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Showing posts from January, 2019

Innovation Awards Program Gets Traction

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Most people are not aware that the Pacific Telecommunications Council is a non-profit entity,  created more than 25 years ago to foster commercial adoption of communications and information technology across the Pacific basin.
Aside from serving its member companies, PTC also has programs that train young professionals to serve in the communications business;  provide leadership training for mid-career professionals on the way up and promotes internet access in rural areas across the broad Asia-Pacific region. 
A new program, Innovation Awards, not only recognizes leaders who are pushing the industry forward, but also now underpins a dedicated fund raising effort to support PTC's philanthropic missions. 
The Industry Awards ceremony, is a tax-deductible contribution (above the value of the meal) that directly funds our non-profit programs. But the awards program--open to all, and not restricted in any way to PTC members and the community--itself has gotten big traction in only its se…

Netflix the Albanian Army?

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Jeff Bewkes, then Time Warner CEO, in 2010 quipped, referring to Netflix, “Is the Albanian Army going to take over the world? I don’t think so.”
Today, more than 76 percent of 128 million U.S. broadband households take at least one major streaming service (Netflix, Amazon or Hulu) according The Diffusion Group. Another eight percent buy a linear streaming service such as YouTube TV or DirecTV Now.
A Deloitte study found the average streaming household subscribes to three services, and that doesn’t include ad-supported services. Perhaps more significantly, Netflix has changed the video ecosystem’s business model. Now that Netflix has become the world’s first global television channel, other would-be leading competitors will have to glo global as well. source: Netflix
Competition is coming, though. Netflix, Amazon and Hulu will continue to dominate the U.S. streaming services market, but will face scores of new services launched by broadcasters and content creators. Revenues are forecast t…

Is 5G a Paradigm Shift?

Some observers use the term “paradigm shift” to describe 5G. Without getting overly picky, “paradigm shift” is a term of art, coined in 1962 by Professor Thomas Kuhn to explain the way science advances. In a nutshell, he argued that science progresses in a non-linear way.
The given consensus begins to encounter greater and greater anomalies, until finally the old consensus abruptly breaks, and a new interpretation arises. Precisely how that applies to industries and business models is never straightforward, especially since marketing grandiosity gets in the way.
But consider one way of looking at scientific paradigm shifts: The transition in cosmology from a Ptolemaic cosmology to a Copernican one. The transition in mechanics from Aristotelian mechanics to classical mechanics (motion). The acceptance of the theory of biogenesis, that all life comes from life, as opposed to the theory of spontaneous generation. The transition between the Maxwellian Electromagnetic worldview and the Einstei…

Great White Shark

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"We're going to need a bigger boat!"

Immediate 5G Value is Capacity, Irrespective of New Revenue Opportunities

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In addition to brand-new revenue sources that should develop later in the 5G era, the immediate and practical value of 5G is to supply ever-growing capacity demands, even as 4G gets more efficient and other platforms come to commercial usage.
And 4G will continue to supply more bandwidth for the next five years, though at a declining incremental rate of increase after perhaps 2020, according to Michael Murphy, Nokia Networks CTO, North America.
source: Nokia Networks
source: Nokia Networks
The ability to aggregate Wi-Fi and unlicensed spectrum to mobile spectrum will add some bandwidth. So will 3.5 GHz spectrum, both licensed and unlicensed. But most of the new capacity will have to come from 5G, using a combination of techniques and new bandwidth.

Netflix Price Increase Illustrates Power of Powerful Brands

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Consumers are price conscious, it is safe to say. So what requires explanation are instances where consumers--while seeking value--are willing to spend money for value. And perhaps nothing better illustrates the value of a valued brand.
Consider the coming increase in Netflix prices. One survey by The Diffusion Group suggests that a price increase of just $1 more per month, eight percent of Netflix subscribers are likely to cancel Netflix.
Netflix is raising the cost of its basic tier by a dollar, from $8 to $9 a month. The standard tier now will $2 more per month, up from $11 to $13, while the premium tier cost will rise from $14 to $16.
source: TDG
With the very-important caveat that consumers often say they will, or will not, do something, some of us would bet that Netflix now provides enough value that the overwhelming proportion of consumers will not desert. That did not happen the last time Netflix raised prices, for example.
Perhaps just as important, a recent price increase of sim…

Global Networks Now are Designed for Video

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Nearly 80 percent of all global data traffic now consists of video, according to Cisco.
sources: The World Bank, Statista
By perhaps 2021, all traffic on global IP networks--save 18 percent--will consist of video, according to Cisco.

About 58 percent of downstream traffic on the global internet is video streaming content. Web traffic is about 17 percent of total, while gaming represents about eight percent of total downstream traffic.
Upstream traffic is dominated by video (especially user-generated video), web interactions and file sharing. source: Sandvine
source: Sandvine
Also, net traffic growth is happening on private networks, rather than public networks. source: TeleGeography

Really "Off Road" Vehicle Concept

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How Many "Mass Market" Service Opportunities Exist?

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Skepticism about telco or cable involvement in the subscription video business is understandable: consumer demand is changing in ways that reduce the size of the market.
On the other hand, the consumer communications segment of the business is dominated by the four anchor services” mobile, fixed broadband, subscription video and fixed phone service, with little to no growth in each product line, at least in most developed markets.
It has long been a truism that consumer spending--in communications or entertainment--tracks growth of income (national gross domestic product, household income). The caveat is that demand for some products has declined markedly (fixed network voice), is declining (linear video subscriptions), or is growing slowly (fixed network internet and mobility). source: Ofcom
Even in growing markets such as Asia, there simply are not that many products “most” consumers will buy, and most of what they do buy is related to mobile service.
source: Analysys Mason
The big po…

When Will Netflix Reach Positive Free Cash Flow?

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Netflix and Amazon have been fearsome attackers of existing business models. Both firms also are equities that worry investors, often expressed as a concern over when free cash flow (and eventually actual profits) will be generated.
Eventually, as with any other company, positive free cash flow, then profits, must happen.
Morgan Stanley believes Amazon could reach free cash flow positive status could happen in 2021.
That, Morgan Stanley believes, can happen even as Netflix continues to invest heavily in content. In fact, Morgan Stanley believes Netflix is spending more than generally believed on content overall (including both original and licensed content). Other observers tend to agree with the higher figures for content rights.
Netflix spending was boosted dramatically in 2018. source: Business Insider
NBCUniversal invests the most in original programming at the moment, to the tune of about $10.2 billion. Fox and Time Warner each spend a bit more than $8 billion. Disney has been spe…

Streaming Video Bundles are Coming

The whole point of multi-product bundling, for a supplier, is to sell more products, often at lower cost, while boosting consumer perceived value. The attraction for buyers might be a bit more complex.
Saving money or convenience typically are cited as the value of bundled product purchases. But higher value at lower cost is likely the key benefit, as consumers view bundles, so long as buyers also have the option of buying a la carte.
It always has seemed inevitable that streaming subscriptions would be bundled, or at least made easier to buy within a single account, creating new forms of subscription video products that somewhat mimic the older linear video bundles of channels.  
Roku and Amazon Prime are among the firms that have been enabling such discretionary purchases.
What has not yet occurred is the ability to functionally bundle Netlfix, Hulu and Amazon Prime in the same way that a Starz or HBO subscription can be added to an Amazon Prime or Roku account. But that is coming, m…

11% More Hyperscale Data Centers Added in 2018

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The number of large data centers operated by hyperscale providers rose by 11 percent in 2018 to reach 430 by year end, says Synergy Research Group. And that could continue to reshape wide area network communications, as most global traffic now is generated by the hyperscale data centers.
Amazon, Microsoft, Google and IBM each have 55 or more data center locations with at least three in each of the four regions of North America, APAC, EMEA and Latin America.
Most  data traffic these days is generated by cloud computing, but most of the actual data communications--as much as 72 percent--happens within data centers, according to Cisco.
source: Cisco
As you likely would guess, hyperscale data centers represent a large portion of overall data, traffic, and processing power in data centers, accounting for 34 percent of total traffic within all data centers and driving 53 percent of in-data-center traffic by 2020.
Hyperscale data centers will also represent 57 percent of all data stored in dat…

Bell Canada Wants to Mine its Customer Behavior Data

North American telcos (Canadian and U.S.) historically have faced more-stringent privacy rules and limitations on data mining than have applied to app providers such as Google, Facebook and other online app providers.
So it perhaps comes as no surprise that Bell Canada began asking its customers in December for permission to track everything they do with their home and mobile phones, internet, television, apps or any other services they get through Bell or its affiliates.
And that is one of the key issues for any telco that wants to mine its customer data for insights that can be used to build a targeted advertising business.
Key to the effort, apparently, is avoidance of divulging any personally-identifiable information. "Bell's marketing partners will not receive the personal information of program participants; we just deliver the offers relevant to the program participants on their behalf," Bell Canada says.
The big upside, some believe, is the ability to earn revenue…