Singapore Auction of 270 MHz for Long Term Evolution

Singapore's communications regulator, Infocomm Development Authority of Singapore (IDA, plans a mid-2013 auction of 270 MHz of spectrum for Long Term Evolution. 

The spectrum includes 150 MHz in the 1800 MHz band and 120 MHz of spectrum in the 2.5 GHz band. A 2 x 20 MHz block will be set aside for a new entrant to the Singapore mobile services market. 

Spectrum licenses will have terms of 13 years (1800 MHz spectrum or 15 years for the 2.5 GHz spectrum. 

IDA will cap any single service provider at of 2 x 30 MHz for the 1800 MHz band, and 2 x 45 MHz for the 2.5 GHz spectrum (assuming a successful new entrant emerges). 

There will be no mandatory wholesale requirements for any of the licenses. To avoid "spectrum flipping," no spectrum can be sold until the spectrum licensee has completed its national build. 

In that context, "new entrant" refers to potential service providers that do not currently provide nationwide mobile service in Singapore. 


Reserve prices have been set at S$16 million for each 2 x 5 MHz block of spectrum in the 1800 MHz band and S$10 million for each 2 x 5 MHz lot for the 2.5 GHz band, excluding the goods and services tax. 

IDA will also require the bidders to pay an annual spectrum management fee of S$26,400 per 2 x 5 MHz spectrum lot per year of each spectrum right, and a one-time application and processing fee of S$5,400 per 2 x 5 MHz spectrum lot.


Service providers are required to obtain a "Facilities Based Operator" license from IDA, among other licences, to roll out any new nationwide mobile system.


IDA forecasts that the mobile data traffic mobile data traffic in Singapore will grow exponentially from around 3.1 petabytes in 2010 to around 37 petabytes in 2015, representing a compound annual growth rate of 64 percent. 

Potential additional blocks of spectrum in the 700 MHz and 900 MHz bands also are expected to be auctioned at some point, separately and in the future. The 700 MHz blocks would not be available until 2020, when analog TV services are shut off. 

Demystifying "Software Defined Network"

Without a doubt, software defined network is among the latest "next generation network" buzzwords to gain traction. Of course, it's hard to describe what SDN actually is, or does, though there is much hype about both topics. 

SDN, some might say, is nothing more than the separation of network data traffic processing from the logic and rules controlling the flow, inspection, and modification of that data. That separation of control and data planes has implications. 

Traditional network hardware such as switches and routers implement these functions in proprietary firmware. SDN  might allow the separation of those functions. Some would say the value is increased flexibility and ease of reconfiguration of networks.

Some might say the advantage is lower cost of network operation. And some would note that the concept has much to do with the ability to use commodity hardware rather than dedicated hardware. 

In fact, some might argue that, next to "big data," SDN is one of the most "hyped" concepts in information technology or communications networking. 

If so, that is because it is hard to pin down precisely what SDN actually is. It's a design principle, not a protocol, not specific set of boxes or software platforms. It's more like the concept of "cloud computing." 

But there is no mistaking the reasons why service providers might like the concept: it promises lower-cost hardware investments and more flexible networks that can adapt in real time, or close to it, to changes in requirements or capabilities. 



The main advantage of a software defined network is that it no longer consists of dedicated and proprietary boxes with names like: firewall, load balancer, router.

If an organization tomorrow suddenly two times the need for firewall capacity, compared to load balancers, they can just provision other software on their existing hardware. 

In addition everything that is controlled by software can be much easier automated than something that is based on hardware. 

That also makes more feasible end-user configurations of services, not simply easier service provider reconfiguration of functions. 

Even Satisfied Mobile Customers Churn, Study Finds

Mobile service providers are said to have hundreds of different customer churn indicators. So how important are “satisfaction” measures, and do they really contribute to customer “loyalty?” The answer could be more difficult than you might think.

A new study by WDS suggests that only about 13 percent of U.S. mobile customers are truly loyal to their service provider, defined as being resistant to competitive price promotions and forgiving of their service provider when things go wrong.

“Satisfaction,” one normally supposed, has something to do with customer loyalty. The notion is correct, but only up to a point. Of those customers currently at risk of switching in the U.S. mobile market, 40 percent are “moderately” satisfied. Only 37 percent of at-risk customers  have “low” satisfaction scores.

The most shocking statistic is that about 23 percent of customers at risk of switching are highly satisfied with their mobile operator. In fact, WDS argues, 19 percent of all “highly

satisfied” customers are considered to be churn candidates.  

The WDS loyalty audit therefore calls into question the conventional notions of how satisfaction relates to loyalty. In fact, even significant numbers of customers who have “low” satisfaction scores are unlikely to churn.

You might easily agree that if a customer has to contact a support channel more than once in a six month period, that customer is twice as likely to become a switcher.

But even “happy” customers will churn. Some 36 percent of those respondents who said they were satisfied with “value for money,” still were churn risks. Some 50 percent at risk of churn were “highly satisfied” with service reliability and 53 percent were highly satisfied with network coverage.

Still, satisfaction remains an important metric. A “highly satisfied” customer is 2.2 times more likely to be retained beyond 12 months than a customer who reports “low satisfaction.”

Typically, a rule of thumb is that customers with long tenure have a reduced risk of churn. But WDS says 25 percent of customers with six or more years of tenure are at risk of switching to another provider.

And satisfaction only goes so far. About 34 percent of “highly satisfied” customers are resistant to switching for a 10-percent price discount. But increase the discount to 20 percent and only 15 percent continue to say they “definitely” would not switch.

All that noted, it might be said that customer satisfaction tends to create conditions for loyalty, but does not assure loyalty.

A customer who reports “low satisfaction” with a mobile service providers service is 3.4 times more likely to be a churn risk than a “highly satisfied” customer.

A customer with “medium” satisfaction score is two times more likely to be a switch-risk than a highly satisfied customer.

In general, a customers’ likelihood to switch decreases with age. For those aged over 60, just 19 percent are at risk of switching, compared to 45 percent of customers who are 25 to 34 year olds.

Of those at risk of switching, 28 percent are high spenders, spending over $120 per month. So you might argue that monthly billing and churn propensity are related in some causal way.

That probably is not the case. About 25 percent of all respondents spend that much. In other words, customers spending more than $120 a month have reported churn sentiment that is in line with their share of the customer base.  

The WDS Loyalty Audit interviewed 1000 U.S. customers.

What Will Softbank Do?

Federal Communications Commission Chairman Genachowski has said the agency’s review of the deals between Softbank, Sprint and Clearwire was on a schedule “consistent with” its nonbinding 180-day transaction “shot clock,” which runs through May 29, 2013.

The chairman’s comments suggest to analysts at Stifel that he believes the FCC ultimately will approve the Softbank purchase of Sprint, as well as the Sprint acquisition of Clearwire.

That likely would take much of the wind out of Dish Network’s rival bid to buy Clearwire, though aggrieved shareholders might yet file lawsuits that would prolong the uncertainty.

Assuming the analysis of FCC deal approval is correct, the real speculation can begin. Up to this point, there has been some speculation that all the moves and counter moves were tactical, on the part of Sprint and Dish Network.

In that view, Sprint doesn’t really want to buy Clearwire right now, but only wants to block Dish and Clearwire from merging. Others might argue Dish doesn’t really want to buy Clearwire, but only to force Sprint to help Dish build its own network, or raise the equity value of Dish Network overall, before Dish sells its spectrum, or itself, to another firm, such as AT&T.

But assume Softbank really does want to acquire Softbank, and wants to use Sprint as part of a larger plan for U.S. market entry. That is a straightforward assessment with no complicated “real motives” required.

Assume Softbank wants Clearwire’s spectrum to make a big splash, in some disruptive way, when it enters the U.S. market. Assume Softbank stays “in character,” and focuses on software (applications) and low retail prices, as it has done successfully in Japan.

Recall that Clearwire’s primary value is that it owns so much spectrum, and already is a wholesale capacity provider.  So then imagine that Softbank decides to leverage that wholesale value proposition, to enable a Google, Amazon or Apple to create a nationwide LTE Internet access network.

That network still could offer voice and text messaging, if customers really wanted it, using Sprint. But the disruptive angle would be a fast, data-centric mobile network optimized around Internet apps and experiences.

One advantage could be a disruptive pricing scheme, leveraging low retail prices and a simple LTE data access value proposition.

"Low Cost" iPhone Coming in 2013

Despite repeated official denials that it was working on a lower-cost iPhone, a lower cost  iPhone is coming, perhaps as early as the summer of 2013.

Of course, in an Apple context, "low cost" is a matter of perspective. Some speculate the "low cost" device will cost less than $400 (the issue is how much less), and will be targeted at the prepaid smart phone market, and China and India, for example. 

Some believe Apple could set a non-subsidized lower cost iPhone price at about $329. 

Investors will worry about profit margin, but that might not be as big an issue as feared. The big issue is whether such a move would crimp Nokia's efforts in the affordable device market, Microsoft's attempt to gain more share, or Samsung's strategy for lower end devices. 

Galaxy S III, iPhone Users are "the Same"

Many early studies suggested Apple iPhone owners were "different" in terms of demographics. Early adopters were disproportionately wealthier, male and technology savvy, compared to buyers of other devices. Over time, those differences have narrowed.

Now a study by Consumer Intelligence Research Partners suggests iPhone and Galaxy S III owners behave the same way.
  
“Use for calling, texting, email, and Internet access was the same for both phones,”Consumer Intelligence Research Partners suggests. “Use differed only for gaming and photos, with iPhone owners using their phones somewhat more frequently for these.”

One might therefore argue that the Galaxy S III is, in many ways, a functional substitute for the iPhone, for many users, in the area of behavior, not simply device preference.

The study also confirms what you might have guessed, namely that smart "phones" actually are more often used for use of Internet applications or text messaging, than for phone calls. 

Phone use was only slightly more frequent than use of email, the study suggests. 

Verizon Messaging: Will it Show the Value of a Phone Number?

Verizon Messaging is a new multi-screen messaging service that extends "Verizon Messages" service to PCs, Android smart phones, and Android or iOS tablets. 

The advantages over third party messaging apps all hinge on integration of the mobile device phone number.Where a third party app has to be present on both sender an recipient devices, Verizon Messaging only requires mobile phone numbers on either end of the communication. 

In other words, senders only have to know that a recipient has a mobile number, and the message can be received on a PC or tablet, as well as the phone, without the need to know whether the recipient has loaded the right app on all of the receiving devices. 

Also, messages can be stored if the recipient devices are not "online" to receive them in real time. That is a difference from third party messaging services that require both sender and receiver to be online at the same time. 

Virtual Currency is "Currency," U.S. Treasury Decides

The U.S. Treasury has decided to apply  money laundering rules to "virtual currencies" such as "bitcoin." 

The move illustrates a principle. Very often, new Internet-based alternatives to legacy products and processes get created.

For a time, those innovations are ignored. As they start to become more significant, a regulatory rule tends to emerge, namely that if something "walks like a duck, and quacks like a duck, it is a duck."

In other words, the new form of a legacy product or process or function comes under the same regulatory framework as the original product or function. Virtual currency has gotten to that point.

The other observation is that new IP-based or Internet-based alternatives to legacy ways of doing things often are based on arbitrage of some sort. That typically allows competitors to get started. But the arbitrage opportunity rarely lasts. 

Regulators tend to move to level the playing field, in regulatory terms. And competitors respond. 

The Treasury says money-laundering rules apply to 'virtual currencies.'


The move means that firms that issue or exchange online "cash" will now be regulated in a similar manner as traditional money-order providers such as Western Union Co.

As a practical matter, that will mean more costs, as suppliers would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000.

HBO Go a High Speed Access "Enhanced Service?"

Broadband Internet service providers always are looking for ways to enhance their services and add value, to avoid a "commodity" approach. Could HBO GO, a streaming service sold by HBO, be such an example of a value-added feature?

It wouldn't be easy, as HBO's important cable, telco and satellite video distributors would not necessarily take kindly to HBO essentially making an end run around them. 

HBO's "HBO GO" online streaming service presently is available only to subscribers to video entertainment services who also buy HBO. 

But HBO continues to talk about the possibility it could be sold, perhaps as a feature of a high-speed access service, to customers who buy voice or broadband access from a  partner, but do not buy a video service. 

It would be a delicate balancing act, and it remains unclear whether the business model actually would work, HBO executives are careful to point out. 

HBO now is talking about an incremental fee of $10 to $15 on top of the customer's high speed access fee, for example. 

By extension, where ISPs have sold security services as an add-on to their access services, perhaps one day streaming video will be another type of add-on feature. 

Each Generation of Mobile Networks Has Required More Backhaul

There’s a very simple reason mobile backhaul demand is growing. By 2017, U.S. mobile data consumption will grow by 11 times the 2012 volume. The other issue is a change in network architecture. With each generation of mobile networks, the number of cells required to cover any area has grown.

That order of magnitude increase will create a market for consumer, enterprise and carrier small cells of about 21 million units, according to researchers at iGR.

What that could mean for mobile backhaul is fairly clear. The number of outdoor small cell backhaul connections deployed by service providers  is forecast by Infonetics to grow more than 100-fold from 2012 to 2016, according to Infonetics Research.

So an order of magnitude increase in mobile bandwidth consumption will lead to two orders of magnitude growth of service provider small cell sites.

What already seems clear is that many of those sites will require wireless backhaul. Smaller, cheaper radios will be needed. But lower cost backhaul connections also will be crucial. In some cases that will mean using consumer grade or business grade digital subscriber line or cable modem connections.

In many other cases unlicensed or licensed radio spectrum will be the connections of choice.

LTE Device Sales Grow 151% in 4Q 2012

Sales of 4G LTE devices were up 151 percent in the fourth quarter of 2012, according to Infonetics Research.

Infonetics expects the number of global mobile broadband subscribers (phone and mobile Internet dongles) to grow from 1.2 billion in 2012 to nearly three billion by 2017. 

Regulating IP Communications is Like Fighting the Last War

It often is said that generals always are ready to fight the last war, especially if it was a lost war. It's catchy, and probably wrong, but you get the point: it is awfully easy to view the future through the lens of the past.

So it also is easy to argue that it is time to stop obsessing over legacy voice regulation at a time when that part of the business actually is "dying."

More than 40 percent of U.S. homes have abandoned their landline phone service in favor of cable, VoIP and mobile.

By the end of 2013, according to USTelecom, less than 30 percent of U.S. homes will rely on a wired connection as their primary telephone service. 

Mobile service providers already are trying to get ahead of the game as well. AT&T, Verizon Wireless (and likely T-Mobile USA, soon) already have moved to a preferred retail packaging that bundles unlimited domestic calling and text messaging with a variable bucket of data usage that drives most of the account revenue.

They are doing so to protect voice and messaging revenues that are expected to begin a long, steady decline.

That is not to say every actor in the communications ecosystem will be happy about a rapid transition to all-IP communications and a new regulatory framework.

But the point is clear enough: we would be wasting time heavily regulating a service that is in"sunset" mode. We essentially made a similar, if smaller mistake when creating the Telecommunications act of 1996. The whole idea was to shake up the voice business.

The whole effort missed the fact that the Internet, mobile and IP communications were about to displace huge chunks of the old voice business.  The principle should now be clear: don't spend lots of time and effort "regulating" a service that is not driving communications in the 21st century. 

Email Isn't Dead Yet

There are three times as many email accounts as Twitter and Facebook accounts combined, according to Wrike.  And email represents 38.5 percent of mobile time spent on the Internet.

What is SDN Good For?

At least in some quarters, we are in a growing hype cycle related to software defined networks. As I simplistically understand it, SDN is about separating the "control plane" from the "data plane." 

In a probably over-simplistic way, that means putting intelligence in a headend or central office location, while using much-simpler, cheaper devices "out in the network" that only have to deal with "data," while the centralized controller does the computation that formerly was "out in the network."

The broad analogy will be familiar to those who once worked with "client-server" computing architectures. It isn't a case of "mainframe-dumb terminal" models, because the SDN clients are not "dumb" devices. But the big computation loads are handled centrally (control plane) while the many distributed data plane devices can work fast because they don't have to deal with local computing chores, and just handle the data.

As we typically do, there will be years of wrangling over "what SDN" really is, and how it is implemented. There will be many attempts to graft SDN onto the existing base of platforms that actually have intelligent devices scattered all over the network.

What probably will be lost is the "so what" part of the discussion, for service providers or their customers. 

Most lost in the discussion will be the end user benefit. But some might argue that's what we really should be talking about. 

It is perhaps not required that SDN be used to provide a user-defined set of policies relating to use of bandwidth. That could logically be provided other ways, including the use of intelligent devices scattered throughout the network.

But it might arguably be much easier, much faster, more dynamic and more affordable to supply end-user define policies on an SDN network than it is today. 

For service providers the advantages might be even simpler. SDN might enable "bandwidth on demand" in a reliable, robust, affordable way. 

But all that will likely be lost in the wave of hype we are about to start hearing. 

2 LTE Air Interfaces for China?

China Telecom's chief executive officer says China Telecom prefers the frequency division flavor of Long Term Evolution rather than the time division flavor chosen by its rival China Mobile. 

If China Telecom does opt for frequency division (FDD-LTE) rather than China Mobile's TD-LTE, it would mean the Chinese market would feature two distinct air interfaces for Long Term Evolution networks. 

Some might say that is not such a good outcome, as handsets might be incompatible. But the choice of FDD-LTE also would mean that China Telecom has immediate access to devices already developed for North American markets, where FDD-LTE is the air interface.

China Mobile already has committed to build its 4G network based on the TD-LTE standard.