Facebook Mobile Traffic Load Grows 60% in 1 Year Because of Video

Perhaps the single biggest new development in mobile data consumption over the past year has been Facebook’s embedding of video that automatically plays on user feeds.

Over a year, Facebook traffic increased by 60 percent on the mobile network, and by over 200 percent on the fixed network, according to Sandvine measurements.

That is the sort of unexpected and  significant action by a third party app provider that directly affects user data consumption, Internet service provider bandwidth planning, capital investment and retail service plan features.

That is particularly the case for mobile networks, which have spectrum constraints not faced in the same way by fixed network operators.

Real time entertainment (streaming video and audio) has been the largest traffic category on most networks, fixed or mobile. But it is mobile video consumption that has the greatest impact on network demand, performance and investment requirements, since bandwidth is more limited and costs-per-bit for end users are much higher than for fixed networks.  

In North America, “average” (mean, or arithmetic average)  monthly usage grew 18 percent in six months, from 465 MB to 522 MB, according to Sandvine.

As with some other physical networks, adding more capacity (Long Term Evolution fourth generation networks) actually increases usage. Median usage (a mid-point figure, with half higher and half lower) grew from 102 MB to 118 MB over six months.

During peak period, real time entertainment traffic accounts for 40 percent of downstream bytes on mobile networks.

In Europe, mean monthly mobile data consumption was 449.5 MB, an increase of over 13 percent from 394.4 MB observed six months ago. Real time entertainment traffic accounts for 38 percent of downstream traffic during peak usage periods.

In Latin America, mean monthly mobile data usage was 390.3 MB, a slight increase over the 355.4MB seen six months earlier.

In Latin America, social networking is the largest driver of mobile usage, accounting for 31 percent of peak downstream traffic.

One reason is the popularity of low-cost, “all-you-can use” social networking plans offered by mobile service providers.

The Asia-Pacific mobile typical data consumption is at least 1 GB a month on average. Real time entertainment represents 47 percent of total data consumption during peak hours.

In Africa, in contrast, real time entertainment accounts for only 6.6 percent of peak downstream traffic.

How Much Danger Does Google Pose to Other ISPs?

After Google Fiber, the notion that a major app provider might actually become an Internet service provider is no longer a possibility, but is a reality. The only issue now is how far that might extend, and which other firms might decide to do something similar.

Facebook appears likely to emerge as a satellite-based Internet service provider in Africa. And both Google and Facebook now own assets that produce unmanned aerial vehicles that could be used to supply Internet access.

Google is testing balloon-based Internet access for rural Australia, a test being conducted in conjunction with Telstra, existing Internet service providers have to be thinking about how far Google, Facebook and others might be looking at the ISP business.

Add to the that the fact that Amazon already is a specialized type of mobile virtual network operator, using AT&T’s mobile network to deliver content to Kindle devices.

There has been speculation that Apple might someday want to do something similar, perhaps becoming a provider of services that connect to any available mobile network network, something that has become a feature of the iPad.

Given the fact that, by perhaps 2020, 80 percent of all Internet access globally will use a smartphone, one has to wonder when that might become a focus for one or more application providers.

GoogleNet is Google’s vision to offer global, near-free Internet-access, mobile connectivity, and Internet-of-Things connectivity using a global, largely-wireless, Android-based, “GoogleNet,” according to Scott Cleland, of Precursor, a site with an admittedly “anti-Google” orientation.

Critics argue Google is following a business strategy of identifying markets with a valuable stream of consumer data, then creating an "open" or "free" product to induce adoption and “undermine the business model of existing market participants,” according to Fairsearch.org, an entity funded by Google competitors.

Once it gains dominance, Google then “closes” the market and excludes competitors, Fairsearch argues.

One does not have to accept the premise of the argument to agree that something important has happened. Google effectively disintermediates and commoditizes the direct relationships Internet or communications or entertainment suppliers have with their customers.

And telcos, cable companies and Internet service providers might have to worry more than they used to about Google. Initially, one might argue, Google was about businesses built on bits in virtual worlds. That is no small matter, as Google arguably has created rival communication products that displace products supplied by communications companies.

But Google now is moving into different realms, including “atoms in the physical world.” including Google Fiber, an Internet service provider operation that competes directly with cable TV company and telco high speed access and video entertainment products.

Beyond that, Google has invested in, and is testing, high-­altitude Wi-Fi balloons, and unmanned aerial aircraft that might also be used to support Internet access.

All of that, building on earlier Google investments, creates at least the potential for a “global Internet access” capability that would disintermediate other existing Internet service providers, as Google Fiber does in a growing number of U.S. cities.

Google bought Skybox Imaging (satellite technology) and plans to spend $1-3 billion on “180 small, high capacity satellites at lower altitudes than traditional satellites” to enable two-way Internet access.

Google also bought Titan Aerospace, a supplier of solar-powered, high-flying drones. Project Loon likewise is testing use of balloons for Internet access, most recently inking a deal to test them to provide Internet access in Australia, working with Telstra.

Google also operates its own global undersea network, including investments in four cable systems.

The issue is how widely Google’s ambitions might extend.

“It Can’t be Done”

Some of the most-dangerous statements an experienced and knowledgeable executive ever can make is that something “cannot be done,” or that a new way of doing something is underpowered, under-featured and essentially a non-serious approach to solving a problem.

If confronted with a requirement to support huge amounts of bandwidth, hundreds of times to perhaps 1,000 times greater than anything yet seen, it might seem obvious that only fixed networks will be able to handle the load.

That is why Marcus Weldon, Bell Labs President and Alcatel-Lucent CTO believes sophisticated core and fixed networks are essential, and that explorations of Internet access networks using unmanned aerial vehicles or balloons are unsophisticated approaches little better than “toys,” compared to the best of today’s telecom networks.

The phrase "toy networks" as applied to new Internet access platforms such as balloons or unmanned aerial vehicles reflects a perhaps-understandable reaction to new networks that lack the sophistication of the existing and future networks envisioned by the telecom industry.

But it is profoundly dangerous to underestimate the threat posed by such underpowered or feature-deficient new approaches. You might recall that the same sort of sentiment was uttered about voice over Internet Protocol.

Disruptive innovation, a term coined by Harvard Business School Professor Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

Such innovations might reasonably be derided by existing suppliers as “not very good” products with limited feature sets, unstable quality and some restrictions on ease of use. Skype initially could only be used by people communicating using personal computers, for example.

Microwave Communications Corp. (MCI) originally competed with AT&T for long-distance voice calls using a microwave network that likewise was deemed less reliable than AT&T’s own network.

Wi-Fi hotspots originally were hard to find, sometimes difficult to log on to, and obviously did not have the ubiquity of mobile Internet access or the speed of an at-home Internet access service.

Netflix originally required mailing of DVDs to view content (it was not “on demand”), and could not be viewed on demand, on a variety of devices.

What happens, over time, is that disruptive attacks gradually “move up the stack” in terms of features and quality of service, eventually competing head to head with the incumbents.

If you live long enough, you might see many examples of such derision.

I can remember being at a meeting at the headquarters of the National Cable Television Association, in the earlier days of high definition television discussions, where it was proposed that a full HDTV signal could be squeezed from about 45 Mbps of raw bandwidth to the 6-MHz channelization used by the North American television industry.

The room essentially exploded, as the attendees, mostly vice presidents of engineering from the largest cable TV and broadcast firms, disagreed with the sheer physics of the proposal. Later, the executive who suggested HDTV in 6 MHz was indeed possible talked with his firm’s engineering vice president, about the the science, to reaffirm that such a thing actually could be done. “Are you sure about this?” was the question, given the magnitude of opposition.

To make a longer story short, it did prove feasible to compress a full HDTV signal into just 6 MHz of bandwidth, making for a much-easier financial transition to full HDTV broadcasting, as well as an ability for cable TV operators to support the new format.

Similarly, when the U.S. cable TV industry began to ask for analog optical transmission systems capable of carrying 20 channels of standard definition video without complicated channel-by-channel coding and decoding, a distinguished engineer from Bell Laboratories privately assured me that such a thing was in fact not possible, and that people who claimed it was possible were simply wrong.

To make a longer story short, it did indeed prove possible to take a full complement of analog video signals (40 channels, as it turned out), convert the full set of broadband signals to analog optical format, and deliver them over distances useful for cable TV purposes.

On another occasion, the vice president of one of the world’s biggest suppliers of equipment said privately that “digital subscriber line does not work” as a platform for high speed Internet access, even at relatively low speeds. Ultimately, that also proved incorrect. Over time, DSL performance was not only proven to be commercially viable, but also delivered much-faster speeds, over longer distances, as experience was gained.

The point is that when a smart, experienced, thoroughly-knowledgeable executive says that something “cannot be done,” one has to translate. What the statement means is only that, at a given point in time, before the application of effort and ingenuity, a given entity has not been able to do something.

That does not actually mean something literally “cannot be done.” Quite often, formerly impossible things actually are made possible, after dedicated investigation and development.

That sort of thing happens often enough that statements deriding novel approaches to solving problems should not be lightly dismissed. New platforms and approaches often do appear to be “toys” at first. But that is not where developments remain for all time.

Executives generally truly believe disruptive new platforms and approaches are unsatisfactory substitutes for higher-performance solutions. That often is quite true, at first. But substitute products often do not remain fixed at such levels. They often improve to the point that, eventually, the new approach is a workable solution for a wider range of applications and customer use cases.

 
Having lived long enough to see the “smart guys” proven quite wrong, I am careful never to argue something really cannot be done. Sometimes, somebody, or another company, is able to do so, even when a reasonable, smart, experienced practitioner “knows” it cannot be done.

45% of Service Providers Now Offer Managed Services

More than 45 percent of communications service providers surveyed on behalf of Allot Communications now sell managed services for enterprises and small and mid-sized business customers ranging from basic email and storage to fully-fledged unified communications, customer relationship management and enterprise resource planning solutions, Allot says.  

Microsoft Office 365 is the most prevalent office suite, sold by a third of all service providers surveyed.

About 23 percent of respondents offer quality of service solutions for mission-critical applications and 32 percent sell cloud-based security services.

QoS management is more common when service providers are selling unified communications, Office and Microsoft Lync.

Allot argues that such cloud services are important for telcos because the opportunity is so large, and telcos need distinctiveness to compete with market leaders Google, IBM, Microsoft and Amazon. Cloud services are projected by Infonetics Research to be a $200 billion revenue business by 2018.  

A change seems to have happened, though. Where initially it was small businesses and smaller organizations that were most likely to buy a cloud-based managed service, the “threshold for an enterprise to source cloud apps has dropped,” said Yaniv Sulkes, Allot Communications AVP.

“In many cases, even large enterprises dind it advantageous to source from thje cloud, rather than hosting themselves,” said Sulkes. “Organizations with 5,000 to 20,000 employees now use cloud-based Salesforce.”

"Mobile Eats the World"

The phrase “software eats the world,” coined by venture capitalist Marc Andreessen in 2011, might have an analogy: mobile eats the world. Already, mobile devices (smartphones and tablets) represent about half the value of consumer electronics sales.

Andreessen’s 2011 quip was meant to illustrate the principle that “we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”

The newer adage--”mobile eats the world”--is meant to illustrate the growing shift of human activity from tethered to untethered devices. “There is no point in drawing a distinction between the future of technology and the future of mobile:they are the same,” says Benedict Evans, also a venture capitalist.

By 2020, Evans argues, the number of people using the Internet, and the number of people using smartphones, will be identical. By about 2017, the percentage of people “not using the Internet” will be identical to the percentage of people “not using smartphones.”

By 2020, 80 percent of everyone on the planet will be using a smartphone, Evans predicts. Every year, at least 7.5 trillion messages are sent by people using mobile networks.In 2010, the U.S. telecommunications industry along employed about 900,000 people.

WhatsApp now supports at least 7.2 trillion messages a year. WhatsApp employs 30 engineers. That shows the relative advantage software firms have in cost structure, compared to capital-intensive industries such as telecommunications, that supply similar services.

Benedict Evans - Mobile Is Eating the World

People Spend 40% of Waking Hours Communicating or Consuming Media

Benedict Evans - Mobile Is Eating the World

If it seems that everyone you know is staring at a mobile screen during the day, that is because they are. 

During most parts of the day, 40 percent of all U.S. consumers are interacting with media and content or communicating, according to . 

In the evening hours, that percentage can rise to 70 percent, according to venture capitalist Benedict Evans.

U.S. consumers spend about three hours a day interacting with their mobile devices, about two hours and 48 minutes watching TV, according to the US Bureau of Labor Statistics. 

In other words, the number one screen, for content consumption,  is the mobile phone.

The television, which once was known as the “first screen,” and the personal computer, once known as the “second screen,” now have yielded their positions. Mobile has become--in terms of engagement time--the first screen. 

TVs possibly are the second screen, while PCs and tablets are the third screens.

In fact, U.S. consumers now spend more time on smartphones than PCs.

There also is a virtual certainty that people are looking at their mobile screens even when in front of the TV, so engagement with TV content arguably is dropping. According to Flurry, time spent on mobile devices grew by 9.3 percent in the past nine months.

Declining Voice, Texting Revenues Pressure Mobile Ops in South Asia, SE Asia

Declining voice and text messaging revenues, plus huge investments in next generation networks will put extreme pressure on South Asia and Southeast Asia mobile service provider cash flow, resulting in minimal or negative free cash flow, Fitch Ratings said in November 2014.

“Revenue growth will be limited to low-to-mid single digit percentages as fast-growing data services offset declines in traditional voice and SMS revenues,” Fitch Ratings said.

Mobile service providers in the Philippines, Sri Lanka and Thailand plan to invest 25 percent to 30 percent of their revenue to build new networks or acquire new spectrum.

In Singapore, the issue is dividends, as service providers there plan to distribute 80 percent to 100 percent of net income to shareholders in the form of dividends.

Overall, the noteworthy observation is that mobile service providers in South Asia and Southeast Asia face the same sorts of problems as service providers in developed regions: cannibalization of voice, text messaging and international revenues, as well as competition.

90% Adoption of Mobile by 2020, Globally

It often is helpful to note problems the world has solved. 

So it is that Ericsson now predicts 90 percent of people aged six years and over will use mobile phones by 2020, when the number of smartphone subscriptions is set to reach 6.1 billion. 

It will have taken a couple of decades, but we will fundamentally have solved the problem of providing voice and text communications to everyone.

The new challenge is to build on those accomplishments by providing Internet access and apps to everyone. The Ericsson report suggests we are well on the way. The number of mobile broadband subscriptions grew 30 percent year over year, reaching 2.5 billion accounts.

Some 65 percent to 70 percent of all mobile phones sold in the third quarter of 2014 were smartphones. That has contributed to 60 percent growth in mobile data traffic during the 12 months since the third quarter of 2013.

Notably, subscribers in Asia Pacific, the Middle East and Africa are exchanging their basic phones for smartphones. By 2020, global mobile broadband subscriptions are predicted to

reach 8.4 billion. at which point mobile high speed access will account for 90 percent of global high speed access accounts.

As a direct result, network traffic will primarily be generated by smartphones, as total monthly smartphone traffic over mobile networks will increase around 800 percent between 2014 and 2020.

Video is the largest and fastest growing segment of mobile data traffic, expected to grow by

45 percent annually through to 2020, by which time it is forecast to account for around

55 percent of all global mobile data traffic.

Social networking will drive 15 percent of total traffic. Web browsing will represent about five percent of total traffic.

Norwegian Regulators Oppose App Zero Rating

Zero rating of any apps is a violation of network neutrality, according to Frode Sørensen, senior advisor at the Norwegian Post and Telecommunications Authority. "Internet users are entitled to an Internet connection that is free of discrimination with regard to type of application, service or content or based on sender or receiver address."

As with most aspects of network neutrality, the issue is complex and confusing, in part because bumper sticker slogans (“treat all bits alike;” “protect the Internet”) so often are used to simplify the argument in ways that can distort understanding.

The problem is that zero rating is a relatively common way of favoring consumption of some products, at the expense of others. When a value-added tax is not levied on many types of food and beverage, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water and sewage services, books and other printed publications, children's clothing, and financial services, that is clearly “discriminatory,” but also furthers some valuable social objectives.

So yes, zero rating is unfair to the apps not being offered on a zero rated basis. But such favoritism can also be a good thing.

Ignore for the moment the issue of paid prioritization as used by content delivery networks.

Sørensen argues that even offering free use of some apps (zero rating), without requiring purchase of a data plan, is “discriminatory.” Some will argue that offering free access to some apps is a reasonable way to acquaint poor Internet non-users with some of the value offered by the Internet and its apps, and has potential to help connect billions of new users by creating demand for using the Internet.

As do most observers, Sørensen explicitly notes that traffic grooming is a necessary part of network management. In fact, outright blocking of access might sometimes be necessary, and in fact happens all the time when networks become congested. The only issue is whether reasonable steps can be taken--or ought to be taken--to manage congestion at peak hours.

“The goal of net neutrality is not that all traffic should be handled identically, which would never be possible in practice,” Sørensen notes.

The hard part, in that sense, is reconciling Internet openness and issues such as congestion.

Zero rating of apps “would constitute a violation of the guidelines,” Sørensen says. By the same logic, offering toll-free phone calls also violates the open nature of the telephone network, even if it provides direct value to consumers.

Protecting Internet openness for its users is a worthy and important goal. But keep in mind that zero rating typically applies to “non-subscribers” or “non-users,” and is an effort to connect those who cannot afford to use the Internet, even if in initially limited ways.

“Openness” might mean one set of things to people who use it. “Access” is the issue for those who cannot afford to use it. As always, there are contradictory goals for Internet policy, as for communications policy in a larger sense.

Competition is good, but so is investment, and the two goals ultimately are inversely related. “Equality” and “access” are in some ways also inversely related, in many markets where people can barely afford food and water. Providing wider access might require unequal treatment.

Many would agree that “the user decides” what they want to do when on the Internet. For those not able to use the Internet, offering some access, to some apps, also allows them to decide, with some obvious constraints. But that is true for all users, since not all Internet apps are available to all, at least not without payment of some kind.

Mobile, Video Subscription Satisfaction is "Neutral" But Low

Sometimes, a satisfaction score just above “neutral” is a good thing.

A new survey of consumer satisfaction with various products and industries by YouGov contains a couple of findings that mirror other studies of consumer satisfaction with cable TV and mobile service: both those industries rank at the very bottom of satisfaction ratings.

That is not as bad as it sounds, though not by any means “good.” YouGov uses a 200-point scale, with +100 the highest and -100 the lowest, with a neutral score being zero. Cable and satellite TV scored 13, while mobile services scored 21. So both industries are slightly above “neutral.”

And that might be an improvement of sorts. Perhaps U.S. consumers do not “love” mobile or video service, but they are at least neutral, in this instance.

You might think consumer satisfaction with social media apps such as Twitter, Facebook and LinkedIn would be dramatically higher than for Internet service providers, cable TV companies or telcos.

After all, those these service provider industries traditionally rank at the bottom of satisfaction ratings produced by the American Consumer Satisfaction Index.

But you would be wrong. At least according to ACSI rankings, consumers are less satisfied with the popular social media apps than they are with fixed telephone service and mobile phone service.

On average, those social media apps get higher satisfaction ratings than video entertainment providers and significantly higher satisfaction ratings than Internet service providers. ISPs scored 63, while video services ranked collectively as a 65 for satisfaction.

Time Warner Cable scored an even-worse 60, while Comcast scored 63. AT&T U-verse and DirecTV both scored a 69.

In 2014, Twitter got a score of 69, Facebook earns a score of 67 and LinkedIn has a ranking of 67 as well.

In other words, according to the ACSI ranking, consumers are only about as satisfied with Twitter, Facebook and LinkedIn as they are with their ISPs and video providers. That puts satisfaction with those social media apps near the bottom of all industry rankings.

Among search engines, Google got a high score of 80. Bing and MSN both scored 73.

Major news portals earned an average score of 74.

Perhaps the most surprising finding is that the leading social media apps do not score much higher than ISPs or video entertainment providers, which have been ranked at the bottom of satisfaction rankings.

The top social apps can be used for no incremental cost, where Internet access service and video entertainment are significant cost items.

And one might draw a couple of  conclusions. Consumers are relatively unhappy, but continue to buy because they need the products. Also, consumers are unhappy and feel they have no workable alternatives that are sustainably better than the others.

Also, there are differences between providers in the same categories. Verizon FiOS, for example, garnered much higher scores than most other ISPs in the ACSI study.  

source: YouGov

Google, Telstra Testing Balloon-Based Internet Access

Google has partnered with Telstra to test a balloon-based Internet access service in Australia.  

Google will supply the balloon platform, while Telstra supplies the spectrum. In the trial, 20 balloons will be launched in western Queensland, aiming to deliver  Internet services to consumers in remote areas of Australia.

The Project Loon balloons feature antennas that can broadcast fourth generation Long Term Evolution mobile services, which allow the balloons to provide as much as 42 Mbps to a ground antenna and 15 Mbps to a handset.

Separately, Facebook’s Internet.org initiative appears on the brink of becoming an ISP serving Africa, according to the Telegraph.

As rumored, Internet.org could contrat with U.K.-headquartered satellite provider Avanti, which owns two broadband satellites positioned over Africa, plans to launch two more in the next three years to increase capacity and coverage.

Zuckerberg reportedly tried to entice mobile service providers to do so, but was rebuffed.

Telstra, apparently, does that think that a wise approach.

And there lies a conundrum often faced by incumbent service providers, namely whether to cooperate, or not, with a potential competitor.

Facebook has been open to partnerships with ISPs. But as with Google, Facebook does not appear to be willing to let partner opposition deter it from extending Internet access as widely as possible, as quickly as possible.

Facebook also has been looking at use of unmanned aircraft as a potential Internet access platform.

Is Facebook on Verge of Becoming an ISP?

Is Facebook about to become an Internet service provider, as Google has done? It seems increasingly likely, though the actual operations would be under the auspices of the Internet.org initiative, according to the Telegraph.

As rumored, Internet.org could contrat with U.K.-headquartered satellite provider Avanti, which owns two broadband satellites positioned over Africa, plans to launch two more in the next three years to increase capacity and coverage.

Zuckerberg reportedly tried to entice mobile service providers to do so, but was rebuffed. And there lies a conundrum. Facebook has been open to partnerships with ISPs. But as with Google, Facebook does not appear to be willing to let partner opposition deter it from extending Internet access as widely as possible, as quickly as possible.

Facebook also has been looking at use of unmanned aircraft as a potential Internet access platform.

Avanti supplies spot beam Ka-band service to sub-Saharan Africa, using a “HYLAS” (“Highly Adaptable Satellite”) bird built by Orbital Sciences Corp. A second satellite extends coverage in Africa, and also reaches the Caucasus and the Middle East. A third satellite covering Africa is expected to be launched in 2015.

The HYLAS satellites feature use of spot beams that can provide extra capacity within the coverage area of the spot beams. The HYLAS 2 satellite, for example,  features 24 active Ka-band user beams and six gateway beams intended to be used by national service providers as a single uplink/downlink connection. The HYLAS 4 satellite supports 66 spot beams, with a total capacity across all beams of 28 GHz.

The use of spot beams allows the satellites to achieve high spectrum efficiencies and high data rates, at the cost of coverage. By limiting coverage, the satellites are able to reuse frequency, much as a mobile network does.

In some ways, Facebook and Google becoming Internet service providers is an ironic development. As traditional vertically-integrated telcos now have partly become suppliers of loosely-coupled Internet apps owned by third parties, Google and Facebook now are becoming suppliers of access and apps, with at least some elements of vertical integration.

In U.S. High Speed Access Market, Mobile has 33% Share

In the U.S. market, 43 percent of people who use the Internet buy cable TV high speed access, while 21 percent buy telco digital subscriber line services.

Some eight percent use fiber-to-home connections, while 4.6 use a satellite broadband connection.

In 2013, about 74 percent of U.S.households bought Internet access service, and 73 percent purchased a high speed access service, according to the U.S. Census Bureau.

Fully 33 percent of households used mobile broadband. 

The data show the lower-income households are more likely to use a “mobile-only” approach to Internet access, though the percentage of homes doing so is in single digits.

 source: U.S. Census Bureau