Telefónica Adds Windows Phone 8 to Firefox OS Support, Wants Alternatives to Apple, Android

Telefónica is among global tier one mobile service providers that are acting to support mobile devices running on operating systems other than Apple and Android, by announcing a new program to boost sales of Windows Phone 8 devices.

Initially for a period of one year, Telefónica will enhance marketing activities in support of its Windows Phone 8 devices in the U.K., Germany, Spain, Mexico, Brazil and Chile.

Telefónica also is supporting devices running the Firefox operating system. In any part of the Internet ecosystem, there are natural tensions between participants, over revenue shares, influence or control.

Mobile service providers naturally believe app providers and device providers have too much influence, compared to the service providers, in large part because of end user affinity for certain apps or devices, which gives app or device suppliers leverage.

The long term issue is whether mobile service providers, who do have much sway over packaging and pricing, can really shift consumer preferences in a significant way, where it comes to device choices. People want what they want, when they want it, how they want it and why they want it.

And though it would be a very-serious step, tensions within the ecosystem sometimes can break out in more serious ways. Channel conflict is a perennial problem in technology businesses.

Branded ISP operations by Apple or Google could be an example of how natural tensions could become inflamed to a more significant degree.

Singapore is Looking at Authorizing 189 MHz of White Spaces Spectrum

Singapore’s Infocomm Development Authority now is working on the framework for enabling use of former broadcast TV spectrum (TV white spaces) in Singapore, making Singapore among the first nations (United States, Canada and United Kingdom also are among the early movers) looking to commercialize use of TV white spaces for Internet access services.

The U.S. Federal Communications Commission  is allowing white spaces operations on a license-exempt basis, with the management of such devices through a database.

The Office of Communications in the United Kingdom is adopting a similar approach. IDA is also considering adopting the same approach to facilitate the initial deployment of white spaces in Singapore.

The IDA also seeks input about whether some white spaces spectrum should be licensed, however, allowing those licensees to gain more certainty about spectrum for services that require something more like a traditional mobile service.

The IDA has allocated the VHF spectrum between 174 MHz and 230 MHz and the UHF spectrum between 494 MHz and 790 MHz for white space operations. A total of 21 MHz in the VHF band is available, including 181 - 188 MHz, as well as 209 MHz to 223 MHz.

There is more spectrum in the UHF band, including 502 MHz to 518 MHz, 614 MHz to  622 MHz, 630 MHz to 710MHz, 718 MHz to  742 MHz, 750 MHz to  774 MHz and 790 MHz to 806 MHz, representing a total of 168 MHz.

In all, 189 MHz will be made available, a huge amount of spectrum in highly-desirable frequencies.

IDA also is inviting views on allowing operation of white space devices in the 694 MHz to 806 MHz band until IDA allocates these frequencies for IMT deployment, set for 2020.

What Does Network Element Unbundling Promote?

Unbundling of network elements (either of full loops or parts of local access networks) has been touted as a reasonable way to enhance competition in markets where only one broadband access network dominates. Many will argue it has, in some markets, done so. 

But there also is new thinking that unbundling of network elements, and allowing competitors wholesale access to those network elements, at healthy discounts, has had a downside: namely reducing next generation network investment.

Perhaps oddly, some in the U.S. policy community have advocated adopting unbundling policies prevalent in the European Union, precisely at the point that the EU is moving away from some of the features of such policies, such as the amount of wholesale discounts, for example. 

Some of us might argue the shift in thinking is because new problems emerge in new periods of communications policy. Solutions to older problems might actually be problems in newer periods. 

In essence, that is why new questions are being raised in markets where widespread unbundling policies are seen as having succeeded in promoting competition. It is hard to solve new problems with yesterday's solutions, especially when the older solutions are directly related to the reasons the new problems exist.

Competition remains an issue, but is not the chief issue. The main problem is that the risk of investing lots of money in next generation networks is higher than ever before, because the returns from such investments are smaller and more uncertain that similar investments have been in the past. Investors dislike higher risk and uncertainty. 

The new issues are the ways unbundling and investment are related. U.S. regulators have supported mandatory narrowband service unbundling, but not mandatory broadband access unbundling. 

European policymakers, on the other hand, have applied mandatory wholesale rules to broadband and narrowband services.

The implementation of unbundling requires European regulators to make a challenging decision on access prices, balancing short-term consumer benefits (from low prices) and long-run benefits from investment and innovation, argue Martin H. Thelle and Dr. Bruno Basalisco of 
Copenhagen Economics.

"Several European fixed telecom incumbents have refrained from investing aggressively in next generation access networks due to regulation affecting the business case for 
fiber investments," they say. 

The problem is that the "unbundling approach does not suit the challenge of promoting investment in fiber-based infrastructure," they say.

Unbundling has created retail competition, but has not been effective at creating incentives for investment in next generation networks, said Roslyn Layton of the Center for Communication, Media and Information Technologies, Aalborg University Department of Electronic Systems.

Gigabit Squared to Launch in Some Seattle Neighborhoods in 2014

Gigabit Squared plans to launch service in some neighborhoods of Seattle in 2014, featuring free 5 Mbps service for five years, 100 Mbps download/100 Mbps upload for $45 per month or a gigabit for $80 a month.

The Gigabit Squared fiber network will initially be made available to neighborhoods located within the University of Washington West Campus District, First Hill, Capitol Hill and Central Area of Seattle as part of a program called Gigabit Seattle.

Installation charges will be waived for customers signing a one-year contract for 100 Mbps service or greater.  Otherwise, a $350 installation fee is required.

Plan A offers 5 Mbps download/1 Mbps upload at no charge for five years. After five years renters or owners can convert to a 10 Mbps download/10 Mbps upload service plan for $10 a month.

Plan B offers 100 Mbps download/100 Mbps upload for $45 per month, with no installation charge with one- year contract

Plan C is a symmetrical gigabit connection costing  $80 per month with no installation charge with one-year contract.

The Gigabit Squared plans show the Google Fiber model is spreading.

Dynamic Spectrum Alliance Launches

Some 23 companies and organizations announced the launch of the Dynamic Spectrum Alliance, which will focus will be on policy and regulatory advocacy.

Dynamic spectrum sharing allows radio communications devices to transmit on any available radio spectrum assigned for such sharing.

Almost by definition, the Dynamic Spectrum Alliance will tend to be disruptive, allowing service providers to get ot market with lower barriers to entry.

That does not necessarily mean “non-licensed” or “no fee” access, but should lead to more efficient, lower cost spectrum costs.

Members include Microsoft and Ruckus Wireless, Taiwan’s Computer and Communication Research Center, Japan’s National Institute of Information and Communications Technology (NICT), the Singapore Institute for Infocomm Research, and White Space Technologies Africa.

Also members are 6Harmonics, Adaptrum, BSkyB, Carlson, Council for Scientific and Industrial Research – South Africa, Indigo Telecom, InterDigital, MediaTek, Network Startup Resource Center (University of Oregon), Neul, RealTek, StarHub, Strathclyde Centre For White Space Communications, Tanzania Commission for Science and Technology (COSTECH), Taiwan Institute for Information Industry, UhuruOne and WaveTek.

Internet Exacerbates "Competition" Issues, But Competition Still is the Key Market Change

It appears that IP messaging app WhatsApp has passed 250 million users, enough to put WhatsApp in the same league as Twitter (200 million users) and Skype (280 million), in terms of user base.

Others might say the real impact is that IP-based instant messaging services are becoming, for many users,  the primary social graph. That means a potentially important new revenue vehicle is being created.

“For whom?” is the issue, as seems always the case for service providers.

Seemingly endless amounts of speculation and argument will continue to be expended by executives, pundits and analysts about “what service providers should do.” That’s a fair enough question.

What should by now be abundantly clear is the strategic impact on service providers, no matter what they decide to do tactically (participate by buying into the business, create branded versions of such services, fight back by enhancing the value of any existing substitute products, or essentially ignore the attackers).

The analogy and historical precedent is the advent of competition within the facilities-based telecom business, even before the advent of over the top competition. A look at addressable market illustrates the primary change of strategic context.

Back in the monopoly days, a national carrier’s business case was fairly simple. Whatever other assumptions one might have made, the potential addressable market was nearly “100 percent of homes and business locations.”

That had implications for the “cost per subscriber” or “cost per customer” metrics. At very high customer penetration, “cost per customer” and “cost per passing” are fairly closely related metrics.

That is a relatively simple business exercise. Build out network, passing 10,000 new locations, and sign up 70 percent to 90 percent of those locations as customers.

All of that falls apart in a competitive environment. Assume just two strong contestants with networks, equally skilled and with some advantages (telcos with mobile or cable TV with video).

In that case, the math is quite different: build or upgrade a network and sign up perhaps half of those locations as customers. That can nearly double the “cost per customer,” based strictly on payback on network capital.

The other likely effect is an increase in marketing expense.

In other words, the effect of competition is a fundamental change in network economics and profit margin.

Over the top services pose the same sort of challenge. By now, it should be obvious that one clear implication of IP-based competition is that profit gets wrung out of any service or application that formerly was immune from such competition.

So whatever tactical response a service provider chooses to make, it will be within the context of radically-different gross revenue and profit margin assumptions.

India Illustrates Principle: Competition is Good, Excessive Competition Is Not

Mobile and fixed network service providers sometimes point out that excessive competition or excessive regulation actually can depress willingness to invest and upgrade networks. And mobile service providers have learned the hard way that overpaying for spectrum likewise can create stress that limits investment into network infrastructure.

That seems to be the case in the Indian mobile market, where Indian service providers will invest a substantially lower percentage of their revenue back into their networks, compared to service providers in China, Indonesia and the Philippines, according to research from ratings agency Fitch Ratings.

Mobile Internet Access is Big with Users 18-34; VoIP Much Less So

When asked what was most important in choosing their next mobile service provider, younger European users 18 to 34 reported they value “more data,” not more texting allowances or bigger voice buckets of use, a survey by Analysys Mason suggests.

The survey also suggests that use of mobile VoIP isn’t as common as sometimes thought.

In fact, Analysys Mason concludes, the conditions for mass market adoption of VoIP on smartphones “do not currently exist.”

Still, VoIP services are most popular with the youngest age group, with more than 10 percent of those under the age of 35 using a VoIP service, Analysys Mason says.

Nor has IP-based messaging fully displaced text messaging, though the process is underway, one might argue.

“Operators will note that despite the high penetration levels of IP-based alternatives, full messaging service substitution has not yet occurred,” says Stephen Sale, Analysys Mason principal analyst.

On the other hand, a bigger bucket of voice usage was the top desire of users in every age bracket other than 18 to 34.

The 18 to 24 and 25 to 34 age groups have widely contrasting approaches compared with older smart phone users, particularly in relation to VoIP, IP messaging and social media services such as Skype, WhatsApp Messenger and Facebook. That won’t surprise you.

More than half of surveyed smart phone respondents 18 to 24 year in the United Kingdom, for example,  use IP-based messaging.

The survey of 6610 consumers 18 or older in France, Germany, Poland, Spain, the United Kingdom and United States also found that only 20 percent of those 65 and over do so.

Text messaging is used by 91 percent of those 18 to 34 but only 67 percent of those 65 and over.

That isn’t to say mobile VoIP or IP messaging are not threats anywhere. In some markets, there seems to be quite a lot of substitution, in others the problem still is rather minimal.

But the survey results do show the wisdom of making Internet access the variable cost portion of a mobile bill. That is the service people increasingly value, above voice and texting, at least in terms of usage quotas.

Criteria for choosing next mobile service

Question: "Which of the following factors would most attract you to your next mobile tariff/contract?" n = 1073

UPC Bumps Top Speed to 500 Mbps, Responding to Reggefiber 1 Gbps

ISPs facing disruptive offers, such as Google Fiber, will have to respond, even if not countering such offers head to head. In the Netherlands, Liberty Global’s UPC operation in the Netherlands faces a competitor--Reggefiber--already offering a symmetrical 1-Gbps service.

“We had to address it head on,” says Bill Warga, Liberty Global VP. technology. By bonding more than 16 6-MHz channels, UPC was able to create a 500 Mbps service.

“We had to build a special modem because (DOCSIS) 3.1 chips aren’t out yet,” he said. “That was a reaction but that tells you how quickly in a marketplace that something can move.”

UPC’s most popular product is the 25 Mbps service costing 25 euros.

AT&T's Europe Interest is "Internet Access"

AT&T is looking to Europe for expansion in large part because U.S. regulators have signaled they will not let AT&T get any bigger in the U.S. market, because the U.S. mobile market is nearly saturated and because Europe, though arguably as saturated as the U.S. market is, holds more promise for broadband access revenue growth.

Chief Executive Officer Randall Stephenson has said Europe is ripe for high-speed Internet access innovation, for example. 

The GSM Association, for example, argues that the United States "has opened up a large lead in deployment of next-generation technologies."

By the end of 2013, nearly 20 percent of U.S. connections will be on Long Term Evolution networks, compared to fewer than two percent in the European Union. 

Average mobile data connection speeds in the U.S. are now 75 percent faster than those in Europe and by 2017 will be more than twice as fast.

Mobile investment in the United States has outpaced that in Europe, with capital expenditure in the U.S. growing by 70 percent since 2007 while declining in the EU.

All of that creates conditions for revenue growth, AT&T seems to believe. 

Myanmar to License More ISPs, Long Haul Network

Myanmar is planning to invite bids for providing Internet services and building a national fiber optic network, after awarding two new national mobile licenses.

“There are lots of opportunities in Myanmar’s telecom sector. While we have called for tenders for the two telecom licenses, our plan is to invite participation for providing Internet services,” said Thaung Tin, Myanmar deputy minister for communications and information technology.

What is not so clear is how Myanmar might go about licensing ISPs or infrastructure providers.

Myanmar Teleport (formerly Bagan Cybertech), Yatanarpon Teleport, Information Technology Central Services (ITCS), Red Link Communications, and the state-owned Myanmar Post and Telecommunication are the Internet service providers in Myanmar at the moment.

Winners of Myanmar Telecom Licenses Won't Have Much Spectrum to Work With

With the two winners of new Myanmar telecom licenses set to be announced June 27, 2013, some firms are starting to line up local mobile network employees.

Qatar Telecom has said it would invest $15 billion in rolling out a telecommunications network across Myanmar, should it win one of two licences being tendered in the Southeast Asian country.

The proposed third generation mobile network would reach 90 percent of the population within two years, according to Qatar Telecom Chief Strategy Officer Jeremy Sell.

The licenses are based on 2×5 MHz worth of spectrum at 900 MHz, as well as 2×10 MHz worth of spectrum at 2.1 GHz. Some might say that limited amount of spectrum is not going to support much use of mobile Internet.

You might think a market where only 10 percent of people use a mobile phone is a huge opportunity. But there might be issues.

For whatever reason, China Mobile and Vodafone, bidding as a consortium, voluntarily withdrew from the license competition.

The Myanmar government has distributed low-cost SIM cards (about US$2) through a lottery system. That indicates people will not be able to buy and use a mobile phone as freely as one might otherwise believe.

Mobile Will in 2013 Surpass Radio as a Content Consumption Platform

At current rates of growth, mobile soon will overtake radio as the third biggest media consumption "platform," possibly in 2013, if current rates of change continue at their present magnitude. 

In fact, with the exception of "online" content consumption, all other channels except mobile are losing share of end user time spent  with media. 

"Smart" or "Dumb," Value is the Issue for Networks

The chief business reason communications executives hate the term “dumb pipe” is that it has the connotation of “low gross revenue” or “low margin” earned by services without distinctiveness. The term implies that communications services are “commodities.”

The real problem therefore is not whether the “pipes” (networks) are dumb or smart, but whether the profit margin is high or low.

So the problem with competitive markets and new technology often is that profit margin gets wrung out of a business.

That appears now to be the case for high-frequency trading, which relies on ultra-low latency communications connections. At least some communications service providers care about high-frequency trading because they supply the ultra-low latency connections that help provide the trading advantages.

Fast, powerful computers and algorithms are the primary driver of high-frequency trading. But acting on what the algorithms suggest is where the low-latency connections come in.

Trading firms have spent millions to maintain millisecond advantages by constantly updating their computers, collocating in data centers and connecting distant computers using low-latency networks.

Of course, once the trading exchanges saw how valuable thousandths of a second were, they raised fees to collocate, and hiked the prices of their data feeds.

“Speed has been commoditized,” says Bernie Dan, CEO of Chicago-based Sun Trading, one of the largest high-frequency market-making trading firms.

And that is precisely the problem: when real advantage is seen, a competitive market tends to reduce the value of the advantages when all competitors adopt the latest technology and approaches.

But the economic downturn is a factor. Overall trading has declined since the 2008 Great Recession, and high-frequency trading might now represent about half of all U.S. trades, according to the Wall Street Journal.

At one point high-frequency trading represented more than 80 percent of transactions, according to the Financial Times.

But U.S. stock-trading volumes declined since at least 2010 and in 2013 are running 35 percent below the industry's peak in 2009, when an average 9.8 billion shares changed hands a day, according to Sandler O'Neill + Partners.

Precisely how much additional value service providers can create in their networks is a legitimate issue. Ultra-low latency networks to link exchanges are one example of how even “dumb networks” can add value.

The problem isn’t whether the networks are dumb or smart: the low latency networks are no smarter than the “normal” networks. They simply use the shortest routes.

Value is the issue.

You Might Question the Value of a College Education: Google Now Does

"One of the things we’ve seen from all our data crunching is that G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation," says Laszlo Bock, senior vice president of people operations at Google. 

Google doesn't ask for transcipts, test scores or GPA, unless a candidate is straight out of school and hasn't worked anywhere else. "We found that they don’t predict anything," Bock says. 

In fact, some teams at Google have about 14 percent of associates who never have gone to college.

Anecdotes such as this are a reason some believe a big disruption of higher education both is coming, and is needed. People might be essentially wasting money and time in hopes of getting a job, when the experience does not predict success at work.