Cricket Move Part of AT&T's Latin America Strategy

There is one easy way to describe the difference in business strategy conducted by AT&T and that chosen by Verizon Wireless. AT&T already is committed to expansion in Latin America, while Verizon remains focused on the U.S. market.

One example: Cricket Wireless, an AT&T value brand, is expanding international service  to nine new countries from the United States.

And that arguably is a relatively small part of the strategy. The most direct evidence are the acquisitions of Nextel Mexico and Iusacell, which make AT&T a direct competitor in the Mexico mobile business, and represent the first “outside the United States” expansion in nearly a decade.

The DirecTV acquisition also delivered AT&T a significant position in Latin America video entertainment, though some think additional expansion in the video area is less likely than investments in mobile assets.

Under the new Cricket plan, U.S. callers can reach Dominican Republic, Colombia, Costa Rica,El Salvador, Honduras, Guatemala, Jamaica, Haiti, or Nicaragua by adding the country of their choice to Cricket's Smart ($50) and Pro ($60) monthly plans.  

For an additional $10 - $15 per month, the add-ons give consumers a range of mobile-to-mobile and landline calling minutes (depending on the country) plus unlimited text, picture, and video messaging (MMS).

Local Firms Eager to Join Myanmar's 4th Mobile Operator Business

As you might expect, there is no shortage of local firms in Myanmar eager to participate in the creation of a fourth mobile service provider in a country that until recently had very low mobile adoption rates, and which is seeing rapid growth.

Some 17  local firms have applied to join a consortium that would operate Myanmar's fourth mobile phone network, said Chit Wai, deputy permanent secretary at the Ministry of Communication and Information Technology.

The firms selected to participate will be announced in September, with a mobile license running 15 years to be awarded to the consortium.

There is no limit on the number of local firms that can joining the consortium, which will include a foreign partner.

Currently, Norway's Telenor and Qatar's Ooredoo offer mobile service in Myanmar. A third telecom license is held by MPT, a joint venture between the telecoms ministry and Japan's KDDI.

source: Myanmar Infrastructure Group

source: Nokia Networks

Smartphone Sales Slow, But Focus Shifts to India

No market, the saying goes, grows to the sky. At some point, every market saturates, as most of the potential buyers actually have done so. That is starting to be the case for smartphone sales globally, even if pockets of potential growth remain.

Smartphone shipments are expected to grow 10.4 percent in 2015 to 1.44 billion units, according to International Data Corporation (IDC).

That forecast is revised lower from an earlier forecast of This is lower than IDC's previous forecast of 11.3 percent year-over-year growth in 2015.

IDC expects a noticeable slowdown in smartphone shipments in 2015 as China growth moderates.

As the largest market for smartphones--32 percent of all new smartphone shipments in 2014--China remains important even if its growth has begun to slow.

Shipments are forecast to grow just 1.2 percent year over year in 2015, which is down from 19.7 percent in 2014.

China will remain the largest market for smartphone volumes through 2019.

However, its share of the overall market is expected to drop to 23.1 percentin 2019 as high-growth markets like India continue to expand.

More than 26.5 million smartphones were shipped to India in the second quarter of 2015, up 44 per cent from 18.4 million units for the same period last year.

Worldwide Smartphone Forecast (units in millions)
Android	1,164.3	81.1%	9.9%	1,541.9	81.1%	5.0%	7.8%
iOS	223.7	15.6%	16.1%	269.6	14.2%	3.3%	7.0%
Windows Phone	36.9	2.6%	5.8%	67.8	3.6%	12.8%	14.2%
Others	11.5	0.8%	-15.5%	23.0	1.2%	8.6%	11.0%
TOTAL	1,436.5	100.0%	10.4%	1,902.3	100.0%	5.1%	7.9%

Source: IDC Worldwide Quarterly Mobile Phone Tracker

International Internet Capacity Grows 31% in 2015

Worldwide international Internet capacity growth rates are slowing, a rather familiar pattern in the international capacity business.

Growth rates were about 41 percent in 2011, and 31 percent in 2015. In part, the law of large numbers is at work: it is harder to maintain high growth rates as the installed base gets larger.

Backbone operators deployed 43 Tbps of new capacity in the past year, according to TeleGeography.

African Internet bandwidth grew 41 percent between 2014 and 2015, and 51 percent compounded annually over the last five years, to reach 2.9 Tbps.

Oceania saw the second fastest growth rate of 47 percent per year between 2011 and 2015 to reach 2.1 Tbps, and capacity in Latin America and the Middle East grew 44 percent per year to 20.6 Tbps and 8.4 Tbps, respectively, TeleGeography says.

While international Internet capacity in each of these regions has doubled every two years over the period, growth in Europe and the U.S. and Canada was far slower, at 33 percent compounded annually.

2011-2015 International Bandwidth Growth Rates

Source: TeleGeography

Verizon "Hum" Gets Carrier into Connected Car Aftermarket

After-market approaches to adding connected car features to vehicles are getting to be a crowded-or abundantly supplied--market. Add Verizon to that crowd, as it rolls out “Hum” branded devices and services.

The reasons are simple: it is a potentially huge market, representing anywhere between $4 billion and $500 billion in sales in 2015.

source: Symphony Teleca

Primary Reliance on Mobile Internet Access Grows in U.S. Market

Mobile Internet access is getting to be as important in the U.S. market as it is in many developing markets, as a primary, if not "the" primary way people get access to the Internet.

In 2014, the percentage of U.S. desktop-only internet users was 19.1 percent, while mobile-only users represented about 10.8 percent of Internet users.

In 2015, the share of mobile-only users has climbed to 11.3 percent, while the desktop-only population has declined to just 10.6 percent.

The vast majority of the digital population (78 percent) is multi-platform and goes online using both desktop and mobile platforms.

Still, the mobile-only user base is instructive. Even in the U.S. market, where fixed access and mobile access are relatively abundant, smartphones and tablets have become a primary method of Internet access.

That has implications for communications policy, not only the fortunes of Internet access, device suppliers, the consumer elecronics market and app providers.

In a similar way, mobile platforms accounted for 60 percent of the total time users spent interacting with digital media, up from 50 percent in 2014.

Also, mobile apps accounted for more than half of all digital media time spent in May 2015.

Those sorts of trends have other repercussions.

In a competitive market, one might well argue, the lowest cost provider among the contestants with significant market share, will win (some smaller contestants could well have even lower cost profiles, but no ability to scale).

And, as it has become undeniable that mobility continues to lead revenue growth and strategy in the broader market, what “cost leadership” looks like in the mobile space now is significant.

Without any question, Wi-Fi has become a core and foundational part of the access fabric for mobile devices and customers. “Ownership,” as such, is less important than “access.”

That roughly mirrors the structure of the Internet Protocol-based communications and application markets, where an app provider does not have to “own access assets,” but simply can use “any available access.”

So mobile service providers can “use” Wi-Fi assets without owning them. That directly affects thinking about investments in access assets. As it turns out, it is less expensive to rely on Wi-Fi for much, if not the majority, of “mobile” access operations.

In other words, encouraging users to go “untethered” on Wi-Fi benefits both users and carriers, as demand is shifted off the core mobile networks. That much is obvious.

Also obvious is that fixed network providers with dense backhaul networks stand to reap benefits as suppliers of small cell (mobile or Wi-Fi hotspots) networks, either for internal use or as a revenue-generating wholesale opportunity.

Just as obviously, any “mobile” service provider able to leverage such assets can change the cost structure of “mobility” services.

And that is precisely the opportunity cable TV operators believe they can seize. In other words, eventually, cable TV operators could emerge as the low cost providers in the mobile market, with implications for market share and leadership.

Australia Mandates Lower Mobile Termination Rates for Voice, Text Messages

The Australian Competition and Consumer Commission has mandated a change in wholesale mobile network termination charges.

For the first time, the ACCC has also decided on a price for mobile network operators to charge to receive SMS messages.

The ACCC has decided that the wholesale price of terminating calls on an Australian mobile network should be 1.7 cents per minute, reduced from the current rate of 3.6 cents per minute.

For the first time, the ACCC has decided to set the price mobile network operators charge to receive SMS messages at 0.03 cents per SMS.

With the important caveat that “cost” is not “retail price,” a study by WIK-Consult estimated the cost of termination for a mobile minute of use at about AU$0.0168, while the cost of terminating a text message was AU$0.00002.  

The rulings are important because, in addition to competition and changes in end user demand, government rules also are pushing down voice and text messaging rates. That, in turn, will lead to lower voice and text messaging revenue for mobile operators

The regulated prices for mobile voice and SMS termination will apply from 1 January 2016 to 30 June 2019.

Mobile voice termination rates in the United Kingdom and Portugal, for example, are projected to decline steadily between 2015 and 2020, WIK-Consult said.

Why AT&T is Aggressive about Software Defined Networks

The cost of bandwidth on AT&T’s networks has not strictly followed the cost curve for computing or storage. Any access networking professional knows why: access networks are construction projects, bound by atoms as much as bits.

So AT&T believes there is room for improvement of about four orders of magnitude, in fact.

That is one reason why AT&T has been so aggressive about software defined networks. SDN is seen as one key tool for driving out the cost of delivering bits over AT&T networks. And AT&T estimates the savings will have huge magnitude.

Will 40% of U.S. Households Use Wireless Charging by 2020?

More than 270 million households worldwide will be using wireless charging technology by 2020, including nearly 40 percent of households in the United States and over 20 percent  in Europe, according to Juniper Research.

The primary barrier to market for wide-area charging technologies is regulatory requirements, such as the U.S.  Federal Communications Commission Code of Federal Regulations part 15, which stipulates that output from radio transmitters operating at frequencies of 45kHz and above cannot emit more than one watt of output power.

This severely limits the transmission of power over distance. For power transfer to be quick enough for most mobile computing devices, which typically charge at between 5 and 15 watts, substantially higher output power would have to be allowed.

That might be a key obstacle. The solution, of course, is not to transmit at a distance, but only in close proximity, as with charging furniture. Such limitations are one reason why Low Power Wide Area standards for Internet of Things devices will include batteries.

Which "Zero Billion Dollar Market" Strategy is Netflix Pursuing?

There are any number of ways to use the term “zero billion dollar market.”

The term can refer to any market potential less than $1 billion; a market that does not yet exist, but which can be created; or an existing market a disruptor can enter, capturing leadership of a much-smaller market.

And sometimes it is not clear which sense of the term ultimately will apply, even for successful attackers that create whole new markets. Apple often is cited as practicing the "create a market that does not yet exist" version of the strategy.

Other services, such as Skype or WhatsApp, might represent some combination of strategices--both creating a new market and cannibalizing an existing market that winds up being smaller.

So two of the ways the term of art "zero billion dollar market" is understood are negative for communications service providers. Any market smaller than $1 billion in annual revenue is too small for a tier one service provider to address. You can think of any number of products telcos have chosen not to create and sell as examples.

When products are sold through channel partners, those are examples of “zero billion dollar markets.” Service providers use channel partners because they cannot afford to sell direct, as the markets are not big enough to support the costs of selling direct.

Any disruptive attacks that shrink the size of the market likewise are unhelpful. Skype, or any other major voice over Internet Protocol app or service that is a direct or indirect substitute for carrier voice, provide examples of that.

Messaging apps such as WhatsApp provide other clear examples. Even Netflix now destroys the linear video subscription market.

Keep in mind the key distinction. In most competitive markets, contestants try and gain or hold  more market share, to build scale and thus obtain higher profit margins.

But many practitioners of the zero billion dollar market strategy are not playing that game. Instead, the objective is to essentially destroy the economics of the present business model.

Skype and messaging services give away for free what telcos try to sell. They hope to create a new business selling new or complementary products. The new revenue streams do not have to be as big as the former revenue streams. They simply have to be quite attractive for the new providers.

Skype, Netflix and WhatsApp therefore raise uncomfortable questions for access providers and incumbent Internet service providers. Those services are not trying to take market share in the legacy business. Instead, they literally destroy the existing business, allowing them to create a new one that is far smaller than the older business, but dominated by the attacker.

It isn’t yet clear which flavor of “zero billion dollar market” Netflix actually will win. Netflix clearly represents a new category that did not exist before. In that sense it is like Apple creating the iPod.

But Netflix success--and that of similar efforts to follow--also could shrink the size of today’s linear video business, making it similar to Skype or WhatsApp.

Use of over the top messaging apps is shrinking demand for text messaging services sold by carriers. Both VoIP and OTT messaging likely will wind up disrupting legacy services and creating a smaller market for voice and messaging services sold by carriers.

It is not so clear what role Netflix ultimately will represent. As it creates a new business, Netflix might also reshape what remains of the linear subscription business.

source: Portio Research, Fierce Wireless

GoGo Expects to Supply 70 Mbps Aircraft Internet Access in 2016

Gogo has received the final Supplemental Type Certificate (STC) from the U.S. Federal Communications Commission required to launch Gogo's 2Ku next generation satellite connectivity service.

The technology currently is installed on Gogo's 737-500 test plane and is now cleared for in-flight testing. Gogo expects to launch commercial service of its 2Ku technology later this year.

The 2Ku system using two phased array antennae to boost reception and therefore speed.

Seven commercial airlines have signed up for either a trial or fleet deployment of 2Ku covering more than 500 commercial aircraft.  Gogo expects to launch commercial service later this year and begin rapid installation of the backlog of 500 aircraft in 2016.

2Ku is expected to deliver peak speeds of more than 70 Mbps to the aircraft, which is more than 20 times the bandwidth provided by Gogo's first generation Air to Ground solution in the U.S.

Windstream Selling Data Center Business

In the data center business, scale matters. Even if data centers are the new central offices, in terms of aggregating edge traffic for transport across the wide area networks, smaller providers competing against Amazon Web Services, Microsoft and Google, plus other providers, will find it tough to compete.

So it is that Windstream is pondering a sale of the data center business  it purchased in 2010.

That will free up capital Windstream can deploy elsewhere, but might also dent its enterprise revenue streams. Windstream earns nearly 80 percent of its revenue from the business segment.

In its second quarter of 2015, Windstream had revenues of $1.4 billion. Consumer revenues represented just $314 million--about 22 percent--of total revenues.

Since about 2010, both Windstream and similar profile service provider Frontier Communications have earned most of their money in the business segment, despite the continuing preponderance of consumer accounts.