Global Internet Backbone Traffic Grows 40% in 2012

International Internet capacity growth fell to the lowest pace in five years, decreasing from 68 percent in 2008 to 40 percent in 2012, TeleGeography says, though international Internet bandwidth continues to grow rapidly, more than doubling between 2010 and 2012, to 77 Tbps. 

That should not come as a terrible surprise. There is a "law of large numbers" at work here. Every new venture that gains end user traction shows high growth rates at first, from a low installed base. As the base of users or customers grows, growth rates naturally slow. 

With the installed base of capacity usage now a large number, growth rates are destined to slow, for the same reason. 

Average international Internet traffic grew 35 percent in 2012, down from 39 percent in 2011, and peak traffic grew 33 percent, well below the 57 percent increase recorded in 2011.

On the other hand, content delivery networks and local caching technologies do reduce the need for new long-haul capacity by storing popular content closer to the end-users. 

Apple TV is Not About the "TV"

Apple TV will succeed not as a "TV" or a "decoder" but only as a service offering the professional video people normally expect to see on a video subscription service, which makes Apple TV a tougher battle than creating a successful MP3 or smart phone ecosystem.

In creating the iTunes and iOS phone ecosystems, Apple faced a weakened music industry and a fragmented mobile service provider industry.

The video ecosystem is highly entrenched and used to dealing with potential disrupters. In addition, Apple faces formidable other viable contenders, including Amazon, Google and Microsoft, Bloomberg argues. But winning will require extensive licensing agreements with content owners and video distributors who are historically suspicious of interlopers that threaten to undermine the control content owners now exercise in the ecosystem. 

Without access to large amounts of that content, any effort to "change," "reinvent" or "disrupt" TV is destined to fail.

Cable and media companies are concerned that a better-designed Apple product will undermine their business model, says Walter Price, an investor with RCM Capital Management. 

“It’s a tough problem because the cable companies and media companies are not very enthusiastic about the prospect of Apple creating a better user interface,” said Price. 

Online "Oversharing" is a Global Problem

According to a recent multi-country study commissioned by Intel and conducted by Ipsos Observer, 60 percent of respondents believe  "oversharing" is an issue, meaning people divulge too much information about themselves online, with Japan being the only exception.

About half of adults around the world feel overloaded by the amount of information people share online. Yet, adults and teens across the globe are  online

While the survey revealed that digital sharing on mobile devices helps many people feel more connected to others, the tendency to share too much information can annoy others for various reasons. 

Adults and teens from each country had differing opinions on top digital sharing pet peeves. Constant complaining, posting inappropriate photos, using profanity and sharing too many life details and personal information were prominent responses.

Intel's 2012 "Mobile Etiquette" survey examined the current state of mobile etiquette and evaluated how adults and teens in eight countries share and consume information online, as well as how digital sharing impacts culture and relationships. The research was conducted in the United States in March and a follow-up study was conducted in Australia, Brazil, China (adults only), France, India, Indonesia and Japan from June to August.

Argentina Decides to Create its Own Mobile Company

Argentina's government apparently is canceling an auction for third generation (3G) spectrum that represents about a third of all potential 3G spectrum in Argentina.

Argentine President Cristina Kirchner has greatly expanded the state's role in the economy since she took office in 2007.

Kirchner shocked investors earlier in 2012 when she seized a controlling stake in Argentina's biggest oil company YPF SA  from Spain's Repsol SA.

Now telecommunications appears to be the next sector that will see an increased government presence, some would argue. 

Argentina boasts one of the highest rates of mobile-phone ownership in the world, with about 55 million wireless subscribers in a country of almost 41 million people.

Instead of licensing that spectrum, the Argentine government will go into business as a service provider itself using the state-owned satellite company ARSAT for backhaul and core network.  So far, it is not clear whether that means Argentina will operate the network directly, or have a business partner do so. 

Argentina's $14 billion mobile phone market is now lead by America Movil's Claro, Telecom Italia's Personal Telefonica's Movistar. The canceled spectrum auction is a blow to Argentina's four incumbent wireless carriers--Telecom Argentina SA and subsidiaries of Mexico'sAmerica Movil SAB de CV, Spain'sTelefonica SA  and U.S.-based NII Holdings Inc. that submitted bids.

Claro, owned by Mexican billionaire Carlos Slim, was the only company seen as having the resources to build a network using the new spectrum allocation, and letting Claro win "would have led to more concentration," Argentina says. 

The government also is studying other ways of reducing what it claims is "monopoly control in the telecommunications business," citing the dominant positions of Telefonica and Telecom as an example. 

The government was initially planning to award 30 MHz of spectrum in the 1,900 MHz band for an area covering the provinces of Entre Ríos, Corrientes, Misiones, Córdoba, Santiago del Estero, Chaco, Formosa, Catamarca, La Rioja, Tucumán, Salta, Jujuy and Santa Fe.

For the southern provinces of San Juan, San Luis, Mendoza, La Pampa, Neuquén, Río Negro, Chubut, Santa Cruz, Tierra del Fuego, parts of Santa Fe and certain areas in Buenos Aires, the government planned to award 35 MHz in the 1,900 MHz band.

For the greater Buenos Aires area, the government was looking to award 7.5 MHz of spectrum in the 850 MHz band and 30 MHz in the 1,900 MHz band.

"This is not a state takeover," the Argentine government says. 

Smart Meter Shipments Grow 34% in Second Quarter 2012

Global smart meter shipments in the second quarter of 2012 grew 33.6 percent over the previous quarter, and were up nearly 51.3 percent year over year, according to  IDC Energy Insights. By the end of 2016, IDC expects worldwide annual meter shipments to surpass 130 million units.

The U.S. market continues to recede, after receiving an artificial bounce with the "American Recovery and Reinvestment Act of 2009, with growth in the smart metering market now shifting to Europe, Asia, the Middle East, and Latin America.

In Europe,  many European Union member states have signaled their comitment to embrace smart metering in compliance with the European legislation mandating deployment of smart meters where economically feasible. These states are now in the process of finalizing the regulatory framework for their respective national rollouts, which are to be completed by 2020.

Apple iOS Devices Consume 8 Times More Web Content Than Some Samsung Devices

Though the comparison is in some ways unfair, Apple iOS users consume about eight times as much Web content as users of eight older Samsung models, including the Galaxy S 4G, Galaxy S II AT&T, Galaxy S II Skyrocket, Galaxy S II T-Mobile, Galaxy S II Epic 4G, Galaxy S Showcase, Droid Charge, and Galaxy Prevail. 

On the Chitika ad network between August 18^t and August 24^t, 2012,  iPhone users generate nearly eight times the Web traffic. 

Some of us might argue that the comparison in many ways pits heavier users (iPhones) with lighter users (the eight older Samsung models), and devices with low share against a single device with leading market share. 

EU Might Reduce Support for Broadband Deployment

To the extent that European Union broadband plans for 2020 rely on financial support from the European Commission, it now appears those plans might slow, as the EC itself now says infrastructure funding is shifting to transport and energy projects. 

It appears that funding levels originally foreseen now cannot be provided at the original levels. "The Presidency recognizes that it is, therefore, inevitable that the total level of expenditure proposed by the Commission, including all elements inside and outside of the MFF, will have to be adjusted downwards."

Translation: less money for the EC broadband plan. 

Users 10 to 19 Drive Telekomunikasi Indonesia Growth

PT Telekomunikasi Indonesia operates in a market where there are 250 million mobile subscribers out of a population of  240 million, and its fortunes illustrate the gradual shift to wireless modes of communications among users of virtually all ages, with significant growth form users 10 to 19 years old.

PT Telekomunikasi Indonesia operates fixed wireline, fixed wireless and mobile networks, serving about 130 million subscribers for the year ended 2011.

At the end of 2011, the company earned about 16 percent of revenue  from its fixed wireline business, but total wireline revenues dropped by almost seven percent, largely due to increased smart phone use and a rising mobile penetration in Indonesia.

That is not too surprising, as most fixed network operators face increased product substitution from mobile alternatives.

The company's fixed wireless revenues also declined significantly in the financial year ended 2011. An intense competitive environment in the region, as well as deterioration in voice revenues, led to the 31 percent decrease in fixed wireless revenues. The company is facing competition from local telecom companies, with every company introducing new and cheap packages for its respective text messaging and voice call services.

The company's mobile business also experienced a slight deterioration in 2011 as well, despite the increase in its mobile subscription base, at least partly because prepaid revenue contribution is less predictable than provided by postpaid accounts.

Total subscribers grew by almost 14 percent in the year as compared to 2010.

Mobile data was largely responsible for offsetting the drop in revenues from other segments, growing by almost 21 percent in the financial year ended 2011.

Overall, mobile customer base grew almost 15 percent in 2011, reaching 117 million subscribers with total additions of 10 million, according to Seeking Alpha.

1/2 of all Humans Will Use Internet by 2017

Broadband, computing and Internet access now have taken the place of the older concern about access to voice communications. In fact, almost nobody worries about whether most humans will be using voice communications. These days, it is access to the Internet and computing that occupies policymakers.

Keep in mind that, just a few years ago, five of the the six billion people on Earth did not have access to computing or the Internet. But that is changing very rapidly, as well.

Although Africa, for example, lags in terms of other forms of computing and communications usage with an estimated 100 million Internet users, between 2000 and 2011 the growth of Internet usage in Africa exceeded 2,000 percent, which is more than five times that for the rest of the world.

Some 2.4 billion people across the world now use the Internet on a regular basis, at least once a month, from home, school, work, or any other location using a PC or a non-PC (mobile) Internet access device, Forrester Research says.

This is expected to grow to 3.5 billion by 2017, representing nearly half of the 2017 overall world population of 7.4 billion.

In some countries — mostly developed economies, such as the US, the UK, Japan, Germany, Sweden, and the Netherlands — Internet penetration as a percent of the overall population is very high; more than 80% of the population are regular Internet users.

In other, mostly emerging markets — such as Brazil, Russia, India, China, Mexico, Indonesia, the Philippines, and Nigeria — Internet penetration ranges between 10 percent and 50 percent.

A key point to note is that while higher PC penetration has driven the adoption of Internet in developed economies during the past two decades, faster mobile penetration in the emerging economies is helping increase the Internet population, thanks to “mobile-only” Internet users.

DOCOMO buying Guam Cable Operator

The proposed purchase of Guam's cable TV service provider by NTT DOCOMO, the parent company of Guam-based DOCOMO Pacific, illustrates a couple of themes in the global telecom  business. First, expansion often must come from "out of territory" assets, as most "home markets" are intensely competitive and offer relatively tough growth prospects.

So expansion out of market is a logical step. The other theme is the choice of network platforms out of market that are different from those of the home market. Most out of market expansion tends to rely on wireless, rather than fixed network facilities, for example.

The proposed purchase of MCV Guam Holding Corp., which does business as MCV Broadband, might seem to be out of character. It isn't. MCV Broadband has the largest mobile market share on Guam. Nor is NTT unfamiliar with the Guam market. 

NTT DOCOMO's entry into the Guam market began when it bought GuamCell, SaipanCell and HafaTel for about $71 million in 2006.

Nor is competition in the Japan domestic market unrelated. Many would say MCV Broadband's main competitor is GTA TeleGuam. 

The principal owner of GTA TeleGuam is Advantage Partners LLP, the largest private equity investment firm based in Japan.

Telco Venture Arms are Quite Traditional, in Some Ways

It is not a secret that tier-one telcos have not been the fastest-moving firms where it comes to rapid creation of new services and applications. In fairness, very large organizations built on global standards, with many legacy systems to support and lots of government and regulatory oversight, have lots of reasons to move more slowly when making changes, only to avoid the danger of inadvertently “breaking something” that was not planned.

Historically, telcos have essentially outsourced technology and services innovation to third parties, be they AT&T Bell Laboratories, Bell Communications Research, leading industry suppliers and global standards groups.

So the recent trend of large telcos creating new venture capital organizations is not out of character.

T-Venture, the venture fund owned by Deutsche Telekom, has a total budget of about 450 million euros ($566 million) for investments.

Deutsche Telekom's T-Venture so far has assets worth 750 million euros invested in about 80 companies. But Deutsche Telekom now wants T-Venture to make faster decisions and take majority stakes in firms.

Aside from any internal discussions about the speed with which any of the larger telcos is “getting to market,” there always are going to be questions about how any smaller app or service is going to “move the revenue needle” for any entity that routinely books scores of billions in annual revenue.

In Spain,Telefonica runs a program dubbed “Wayra,” which nurtures companies in Europe and Latin America. Telefonica receives a 10 percent stake in each business and a preference right to buy a successful product.

Telefonica has also started Amerigo, an international network of technology venture capital funds, supported by the governments of Spain, Colombia, Chile and Brazil, as well as financial institutions, the company said in a statement today.

Though it certainly is correct to note that telcos might do better by insulating venture efforts from the day to day operating units, it also is correct to note that this is the traditional way larger telcos have innovated in the past.

The perhaps growing issue, as more such activity occurs, is how fast the innovations will have a significant revenue impact for the sponsoring telcos.

Android Builds U.S. Market Share lead in July 2012

For the three-month average period ending in July, 2012, 234 million Americans age 13 and older used mobile devices, with Samsung ranked as the top manufacturer with 25.6 percent of U.S. mobile handset users, followed by LG with 18.4 percent share. 

Samsung and LG experienced slight share drops, but Apple gained share, up to 16.3 percent.

Top Mobile OEMs 3 Month Avg. Ending Jul. 2012 vs. 3 Month Avg. Ending Apr. 2012 Total U.S. Mobile Subscribers (Smartphone & Non-Smartphone) Ages 13+ Source: comScore MobiLens
	Share (%) of Mobile Subscribers
	Apr-12	Jul-12	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Samsung	25.9%	25.6%	-0.3
LG	19.2%	18.4%	-0.8
Apple	14.4%	16.3%	1.9
Motorola	12.5%	11.2%	-1.3
HTC	6.0%	6.4%	0.4

More than 114 million people used smart phones during the three months ending in July, 2012, up seven percent over April 2012. Google Android ranked as the top smart phone platform with 52.2 percent market share (up 1.4 percentage points), while Apple’s share increased two percentage points to 33.4 percent. 

RIM ranked third with 9.5 percent share, followed by Microsoft (3.6 percent) and Symbian (0.8 percent).

Top Smartphone Platforms 3 Month Avg. Ending Jul. 2012 vs. 3 Month Avg. Ending Apr. 2012 Total U.S. Smartphone Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Apr-12	Jul-12	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	50.8%	52.2%	1.4
Apple	31.4%	33.4%	2.0
RIM	11.6%	9.5%	-2.1
Microsoft	4.0%	3.6%	-0.4
Symbian	1.3%	0.8%	-0.5

Galaxy S III Sales Surpass Apple's iPhone 4S

For the first time since it launched last October, Apple's iPhone 4S was not the top selling smartphone in the U.S., as the newly released Samsung Galaxy S III took the top spot in the month of August, according to  Canaccord Genuity. 

A Look at U.S. E-Commerce

EU to Approve U.K. Mobile Payments Consortium

European Union regulators will approve plans by British mobile operators Vodafone, O2 and Everything Everywhere to set up a mobile payments joint venture, Reuters reports. The consortium therefore would represent 92 percent of all U.K. mobile subscribers. 

Known informally as "Project Oscar," the venture will create a mobile wallet platform and an advertising sales effort aimed at about 74 million subscribers to all of the partner mobile networks, or about 92 percent of all mobile subscribers in the United Kingdom. 

The project is designed to enable extensive "data mining" on consumption habits, location and demographics of customers, which would in turn allow creation of highly-targeted advertising and other loyalty services.

Customers would be able to store debit and credit card details on their phones and pay for goods and services either online at retail locations by using their near field communications equipped smart phones.