Users Prefer Flat-Rate Pricing. Duh!

Mobile internet users across the United Kingdom and United States prefer flat-rate pricing, a new survey by YouGov has found. That finding should surprise nobody in the U.S. market, given the development of the whole Internet access business since AOL dropped metered billing and went to flat rate packaging.

Unsurprisingly, respondents said they would use the mobile Web more if flat rate access is available. That does not necessarily suggest consumers would reject flat-rate plans that are tiered for usage, even if any rational consumer would say they prefer a low flat rate for unlimited usage.

Smartphone users might be used to low rate, unlimited access, but users of mobile PC dongles and cards are well accustomed to the idea that usage and price are related for "buckets" of usage.

Some 4,324 consumers,18 or older, were polled as part of the study.

In the United Kingdom, 33 percent of respondents  reported that they don't use the Internet despite having access on their phone, while 25 percent of U.S. respondents with an Internet-ready phone say they do not use that feature.

The study also found that users want Web sites and services optimized for their specific mobile device, especially if it means that they could more quickly access the services they want. About 32 percent of respondents say that would increase their usage.

About 51 per cent of all respondents said they were only prepared to spend up to three minutes surfing for a specific piece of content on their phones, emphasizing the importance of navigation and usability.

About 13 percent of U.K. users, and 17 percent of U.S. respondents now access the Internet more than once a day from their phones. About 27 per cent of U.K. consumers and 28 percent of U.S. consumers surveyed now use the mobile Internet at least once a week, if not more.

Video and Web Drive Mobile Bandwidth Consumption

Mobile bandwidth demand already is driven by video and Web access, a new analysis by Allot shows (click on image for larger view).

And though peer-to-peer applications were the cause of bandwidth fears several years ago, most video activity now occurs using HTTP, meaning it is now part of the Web browser experience.

As is true for backbone networks and fixed networks, voice, instant messaging, email and all other apps besides video and Web applications are a negligible driver of bandwidth consumption.

That doesn't mean revenue reflects bandwidth use. Revenue still is inordinately driven by voice and texting. Over time, that will change. If broadband is what is driving use of the network, then broadband has to become the mainstay of the revenue model as well.

Which Growth Pattern Emerges as Recession Ends?

Many economists and market watchers think consumers eventually will return to spending patterns as they existed prior to the recent recession, and on the growth pattern of the 20 years before the recession.

Others warn that growth patterns are more likely to revert to patterns of the 1945 to 1970s, when annual growth in consumer spending was much more restrained.

So the question for many might be, which view is right? For application and service providers, the question might not be as germane. The reason is that consumer spending on network-delivered services and applications was stable over the entire period, and in fact has shown a slow, steady growth.

In other words, people are shifting more of their available entertainment budget to network-based products. Communications spending likewise has slowly grown its percentage of overall discretionary spending, not fluctuating wildly from one year to the next.

Of course, lots of other background factors have changed. There are more products, more applications, more services and providers to choose from.

The value of many products has taken on an increasing "network services" character as well. Consider the value of a PC without Internet access, for example.

The point is that whichever forecast proves correct--either a return to the growth trend of the past two decades, or a reversion to the lower spending growth of the years 1945 to 1979, network-based products are likely to continue a slow, steady, upward growth trend. That may not be true for other industries.

The "Problem" With Nexus One is the Retail Packaging, Not the Phone

By some accounts, the Google Nexus One phone has not sold as many units as some might have hoped. Flurry, a mobile analytics firm, estimates that 20,000 Nexus Ones were sold in the first week. That tracks poorly compared to the myTouch3G, which sold up to 60,000, and the Motorola Droid, which sold 250,000 in the first week.

Some people really like the idea of "unlocked" phones, despite the full retail price, as the price of gaining freedom to use "any" carrier (in the U.S. market two of four major carriers). But so far, most U.S. consumers seem to prefer the old "closed" model, where they get discounts on devices in exchange for contracts.

Beyond that, there is the clumsy customer support process. Users can email Google and get an answer within 48 hours. I don't know about you, but if any service provider took that long to get back to me when I have a problem, they will not be my service provider much longer than that. I can easily find a replacement provider within two days.

But that's the problem with Google's current model. With the current model, a customer contacts Google, and hopes the problem is not something the carrier (T-Mobile) or HTC (the device manufacturer) has to fix.

That's no slam on the device. But the customer interface is wrong. People are used to buying from one retailer that "owns" the customer service responsibility. And people will not be happy with two termination fees for early cancellation of a contract--one charged by T-Mobile USA and a separate restocking fee levied by Google.

Ignoring the amount of the fee and the logic, that's just going to make people mad. People generally understand the early termination fee. But they don't expect to pay twice.

Unlocked phones have sold better in Europe, but there is a huge difference between the U.S. market and Europe. In Europe, when one buys an unlocked device at full price, it really does work on all networks. In the United States, Verizon and Sprint use the CDMA air interface while AT&T and T-Mobile use the GSM air interface.

So an unlocked phone will only work on half of those networks. Under such conditions, the value of an unlocked phone is dramatically reduced. But most consumers don't really care about air interface or "locking."

They are used to a retail relationship where they know who owns the product and process. And there still is not much evidence to indicate the value of an unlocked, full retail device is more important than the comfort of knowing who is responsible when something doesn't work properly.

Despite the generally-accepted wisdom that "open" ecosystems innovate faster (which is true), that doesn't mean customer experience is better. As Apple has shown time and again, a closed, tightly-integrated approach can produce a much-better experience and lots of innovation at the same time.

So far, it doesn't appear the unlocked Nexus One model is doing that.

Mobile Broadband Will Need a New Business Model

One way or the other, something has got to change in the mobile business as voice ceases to be the industry revenue driver. Today mobile service providers get 86 percent of their revenue from low-bandwidth applications like voice and text. But that will keep changing in predictable ways.

Namely, most capacity requirements will be driven by low-margin data rather than high-margin voice and text.  Over the long term, it is irrational to better price services in relationship to cost without attributing more revenue directly to the data services that are driving capital investment.

That doesn't mean every single service or application necessarily has to be priced in relationship to cost. Loss leaders at supermarkets, promotional DVD prices at Target and other promotional pricing happens all the time, in every business. Some products have high margin, others low or even negative margins.

The point is that current retail pricing will get more irrational as data demand grows, and that something will have to be done about it.

Carriers are investing in new capacity, but that alone will not be enough to bring revenue and capacity into balance. By 2013, virtually all traffic load will be driven by broadband data of one sort or another, especially video. That means, over time, new ways of charging for network usage will have to be created.

Like it or not, network management is going to be necessary, plus traffic offload and policy management. The issue, in part, is that demand is unevenly distributed. Even at peak hours of congestion, only a minor percentage of cell sites actually account for most of the congestion. To speak of congestion management at the "whole network" level is not to capture the issue.

The key issue is peak-hour congestion at perhaps 10 percent to 15 percent of sites. Put another way, even at peak congestion, 85 to 90 percent of sites do not experience difficulty. That means it might be necessary to use different policies at a small number of physical sites, not the entire network, even at peak hours.

So even if traffic shaping, bit priority policies and other tools are not generally required at every site, for every application or user, there will be a need to do so at some sites, some of the time.

What Does Text Message Actually Cost a Heavy Teen User?

The frivolous answer to the question "what does text messaging cost a teenager" is "nothing," because a parent is paying. Perhaps a better way to phrase the question is "what does text messaging cost the parental unit paying for the service?"

Nielsen might have an answer. The research firm analyzes more than 40,000 mobile bills every month to determine what consumers actually are spending. The results suggest "staggering" levels of usage.

American teenagers are consuming 3,146 messages a month, which translates into more than 10 messages every hour of the month that they are not sleeping or in school.

Even the under-12 users aer sending 1,146 messages per month, which is almost four text messages per waking hour that they are not at school.

One thought you already should be having is that there is no way usage at that level is occurring on an "a la carte" basis. And you are right. Only a very small percentage of people who text message are doing so on a pay-as-you-go basis, which typically means a 20-cent per message rate.

Most users have buckets of usage. Because of that, most users are paying about one cent for each message.

From the first quarter of 2008 to the third quarter 2009, the effective price of a text message has decreased by 47 percent, in large part because so many users now are on unlimited or heavy texting plans.

Bad and Worse News on Job Front

Unemployment rose in most cities and counties in December, signaling that companies remain reluctant to hire even as the economy recovers, according to a new report from the U.S. Labor Department.

The unemployment rate rose in 306 of 372 metro areas, the Labor Department says. As bad as that is, matters may be worse.

Job losses during the recession may have been underestimated by close to a million jobs. The prevailing figure is that the recent recession cost more than seven million jobs. It appears the Labor Department might have to revise those numbers, making the actual total eight million.

The shockingly bad news is that over the last 10 years, according to ADP data, the United States actually has added no net new jobs.

In December 2000 there were 111.65 million U.S. employees working. In January 2010 there were 108.14 million Americans working.

In May 2008 there were 115.2 million U.S. workers. That means the country must add back 7.1 million jobs--or more likely 8.1 million--to get back to where it was before the recent recession began.

That raises a question many of us have not been asking. Up to this point, the issue has been "when will the recession end?" with the implicit assumption that a relatively normal job recovery pattern would follow.

The recovery appears to have started, though we will have to wait for some time to date the actual turning. point.

The new question is what happens to growth rates and job recovery as the recovery continues.

Some have argued that consumer behavior has permanently altered because of the severity of the recession, which would imply a slower rate of growth, even if other negatives were not in place.

But there is no way to test the thesis of new consumer behavior patterns in the near term, because it will take years before consumers really are free to choose new patterns of behavior. There is a difference between "permanent" changes in behavior and "temporary" changes. We seem at the moment stuck in a "temporary" mode: people simply are not free to change their behavior at the moment. So long-term conclusions cannot be drawn.

That has obvious implications for the marketing of most consumer products and services. The recession is over, but recessionary buying habits will persist for some time. We cannot know whether these changes are permanent or cyclical.

ADP Reveals Shocking Decade-Long Employment Data

Medium-sized businesses are back in hiring mode, according to ADP. That's the good news, since medium-sized businesses employ more Americans than big corporations and almost as many as small businesses. Nationally, these firms employ more than 42 million Americans, far more than large companies (17.8 million) and nearly as many as small businesses (48 million).

The bad news is that small businesses shed another 12,000 jobs and large businesses shed 19,000 in January 2010.

The really bad news is that over the last 10 years, according to ADP data, the United States actually has added no net new jobs.

In December 2000 there were 111.65 million U.S. employees working.

In January 2010 there were  108.14 million Americans working. From March 2007 to May 2008 U.S. employment was above the 115 million mark.

Overall, the economy still lost 22,000 jobs between December and January, according to the ADP report.

In May 2008 there were 115.2 million U.S. workers. That means the country must add back 7.1 million jobs to get back to where it was before the recent recession began.

One might argue that means 7.1 million U.S. families that are spending far less than they used to, on communications and all sorts of other things. But that completely understates the matter. Several hundred other million consumers have ratcheted their spending down as well.

All of that likely means several more years of slow economic growth, as consumers restructure their finances, government at all levels finds it simply cannot spend so much because the tax revenue isn't there, and the other long-term impact of unusual and unprecedented government indebtedness starts to be felt.

Some have argued that consumer behavior has permanently altered. One doesn't even have to go that far to predict a long, sluggish climb back up. Behavior now is constrained in real ways. It isn't a matter of permanently altered behavior but rather of sheer inability to behave otherwise.

The recovery has begun. The bad news is that it will be hard to see, and that there is no way to test the thesis of new consumer behavior patterns for some years, because it will take years before consumers really are free to choose.

Internet Isn't What it Used to Be

Some time ago, the Internet was "controlled" by standards groups.

These days, some think it is controlled by ISPs.

Increasingly, it is controlled and shaped by ecosystems formed about devices or key applications (Click on image to see larger view).

That means our old notions about the "open" or "neutral" Internet have changed.

To some extent, the Internet still is about the ability of any one user to reach other user. To an increasing extent, it is about domains accessible only to members, users and subscribers.

For content owners, advertising and marketing specialists, users and enablers, that means development and business models are based on discrete ecosystems, not the "Internet" in general. And while much attention is paid to the role of ISPs as "gatekeepers," there are all sorts of gatekeepers these days, and application providers or device manufacturers might be more important gatekeepers than ISPs.

Do People Expect Too Much from Nexus One?

The Nexus One launch has not gone flawlessly, that is clear enough. Users report their devices are randomly switching between the T-Mobile USA 3G and the EDGE network. Early Apple iPhone devices had the same problem, some niote.

Others are disappointed Google wasn't "more disruptive" of the retail pricing regime, or the lack of multi-touch support for the screen (an input capability using input from two fingers, used to enlarge a section of the screen image by pinching or sweeping the touch points apart or together.

Despite the "earned media buzz," Nexus One's first-week sales appear to fall far short of sales of the Apple iPhone, for example. Flurry estimates the iPhone sold more than a million units in three days when first introduced, and 1.6 million units in its first full week,  while the Nexus One might have sold only 20,000 units.

The Verizon Droid sold 250,000 units the first week it was available, while the HTC "myTouch" sold 60,000 units in its first week of availability.

To be sure, Nexus One, myTouch and Droid all are available on just a single network in a single coutnry. The iPhone initially was available in eight countries and eight carriers.

That's no coincidence. After the iPhone hype, it is proving more difficult for each competing device to illustrate how it is similarly "revolutionary." There's just no way to get around the fact that the iPhone was revolutionary, and so far, the other devices, though unique in many wasy, simply are following in the general mode.

Apple might have seized such a mindshare lead that there simply is no way any other device can "challenge" iPhone. That isn't to say many other touchscreen smartphones will fail to be built and marketed, but simply that the "buzz" hasn't been matched by the same sort of enthusiastic consumer resposne as the iPhone received, simply because no subsequent device, so far, as proven to be such an advance over the earlier generation of devices.

So far, all the other models are "like the iPhone." So far, that hasn't been enough. That's one reason why at least a few of us might think the challenge for all the other devices is to create a unique identity in the market, not to "be the next iPhone." That probably cannot be done at this point.

What device promoters can do is what Research in Motion achieved with th BlackBerry. RIM created an email-optimized device that syncs seamlessly with key Microsoft applications such as "Outlook," in additiion to handling email, capturing a specific segment of the mobile device market and end user base (business users).

But there's more to it than just that. The mobile is a mass market retail business, where marketing, distribution and customer support all matter. As much earned media attention as Nexus One has gotten, it is nothing like what Verizon was apparently able to do with a huge marketing and advertising blitz for its "Droid," or what Apple was able to do, not just with its own earned media campaign, but with a follow-on marketing campaign and network of highly-trafficked retail locations.

The Nexus One is being sold through a Web site, with only earned media support. Verizon launched a $100 million on marketing blitz, including the key Christmas selling season. Suffice it to say many many millions more people know the name "Droid" than "Nexus One."

T-Mobile, whose currernt role in the Nexus One ecosysem is largely indirect, does not appear to have supported the Nexus One launch with its own marketing funds, though it did for the myTouch.

Also, with a few new Android devices now competing for attention, there may be some fragmentation of the message. There's just one iPhone; there are several Android smartphones.

Also, Google might not have priced the device at levels that would drive more volume, though it also is battling the known resistance most end users have to paying $500 or more for an "unlocked" smartphone that only works on one U.S. network (with full access to all the frequency bands) anyway. What does "unlocked" mean to most consumers when the device can only be used on one network?

Beyond that, there is the simple fact that device hype likely outstrips ability to deliver, at this point. Everybody is looking for the first true "iPhone competitor." That might be asking too much.

http://blog.flurry.com/bid/29658/Flurry-Special-Report-Google-Nexus-One-Launch-Week-Sales

AT&T Announces New Pricing for Unlimited Mobile Plans

AT&T has announced new unlimited plans across all of its devices. The new plans, available beginning Jan. 18, 2010, feature an unlimited voice plan for $70 a month. "Family Talk" customers (two lines) will be available for $120  a month.

Texting plans remain unchanged at $20 for unlimited plans for individuals and $30 for Family Talk plans.

"Quick Messaging Device" (feature phone) customers can buy unlimited talk plans for $70 a month and Family Talk customers can buy unlimited talk plans for $120 per month (two lines).

These plans also require a minimum of $20 per month for individual plans and $30 per month for Family Talk plans for texting or Web browsing packages for new and upgrading customers.

All smartphone customers, including iPhone customers, may now buy unlimited voice and data for $100 a month.

For smartphone customers on Family Talk plans (first two smartphones), unlimited voice and data is now available for $180 a month. Texting plans remain unchanged at $20 for unlimited plans for individuals, $30 for Family Talk Plans.

Beginning Jan. 18, 2010, existing AT&T customers can change to any of the new plans without penalty or contract extension

Is Nexus One A Particular Threat to Service Providers?

Does Google's Nexus One launch mean anything in particular for mobile service providers? That might be a matter of some debate at the moment. Some observers were expecting something "more disruptive." Perhaps an ad-supported voice service; maybe a completely unlocked device able to work on any carrier's network; maybe a business model that clearly delineates a new role for the handset provider.

That didn't happen. Some observers think the bigger innovation is the way Google is selling from a
Web site. Some might see too much difference there, either. Selling from a Web site isn't too unusual these days, and Apple's retail stores and existing carrier Web sites.already provide models for handset distribution aside from the branded mobile carrier stores.

To be sure, an "unlocked handset" strategy always will be tough in the U.S. market until such time as most carriers are using one single air interface and handsets are equipped with enough frequency agility to adapt to whatever network si providing access. An unlocked handset today means a choice of no more than one or two major carriers (one WiMAX, two CDMA and two GSM).

The other angle is that U.S. consumers have not yet shown any desire to pay full retail price for a handset, when they can get a subsidized device at the price of a two-year contract. People might gripe about the existence of contracts, but they have choices. They can pay full retail for their devices and avoid the contracts. Not many make that choice.

The more interesting observation is about what various Android devices really are. A BlackBerry is an email device; an iPhone is a Web surfing device. Many feature phones are texting devices. Some models are social networking devices, or at least highly optimized for that purpose. Some devices are optimized for navigation.

Could a new niche be developing for a "search" device? Is "finding stuff" a sufficiently robust need that at least one of the Android devices becomes recognized as the single best device for finding things? That seems to me the most interesting question about what the Nexus One or broader family of Android devices might raise.

Matters always can change, but at least for the moment, it does not appear the Nexus One is especially disruptive of the existing mobile business model or standard practices, either.

http://connectedplanetonline.com/mobile-apps/news/googles-nexus-effects-0115/?imw=Y

New Verizon Wireless Pricing Shows Growth Strategy

Verizon Wireless today announced that it is introducing new data, prepaid, and voice plans on January 18, 2010. The single biggest change is a new mandatory data plan requirement for all 3G multimedia devices. For "feature" phones, that will mean a $10 a month charge for use of up to 15 Mbytes. 

Smartphone packages remain at $30 a month. 

But Verizon also introduced new unlimited postpaid plans for voice ($70 a month) and unlimited talk and text for $90 a month. Prepaid unlimited plans sell for $75 a month for voice, and $95 a month for unlimited voice and texting.

"Nationwide Unlimited Talk Family SharePlans" will be $120 a month while "Nationwide Unlimited Talk & Text Family SharePlans" will cost $150 a month.

All Family SharePlan pricing includes the first two lines of service. The new plans do not apply to existing customers, though any current customer can change to any of the new plans without a penalty or contract extension.

So heree's the strategy background. Verizon wants to build the biggest-possible data customer base before it launches its new fourth-generation Long Term Evolution network. That's an essential part of getting a financial return on the 4G investment, and also reflects the growing importance of smartphones as a percentage of total devices sold and the importance of data service revenues.

Verizon also wants to protect its base of "high-value" customers by simplifying pricing plans, providing more value and encouraging uptake of higher-end plans. Verizon expects to see higher data penetration, higher average revenue per user and less churn, with lower-end customers moving up to unlimited plans in greater numbers. 

Verizon believes the moves to unlimited plans also will reduce operatinal costs. Since a large percentage of customer service costs are driven by consumers concerned about their usage and overages, unlimited plans will blunt the volume and cost of handling such requests. 

Strategically, the data plan moves also are a reflection of the vanishing voice revenues business, and the absolute centrality of data revenues as the mainstay of Verizon Wireless revenue. 

Small Businesses Challenged by Social Networking

As often is true in the communications business, tools that large enterprises find useful and helpful are not necesarily so helpful or useful for small businesses. Social networks likely fall into that category.

A survey of small business executives by Citibank, for example, found owners and managers giving short shrift to social networks as a help for their businesses.

The survey of 500 small business executives across the United States by Citibank / GfK Roper found 76 percent of respondents saying they have not found social networking sites such as Facebook, Twitter and LinkedIn to be helpful in generating business leads or for expanding their business during the last year, while 86 percent say they have not used social networking sites to get business advice or information.

The survey found that general search engine sites such as Google and Yahoo! trump small business-focused sites and the WSJ.com as destinations for small business owners to seek business advice or information. 61 percent of respondents say they rely on these search engine sites.

"Our survey suggests that small business owners are still feeling their way into social media, particularly when it comes to using these tools to grow their businesses," says Maria Veltre, Citibank EVP. "While social media can provide additional channels to network and help grow a business, many small businesses may not have the manpower or the time required take advantage of them."

That's a lesson even some mid-sized companies already have encountered. It isn't that social networking takes much capital or imposes much operating cost. What it does require is time. So the typical pattern is that a firm launches a social networking effort of some sort with time borrowed from executives and professionals who are very busy and scarcely have time to tackle the other issues on their agendas.

Over time the effort dwindles. That's one reason few small businesses have made sustained and vigorous social networking efforts.

One trend confirmed in other studies is that small businesses are making greater use of Web sites to support their business operations, marketing and sales.

About 42 percent of small business owners and managers reported that in the past year they have made greater use of their company's Web site to generate business leads and sales, though.

Among companies with 20 to 99 employees the percentage rises with 57 percent saying they have made greater use of their Web site.

Survey respondents are also using email marketing (28 percent) and online advertising (25 percent) to generate business leads and sales.

But the evidence on how well social networking works for lead generation is contradictory, so far.

A recent survey by Ad-ology found lead generation is the biggest benefit of social networking for U.S. small businesses, cited by one-half of respondents as being the case. Social networks were also considered a good way to keep up with the industry and monitor online chatter about the business.

Small businesses rated Facebook the most beneficial social networking site, with 33 percent of respondents reporting it was at least somewhat helpful. It was also the social network most likely to be used. Use of LinkedIn was less common, but the business-oriented site was claimed as beneficial by 21 percent of small businesses, compared with 19 percent that said the same of Twitter.

The biggest roadblock, however, was the perception that “our customers do not use social networks,” which 31 percent of respondents said they believed.

And as has been the case noted above, nearly 50 percent complained that they did not have the time or staff available to do a good job with social network marketing.

Video Represents 99% of Consumer Information Consumption

Reduced to bytes, U.S. consumers in 2008 imposed an information transfer "load" of about 34 gigabytes a day, say Roger E. Bohn, director, and James E. Short, research direction of the Global Information Industry Center at the University of California, San Diego. That works out to about seven DVDs worth of data a day.

And that isn't even the most-significant potential implication. We are used to hearing about consumption of media or information in terms of "time," such as hours consumed each day. But Bohn and Short also look at information flows in terms of "bandwidth."

If one looks at consumption based on the "hours of use," video accounts for possibly half of total daily consumption.

If one looks at the flows in terms of compressed bytes, or actual bandwidth required to deliver the information, then video represents 99 percent of the flow volume.

That has huge implications for the design of any nation's communications and "broadcasting" networks. To the extent that virtually all information now is coded in digital form, a shift of consumption modes (from watching linear satellite, cable or telco TV to Internet delivery) can have huge effects.

Recall that video bits now represent 99 percent of bandwidth load. But also note that most of that load is delivered in the most-efficient way possible, by multicasting a single copy of any piece of information to every potential consumer all at once. It requires no more bandwidth to serve up an event watched by 500 million people than one person.

That is why video and audio networks historically have been designed as "mutlicast" networks. They are the most effiecient way of delivering high-bandwidth information.

If more video starts to move to Internet delivery, the bandwidth requirements literally explode. To deliver one identical piece of content to 500 million Internet users requires 500 million times as much bandwidth as the "old" multicast method, in at least the access link. If network architects are ruthlessly efficient and can cache such content at the edge of the network, wide area bandwidth consumption is reduced and the new load is seen primarily on the access networks.

All of this suggests a rational reason for maintaining "multicast" video entertainment networks, and not shifting all consumption to unicast Internet delivery. It is extremely inefficient and wasteful of network resources. To the extent that much "on demand" viewing of popular professional content can be satisifed by local storage (digital video recorders), this should be done.

On-demand viewing of YouTube content is harder to rationalize in that manner. For the same reason, local storage of computer games, where possible, makes sense. Interactive, "live" gaming does not allow such offloading, and will contribute hugely to Internet bandwidth demand, just as viewing of YouTube videos is doing.

“Information," representing flows of data delivered to people from 20 sources, is likely to be much higher the next time the researchers replicate the study, because television, which accounts for nearly half of total consumption, now has shifted from analog NTSC to high-definition, which imposes a greater information load.

Television consumption represents about 41 percent of the daily consumption, but computer and video games represent 55 percent of the flow. Add ratio and TV and those two sources represent 61 percent of the flow.

But there is another important implication: the researchers counted "compressed" information, or "bandwidth," in addition to more-familiar metrics such as hours of consumption.

Looked at in this way, the researchers say, "led to a big surprise." In fact, only three activities--television, computer games and movies account for 99 percent of the flow. All other sources, including books, mobile or fixed voice, newspapers, radio or music, contribute only one percent of total load.

The researches also point out that they count bytes as part of the  "information flow" only when users actually consume the information. Data stored on hard drives or TV or radio signals not being watched or listened to does not count in the research methodology.

The researchers also point out that if “personal conversation” is considered a source of information, then high-quality "tele-presence" applications that actually mimic talking to a person in the same room would require about 100 Mbps worth of communications load.

Three hours of personal conversation a day at this bandwidth would be 135 gigabytes of information, about 400 percent more than today's average consumption.

40% Will Increase Email, Text Message Marketing Campaigns, Survey Finds

About 40 percent of email marketers surveyed in November 2009 by Silverpop say they will increase their email marketing budgets in 2010, while 47 percent said their budgets would stay the same.

In the coming year, more than half of survey respondents (52 percent) said increasing customer loyalty was a top email marketing goal.

But incremental revenue clearly is the top driver. Overall, 51 percent of respondents want to drive incremental revenue with their email program, while 65 percent of those with larger email budgets say that's their top goal in 2010.

"Inbox clutter" remains an issue for 37percent of respondents. That's an issue, but nothing like the opt in issues faced by users of text messaging campaigns, whose users often must pay "by the message" to receive them. Cluttering up an inbox is one thing, charging someone to receive your marketing message is far worse.

And social media is growing in important. About 84 percent or marketers plan to include social media into their email programs in the coming year, while 38 percent will add text messaging.

Marketers enjoying budget increases are even more likely to add these to their programs; About 89 percent of marketers will growing budgets say they will incorporate social media,  while 44 percent of respondents with growing budgets say they will add text message campaigns.

Email linked to popular social networks will work fine for PC-based users, but text messaging will be needed to reach mobile users on the go.

Will 2010 be a Turning Point for the Telecommunications Industry?

Will 2010 be a turning point in the telecommunications industry? Maybe, says Mike Cansfield, Forrester Research analyst.

Cansfield argues that the recession has brought a new realism to the sector, forcing telcos to cut costs and adopt better operating practices. Might might argue this trend has been underway for several years, though.

Uncertain economic growth also will weigh on the industry.

But new converged services might explode, as the boundaries between Internet, telecom, voice, data video and applications continues to blur.

Cansfield argues that a major telco will disappear in a merger or go bankrupt in 2010. The merger of T-Mobile and Orange in the United Kingdom, the unsuccessful merger of Bharti Airtel and MTN Group in Africa, and the purchase of HanseNet in Germany by Telefonica are examples.

"Green" initiatives will be back on the telco agenda in a big way, Cansfield believes.

Mobile device wars will renew with extra intensity and the battle for the mobile apps market will begin in earnest. Just as iTunes in conjunction with the iPod changed the music industry and the MP3 device market, so the Apple App Store in conjunction with the iPhone transformed the mobile data and applications market for both consumers and, now, businesses.

The boundaries between "work" technology and "home" technology will continue to blur. Traditionally customers have bought different communications services depending on whether they were at work or at home.

But these distinctions are blurring, Cansfield says. Many of us today work part of our week at home and connect with the office through our own terminals and fall into the trap of dealing with business emails at home in our supposed down time. But this is not a one-way-street — hence the high number of personal SMS and Twitter messages sent from the workplace.

Net neutrality will be a major issue in 2010, because the evolution of stable and sustainable revenue models for the entire ecosystem is at stake, though most for network service providers.

Also, 2010 will be the year that many governments will recognize that broadband connectivity is essential for economic competitiveness, the delivery of public services, and an inclusive society, and they will step up to the plate to close the digital divide, Cansfield argues.

All of us likely have opinions about the importance of 2010. I suspect some of us really believe 2010 will not be especially noteworthy in terms of marking a turning point in the telecommunications business, but only because the underlying changes are irresistible forces not dependent on economic conditions, government regulations or industry consolidation.

The business is changing in profound ways because end user needs and interests, provider business models and powerful technology trends are profoundly aligned. Nothing is going to stop those changes.

Americans are Happy with their Products and Services, Sort Of

A new study by the Government Accountability Office suggests 84 percent of U.S. wireless users are "very" or somewhat" satisfied with their wireless phone service. That isn't to say there are no issues: there are.

The GAO says 10 percent of users are "dissatisfied" with their service. About 12 percent say they are dissatisfied with billing, 14 percent are dissatisfied with terms of service, 11 percent unhappy with call quality and 12 percent dissatisfied with customer service.

But 76 percent of respondents are satisfied with billing; 72 percent satisfied with terms of service, 85 percent satisfied with call quality and 70 percent satisfied with customer service.

In terms of complaints received by the Federal Communications Commission from end users, 55,000 were unhappy with billing and rates. About 14,000 were unhappy with call quality, 13,000 complained about contract early termination issues and 12,000 were unhappy with customer service, GAO says.

In terms of complaints, billing issues were more than 400 percent more common that complaints about call quality, contract termination or customer service.

In some ways, in fact, the GAO study suggests a higher degree of satisfaction with wireless service than other surveys might suggest. The American Consumer Satisfaction Index, which ranks consumer satisfaction on a scale running from zero to 100, with 100 being the top score, might suggest less happiness, not only with wireless, but also with cable TV and satellite service, with declining scores for wired voice service.

Global Revenue Now Lead by Mobile

Global telecom services revenue now is lead by mobile services, at 46 percent of total revenue, say researchers at Analysys Mason.

Wired voice revenues now account for 21 percent of total revenues.

Business services account for 14 percent of revenue, while consumer broadband now represents eight percent of total, the firm says.

Video represents about eight percent of total.

Huge Increases in Consumer Communications Value Since 1990, Data Shows

With the caveat that the product of a fraction always changes as either the nominator or denominator change, huge increases in consumer spending on communications and information technology since 1990 have been more than matched by broader increases in household income, holding the percentage of household spending on communications flat over the entire period.

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Since 1990, consumer spending on information and communications technology has grown from $197 billion to $545 billion, 5.1 percent of national disposable income in 1990, peaking at 5.9 percent in 2000, and falling to 5.4 percent in 2008.

Spending on communications services has tripled over the same period, from $77 billion to $243 billion, and at 2.3 percent of national disposable income, up from 1.8 percent in 1990 but below its peak of 2.5 percent in 2001.

Basically, the story is one of large increases in consumer value. Consumers are spending more on communications and infornation technology, but a steady percentage of disposable income.

Yet consumer value has grown exponentially in the intervening years. U.S. communications expenditures as a share of national disposable income has been flat since 1997, but users have added over 100 million broadband and video connections and over 100 million wireless connections, according to the Bureau of Economic Analysis.