Posts

Showing posts from March, 2017

Verizon to Launch New Streaming Service

Verizon Communications plans to launch a new over-the-top streaming live TV service service that would compete with Hulu, Dish and DirecTV Now, Bloomberg reports. The service would not compete directly with Netflix or Amazon Prime, whose catalog largely is built on movie and other pre-recorded content accessed on demand. The Verizon service would instead compete in the “live streaming” segment of the market that is a replacement for linear TV.
In large part, the move is designed to capture demand from consumers for lower-cost, skinny bundles of channels. Comcast seems also to be preparing to offer a skinny OTT bundle.
Pricing is expected to range between $20 and $35 a month, most expect, as that is the range for the competing services.
The Verizon move shows the “harvest linear, grow OTT” strategy the leading linear video subscription service providers are following. The launch also shows the importance of video entertainment services as a driver of consumer service provider gross rev…

OTT Video is a Challenge, But Not a Fatal Challenge for Access Providers

Image
It goes without saying that the maturation of the linear TV business, and the growth of the streaming business, could have significant repercussions for revenue earned by telcos and cable TV companies in the U.S. and other markets from consumer customers, though not as great an impact as will the development of the internet access business.
The reason is that linear video has become a significant--in some cases very significant--contributor to fixed network telco revenues. Video represents a greater contributor to consumer account gross revenue per account than does voice, for example.
source: Telco 2.0
source: Deloitte
So a clear and key strategic challenge for fixed network providers serving the mass market is how to finesse the transition from linear to OTT formats. Some will point to leadership by Netflix and others as evidence that linear providers cannot make the transition to OTT. We do not know that, for certain, as linear providers have huge incentives not to cannibalize their …

"Dig Once" Might Not Help Much

Image
There arguably are all sorts of barriers to broadband deployment related primarily to infrastructure cost or underlying demand. Some recently have proposed duct placement whenever federal highway funds are used to build new highways. Of course, some might note that the potential upside might come at a cost: less money to spend roads. Most of the reason internet access is suboptimal is access infrastructure, not long haul transport. And, of course, most highways are “long haul” infrastructure, not “access” facilities such as urban streets.

To be sure, middle mile infrastructure is a definite problem for most rural communities. Ductwork placed in the ground when new highways are built might not help solve that problem, as highways generally run between large population centers (east-west or north-south), and long haul facilities likely already follow those routes, as long haul lines already follow railroad rights of way.

Dig once” always sounds good. But it costs money, and might not t…

Price Matters, Where Public Wi-Fi is Concerned

Causation always is suspect when people say something needs to be done to spur economic growth by the means of better internet access. To be sure, virtually everyone behaves as though there is a causal relationship between internet access and economic growth, even if that cannot be proved.
Quite often, an argument can be made that the reverse actually makes more sense: quality internet access is a result of economic growth or existing wealth, not the cause of those developments.
On the other hand, it bears noting that value and price relationships do have a causal relationship to consumer buying. As with any desired product, lower prices cause more buying of that product.

Way back in the days of dial-up internet access, when most such dial-up services were sold on a metered basis, AOL leapt to leadership of the market by abandoning metered pricing, offering monthly access for a single flat rate.

The point is that, when new supply is added to the market, price matters. In most markets …

Nationwide Content Rights Mean Comcast Eventually Will Break With Past Industry Practice

Geography and industry culture sometimes can be barriers to success in the over the top applications and services realms. Note past efforts by Comcast to offer a streaming service only to consumers who live within Comcast’s fixed network geography.
That decision was partly an effort to avoid cannibalizing it own linear TV services, and partly to avoid competing with cable operators in other areas (cable TV operators virtually never overbuild over cable tV operators).
So Comcast’s latest move to gain content rights on a nationwide business is an important move. Eventually, success in the streaming service business will require ubiquitous availability, irrespective of which entity owns the actual access networks. That is a fundamental reflection of the way internet protocol networks operate, where any application can be used by any user on any public IP network.
But any such move to nationwide service availability will mark a huge change in industry practices, virtually requiring compet…

Intel Says Moore's Law Not Dead

Intel insists it can keep innovating in ways that keep rates of progress based on Moore's Law a relevant assumption. Intel’s success or failure will have direct implications for the cost of many products requiring computing.  If other industries experienced innovation at the rate of Moore’s Law, car owners could drive a distance equivalent to traveling between the earth and the sun on a single gallon of gas, according to tacy Smith, Intel SVP.
Agriculture productivity would be so high we could feed the planet on a square kilometer of land, said Smith. As for the speed of travel, humans would be traveling at 300 times the speed of light.
So yes, Moore’s Law matters. But Intel is making some shifts in the way it measures progress, focusing less on the number of transistors and more on the cost of computing. Intel now will emphasize such matters as the manufacturing cost per transistor, which Intel expects to cut by about half with each new manufacturing process, which is in line wit…

Growth Gambles (Moving Up the Stack) are Dangerous, Difficult but Also Necessary

Not to pick on Ericsson at all, but the last several decades have not been kind to legacy providers in the telecom business, as growth has ended in some geographies (developed markets, mostly) , and is nearing the end even in emerging markets that are stronger now (Asia) , or poised to be stronger (Africa).
Many now are too young to remember it, but in the monopoly era  (pre-1980), both the United States and Canada were home to a couple of the biggest telecom infrastructure providers in the world (Northern Telecom and Lucent, formerly Western Electric). But some of that era’s leading firms also now have been absorbed, including Alcatel (to Nokia Networks), while the biggest growth has happened among the ranks of Chinese firms (Huawei and others).
At the same time, as activity and investment have flowed to all things internet, other suppliers traditionally more viewed as “computing” suppliers have surged, as virtually all networks now are “internet protocol” networks. To a large extent…

Video is Important Revenue for Fixed Service Providers

Image
The fixed network internet access business now is importantly augmented by video subscription services, which significantly boost average revenue per account. For defenders as well as attackers, video take rates have an important impact on the business model.
In the latest figures compiled by the US Copyright Office and reported and analyzed by MoffettNathanson, Google Fiber said it added a little over 15,000 video subscribers in the second half of 2016, boosting its total to slightly over 84,000 video customers in its seven markets.
To be sure, that represents a 57.8 percent annual growth rate, but from a small base. Perhaps more important, video account additions declined from the 66.2 percent year-over-year growth rate in the first half of 2016 and the 78.8 percent annual growth rate in the same period of 2015.
The data also show that video subscriber growth slowed particularly in Google Fiber's principal Kansas City market. "Google Fiber added 19 percent fewer customers in…

Consumers Want Fresh Content, Fast Loading, Personalization

About half of consumers in Malaysia, Singapore, Thailand, and the Philippines now spend more than 16 hours online, though, surprisingly, older demographics spend even more time than that online, a study by Limelight Networks shows.

Regardless of the time spent online, consumers are doing so primarily via their smartphones.

When it comes to spending time online, social media is the most dominant activity followed closely by watching online video.

Although consumers in the LImelight Networks study have demonstrated the importance of website performance, even performance comes in second to “fresh and updated” content.

Together with a consumer predilection for “fresh and updated” content, 53 percent of respondents say they  want a personalized web experience. Most consumers (67 percent) surveyed want a website to remember them and make recommendations based on previous visits.
Nearly half (43 percent) of consumers surveyed will leave a website and go to a competitor if a web page takes too l…

DSA Features Regulators

The  fifth annual Dynamic Spectrum Alliance Global Summit, which will take place in Cape Town, South Africa from 9-11 May 2017, will feature: Mr. Pakamile Kayalethu Pongwana, CEO, Independent Communications Authority of South Africa (ICASA) Hon. Hector Huici, Secretary of Communications and Information Technologies, The Ministry of Communications, Argentina Dr. Martha Liliana Suárez Peñaloza, Director, Agência Nacional del Espectro (ANE), Colombia Dr. Agostinho Linhares, Manager, Spectrum, Orbit and Broadcasting Division, Agência Nacional deTelecomunicações (ANATEL), Brazil Mr. Peter N. Ngige, Assistant Director, Frequency Planning, Communications Authority Kenya Mr. Mario Maniewicz, Deputy Director, Radiocommunications Bureau of the International Telecommunications Union (ITU), Geneva

AI Gets Practical for Content

Image
The internet’s future, many believe, is intimately bound up with artificial intelligence, used in various forms. But AI already is a practical tool, used by Google to support its advertising operations.
Author Patrick Tucker argues that  “when the cost of collecting information on virtually every interaction falls to zero,”  insights gleaned from activity will transform those interactions. AI will be the enabler, allowing the sifting of huge amounts of data to glean insights and patterns.
To assess what the economic impact might be, some analysts compare AI to other innovations such as computing advances, internet access, mobility and industrial robotics. That is not to say AI will produce value in these stated industries in equivalent volumes, only to note that big and important innovations have produced estimated benefit in about such volumes.   source: Analysis Group
What is telling, though, is the importance content as assumed in the internet apps space as well as the internet acces…

Rising Content Costs Help Netflix, Hurt Linear Providers

Image
Netflix now is among the reasons video content costs are rising. Netflix, other buyers say, is boosting content prices by snapping up content creators and spending big to do so. But rising content prices are a primary reason linear video subscription prices climb, at rates above inflation, virtually every year.
That is why “skinny bundles” are now such a big trend in the linear video subscription business. With falling demand, ever-higher prices for traditional bundles are becoming unsustainable.
That is even more important when, in the future, most subscription growth is taken either by over-the-top providers or mobile services.
source: J. Mack Robinson
source: IHS

Spectrum Sharing is Likely Value to AT&T of FirstNet

Image
Spectrum sharing fundamentally is important because it can change the business model for existing and new potential providers of communications services, much as increased availability of unlicensed spectrum likewise allows incumbent and new service providers to create services and revenue streams. In other words, shared spectrum is important because it changes the value and cost of spectrum rights.
Many would argue that the nationwide first responder network proposed in the wake of the Sept. 11, 2001 attacks on the World Trade Center in New York have gone nowhere for 15 years because the business model was quite questionable. That FirstNet now will be built and operated by AT&T suggests that something significant in the business model has changed, as is true for several other access technologies or approaches.
In the case of FirstNet, what seems to have clearly tipped is the perceived value of building and operating a network that has great potential societal value, but a question…

FirstNet Gets Ready to Link 10,000 First Responder Organizations

Image
FirstNet is one of the largest public-private partnerships in the U.S. communications business, planning ot build a nationwide 4G Long Term Evolution network to be used by as many as 10,000 first responder agencies across the country

In Phone, App, Access Provider Business, "Winner Take All" Holds

The applications business now is said to have a winner take all structure, where one or two providers have 70 percent to 90 percent market share. The smartphone business long has been dominated by Apple and Samsung. The telecom business likewise seems to operate with a “few providers” structure.
So it is hard to ignore those basic observations when formulating business strategy, almost anywhere in the internet and communications ecosystems. AT&T, for example, now seems to see such limited results from offering a robust array of phones that it is simplifying its line.
BayStreet Research analyst Cliff Maldonado argues that while AT&T is streamlining its phone lineup, since it does not see too many marketing advantages from offering “AT&T-only” phones, while Verizon still appears to believe that device differentiation provides advantages.
Nor does AT&T feature some  traditional device promotions (buy one, get one free, phone-service bundles). In part, those changes reflec…

For Cable, Old Monopoly Behaviors are Going to Change

Telcos and cable TV companies historically have not generally competed head to head with each other on a facilities basis, though mobile companies quickly moved to facilities-based competition. That is not to say fixed network telcos and cable companies now are unused to competition. They compete with each other, with satellite and mobile companies and sometimes overbuilders (independent ISPs).

But, as a rule, telcos have not overbuilt other telcos and cable companies have not directly confronted each other. The direction, though, clearly is in the direction of growing competition, nationwide, albeit on the basis of “over the top” applications competition, and only partly in terms of physical facilities.

For telcos, mobile services were the big break from the historic monopoly pattern. Now AT&T offers nationwide video service for the first time, using it DirecTV asset. Over time, AT&T and Verizon are likely to compete nationwide, or globally, to an extent, in various areas rel…

No Mystery about Cancelled Google Fiber Installs

If one accepts the logic of building new fiber-to-home (FTTH) facilities on the basis of neighborhood demand--building first where there is the greatest chance of getting a significant customer base--then it makes sense that some potential customers who live in neighborhoods without such critical mass might have to wait for facilities to be built.
Some appear to think there is mystery around what Google Fiber is up to, as reports surface of customers in Kansas City having their install orders cancelled. There might be less mystery than some would think.
Google Fiber has halted expansion, using FTTH. It is just that simple. So potential customers in new areas are not going to get that particular service. That means cancelled orders in areas Google Fiber will not now reach. In some cases, it is possible that even new orders in existing areas might be refused. That tends to happen for a number of logical reasons.
An ISP might have made a decision to switch technology platforms. An ISP mig…