments in core network facilities. That obviously will make more sense for some operators than others.

Still, even if one does not fully agree with the full extent of potential benefits, virtually nobody would contest the general notion that a dense pubic or carrier Wi-Fi network has significant benefits in terms of quality of experience or relieving mobile network congestion.

Telco Fundamental Strategic imperatives Remain, Tactical Focus Changes Over 5 Years

“Telcos are an endangered species; their traditional business model has come undone, and many operators face a downward revenue/earnings/investment spiral,” Forrester Research analysts argued in 2011.

Revenue shrinkage in triple digit billions was predicted by analysts at Telco 2.0, over a span of perhaps a decade, beginning about 2006.

Whether you agree or disagree with the characterization, not much has fundamentally changed, though the specific tactical recommendations might be different.

Now, as then, competition from alternative connectivity providers, IT services firms, and over-the-top providers, all enabled by open regulatory environments, is a fundamental reality.

Some of the 2011 recommendations still make sense. Service providers need to “adjust” cost structures from higher to lower. But where earlier efforts focused on headcount or other relatively obvious operating areas, attention now is turning to methods of revamping core network operations and capital spending.

That is why one hears so much about network functions virtualization or software defined networks. 

Some of the issues are largely resolved, or will soon be solved. The transition from legacy to Internet Protocol environments continues. But few executives spend much time talking about that change, since the path is largely understood and underway.

Finding new, sustainable revenue opportunities remains as crucial now as it was in 2011. But the opportunities are not necessarily the same.

Forrester emphasized “wholesale and cloud computing” as new revenue streams in 2011. Service providers largely already have responded, where possible.

Telcos have moved into video entertainment, while some are investing in various digital enabling platforms and services, ranging from mobile payments to mobile advertising.

The attention now is on the next generation of services, or perhaps next several generations, based on Internet of Things and services not sold directly to end users.

That is why fifth generation networks, and specialied narrowband IoT networks, now loom large.

LTE Now Generally Faster than Wi-Fi

Smartphone users are on average connecting to fourth generation Long Term Evolution  networks at much faster speeds than Wi-Fi, according to Open Signal, a circumstance that might surprise you.

In the past, users connected to Wi-Fi because it provided a faster connection than the mobile network. That might still happen, but, on average, LTE connections now are faster than Wi-Fi.

Open Signal points out that there is “tremendous variance” in Wi-Fi connection quality around the world.

In North America or East Asia, a consumer might see 50 Mbps or better connections on their home or office networks, but then find their internet connection timing out at a local coffee shop.

There’s also a lot of variance in Wi-Fi speeds between countries, with some of the fastest Wi-Fi  speeds in Europe.

Of course, network loading and backhaul availability and cost are key parts of the picture.

Some of the earliest adopters of LTE -- like the U.S., Japan, Sweden and Germany -- are starting to fall behind in terms of data performance. In part, these older networks are suffering from their own success, Open Signal says.

In the U.S., for instance, LTE’s introduction in 2010 resulted in a huge base of LTE subscribers in the country today. Those subscribers are all competing for the same network resources, slowing down average speeds.

In comparison, newer networks in South America and Europe are more lightly loaded. But the U.S. has also failed to keep up with the rest world in both spectrum and technology, Open Signal argues.  

Who Leads U.S. Fixed Network Markets? Some Clearly Say "Cable TV"

Definitions matter. For example, Access Platforms, in an analysis of “overbuilders” in San Antonio, Texas, uses a definition of high speed access provider market I had been unaware of, and illustrates the fundamental nature of the market.

Access Platforms, noting that cable TV service providers have 62 percent high speed access market share in San Antonio, considers AT&T an overbuilder.

My traditional understanding of an overbuilder is that it is a third or ancillary provider of triple play services in a market, in addition to the presumed incumbents, a cable TV operator and the local telco.

Access Platforms defines overbuilder as “Companies (independent telco and municipalities) that build additional systems over existing cable systems in order to provide a competitive service in a market.”

That might apply to virtually any fixed network service--video, Internet access or voice--normally sold by a triple play services provider.

Access Platforms considers all providers other than the cable TV operator as overbuilders, such as Google Fiber, a fixed wireless or perhaps satellite internet access service. Eventually, TV white spaces and other networks also will be added to the competition in some locales.

So here’s the key assumption: where it comes to high speed Internet access, according to Access Platforms, it is the cable TV operator that is the incumbent, and everyone else is a challenger.

The fact that a telco operates in region, and historically has been one of the two major suppliers of Internet access, does not appear to matter.

There is cable, which is the incumbent, and then there is everybody else. Looking at all of the constituent services, for example, satellite has significant share, based on its video services, with about 29 percent market share. Cable has 34 percent, while telcos have 21 percent, while other overbuilders have perhaps 15 percent share.

While I would not use such a definition, the implications are huge. Cable TV is considered the incumbent to beat. Everybody else is an overbuilder.

If you wonder why AT&T or Verizon face huge issues related to their fixed network businesses, that framework explains why. Cable is the new leader.