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Showing posts from January, 2018

In 4Q 2017, AT&T Earned 85% of Fixed Network Consumer Revenues from Apps, Not Access

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One takeaway from AT&T’s fourth quarter 2017 results is the importance of video entertainment, compared to internet access and voice as revenue drivers in the consumer segment of the fixed network business. Consider the wide gulf between U.S. video entertainment, internet access and other revenues: video drove 74 percent of fixed network consumer revenues.
Internet access represented just 15 percent of total, while the “other” category generated about 12 percent of total revenues. source: AT&T
One way of describing those results is to note that internet access is a “dumb pipe” service. Both voice and video entertainment are “apps.” So AT&T, in its fourth quarter, generated 85 percent of its consumer fixed network revenues from “apps” and only 15 percent from dumb pipe internet access.
That, in turn, illustrates why AT&T will look to applications, services and maybe platforms as it grows its internet of things and 5G businesses. Ignoring profit margin for the moment, apps …

5G Telecom New Revenue Growth Shifts to Enterprise Sources

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The telecom industry is moving to new business models that change revenue opportunities in both mobile and fixed realms. Among the biggest changes: mobile revenue growth is going to shift to enterprise, away from consumer; from people to sensors. And fixed network revenue growth likewise is shifting from retail to wholesale.
In the mobile segment, the advent of 5G networks actually represents a discontinuity. As mobile subscriptions sold to people saturate, growth is going to come from selling connections to sensors and internet of things devices, in part.
The bigger change is that mobile access providers will have to move up the stack into higher-margin services and apps that underpin the value of IoT.
The precursor is what is happening in media and communications, as more mobile and fixed operators discover that growth hinges on moving into the content portions of the internet ecosystem.
In the fixed network, more of the value is coming from backhaul for smaller cells, as well as se…

App Providers Do Not Treat Their Own Bits "the Same" As All Others

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One of the frustrations I have with discussions of network neutrality is the overly-broad application of the concept of “treating all bits alike” with the obvious reality that all bits are demonstrably not treated alike on today’s internet.
Ignore for the moment that governments often simply outlaw some apps and content. Forget “treating all bits alike,” some bits are simply blocked.
Even if one assumes network neutrality is about “treating all bits the same,” that does not happen. Most large app providers--and eventually virtually all--use content delivery networks to improve user experience, precisely by treating their own bits differently from others that do not use CDNs.
Google, Amazon, Microsoft, Facebook, and Netflix, for example, operate their own content delivery networks. Such private CDNs represent 61 percent  of all CDN traffic, rising to 68 percent by 2021.
By 2021, 71 percent of Internet traffic will be delivered from a content delivery network (CDN), up from 52 percent  …

Gigabit City, Or Not?

As often happens in the telecom and technology businesses, companies make announcements by press release. Sometimes, the releases are accurate, but the headlines or summaries are factually incorrect.
“The City of Santa Maria will become the Central Coast’s first truly gigabit city under an agreement with Wave Broadband,” reads a summary on a press release announcing that Wave Broadband will complete construction of the City’s fiber-optic ring.
The release also says the network will “bring reliable, high-speed gigabit service to City departments, businesses, schools, and residents as a whole.” That last clause--”residents as a whole”--seems to refer to public Wi-Fi hotspots to be activate as part of the municipal network.
The release says the municipal network “will also allow the city to offer public Wi-Fi in its revitalizing downtown core,” while Wave evaluate “providing Wi-Fi in residential neighborhoods where traditional carriers have been slow to upgrade internet service.”
The claim …

New S&P 500 "Communications Services" Segment Shows You Where We Are, Where We are Going

Though impressionistic, a coming September 2018 change in industry categories--combining telecom, tech, media, and entertainment companies--tells you something about fundamental changes in the internet and telecom ecosystems. To wit, the changes show--in part--that connectivity and apps now are becoming parts of a single market.
The new S&P 500 sector called Communication Services also is being created because the former “telecom” sector now includes too few firms. The new Communications Services sector will replace the former “Telecommunication Services” category.
But the rationale is important for larger reasons. S&P Dow Jones argues that tech and content and app companies have become a lot more integrated.
Verizon, AT&T and Comcast,  for example, have made acquisitions to become content, mobile and internet services providers. Google now makes devices and provides mobile and internet access service, not just key internet apps. Facebook and Amazon have made smaller moves …

Cord Cutting by Heavy Users Saves Them $115 a Month, Study Finds

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Customers who seem to the heaviest users--and cut their linear video subscription--saved about $115 each,  study by LendEDU finds.
The typical heavy users--spending more than $140 a month total on entertainment video, also reported buying three streaming services, though, spending an average of about $33 a month on streaming services.

Some 77 percent of the cord cutters report they still continue to buy streaming services, and report spending about $35 a month on streaming services.

source: lendedu

When current cable subscribers were asked whether they use their linear services or streaming more, the split was fairly even: 52 percent reported using linear more, while 48 percent reported using streaming more.

Less than 70 percent of the current linear video subscribers estimated they still would be buying in a year. Three years out, just 44 percent believe they still will be buying a linear service.

The main point seems to be that many consumers still want to buy entertainment video, b…

Nokia Launches Future X Platform for 5G

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Nokia now is calling its 5G platform"Future X," referring to the reference silicon design and the 5G network itself. Here is what is notable about the nomenclature. The phrase “Future X” actually comes out of Nokia Bell Labs, the research and development unit, and specifically from the title of the first book ever published by Nokia Bell Labs, The Future X Network, written by Bell Labs President Marcus Weldon.

In choosing the name, Nokia also suggests its strategy. The Future X Network will have to deliver different value, Weldon and the team of contributors argues.  Most fundamentally, the value of the network will not be “connectivity.”

"Free" Wi-Fi illustrates the problem. At a recent industry conference, the audience saw a slide illustrating the telecom industry new value proposition, and laughter erupted. It erupted because at the base of the value chain was the phrase “free Wi-Fi.”

Acknowledging the mirth, Weldon suggested that was because the audience of teleco…

U.K. Hits "Superfast" Targets, But the Target Keeps Moving

Remember when the United Kingdom in 2010 announced plans for “superfast” internet access blanketing the British Isles? That is pretty much done. Nearly 95 percent of U.K. customers now can buy internet access at minimum downstream speeds of 24 Mbps.
Of course, speeds change fast in the internet access business. When the “superfast” initiative was launched, back in 2010, 24 Mbps might have seemed “superfast.” At that time, about 68 percent of U.K. customers had services with headline speed (not actual experience) of between 8 Mbps and 10 Mbps.
In practice, actual average speeds were perhaps half the “headline” speeds. By April 2017, typical average U.K. internet access speed had climbed to 36 Mbps.
By way of comparison, U.S. average internet access speeds  were less than 4 Mbps in 2010, by some estimates. By 2017, average speeds had jumped to 23 Mbps, by some reports, while other studies said average speeds were up to 55 Mbps.
Speeds increase at Moore's Law rates, one can argue, at…

PTC18 Launches Innovation Awards

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At PTC18, the annual conference held by the Pacific Telecommunications Council, several innovation awards were presented to companies and individuals, in a range of categories ranging from technology to quality of life impact on the peoples of the Pacific region.
Organizers say they hope the program will continue, as a way of recognizing and promoting innovation in communications as practiced across the Pacific region.  

The awards covered six categories related to innovation within the ICT industry and were judged by a panel of seven jurors representing a broad cross-section of industry executives and thought leaders from a variety of network-centric industry segments.
The jurors were RingByName CMO Matt Bramson, Salesforce Vice President for Strategic Research Peter Coffee, APTelecom CEO Eric Handa, DE-CIX International CEO Ivo Ivanov, Garnet Consulting Pty. Ltd. CEO Hugh McGarry, North American Hawaiki Cable President of Business Development Randy Neals, and HOT TELECOM President an…

Mobile Phone Use as a Proxy for Creditworhiness

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I was chatting with a banker recently about the use of mobile phone behavior to assess borrower risk in areas where most people do not have credit scores or banking relationships. She was skeptical. I don’t blame her.
But many now believe that analysis of mobile data relationships, communities, frequency of communication and other evidence based on mobile phone use could, indeed, be used to assess credit risk.
There are many straightforward indicators of behavior that are plausibly related to loan repayment. A responsible borrower may keep their phone topped up to a minimum threshold so they have credit in case of emergency, whereas one prone to default may allow it to run out and depend on others to call them.
An individual whose calls to others are returned may have stronger social connections that allow them to better follow through on entrepreneurial opportunities.
As you would guess, such techniques are most valuable in the global South. source: World Bank
One obvious source of da…

Federal Preemption Coming in Internet Access Business?

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Communications that cross state lines generally have been regulated differently than communications that are confined within a single state, or parts of a state. In the internet era--even if data communications tend not to be regulated very much--there has been a “hands off” approach, which fits the generally highly-distributed nature of modern computing.
In more recent times--in the wake of the Telecommunications Act of 1996--there was a perhaps-necessary clarification of state and federal roles, mostly in the area of federal preemption of state and local rules.
The logic has been that, for clear efficiency reasons, it does not make sense to have potentially 50 sets of rules for communications that are, almost exclusively, interstate or global in nature.
It seems almost inevitable that we will have some form of the federal preemption debate as policy on internet access potentially fractures with imposition of state rules on internet access. AT&T, for example, already has started …