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Showing posts from September, 2017

IoT, AI, Edge Computing, 5G, Fiber-Deep Networks All Related

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The internet of things, artificial (or augmented) intelligence, edge computing, low-latency application requirements, 5G, fiber-deep networks and mobile small cell architectures all are related trends. IoT, in many cases, will require low-latency computing, using advanced AI techniques with processing necessarily localized.
That, in turn, dovetails with the use of 5G and other communication networks that will have to support low-latency communications and highly-distributed computing nodes using 5G air interfaces, small cell architectures and fiber-deep distribution networks.
source: CB Insights

Google Launches IoT Platform

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One example of the challenges telcos will face as they ponder moving into platform portions of the internet of things ecosystem are moves by rivals with business advantages. Consider that Google has officially launched its Google Cloud IoT Core service into public beta.
Google Cloud IoT Core is a fully managed service on Google Cloud Platform (GCP) that helps businesses secure and manage their connected IoT solutions.
Google Cloud IoT Core integrates with other Google analytics services such as Google Cloud Pub/Sub, Google Cloud Dataflow, Google Cloud Bigtable, Google BigQuery, and Google Cloud Machine Learning Engine.
Pricing is based on the volume of data exchanged with Cloud IoT Core.

Rate of Cord Cutting Slowing?

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“The number of current pay-TV customers who plan to cut the cord has actually declined, and the number of hours spent watching old-fashioned, time-slot television is growing,” said Peter Cunningham, Technology, Media, and Telecommunications Practice Lead at J.D. Power.
To be clear, a new J.D. Power survey only shows that the rate of decline has slowed. The percentage of customers who say they plan to cut the cord on pay-TV during the next 12 months has declined to eight percent this year from nine percent in 2016, the company says.
source: Mary Meeker
The study might be interpreted as suggesting streaming and linear viewing modes are reaching some sort of equilibrium. We will have to wait and see. Many other forecasts suggest that newer modes (mobile, especially) are growing, though that does not directly speak to the issue of linear versus on-demand viewing.
Despite growing satisfaction with streaming video services and widespread use of DVR and video on-demand, the number of hours sp…

Why Voice is Not Central for Next Generation Networks

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A fateful decision was made when the global telecom industry decided the next generation network would be based on Internet Protocol, and not some traditional architecture such as ATM.

All of today's strategic issues around "over the top" services and value grow directly from that architectural choice, since IP fundamentally separates network access and all applications that run over the IP networks.

By definition, all apps are "over the top," no matter who owns those assets. In choosing to build the next generation networks on IP, the industry also chose to create the "dumb pipe" business model.

Even when telcos sell carrier voice, those services architecturally will operate "over the top."

At the same time, voice is receding as the core revenue driver.

According to Reza Arefi, Intel director of spectrum strategy, nobody is working on voice as part of 5G at any of the core standards bodies. That might come as a shock to many observers, but simpl…

Nearly 1/2 of Linear Video Customers Might Consider Switching Next 6 Months

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Nearly 84 percent of respondents to the most-recent Tivo survey of consumers still buy a linear TV service, while 16 percent of respondents do not. “Price” was cited by 85 percent of the non-buyers as the reason for not subscribing. About 46 percent reported using a streaming service as an alternative.
Even if the top reason for not buying a video subscription is “price,” the actual reason likely is “value,” including both demand for video and its price.
Of the 83.9 percent of respondents who subscribe to pay-TV service, 8.9 percent have switched providers in the last three months, Tivo says. When asked if they planned to leave their current service providers in the next six months, 6.3 percent said they plan to cut their pay-TV service entirely.
Another  8.1 percent plan to change to another provider. In addition, 4.5 percent plan to switch to an online service or app. About 30.6 percent report they might make a change.
Altogether, 49.5 percent of respondents could potentially leave …

IoT Awareness Still Low

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Many executives, in many industries, might be unaware of internet of things business value, a survey by Analysys Mason suggests.
In a survey of 1600 IT and telecoms decision makers in enterprises worldwide, Analysys Mason found 12 percent of small/medium businesses and 18 percent of large enterprises already had IoT systems operating.
On the other hand, 52 percent of SMEs and 40 percent of large enterprises were “unaware of IoT or not interested in it,” Analysys Mason found.
“Overcoming a lack of awareness in IoT is more important than technology issues,” Analysys Mason suggests.
None of those findings would surprise many observers. Present use of sensor networks is common in some industry verticals and for some applications, but it would be reasonable to argue that the big growth has yet to begin.

                     Percentage of enterprises at each stage of IoT development, 2017
The U.S. market currently has the highest levels of adoption of IoT solutions, but China is expected to …

Enterprises Might Drive Incremental 5G Revenue

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If you work in the telecom industry long enough, you are likely to discover yourself changing focus from time to time. Having started out in cable TV, consumers were really 100 percent of my focus. When I switched to the competitive side of telecom, enterprises, wholesale and small and mid-size businesses became the focus.
When the internet hit, it was clear that consumer apps were going to drive growth and change, so I switched back to following consumer apps, business models and revenue streams almost exclusively.
I’m pretty sure that another shift back to enterprise is coming, since 5G is likely to be about enterprise, in terms of business success, incremental revenue and growth. Internet of things is the driver, since IoT will be “purchased” by enterprises and businesses, either to serve business users or consumers.
Some other inklings are that even enterprise wireless traffic looks to be on the cusp of significant change, according to Bell Labs.
Looking only at video, which is driv…

What Takes the Place of Mobility Over the Next Decade?

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One fundamental rule I use when analyzing telecom service provider business models is to assume that half of current revenue has to be replaced every decade. One example is the change in composition of Verizon revenue between 1999 and 2013. In 1999, 82 percent of revenue was earned from the fixed network.
By 2013, 68 percent of revenue was earned by the mobile network. The same sort of change happened with cash flow (“earnings”). In 1999, the fixed network produced 82 percent of cash flow. By 2013, mobility was producing 89 percent of cash flow. The fixed network was creating only 11 percent of cash flow.
source: Deloitte
The picture at AT&T was similar. In 2000, AT&T earned 81 percent of revenue from fixed network services. By 2013, AT&T was earning 54 percent of total revenue from mobility services.
source: Deloitte
Also, consider CenturyLink. In 2017 (assuming the acquisition of Level 3 Communications is approved), CenturyLink will earn at least 76 percent of revenue from…

Up the Stack or Forward in the Value Chain?

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Sometimes, moving up the stack is a business strategy, as hard as it is to achieve. More often, horizontal acquisitions for scale have driven telecom service provider acquisitions.
Sometimes, moving forward into the ecosystem supply chain also can work. Paradoxically, moving forward in the video entertainment subscription business (often understand as integrating lower inputs into a finished product or service) also means moving up the stack.
Either approach--up the stack or forward integration--is risky, in part because such moves represent moves outside the present understood core competence, but also because other firms will tend to resist buying horizontal functions and services from a key competitor.
Moving up the stack sometimes can mean acquiring assets that are a foundation for today’s core offerings. That paradoxical move is not, strictly speaking, a move “down the stack,” but is an example of vertically integrating a “cost of goods” input.
The best examples likely are video …

Big Questions about IoT Connection Choices

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No matter how one looks at the 5G business model, there are huge questions. Consider the fundamental issue of how big incremental new revenue opportunities will be. The "big three" use cases always are said to be enhanced mobile broadband; low latency apps and massive machine-to-machine apps.
Briefly, here are the unknowns. Much of the 5G upside from enhanced mobile broadband initially will come from users upgrading from 4G. There is some incremental revenue upside, but most of the revenue will simply come from users switching from 4G to 5G.
In the IoT area (massive machine-to-machine apps), there are questions about which networks will gain. Not only are multiple network platforms conceivable, ranging form Wi-Fi and other local access options, but also dedicated IoT networks (LP-WAN), as well as 4G and 5G.
Will enterprises choose a 4G or 5G solution when looking at mobile networks for IoT connectivity?
As use of internet of things services grows, the value of connectivity ser…

How Close is Mobile to Becoming a Full Substitute for Fixed Networks?

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The latest Federal Communications Commission report on the mobile industry in the United States, based on 2015 data that is several years old, shows the need for hard thinking about communications policy.
It is not simply the state of the mobile industry, but the coming changes that will make mobile solutions competitive with fixed network solutions in many (in some cases most) instances. That, in turn, suggests a rethink of fundamental communications policy.
As the business model for fixed networks gets worse (in the consumer space), the business model for mobile--as an access solution--gets better. How much better, compared to fixed, is the real issue.
Some policy advocates reject the notion that mobile is a reasonable and customary replacement for fixed networks. Others would contest such views.
There are many issues: Can mobile really be fully effective substitute for fixed network access? What will happen in the 5G era, and what will that mean? What policies need to be created as la…