Mobile operators in India pay fees for use of spectrum. For spectrum acquired in the upcoming 2016 auctions, the spectrum usage charge will be three percent of of service provider adjusted gross revenue (AGR) on spectrum acquired in forthcoming auction in 700, 800, 900, 1800, 2100, 2300 and 2500 MHz band. Bharti Airtel, India’s largest telecom operator will pay 3.8 percent. Reliance Jio Infocomm will pay about 3.05 percent.
Those charges might be seen as a small part of a much larger problem: high capital investment and regulatory risk that makes the business model unsustainable.
And at least some now question whether there is truly enough potential revenue in at least some emerging markets to sustain robust investment in traditional mobile network bandwidth. An open question: whether a dramatic reduction in access network costs is feasible.
By the same token, one might question whether there is enough demand to support gigabit Internet access in many countries without key subsidies fr…
Low overhead, and low operating costs--rather than any special capital investment advantages-- appear to be a key element of the business plan for Tucows mobile and Internet access businesses.
But picking the right market might be even more important. A delay in Google Fiber construction plans in Portland, Ore. might provide an example. Where Google Fiber might once have hoped to be the only provider of gigabit Internet access in Portland, both major suppliers Comcast and CenturyLink already are moving to do so.
No matter how attractive an offer Google Fiber might supply, it could be only the latest of three major ISPs to offer gigabit services in that market.
And that likely will be the case for any successful new facilities-based independent Internet service providers, as well. That has been the case for cable TV operators, who now are the market leaders for high speed Internet access in the U.S. market, and likely is true for Google Fiber.
It is not clear where customer revenue or network cost now are the biggest obstacles to wider deployment of high-bandwidth or “gigabit” networks in either the United States or United Kingdom. A U.K. group representing competitive access providers claims fiber-to-home network costs now are substantially lower than in 2008, and faster fiber-to-premises investment would be made if some policy changes were made in the U.K. market. On the other hand, Google Fiber seems to have encountered not so much a network cost issue as a “lack of customers” (revenue) issue with its own fiber to home efforts. And cost reductions might have hit a plateau. To be sure, both capital investment and revenue are key components of the business model. But Google Fiber seems to have concluded that even lower FTTH costs (equipment, make ready, construction) are not sufficient if take rates are too low, as the stranded assets problem is so significant at low adoption rates. And Google Fiber is not the only major …