Showing posts from 2018

S Curves Only Apply to Successful Innovations

Some generally-useful visualizations, such as the S curve, require some qualification. You may think of the S curve as showing the technology life cycle, a product life cycle or an innovation life cycle. The basic idea is that adoption starts slow, hits an inflection point featuring fast growth, but eventually reaches saturation as nearly every potential user or buyer already has become a user or customer.
source: galsinsights
The major qualification is that the S curve applies to innovations, products or processes that succeed in the market. Unsuccessful innovations simply die. Perhaps they go parabolic before they die. The point is that S curves refer only to products, technology and services that actually succeed in the marketplace.
It probably is worth noting that something similar exists for hyped technologies as tracked by the Gartner Group. Between 2017 and 2018, some nine technologies simply disappeared. That is perhaps a good illustration of unfulfilled hype.

source: Gartner

Live TV is the Next Big Growth Opportunity for Streaming Video

“Live TV” is the new focus for over-the-top streaming video, one might well argue. The reason is that the non-linear, on-demand services (Netflix, Prime, Hulu and others) have begun reaching saturation. What is left largely unfulfilled are “live video” streaming services that mostly represent OTT “skinny bundles” featuring real-time TV programming that are very-direct replacements for linear subscription TV (cable TV, telco or satellite-delivered subscriptions).
Though almost no consumers will ever call them by their bureaucratic name, such virtual “multichannel video programming distributors” (virtual MVPDs) are the new growth opportunity in the consumer video streaming area.
In April 2018, just five percent (4.9 million) of U.S. households streamed content from vMVPDs on their television screens (as opposed to their mobiles, tablets or PCs, perhaps?). That is a 58 percent increase in households from the year before, according to comScore.
Consider the number of subscribers to OTT real…

Software Drives Hardware Demand; Video Drives Internet Access Demand

“The value of software to stoke demand for new hardware was as old as personal computing itself,” says says Daniel Eran Dilger, who writes for AppleInsider.  “Everyone in the industry was already aware that Apple II systems first sold in the 1970s because of VisiCalc; that PageMaker had initially driven sales of Macs in the 1980s, that Office had primed Windows PCs in the 1990s.” LIkewise, one might argue that Apple’s content ecosystem was among the reasons for Apple’s possibly improbable ascent and longevity in the consumer hardware business.
So it might be an unusual stretch to argue that efforts by telcos and cable companies to move from “mere” distribution to  “content ownership,” as Apple has moved from “mere” hardware to software ecosystem, are similar. Content and apps drive sales of hardware. Perhaps likewise, content drives sales of internet access (bundles, for example) and mobility (streaming video bundled with mobile internet).
Whether the path of application (content) owne…

S&P Communications Index Reflects Cross-Industry Convergence

On September 28, S&P Dow Jones Indices and GICS will create a new sector for tech, media, and telecoms companies. "The lines among media, communications, and content are blurred," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said. "It is time to acknowledge this convergence and the overlapping services these companies provide."
It will only have 60 components, making it the eighth-largest by this metric. However, those components will include some of the biggest stocks on the market. Walt Disney Co., Netflix, Facebook, Alphabet, Comcast Corp., AT&T, Verizon, CenturyLink and others, such as 21st Century Fox, TripAdvisor and Electronic Arts.
source: Morgan Stanley
“The last several years have seen an evolution in the mode in which people communicate and access entertainment content and other information,” S&P Global says. “This evolution is a result of the integration between telecommunications, media, and internet companies.…

Platforms Really Do Matter

Soon enough, we will be trying to make predictions about the impact of 5G on fixed network internet access lines, on end user typical speeds, typical retail prices, video entertainment accounts and service provider market shares. It is going to keep us busy, as few trends will be stable.
And platforms really do matter.
It is hard to overemphasize the importance the cable industry has had in driving U.S. internet access services. Cable has been the market share leader since about 2000. Telco fiber to home connections have grown, but growth has been relatively slow. Digital subscriber line has declined, with satellite connections reaching a peak of about three million before seemingly settling back to about two million accounts. source: USTelecom
Many of us believe 5G will be a bigger platform innovation that cable's hybrid fiber coax network was.
One basic rule I use when evaluating service provider business models is to assume that tier-one service providers lose about half their c…

U.S. Service Provider Capex Returns to 2014 Levels

A two-year decline in private capital investment in U.S. broadband infrastructure from 2014 to 2016 appears to be over, according to a preliminary USTelecom analysis of the 2017 capital expenditures of wireline, wireless, and cable broadband service providers.
U.S. broadband companies, excluding independent competitive local providers and fiber operators, have invested between $72 and $74 billion in network infrastructure in 2017, compared to $70.6 billion in 2016, showing at least an increase of nearly $1.5 billion, UST says.
source: USTelecom

IoT Success Might Typically Require Moving Up, Down the Stack, or Both

How big is IoT? Big. According to GSMA analysts, some 7.6 billion IoT connections (mobile and non-mobile) were in service in 2017.
The complication, for communications service providers, is that the vast majority of those IoT devices are connected by unlicensed radio technologies, designed for short-range connectivity (Wi-Fi, Z-Wave and Zigbee). That might be quite as true for some future IoT apps (autonomous vehicles, for example). Still, the point is that most future IoT connections might generate zero incremental revenue growth for connectivity providers.
And for many connections that are net additions, annual revenue might be quite low.
Mobile network IoT connections might grow from 600 million connections in 2017 to 3.1 billion in 2025. That might represent 12 percent of mobile accounts. And 60 percent of those might require mobility, while 40 percent are fixed, GSMA argues, using either NB-IoT or  LTE-M.
Of total IoT ecosystem revenues, 66 percent might come from platforms, applica…

Verizon Fixed 5G Strategy: Attack Out of Region

Verizon’s strategy for its 5G fixed wireless platform is fairly clear, so far. In its announced first four cities--Indianapolis, Houston, Los Angeles and Sacramento--Verizon is attacking out of its fixed network footprint, and therefore will be competing head to head with AT&T, Comcast and Charter Communications.
One obvious objective is to grow revenue and accounts the “old fashioned way,” by taking market share away from incumbents who already have those accounts, in the fixed network internet access business.
Comcast passes (can actually sell service) about 54 million homes. Charter Communications passes some 50 million home locations.
AT&T’s fixed network passes perhaps 62 million U.S. homes. Verizon, on the other hand, passes perhaps 27 million locations.
What that means is that Verizon has a clear interest in using 5G fixed wireless to expand its addressable market by more than 35 million U.S. homes (up to perhaps 39 million) that it cannot reach today, giving Verizon a fi…

Does Better Internet Access Cause Rural Economic Growth?

A new examination of the correlation between internet access and unemployment, income and employment in rural U.S. areas finds no correlation. That matters because any government program to expand internet access availability is based on the fundamental assumption that internet access “leads to” or “causes” economic growth.

On the other hand, there is a subtlety: there might be a correlation (not causation, though) between use of internet access and economic growth.

So one researcher argues the focus should be on spurring adoption by people who do not use the internet, rather than a focus on increasing internet access availability in  “underserved areas” as such.

That actually is a rather non-controversial observation, as many observers have noted that teaching people how to use the internet, and why it is useful,  is among the keys to spurring use of the internet by the the last 15 percent to 20 percent of non-users.

What we need is “a nuanced approach to broadband policy that is tar…

Cable Gets 100% of Net Internet Access Accounts in 2Q 2018

The largest cable and telephone providers in the U.S., representing about 95 percent of the market, acquired about 455,000 net internet access subscribers in the second quarter of  2018, compared to a gain of about 235,000 subscribers in the second quarter of 2017, according to Leichtman Research Group.
These suppliers providers now account for 97.1 million subscribers. Cable companies have 62.9 million subscribers, while telephone companies have  34.2 million accounts.
As has been the case in recent years, cable is getting virtually all the net additions. Telcos have had net account losses in each of the past nine quarters. A great percentage of the losses over that period have come at Frontier and CenturyLink. AT&T and Verizon sometimes gain, sometimes lose, but at a rather low rate, either way.
The top cable companies added about 585,000 subscribers in 2Q 2018, compared to about 465,000 net adds in 2Q 2017.
Telephone companies lost about 130,000 subscribers in 2Q 2018, compared t…