Showing posts from November, 2016

Altice to Become Frist Major U.S. Cable TV Operator to Abandon HFC in Favor of FTTH

In a major break with other leading U.S cable TV providers across the United States, Altice USA, the fourth largest U.S. cable TV company, announced plans to switch to a new fiber-to-the-home Network, appears ready to use proprietary technologies it has developed on its own, and also appears to believe that “energy cost savings” will be substantial enough to allow construction of the FTTH network “within the existing capital budget.”
Any one of those actions--abandoning the hybrid fiber coax platform; using its own proprietary platform; or building a brand new network without boosting its capital budget--would be unusual steps. Taking all three is mind-boggling.
Of the three decisions, it is the clear break with HFC that stands out most starkly. The cable TV industry has insisted for decades that HFC is an extensible platform capable of supporting all future requirements. And the industry has argued for many decades that its platform was, in fact, superior to FTTH, in terms of its busine…

India Mobile, Voice, Fixed Accounts Decline in July; Internet Access Grows

Though the trend is likely caused mostly by short-term developments, fixed network, mobile and voice accounts declined in India from July 2016 to August 2016, according to the Telecom Regulatory Authority of India. Many speculate that the currency retirement program now underway in India, retiring Rs 500 and Rs1000 notes, has many consumers focused on trading in their old currency, rather than buying new mobile phones and service, at least for the moment.  
That could change over the next several reporting periods, however, as Reliance Jio entered the mobile market in early September 2016, gaining 50 million new accounts. So the issue is what percentage of those net new accounts were taken from other suppliers (which would not affect overall net subscriber growth) and what percentage represents net new mobile accounts (people buying mobile service and not switching from another provider).
Internet access accounts (broadband) grew from 166.96 Million at the end of July to 171.71 million…

Did AT&T Divestiture and Telecom Act of 1996 Both Fail?

“Unintended consequences” might represent the more-significant of outcomes from the last two major transformations of U.S. telecom law. One might argue that happened because, despite best efforts, U.S. telecommunications law was backward-looking, something analogous to generals planning to “fight the last war.”
In retrospect, the biggest issue was the framing of problems. The breakup of the AT&T system--a historical anomaly, as it turned out--was designed to “solve” the problem of high long distance prices. The Telecommunications Act of 1996 was intended to “solve” the problem of high prices for local telecommunications services.
The 1983 divestiture completely missed the coming role of mobile services. In fact, mobile arguably had more to do with falling long distance prices than did competition among fixed network service providers.
A good argument can be made that the last two big revamps of U.S. telecommunications law were similar in one striking way: they were based on false o…

Will 2017 be the Year the Fixed Network Business Model Crashes?

Will 2017 be the year the global fixed network telecom business goes negative, or upside down, on a cash basis?
Yes, say researchers at the Economist Intelligence Unit. Their 2017 telecom forecast predicts that, by the end of 2017, the global fixed networks business will go negative. In other words, annual revenues will be less than investment required to operate the business.
That necessarily will start--or accelerate--a huge process of rethinking the role, scale and scope of fixed networks. Over the long term, fixed networks cannot be operated at a permanent loss, much less justify continual investment in higher speeds and capabilities, as revenue drops.
That calls into question not only the future role of a fixed network, its role and customers, but also the platform, marketing and operating costs required to sustain the business.
In simple terms, revenue no longer will cover fixed or variable costs in the business. That is a big big deal.

source: The Economist

Telecom Infra Project Adds Operations Focus

Bell Canada, du (EITC), NBN, Orange, Telia, Telstra, Accenture, Amdocs, Canonical, Hewlett Packard Enterprise, and Toyota InfoTechnology Center have joined the open-source Telecom Infra Project that aims to create global, open source network platforms from access to core networks.
TIP also now is expanding its work on operating processes. The “People and Process” project will collect and codify best practices that can improve operating metrics. The group will be co-chaired by Bell Canada and Facebook. Members of this new group include: Accenture, Agilitrix, Bell Canada, Deloitte, Hewlett Packard Enterprise, NBN, SK Telecom, Tata Communications, Telefonica, and Telstra.

Reliance Jio--After 3 Months--Already is Largest Mobile Data Supplier in India

Have you ever seen market structure in any telecom market transformed in three months? That appears to have happened in India, where Reliance Jio Infocomm, the latest and biggest new entrant in India’s mobile business, has acquired more than 50 million new mobile data subscribers since commercial services were launched early in September 2016.
For those of you keeping count, that is about 1,000 new customers a minute over a three-month period.
Looking only at mobile data accounts--not total accounts--Reliance Jio already has become India‘s top carrier by mobile broadband user base, surpassing Bharti Airtel. That rapid rate of account growth already has altered the Indian mobile market structure, as Reliance Jio now is the biggest provider in the market.
Top Five Wireless Broadband Service providers, January 2016: 1.   Bharti Airtel (31.02 million) 2.   Vodafone (26.23 million) 3.   Idea Cellular (22.04 million) 4.   Reliance Communications (15.37 million) 5.   BSNL (10.26 million)
Top Five …

Ofcom Decides Against Openreach Structural Separation

If Openreach becomes a wholly-owned affiliate of BT, but with its own board of directors, will that increase competition in the U.K. internet access business?
Ofcom, the U.K. communications regulator, apparently believes that is the preferable alternative to complete structural separation of Openreach. All other policy concerns aside, Ofcom arguably wants to avoid years of legal wrangling and substantial costs that would be triggered by what would be a divesting of BT instructure from its retail role.
Many will disagree. For many observers and industry participants, the structural separation of Openreach from BT has been deemed necessary. Ofcom, the U.K. communications regulator, has been looking at the broader question of broadband policy, as well as the specific question of the structure of Openreach and its ownership by BT.
Rivals of BT were chief among those believing structural separation was necessary to protect and promote healthy competition in the internet access market. Virgi…

AT&T Announces Pricing for New Streaming Services

In addition to DirecTV Now, AT&T’s new streaming video service, AT&T also has announced price points for two other services, FreeVIEW and Fullscreen, both of which can be used with no data plan usage for AT&T mobile service customers.
Fullscreen offers more than 1,500 hours of ad-free premium scripted and unscripted original series, TV shows and films licensed from studio partners.
Fullscreen can be used at no charge for one year, for all AT&T mobile plans including a messaging service, and without incurring data usage charges. Regular pricing after the introductory year is $5.99 a month.
Fullscreen can be used anytime, anywhere in the United States, at, on iPhone, iPad, select Android Phones, Chromecast and Apple TV devices.
FreeVIEW also provides unique and exclusive content free of charge, including a sampling of on-demand content from AUDIENCE Network, Otter Media properties and other channels on DirecTV Now, using either the DirecTV Now app or at …

Demand for Fixed Network Voice Lines is Lower than Many Think

Consumer demand for fixed network voice connections arguably is substantially lower than one might conclude from units sold to households. In some markets, purchase of a voice line is required if a customer wants internet access (United Kingdom buyers of retail landline service from BT or any BT wholesale customers, for example).
In other markets, such as the United States, voice typically is sold in a bundle that offers substantial discounts for buying three bundled services, making purchase of a voice line a feature of service often primarily purchased for internet access and video entertainment.
Also, global development experts believe mobile and internet are, in any event, the key services to monitor, not fixed line voice.
The key observation is that many consumers must buy a fixed network voice service in order to buy internet. The question is how demand would be affected if that requirement were not in place.
One survey found that between 25 percent and 40 percent of U.K. consume…

Linear Dollars for On-Demand Pennies?

One enduring observation made by content business executives about the gross revenue or profit margin impact of digital content is that companies exchange analog dollars for digital pennies. That might also be true of the switch from linear to on-demand video entertainment.
Gross revenue for AT&T’s new DirecTV Now streaming service, for example, might generate an average of $118 a month. DirecTV Now will generate just $35 a month in subscription fees. So DirecTV Now represents gross revenue per account just 25 percent the size of a linear subscription, on average.
Profit margins suffer even more. Gross margin for the linear product might be as high as 45 percent, while gross margin for DirecTV Now might be as low as four percent, some predict.
Others think the profit margin will be even slimmer, as the “cost of goods”represents as much as 97 percent of revenue. Craig Moffett, MoffettNathanson equity analyst, estimates the  the cost of the channels expected to be included in DirecT…