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Showing posts from February, 2016

2015 Inflection Point in U.S. Fixed Network Business?

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It looks as though 2015 could have been an inflection point, where it comes to installed base and market share in the U.S. fixed network high speed Internet access business. Cable TV operators have had the largest market share, and have been steadily taking market share, since at least 2008 or so.
A logical question is “why” the shift is happening, and the logical answers are several. Cable TV has simply been able to upgrade its speeds faster than telcos have been able to do, in large part because the DOCSIS platform largely allows upgrades without full rebuild of the access network, where telcos generally have to rebuild plant (fiber deeper into neighborhoods or all the way to the customer premises) to match cable TV speeds.
The corollary question might be “why” most telcos have not invested more heavily into next generation access infrastructure.
That is a more complicated question. In some cases, requisite capital is not obtainable. In most cases, the business model is questionable…

10 Gbps in Singapore

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Singapore's M1 has joined SingTel in offering 10 Gbps residential high speed access service, illustrating the difference in “developed” and “developing” Asia, where it comes to high speed access.
M1 is offering the service for S$189 (US$124) per month on a 24-month contract. Residential service at 1 Gbps costs $39 (US$26).
SingTel launched 10 Gbps residential Internet access Internet accessservices earlier in February 2016, at the same price now offered by M1.
China is expected to introduce 10 Gbps service in 2018.
source: We Are Social

Revenue-Per-Megabyte "Always" Drops; Sometimes Faster than Others

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No market ever grows to the sky, financial analysts sometimes quip, while maturing markets often see competitive pressures that lead to price cuts and thinner profit margins.
The reason is simple enough: in a mature market, new accounts generally must be taken from other existing providers. These days, saturation and new competition can come rather suddenly.
As important as mobile services have been over the past couple of decades as the single most-important driver of service provider revenue growth, big changes are happening. Globally, subscriber growth has flattened.
In many markets, the immediate revenue growth opportunity is incremental data services revenue. Beyond that, similar big new sources remain to be discovered, which is why there is so much attention paid to the Internet of Things.
If sales to humans are saturated, then the next big wave of growth might well come from sales to enterprises who require huge sensor and control networks, or sell retail mass market products u…

Communications Policy is Becoming Disconnected from Reality

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High speed access markets in the United Kingdom and United States show a pattern that should fundamentally challenge the prevailing communications policy framework. Simply put, lightly-regulated cable TV operators are emerging as the dominant suppliers of consumer triple-play services.
Telcos not only are losing installed base and market share, but not are facing additional pressure from cable TV suppliers in small business, mid-sized and increasingly enterprise services as well.
Soon, cable TV will enter the mobile business as well. At every turn, some telco advocates have suggested cable would not succeed. Those predictions have been wrong, every time.
Now we also see lightly-regulated Google Fiber, independent ISPs and municipalities creating new alternatives as well.
That is going to cause bigger and bigger problems for regulators and policymakers over time, as policy becomes ever more disconnected from commercial reality.
Increasingly, not only is the “telecom is a monopoly” framewo…

Ofcom Decides Not to Fully Separate Openreach from BT

The U.K. regulator, Ofcom, has concluded, after a review of U.K. communications structure, that it is not best to fully separate fully separate BT from Openreach, the wholesale services division of BT, as a way of promoting innovation and investment in U.K. fixed network communications.


In Australia, New Zealand and Singapore, full separation exists as the current framework for access services.

Inevitably, disagreement will continue, as the present structure might not satisfy competitors or regulators  over the long term. Wherever wholesale access is provided, there are never-ending disagreements between retail buyers and facilities owners about the appropriate prices and policies for allowing such access.

A number of other approaches to robust  wholesale access already have been taken by a number of other countries, though without embracing the full “divest the network” approach taken by Australia, New Zealand and Singapore.

In Belgium, Germany, the Netherlands, Sweden and Spain, whol…

Sonic Begins Marketing of Gigabit Internet Access in Parts of San Francisco

Independent Internet service provider Sonic, which operates in Northern California, says it has launched gigabit Internet access service in the Sunset and Richmond districts of San Francisco. One assumes that service is provided over Sonic’s owned fiber to home facilities.
Elsewhere in San Francisco, Sonic also is selling voice and Internet access that appears use AT&T’s fiber to neighborhood network (Sonic appears to be a wholesale ISP customer of AT&T).
Sonic’s Fusion Fiber service costs just $40 a month and includes “unlimited” domestic calling as well as unlimited international calling to 66 countries.
Sonic has previously delivered Gigabit Fiber in Brentwood and Sebastopol, Calif., plus business parks in Santa Rosa, Petaluma and Windsor, Calif.
At such prices, Sonic definitely undercuts the prices Comcast (which serves San Francisco) is likely to offer when it launches its own gigabit Internet access service in San Francisco, sometime later in 2016. In other markets, such se…

U.K., U.S. Consumers Like Mobile Service More than Fixed Internet, Video or Voice

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U.K. consumer complaints suggest that, overall, people are much happier with mobile service than they are with fixed network service.
U.K. consumers are roughly twice as unhappy with fixed network service disruptions than they are unhappy with mobile service disruptions.
They are nearly that unhappy with fixed network service quality, compared to mobile service quality.
Customer satisfaction trends are similar in the U.S. market, where satisfaction with Internet access and video entertainment service (and fixed voice service) is lower than satisfaction with mobile service.
source: ACSI
source: ACSI
source: ACSI
source: Ofcom

Internet Access is Not a Monopoly; Why Regulate It That Way?

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The Internet ecosystem tends to move faster than government regulations are able to keep up with.
In the United Kingdom, the goal for some years has been to provide ubiquitous 30 Mbps Internet access. Under the current definition, “super fast” access is said to be 30 megabits per second.
But U.K. cable TV networks, which reach about half of U.K. households, are able to provide Internet access at speeds up to 100 megabits per second, on their own networks.
One still finds data collection on “fiber to home” capabilities, for example. But that simply ignores all the other ways ISPs already are providing service between 100 Mbps and 1 Gbps, on alternate commercial networks.
Some might argue there is no alternative but reliance on a single network. But that is not the case for a growing number of countries, where two or, in some cases, three fixed high speed access networks are commercially available.
Telecommunications is no longer a natural monopoly. Neither, it appears, is high speed Int…

Frontier Communications to Launch Linear Video in 40 Markets

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Frontier Communications plans to launch linear video service to more than 40 markets, representing approximately three million households, over the next three to four-years.
Once complete, video service will be available to about 50 percent of the 8.5 million households in Frontier's existing footprint. Frontier also will be adding video subscribers as the result of its acquisition of Verizon properties in California, Texas and Florida.
In total, Frontier will pass about seven million homes with video-capable networks.
Some might think Frontier Communications is making a mistake, investing in linear video at a time when the market actually is shrinking. The same sort of argument was made about AT&T’s acquisition of DirecTV. But actions by other actors, such as Google Fiber, show that the business case for a fiber to home network is dramatically improved when an ISP can sell both high speed access and entertainment video. In other words, selling two or three services boosts avera…

Maybe Service Providers Need to Follow Banks

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It is too bad that service providers have to send bills to consumers every month. Such processes, and the questions they generate, are one reason customer service chores sometimes are onerous, and why consumer ill will is garnered.
Some banks have found that mobile phone transactions can offload as much as 90 percent of the transactions that once required a JPMorgan teller.
In 2015, about 65 percent of new JPMorgan customers used mobile capabilities within six months of opening an account, up from 53 percent.
Customers say they are happier, and JPMorgan cuts its operating costs and churn.
JPMorgan estimates that each teller transaction costs $2 to $3, compared with 10 cents for the same service using an automated teller machine and just a few cents via a mobile device.
Mobile devices are helping with customer retention as well.
People who use their bank's smartphone app frequently are 40 percnet less likely to switch banks than those who do so only rarely, according to a study JPMorg…

Top U.S. Linear Video Providers Lose Subs in 2015 for First Time Since 2006

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For the first time since Verizon and AT&T launched their TV services in 2006, the six largest U.S. linear video subscription providers lost subscribers for a full year, despite gains in the seasonally-strong fourth quarter, says Ooyala.
There possibly should be an asterisk, however. Some of those firms now include streaming accounts in their subscriber totals. That is akin to a mobile operator including prepaid accounts as well as postpaid accounts in the subscriber totals, mixing higher revenue, higher value net adds with lower value, lower revenue gains.
In the fourth quarter of 2015, DirecTV, AT&T, Time Warner, Comcast, Dish Network and Verizon gained a net 125,000 subscribers.
DirecTV (owned by AT&T) gained 214,000 subscribers in the U.S. market, but AT&T’s  U-verse also lost 240,000 for the quarter.
source: Business Insider

It was AT&T’s third consecutive quarter losing accounts, the only three quarters AT&T has failed to gain linear video accounts since 2006…