10 Telco Myths

Telco 2.0's "10 misleading myths" in telecom. 

Western Europe Fixed and Mobile Service Revenue is Dropping

Researchers at Analysys Mason say Western Europe's fixed network and mobile service providers now see declining revenue. Consumers also are allocating a smaller percentage of their incomes to communications services. 






Retail spend per capita per month by service type, USA and Western Europe, 2010 and 2011 [Source: Analysys Mason, 2012]

Verizon Wireless to Turn of Its 2G and 3G Networks by 2021

Verizon Wireless plans to decommission its 2G and 3G networks by 2021, says Aparna Khurjekar, Verizon vice president of global strategy for M2M. 

Western Europe Mobile Revenue Will Drop 4% Per Year to 2020

The mobile industry’s combined revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or 4% per year, in the next five years, and by 30 billion Euros by 2020, says STL Partners.

You can call that an example of the product life cycle. You can point to the impact of competition. But at that rate, those mobile service providers will lose half their current revenue within a decade. 

Forecast Mobile Telco Revenues in Euro 5 Economies

Sprint Waiting on Any Potential MetroPCS Offer

Sprint Nextel Corp. seems to be holding off on any immediate counterbid for MetroPCS Communications, at least in part because it wants to spend more time examining the particular terms for the planned sale to T-Mobile USA, Bloomberg reports. 

Also, Sprint might have some months before it would have to submit a formal offer. Sprint might be betting that MetroPCS could drop in value before a formal bid. 

Retailers Make Bid to Lead Mobile Payments

Over the past decade, the dominant payment networks (Visa, MasterCard, American Express) have accounted for most of the investment in mobile payments trials aimed at retailers. That has changed recently. 

Programs launched by Starbucks and a number of mobile point of sale suppliers such as Square, PayPal and others illustrate bids by retailers to operate their own closed loop systems, as well as new efforts by branded payment networks to reshape the payments clearing part of the business. 

But the formation of the Merchant Customer Exchange (MCX) by major retailers is a bid by retailers to maintain better control over the emerging mobile payments business.

Created by merchants with some $1 trillion in annual retail sales, the MCX wants to create a standard for smart phone-based transactions for all major platforms. Its members include Best Buy, CVS, Sears, Shell Oil, Target, and Wal-Mart Stores.

Walmart Expects $9 Billion in E-Commerce Sales in 2014

Walmart said it plans to generate $9 billion in revenue from ecommerce sales in 2014. One way Walmart expects to reach that revenue goal is by adding a "same-day delivery" capability. Amazon also has said it is looking at next day delivery, or perhaps same-day delivery, in at least some markets.

Walmart is more optimistic than is Amazon. Walmart is testing same-day delivery in four markets and a scan-and-go smart phone service, which would allow customers to scan purchases with their smart phones and pay for the purchases without getting into a check-out line.

Another Example of How Technology Diffusion Has Changed

Major General Robert Wheeler says that where once the military led development of new technologies with war-fighting implications, now the vast majority of improvements are being driven by advances made in the private sector. And that is particularly true in the mobile technology area, Wheeler says. 

So the Department of Defense and other federal agencies are looking for help from corporations and enterprise sources. 

That mirrors the paradigm change for many other technologies. Once upon a time, important new technologies were discovered or proposed at universities, then commercialized for enterprises. Technology then tended to migrate to mid-market firms, then to smaller businesses, and finally to consumers.

In the broadband and mobile businesses, that pattern has changed. These days, innovations tend to move from university directly to the consumer markets, and people then migrate their use of those tools into the work environment. 

Enterprise Workers Use "Non-Desk PCs" 1/2 the Time

A survey by Forrester Research shows that about half the time, surveyed employees use only their desk PCs. About 20 percent of the time, workers use both PCs and laptops, and 28 percent of the time use their desktop, notebook and smart phone.

Smart phones represent about 35 percent of the amount of time enterprise workers say they use at some point in a day. The desktop PC gets used at some point in the day by about 82 percent of users in a typical day.

Many employees use multiple devices during a typical day. Some 16 percent to 20 percent of workers said they use four devices at work. 

Perhaps 22 percent said they used two devices, 18 percent said three, 20 percent four or five, and 14 percent said six or more. 

In other words, workers using 2 or more devices was at 74 percent in February, and has now dropped to 66 percent. Tablet usage is about 12 percent.

PC Sales Drop in 2012 for First Time in 11 Years

PC sales will drop in 2012, for the firs time in 11 years, according to IHS iSuppli. IHS iSuppli notes that hasn't happened since 2001, the "dot com bust."

Videoconferencing "Cannibalized" by Mobile Devices

The videoconferencing market is moving away from expensive telepresence systems and toward mobile applications, says Andrew Davis, senior partner of Wainhouse Research. 

Davis says mobile applications will soon outpace other videoconferencing offerings such as tele-presence and room-based systems. 

In fact, demand for telepresence systems is expected to decline sharply in the coming years as the market for these systems becomes saturated with options.

That will not come as a surprise to observers who follow the industry. Over the last couple of years, enterprise and business interest in videoconferencing likewise has been moving to desktop approaches rather than room-based approaches. 

Revenues generated by the enterprise videoconferencing and telepresence market dropped to $644 million in the second quarter of 2012, a 6 percent decline, according to a new report by market research firm Infonetics Research.

Dwolla Partners With mFoundry for Peer to Peer Mobile Payments

Dwolla is partnering with mobile banking and payments service provider mFoundry to provide peer to peer mobile money transfers and payments to mFoundry's  800 banks and credit unions using the mFoundry cloud banking platform known as Fin.X.

The Starbucks Card Mobile is powered by mFoundry. The new agreement means Bank of America, PNC Bank, Zions Bank and more than a third of the top 50 U.S. institutions could provide P2P money transfer, if they choose to do so. 

EBay UK Soon Will Close 50% of Transactions on a Mobile

"Showrooming," the process where consumers check out merchandise, but wind up buying it online, is going to get worse, some might argue. One aspect of mobile commerce is that consumers increasingly will be able to look at merchandise, and then buy from an online suppliers, while they are inside retailer locations, immediately, says eBay CEO John Donahoe. 

That explains why eBay is interested in mobile commerce. Donahoe says  eBay UK closes about a quarter of its business will close on mobile, and that percentage rapidly is approaching 50 percent of transactions. 

Donahoe shared that eBay has between 300-400 employees working on mobile solutions.

Canadian Government Will Use National Security Criteria When Picking Communications Infrastructure Suppliers

The Canadian government has said that it will be invoking a "national security exemption" as it hires firms to build a secure network, as the U.S. government might do. The move follows a U.S. Congress committee report concluding that Huawei and ZTE pose security risks . 

The exemption allows the Canadian government to bar firms from competing for government infrastructure contracts if those companies, or in some cases their home countries, are considered security risks.

LTE Will Drive a Majority of Verizon Wireless Data Traffic "Soon"

Verizon Wireless said that more than a third of its data traffic is already travelling on its Long Term Evolution 4G  network, and that within a few months, the majority of data traffic will be on that network.

It is taking only two years to reach that milestone, compared to the eight years it took 3G to account for the bulk of data traffic, Chief Technical Officer Nicola Palmer said. Verizon expects to have LTE running in 400 cities by the end of October 2012.