U.S. Mobile Market Structure Will be Shaped by Dish Decisions

As competitive as the U.S. mobile market has become--despite frequent protests that the market essentially is a duopoly--it almost certainly is going to become more competitive.

Strategically, Comcast is expected to enter the market, at some point. Cablevision Systems Corp. already has done so, though as a niche provider with greatest potential impact in its limtied home operating area. Comcast almost certainly will have to enter as a national provider.

Dish Network either must enter the market as an operator, or forfeit the rights to spectrum that presently accounts for as much as 80 percent of its total market value.

And then there are the other contenders, including Google, which it is believed soon will be entering the mobile market, and Apple, a perennial potential actor in the market as well.

But the biggest current question mark is what Dish Network will do.

Since nobody believes Dish will allow scores of billions in equity value to evaporate, Dish’s Long Term Evolution spectrum has to be put into service. That might consist of partnering with an existing carrier (normally assumed to be Sprint, T-Mobile US or Verizon) to create a wholesale-only operation, or a branded retail offering, or selling the whole spectrum portfolio or the whole company.

So the shape of competition--and the structure of the U.S. mobile market--rests on which alternative Dish ultimately pursues. Both Comcast and Google are expected to enter the market as retail providers, though each might pursue something of a niche approach.

If Dish decides to partner with one of the existing leading national operators, and become a wholesale provider, it will enable third parties, but not directly increase or decrease the number of national providers.

Should Dish decide to become a full branded retail provider, it might take a niche approach, heavy on video entertainment. But the manner of entry matters.

Some speculate Dish will try and buy T-Mobile US. In that case the U.S. market structure is not changed. Others believe Dish will partner with a network owner, but become a retail service provider, in which case the number of potential leading contenders in the market increases from four to five.

But Dish might also simply sell itself, in whole or in part, monetizing its spectrum holdings, but leaving the market structure unaffected. Some will argue the odds of a buyout that large, by either AT&T or Verizon, is extremely unlikely, given the debt loads both leading carriers now carry.

At some later point, such a purchase by Verizon--not AT&T--is possible, but not at the present time.

AT&T presumably already would have acquired DirecTV, which makes additional video assets superfluous. Nor does AT&T appear especially interested in investing much more capital in the U.S. market, given its Mexico market expansion or other potential growth moves outside the U.S. market.

Verizon must wait to get its debt burden reduced significantly before it can afford to consider an acquisition of all of Dish. A more limited buy of some significant spectrum assets is more feasible, but Sprint might be a seller of spectrum assets as well.

Complicating the analysis is the nature of potential Sprint and Dish Network spectrum assets. Some of Dish Network’s spectrum is in the 700-MHz band, while much is in higher bands near 2 GHz.

Some of the potential partners--especially Sprint and T-Mobile US--have plenty of spectrum in the 2-GHz range, so either have little need for additional spectrum in those bands themselves, but might be happy to earn revenue supporting Dish Network network operations.

Verizon, historically not a big player in the mobile wholesale market, does have some potential obligations to support wholesale operations by Comcast and other cable operators from which it purchased AWS spectrum.

Should that happen, Verizon might want the additional Dish spectrum to support its wholesale partners, in addition to its own retail requirements, in the future.

Complicating matters further is growing ability to use unlicensed spectrum to support and augment LTE, plus additional communications spectrum that will be added, at some point, on a shared basis.

More competition is coming. It just is hard to predict precisely what form that competition will take.

Study Finds Most Don't Understand Net Neutrality

A survey of U.S. consumers has found what you might expect, namely that few U.S. residents understand network neutrality. The Hart Research Associates survey found only 25 percent of respondents claimed they knew what network neutrality is.

Perhaps not surprisingly, 73 percent said they wanted disclosure of what the rules actually are, when told that “just five members of an unelected Federal Communications Commission will decide the future of the Internet without providing an opportunity for the public to see and understand the regulations prior to a vote.”

The wording of the explanatory note, most might suggest, was not “neutral.” So it might not be surprising that 80 percent of respondents wanted full disclosure of the ruling before a vote is taken.

Just 32 percent of respondents thought regulating Internet access like telephone services would be helpful.

Business, or Consumer, Few Actually Benefit from Really Fast High Speed Access

With the caveat that a business customer’s use of bandwidth differs from the pattern typical of a consumer customer, small business customers of Cogent Communications tend to use about 12 Mbps of the 100 Mbps services bought to replace T1 connections of about 3 Mbps, said BTIG researchers.

According to Cogent, only about 12 to 24, out of perhaps 17,400 customers ever have reached 50 percent utilization of the 100 MB pipe.  Likewise, customers who buy gigabit connections have usage that does not likely differ materially from 100 MB customers, according to Cogent.  

One might well argue that consumer consumption is growing faster than business customer usage, certainly. But Sandvine data suggests U.S. median household data consumption over a fixed network connection is about 20 Gb a month. Granted “Gbps” is a measure of speed, while “Gb” is a measure of consumption, but monthly consumption of 20 Gb does not suggest most households likely are taxing their access downlinks.

To be sure, households with faster connections tend to consume more data. But that might be because households consuming more data disproportionately buy the faster connections. As more locations are able to use connections operating from 40 Mbps up to 1 Gbps, we should get a better idea of how much a “typical” user consumes, when access speeds exceed the ability of far-end servers to respond.

A study by Ofcom, the U.K. communications regulator, suggests that beyond about 10 Mbps, local access speed is not the experience bottleneck.

The study found that “access speed” matters substantially at downstream speeds of 5 Mbps and lower. In other words, “speed matters” for user experience when overall access speed is low.

For downstream speeds of 5 Mbps to 10 Mbps, the downstream speed matters somewhat.

But at 10 Mbps or faster speeds, the actual downstream speed has negligible to no impact on

end user experience.

Since the average downstream speed in the United Kingdom now is about 23 Mbps, higher speeds--whatever the perceived marketing advantages--have scant impact on end user application experience. Some 85 percent of U.K. fixed network Internet access customers have service at 10 Mbps or faster.

Investing too much in high speed access is, as a business issue, as bad as investing too little, one might argue.

Average access speeds in the United States are 10 Mbps, according to Akamai. Average speeds are 32 Mbps, according to Ookla. Another study shows that average Internet access speeds in the United Kingdom and United States are equivalent, in fact.  

The point is that, in terms of user experience, faster marketed speeds (gigabit, 100 Mbps) actually do not improve end user experience.

As someone who recently was able to upgrade from about 15 Mbps to 105 Mbps, I would confirm, as an end user, that the upgrade has made no apparent difference in my browsing experience.

For that reason, I will not be buying a gigabit access connection, which I could do. There being no apparent change in experience at 100 Mbps, I cannot see the advantage of upgrading further, to 1 Gbps.

IoT, M2M Will Lean on Platforms Using Unlicensed Spectrum

source: Verizon Communications

As important as licensed spectrum has been for development of mobile services, unlicensed spectrum is shaping up as a more-important access approach.

Verizon Communications has committed to introduce Long Term Evolution using unlicensed spectrum, even before the formal standard has been ratified.

LTE in unlicensed spectrum allows mobile service providers to bond capacity supplied by licensed and unlicensed spectrum.

The other important development is the Internet of Things, especially many machine-to-machine sensor apps that require extremely low-cost devices with long battery life, wide area communications range and low-cost network platforms as well.

So it is that the LoRa Alliance, including firms such as IBM, Cisco and Microchip Technology, as well as telecom operators Bouygues Telecom, KPN, SingTel, Proximus, Swisscom, and FastNet (Telkom South Africa), supports the use of LoRa spread-spectrum radio protocol for use in wide area networks and the Internet of Things.

LoRa (Long Range) is a low data rate, long-distance communication protocol used by Semtech Corp. to provide industrial, home and building automation networks. LoRa supports devices with a range of up to 50 kilometers. The long range means that large areas can be covered by relatively few base stations.

Just as significantly, LoRa devices are expected to operate for as long as 10 years without a battery swap.

That is part of the reason supporters believe LoRa has value for many IoT and M2M applications.

Separately, SigFox uses an ultra-narrow-band platform for machine-to-machine communications and IoT, also operating in unlicensed spectrum.

The base stations are said to operate over ranges of three to 10 kilometers in urban areas and up to 30 to 50 kilometers in rural areas.

To be sure, mobile service providers have numerous tools available to them to increase network capacity, ranging from exclusive spectrum resources to traffic offload to network architecture to improvements in air interface technology.

So despite the importance of licensed spectrum, other sources of leverage, including unlicensed spectrum and network elements, technology and architectures, are becoming equally important.

And at least as Verizon Communications positions the matter, the cost of acquiring new spectrum is growing, while the cost of network enhancements is dropping.

Without question, mobile service providers prefer to supply capacity by gaining the use of new spectrum, largely because that has been “an extremely cost effective means of adding capacity,” according to Tony Melone, Verizon Communications CTO.

But Moore’s Law and manufacturing volume matter. So the cost of relying on a technology-driven solution (smaller cells, better radios, antennas and modulation protocols) are going down every year, Melone also said.

That probably does not mean capacity gains are equivalent, using either “new spectrum” or “network technology” approaches. It likely remains the case that additional spectrum remains a cheaper way to gain new capacity.

source: Verizon Communications

But Long Term Evolution, eventually 5G, antenna technologies and interference management techniques are playing a crucial role.

“All of these technology solutions will drive improvements in bits per hertz and cost per bit,” Melone said.

The latest technique is use of LTE protocols over unlicensed spectrum. “With our key suppliers we are active in the standards process and will likely deploy a pre-standard version in the not too distant future,” said Melone.

Unlicensed spectrum might play a key role supporting Internet of Things networks especially focused on industrial, agricultural, utility and environmental sensor applications.

Such applications typically require low power platforms of low cost, but able to transmit messages at reasonable distances.

SigFox claims to have a network providing 80 percent coverage of France and has signed up operators in the Netherlands, Spain, UK and Russia, and is working on satellite connections as well.  

The point is that, if one assumes the next big leap in mobile and untethered communications will be to support machines, not people, then unlicensed spectrum is likely to play a bigger role.

Has T-Mobile US Finally Changed U.S. Mobile Market Share?

T-Mobile US might, by the end of 2014, caught Sprint in terms of total number of subscribers. Possibly early in 2015 T-Mobile US could pass Sprint, with T-Mobile US becoming the third largest mobile service provider.

Market share shifts of that type, at the top of the market, do not happen very often. 

Will Apple Get into Connected Car?

It isn’t yet clear what Apple might be up to in terms of connected car activities. Some think Apple will build an automobile, while others think Apple only wants to unify as much of the in-vehicle communications and applications experience as possible.

Whatever the reason, Apple has us all talking about the possibilities, which might be a signal sent about future huge product categories beyond the watch. Whatever the long term thinking, that possibility will help Apple attract and retain key employees attracted by the opportunity.

Despite the apparent fact that consumers do not really seem to understand what a connected car is, analysts are forecasting huge sales for connected car products and systems.

Transparency Market Research predicts the connected car market will reach $132 billion by 2019.  

DirecTV Boosts 2014 Revenue, Earnings, Free Cash Flow

Even if one believes streaming services are about to begin taking more market share in the subscription TV and video business from linear providers, that does not mean every provider is losing customers, market share, or revenue.

In its most recent quarter, DirecTV grew Latin America full year revenues three percent, to $7.1 billion, largely by adding 903,000 net new subscribers.

Full year U.S. revenue grew five percent  to $26 billion, driven by average revenue per user growth of 4.7 percent and annual subscriber growth of 99,000 accounts.

Full year 2014 earnings per share Increased 12 percent, while free cash flow grew 21 percent to $3.1 billion.

What AT&T, in the process of acquiring DirecTV, cares about is the free cash flow, even more than the incremental revenue and the ability to sell entertainment video, plus its other mobile services, nationwide.

AT&T Makes Big Strategy Shift

As a long term matter, it has seemed logical that tier one telcos globally would begin to shift revenue focus from the consumer to the business segment, especially where competition in the fixed network segment was particularly robust.

That trend seems to be emerging clearly for AT&T.

Our transactions with DIRECTV and Mexican wireless companies Iusacell and Nextel Mexico will make us a very different company, said AT&T CEO, Randall Stephenson. “After we close DIRECTV, our largest revenue stream will come from business-related accounts , followed by U.S. TV and broadband, U.S. consumer mobility and then international mobility and TV.”

Consider the magnitude of the changes. In 2014, AT&T reported earning nearly 60 percent of total revenue from mobile services. AT&T meanwhile earned about a quarter of its revenue from business customers.

Consumer landline revenue was less than 20 percent of total.

Assuming AT&T’s acquisitions of Iusacell, Nextel Mexico and DirecTV are approved, AT&T will earn about 45 percent of total revenue from business customers and about 20 percent from consumer mobility services.

About 30 percent of revenue would be earned from U.S. consumer high speed access and video entertainment.

For perhaps the first time, AT&T revenue would be driven by business accounts, not consumer services.

For the first time, AT&T would emerge as a leader in the subscription video market.

Contributions from the mobility segment would not wane, but AT&T would be far less exposed to competition in the consumer mobile segment.

All of that has key implications. AT&T will reduce reliance on U.S. market revenues and consumer “communications” revenues, to a significant extent, with a bigger reliance on video entertainment.

One might argue that diversification lessens the threat AT&T faces from cable TV, T-Mobile US and Sprint, CLECs, Google Fiber and other emerging independent ISPs.

One obvious question is what Verizon might do. So far, it has made a different bet, banking heavily on the U.S. mobile market for growth. Whether that will remain the case over the next decade is the issue. Some might argue the fundamental strategy will have to change.

The extent to which the pattern emerges elsewhere around the globe is the larger issue. Some might argue the pressure to focus on business accounts is less, since “cable TV” tends not to be a rival industry but a platform owned by tier one telcos, where it is a factor in the markets.

Also, few markets have the degree of facilities-based competition on the U.S. model.

Still, there are any number of reasons why tier one service providers ultimately might want to shift attention to business accounts. Larger revenue per account is one good reason.

Also, higher profit margins are another advantage. That is one reason why U.S. competitive local exchange carriers generally focus on business accounts only when they move out of market and compete with other telcos.

Also, to some extent, there is less competition in the business segment, compared to the consumer segment. Few competitors can compete with tier one telcos, other than other tier one telcos, in the international communications segment, or even in national large enterprise account markets.

There arguably is more competition in the mid-market segment, but growing competition in the small business (mass markets) end of the market, especially as both cable TV companies and CLECs compete in the small business market.

In consumer markets, there is fierce competition from satellite and cable TV providers. In fact, in the U.S. market, it increasingly looks as though cable TV companies are emerging as the leading providers of fixed network triple play services, not telcos.

Even in the mobile services segment, long dominated by telcos, heightened competition is occurring, putting pressure on gross revenue and profit margins. And more competition is expected,

T-Mobile US "Kills It" in Fourth Quarter 2014

The quip by John Legere, T-Mobile US CEO that “we killed it” pretty much sums up T-Mobile US fourth quarter 2014 results. Adjusted earnings (EBITDA) of $1.8 billion, up 41 percent,  beat analyst expectations of $1.62 billion.

Service grew 13.6 percent year over year in the fourth quarter, and were up nine percent in 2014, compared to 2013.

Total revenues were up 19 percent in the fourth quarter and stronger by 13 percent annually.

In fact, T-Mobile US it won nearly 80 percent of industry postpaid phone growth in the fourth quarter,and nearly 100 percent of phone account net growth in 2014. That could happen because AT&T and Verizon account growth is substantially driven by tablet account additions.

T-Mobile US added 2.1 million net new accounts, including 1.3 million branded postpaid accounts.

In 2014, T-Mobile US added 8.3 million net accounts to end with 55 million total. Of the total branded postpaid net adds in 2014, T-Mobile US added more than four million phone net adds and 0.8 million mobile broadband accounts.

Branded postpaid average billings per user grew 5.1 percent to a record $61.80. Branded postpaid phone average revenue per user was $48.26.

T-Mobile US expects to add another 2.2 million to 3.2 million net branded postpaid accounts in 2015.

Will Title II Lead to App Provider Charges Even Higher than "Paid Prioritization?"

Unintended consequences are among the reasons why intended policies rarely work as expected.

Is there a danger content providers would have to pay Internet access providers termination charges if Internet access is regulated as a common carrier Title II service? Yes, say economists and analysts as the Phoenix Center for Advanced Legal & Economic Public

Policy Studies.

“Reclassification turns edge providers into customers” of access providers, argue George Ford, Phoenix Center chief economist, and Larry Spiwak, Phoenix Center president.

This new “carrier-to-customer” relationship (as opposed to a “carrier-to-carrier” relationship) would then require all access providers (telephone, cable, and wireless) to create, and then

tariff, a termination service for Internet content under Section 203 of the Communications Act, Ford and Spivak argue.

Though skeptics will argue that is not going to happen (that the Federal Communications Commission will not impose such obligations, though it can), the potential outcome could be far worse than the hypothetical “content delivery network” fees some have argued should be outlawed.

With the caveat that the arguments--however important--are “in the weeds” for most people, the FCC  “would likely be prohibited from using its authority under Section 10 of the Communications Act to forbear from such tariffing requirements because the Commission has labeled all BSPs as ‘terminating monopolists.’ Spiwak and Ford argue.

In other words, the FCC cannot avoid having ISPs impose such charges, even if the FCC now claims it can apply a “light touch” Title II regime that does not create such obligations.

Historically, edge providers (application providers) have not been considered “customers” of

the Internet access providers.

By reclassifying broadband as a telecommunications service, this termination service becomes a common carrier telecommunications service, thereby formalizing this “customer” relationship between application providers and ISPs whose facilities they use, Phoenix Center argues.

In other words, application providers are customers of the ISPs, just as end users are.

What the “just and reasonable” tariffs ought to be, and how much application providers must pay, is the issue. The only certainty is that the tariff cannot be “zero.”

In a perhaps terrifying new development for content and application providers, it could turn out that most of the revenue IPSs earn will come from content and app providers, not end users.

That unanticipated outcome could be the worst outcome of any Title II regulation for application providers, though oddly enough ISPs could benefit. Ultimately, the ecosystem would suffer, as economics suggests higher prices will lead to lower usage.

Unstable U.K. Mobile Market About to Become "Stable?"

Given regulator preference for four leading mobile players, rather than just three leading providers, it has to be noted that regulators are deliberately opting for a market that is inherently unstable, compared to the likely structure of a three-provider market.

The reason is that the mobile business arguably and ultimately is an oligopolistic industry, even if the markets can, for a period of time, apparently diverge from that pattern. As a theoretical rule, one might argue, an oligopolistic market with three leading providers will tend to be stable when market shares follow a general pattern of 40 percent, 30 percent, 20 percent market shares held by three contestants.

Up to this point, the U.K. mobile market has featured EE and O2, each with 29 percent market share, followed by Vodafone with 23 percent share, trailed by Hutchison’s 3 at 12 percent.

That four-provider structure is roughly similar to the U.S. mobile market, where AT&T and Verizon each tend to have 30 percent share, while Sprint has about 17 percent and T-Mobile US has about 14 percent share.

If one assumes a stable oligopoly market structure has the leading provider with about 40 percent share; the number-two supplier with about 30 percent share and the third player a share of about 20 percent, the U.K. market would, with a Hutchison acquisition of O2, be functionally stable.

That still leaves open the question of whether Vodafone ultimately is acquired, but that change of ownership would not make the market unstable.

Looking only at the mobile market, BT has 40 percent share. If Hutchison were to acquire Telefónica assets, Hutchison would have about 29 percent share. Vodafone would have about 23 percent share. That fits the stable oligopoly market pattern almost perfectly.

Whether it still will make sense in the future to evaluate fixed and mobile markets as distinct entities is the issue. In reality, the consumer services market has become reliant on a bundled services approach that initially has been anchored by voice, video entertainment and high speed access, but is moving to a quadruple play approach that includes both fixed and mobile services.

Vodafone, which with a Hutchison acquisition of O2 would fall to fourth place among mobile operators, is shifting from its historic mobile-only strategy to a quadruple play approach.

As a rule, there are two kinds of companies in the telecom business: strategic buyers and strategic sellers.

After disposing of its U.S. Verizon Wireless stake and SFT to Vivendi in France, Vodafone might have been seen as a strategic buyer. But some have considered Vodafone a strategic seller. In the near term, Vodafone might be a buyer, even if it ultimately winds up being a strategic seller.

The point is that it might soon be misleading to assess market share in the mobile segment as distinct from share in the fixed services segment. If the market shifts to quadruple play, with a mix of fixed and mobile assets, share across networks and services will matter most.

Telecom Revenue Growth Slows in Every Region

“Overall, growth in telecom revenue continues to slow in every geographic region,” according to  Stéphane Téral, Infonetics Research principal analyst.

Europe’s five largest service providers—Deutsche Telekom, Orange, Telecom Italia, Telefónica, and Vodafone—continue to experience declining revenue, though less pronounced than in the past three years, he noted.

Global mobile service revenue barely budged in the first half of 2014, up just 0.5 percent from the same period a year ago, Infonetics says.

But mobile data services (text messaging and mobile broadband) rose in every region in the first half, driven by the increasing usage of smartphones.

Mobile broadband services grew 26 percent year-over-year, enough to offset the decline of text message revenue declines, Infonetics reported. On the other hand, that sometimes was not enough to offset losses of voice revenue.

In Latin America, mobile data will not replace lost voice revenues. Orange voice revenue declined 3.3 percent in 2014. In Japan, DoCoMo says a change in voice tariffs might mean NTT does not make money on voice until 2017.

High speed access revenue still drives growth in mobile and fixed line segments, but revenue will “begin to stabilize” between 2015 and 2016, if  “our competitors behave, said Ramon Fernandez, Orange CFO.

Vodafone now is focusing on fixed network broadband for revenue growth, as its mobile business is declining.

On the video entertainment side of the business, there also are warning signs.

Only 40 percent of Millennials (people roughly 18 to 34) in the U.S. watch live TV each month, Forrester Research.

ComScore said in October 2014 that 24 percent of 18- to 24-year-olds do not have a traditional pay TV service.

Of those survey respondents, 13 percent previously had subscription TV service but have disconnected, while 11 percent have never subscribed to a linear subscription TV service at all.

Nielsen found in December 2014 that U.S. adults spent 60 percent more time in the third quarter of  2014 watching streaming video than they did the year before.

Traditional TV viewing, which had been falling among viewers ages 18 to 34 at around four percent a year since 2012, tumbled 10.6 percent between September 2014 and January 2015, according to Nielsen.

All of that illustrates fundamental revenue challenges in all the key products sold by communications service providers, fixed or mobile.

Acquisitions will help, as service providers buy growth in new product segments or geographies. Still, some big new revenue stream eventually will have to be found. That explains the interest in a variety of new businesses, largely centered around the Internet of Things.

Mobile is Becoming the Way Lower Income Users Access the Internet

Reasonable people will disagree about whether specific mergers or acquisitions should be approved, as well as about the merger conditions appropriate when such mergers or acquisitions are deemed reasonable.

What does seem odd and unwise, though, are conditions that mandate specific and high adoption rates of specific services as a condition of an acquisition. One example is a proposed condition specifying that 45 percent of low-income consumers buy a "lifeline" Internet access service from Comcast. 

Service providers cannot guarantee that specific numbers of consumers will buy any specific service. The details of the offer, aside from mandatory buy rates, are reasonable areas for discussion.

But it would be hard to ensure that 45 percent of potential consumers buy any specific products at all, under the best of circumstances. 

There is a growing body of research indicating that the most logical consumers of such a service actually rely on mobile access for Internet service, for example. The point is that mobile access is emerging as the preferred way of using the Internet. 

For that reason, it is possible demand for a lifeline Internet access service could be limited. 

Mobile Money Providers Will Provide Full Range of Financial Services in Africa by 2030

Banking and agriculture are two important ways mobile phones will help transform the lives of billions of people over the next 15 years, argues Bill Gates.

In Bangladesh, the fastest-growing financial services company is a mobile money provider called bKash. Less than four years after launching, it processes roughly 2 million transactions per day, with a total value of nearly $1 billion each month.

Mobile also will play a role in raising agricultural outcomes. As more farmers have access to mobile phones, they will be able to receive all sorts of information, from weather reports to current market prices, and be able to use that information to advantage.

“Already, in the developing countries with the right regulatory framework, people are storing money digitally on their phones and using their phones to make purchases, as if they were debit cards,” the Gates says. “By 2030, two billion people who don't have a bank account today will be storing money and making payment with their phones.”

By 2030, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance.

Prices Matter: in Japan, Consumers are Buying More Feature Phones

As with most consumer products, mobile data plan prices do matter. In Japan, where mobile data plan costs are high, consumers seem to be deliberately buying feature phone devices that can be used without incurring high data costs.

Since 2012, smartphone sales in Japan have been falling. Since 2013, sales of feature phones have been growing.

Prices matter.