75% Mobile Voice Adoption in 5 Years, Where Just 13% Have Electricity?

Telenor Mobile Communications of Norway and Ooredoo of Qatar, the two new mobile service providers in Myanmar, face the challenge of getting 75 percent adoption of mobile voice in five years, in a country where just 13 percent of homes have electricity. 

The challenges of getting to a high level of mobile use therefore will require more than the  building of the mobile networks. An infrastructure of retail sales and support has to be created as well.

That will include places people conveniently can recharge their devices and pay for additional usage, assuming a prepaid model is common.

Less than 10 percent of the country currently buy voice services using a mobile or fixed network.

2 New LTE Licenses Awarded in Peru

Telefonica Moviles and Americatel Peru have won their bids for 4G spectrum licenses  in Peru, in auctions that raised US$257 million.

Peru’s Ministry of Transport and Communication (MTC) sold two 20-year, 40 MHz (2×20MHz) spectrum licences in the 1700MHz and 2100MHz paired bands (Advanced Wireless Services spectrum) for 4G services.

Movistar was awarded the ‘A’ block of 1700MHz/2100MHz frequencies.

Americatel Peru, the Peruvian arm of Chile’s Entel, won the ‘B’ block of AWS spectrum.

The two operators have been given six years to build out their networks across 234 districts in the country, with three years to provide coverage in Peru’s major cities.

Another smaller provider, VelaTel Global Communications, on the other hand, decided it could not obtain 4G assets in Lima, its core market, and earlier in 2013 made preparations to sell its assets.

VelaTel Peru historically offered fixed telephony services including interconnections, national and international long distance, and voice over internet protocol (VoIP) solutions. VelaTel Peru also was awarded radio frequency licenses to use 2.5 GHz spectrum to offer wireless broadband access services in eight of Peru’s largest cities (excluding the capital city of Lima and its suburbs). In 2010, VelaTel launched a network in the Peru market under the brand name GO MOVIL.

The Chinese company that owns VetaTel also has other communications assets in China, Europe and other parts of Asia.

Few Say They are Happy with Mobile Service, But Few Leave

If consumer dissatisfaction with mobile services is as significant as some studies suggest, T-Mobile US and Sprint have reason to believe they can disrupt the U.S. mobile market. 

On the other hand, both T-Mobile US and Sprint confront relative stability of consumer behavior, which works against the odds of major change.

Unhappy customers should suggest there is room for an attack. 

But there is lots of evidence that even unhappy customers do not abandon those products. That, for example, was true for decades in the U.S. cable TV business, where almost every survey found significant levels of dissatisfaction, and yet rather low churn rates. 

Even unhappy customers do not change service providers all that often, one might conclude from low churn rates that now seem to characterize the U.S. mobile market.

Of the roughly 326 million U.S. mobile accounts, about one percent a month of AT&T or Verizon Wireless seem to choose another service provider. 

About two percent of T-Mobile US or Sprint customers choose another service provider in a given month. 

That's low for a consumer service. In past decades, it would not have been unusual for more than three percent of a cable company's customers to stop buying service in any given month. 

Even churn among small business customers of most competitive local exchange carriers has run in the three percent a month range. 

To make matters harder for T-Mobile US and Sprint, churn performance has gotten better, for all four service providers. 

It might seem that unhappy customers do not leave, or that happy customers will desert a service provider, but both types of behavior seem rather common.

You might agree that even satisfied or very satisfied customers will leave their current supplier for a better alternative, even if they were happy with their original supplier. "Same features, lower price" typically is a reason for doing so. 

Perhaps the harder behavior to explain is an unhappy customer that does not leave. There could be a number of quite rational explanations for such behavior, though.

Experienced consumers might already have tried the other mobile service providers, and discovered that virtually every network, and every service,  has some strong points and weak points. 

Consumers might perceive one service to be superior, but also resist the higher price such a service carries. 

In other words, some experienced consumers might simply have learned from experience that no service provider does a consistently better job, provides the lowest price and best features. 

Think about the experience most people have with traveling by airline. In most cases, no matter the supplier, most travelers might rate the experience as troublesome on some dimensions. 

On the other hand, travelers might also say they prefer lower prices, and troublesome experiences therefore are caused by the very fact of the ability to obtain lower prices. 

One suspects something of that process is at work for mobile services. One way of putting matters: nobody is happy, but nobody expects any of the other alternatives to be consistently better. 

That is the challenge Sprint and T-Mobile US will face in attempting to disrupt the U.S. mobile market. Something rather more profound than what T-Mobile US, Sprint, AT&T and Verizon have been doing so far will likely be required to make a significant breakthrough. 

Price Anchoring and Gigabit Internet Access

You can assume many Internet service provider executives would argue that Google Fiber is priced too low. That would be a logical response by an incumbent to a disruptive price and value attack by a new competitor.

Google wanted to make a point by offering symmetrical gigabit Internet access for just $70 a month. In part, it wanted to prove that a brand new fiber to home network could be built to provide such connections, at unheard of prices, and still be a profitable venture, partly as a way of creating incentives for other ISPs to do so as well.

But some pricing specialists might argue Google Fiber's pricing was too low, and that other ISPs wishing to offer much faster Internet access should create their own much-faster services, but price a gigabit connection at higher levels, as much as $300, as many other ISPs have done.

The reason is price anchoring, the tendency buyers have to evaluate offers based in part on other information they have. For example, if a potential buyer learns that a “suggested” or “standard” price is $1,000, that buyer might be quite happy if the same product can be bought “on sale” for $500.

In similar fashion, buyers might conclude that a better immediate value proposition is a 300 Mbps access service, costing $150 a month, than a gigabit connection costing $300 a month.

Others might likewise conclude that a 150-Mbps service costing $75 also is something worth buying, especially if what they currently buy is a  20 Mbps connection for $50.

Whether it is too late for most ISPs to adjust is a reasonable question. Any ISP competing against Google Fiber is stuck: the market rate for symmetrical gigabit connections is $70 a month.

But in most markets, Google Fiber is not yet a product that can be purchased. So it might be possible, for some time, to offer a gigabit connection at prices high enough that most consumers wouldn’t buy them. But the anchoring effect will happen.

All of a sudden, a 500-Mbps service, at half the price of the gigabit connection, will seem more reasonable. Likewise, a 250-Mbps connection at a quarter of the price of the gigabit connection, will seem even more reasonable.

If the objective is to get customers to upgrade to 100 Mbps to 250 Mbps, setting a high price for a gigabit connection, and then essentially establishing a new mental image of what the value and price relationship is for services an order of magnitude faster than what most people buy, is possible.

That isn’t to argue for higher prices or lower prices, as a matter of course, but simply to point out that high posted prices sometimes can lead to higher perceived value, and higher purchasing, of other products whose value is anchored by the high value, high price of an anchor product.

Network Interconnection Explained

Jon Brokkin does a nice job of explaining peering and interconnection agreements between Internet service providers can interfere with user experience. 

There are business issues of several types, some related to revenue models, others related to the more-prosaic details of how carriers historically have compensated each other for exchanging traffic.

Disputes between ISPs over settlement-free interconnection sometimes directly resemble the disputes between cable companies and programming networks over new contract terms, and generally for the same reason: money earned by one of the parties, and money paid by one of the parties. 



Read it here. Often, one of the parties to such a dispute tries to position a dispute as an attack on network neutrality. It isn't. The disputes are about interconnection of networks. But that does not mean there are no business issues. Those issues can be genuine. 

Do Smart Phone Users Want Bigger Screens?

Do users want bigger smart phone screens? It looks like Android users do. 

Look at trends in the phablet category. It appears to be the same preference emerging. 

U.S. Consumers Spend Nearly 12 Hours a Day Interacting with Content

In 2013, for the first time, the average amount of time U.S. consumers spend with digital media each day will surpass the amount of time they spend watching TV, according to eMarketer.

The average adult will spend over five hours each day online, on non-voice mobile activities or with other digital media in 2013, eMarketer estimates, compared to four hours and 31 minutes watching television.

How one measures time spent with media does involve a judgment call, though. Where eMarketer measures both time spent with a tablet, smart phone or PC when the TV also is on, others have different methodologies.

Nielsen reported fourth quarter 2012 media consumption of four hours and 39 minutes per day watching live TV, and an additional 25 minutes with DVR playback and 11 minutes with DVD playback. That adds up to 5 hours and 15 minutes spent with TV.

That is because Nielsen measures all time a TV is turned on, not the amount of time viewers are actually engaging with the medium.

In other cases, researchers also have to make judgment calls about the amount of time people are using their PCs.

Estimates for 2012 mobile content consumption likewise involve some judgment calls. According to MAGNAGLOBAL, mobile content consumption is just under an hour each day to two hours, but also including any time spent talking on a mobile device.'

Still, whatever the methodology or magnitude of usage, most observers would simply agree that consumers now engage with content, and video content, on numerous screens.

U.S adults will spend an average of two hours and 21 minutes per day on non-voice mobile activities, including mobile Internet usage on phones and tablets. That is more time than they will spend on desktop and notebook computers, and nearly an hour more than they spent on mobile last year, according to eMarketer.

Also, note that multitasking now is a major driver of such “time spent” measurements. When assessing “time spent with media,” eMarketer and others now have to account for times when a user has a TV on, and is watching, but also interacting on a tablet, smart phone or other PC device.

Such multitasking arguably now is driving the overall time people spend with media each day, which eMarketer expects to rise from 11 hours and 39 minutes in 2012 to 11 hours and 52 minutes in 2013.

Time spent with mobile has come to represent a little more than half of TV’s share of total media time, as well as more than half of digital media time as a whole, eMarketer notes.

The bulk of mobile time is spent on smart phones, at one hour and 7 minutes per day. Users spend one hour and three minutes a day on their tablets.

US Cellular Loses Customers in 2Q, Illustrates Trend

For its second quarter of 2013, United States Cellular Corporation reported service revenues of $911.0 million, compared to $1,029.7 million for the comparable period one year ago. That reflects asset sales, though.  

The real problem is a subscriber decline in US Cellular core markets, where organic growth is negative. The customer losses have been a problem since 2011.

That’s just one data point, but shows why consolidation in the U.S. mobile market will continue. It is getting harder for smaller regional providers to compete with the larger national providers.

Public-Private Access Venture the Answer for Oakland?

Ask anybody who has looked at, or is trying to stimulate, broadband access in places where access is spotty, or where higher speeds are wanted, and the revenue model or business model always becomes a top issue.

The reason is simple enough. If existing ISPs thought they could make money, they already would be providing service. So the key issue, for billions of people who have no access, is how to change the economics enough that a sustainable revenue model is possible.

In many cases, proponents believe public-private partnership is one way to prime the pump, even when other ISPs already operate. 

Is Google the New Bell Labs?

Some with long memories will remember the seminal innovations that were commercialized after incubation at Xeros PARC. Others might even have forgotten the many significant innovations developed inside AT&T Bell Laboratories.

Those with long enough memories also might agree that when the profit began to be ripped out of the telecommunications and information processing industries, such long-time-horizon incubators of seminal technologies became virtually impossible to support.

Increasingly, the focus of research acquired a more-urgent, quicker time to market character, with less support for innovations that might, or might not, result in new products with a commercial character.

But one might make an argument that, under chastened circumstances, the closest thing we now have to the legendary PARC or Bell Labs is Google.

That will frighten some, and cheer others. But some of us would have a hard time identifying any other entity that is doing work of such long-range potential that no commercial results could occur within a decade.

40-Gb Usage Cap for U.K. High Speed Access?

If you had to make a prediction today, based on just a couple of data points, you might argue that high speed access services in the U.K. market are headed for something like a 40-Gb usage cap per month, even if at the moment there still are several providers offering "unlimited" plans. 


Usage caps are blunt instruments, to be sure. Purists might argue that what matters are incentives for users to be careful at peak hours, when the danger of congestion is highest. 

That might argue for congestion pricing. But data caps seem right now to be a reasonable service provider compromise between usage-based pricing and unlimited-usage pricing, for most consumers. 

Consumers dislike usage pricing and service providers dislike the liability of virtually unlimited usage. Usage buckets are more blunt methods than perhaps using congestion pricing. But they are simpler and introduce some element of end user choice without unduly irritating customers or bearing unlimited liability. 

Median U.K. Mobile Data Consumption Up 70% in 1 Year

According to data collected by BillMonitor, the median U.K. mobile data user consumed 63 percent more data in January 2013 than in February 2012, representing median consumption of 236 MB, an annual increase of 70 percent.

It appears, as other studies have suggested, that 4G users consume at least an order of magnitude more mobile data. EE has said that subscribers to its 4G services used an average of 1.4 GB of data per month.

In May 2013, 4G users interviewed by YouGov SixthSense were a third of respondents. Of respondents aware of their consumptionm YouGov found that 29 percent of 4G

users consumed more than 1 GB per month.

About 47 percent said they used less than 500 MB per month. Some 44 percent of the smart phone users surveyed by Ofcom in April 2013 said that they would use their handset more if their mobile data connection was faster, a pattern that would mirror consumption trends for fixed network access as well.

Data collected by BillMonitor also found that the largest percentage increases in the consumption of mobile data were from the users with the lowest historic consumption. Users in the 25th percentile of usage increased their use of mobile data by 94 percent, equivalent to 106 percent on an annual basis.

Users in the 90th percentile increased their use of mobile data by 51 percent between 2012 and 2013, about 57 percent on an annual basis.

The 90th percentile consumers used 878 MB of data in January 2013, more than 3.7 times the consumption of the median user.