Sprint Operating Metrics Improve, but T-Mobile US Takes Third Place in U.S. Mobile Market Share Rankings

Sprint reported improved churn performance and improvement in its net account additions, with a small loss for its first quarter of 2015, ending in June 2015.

But some also would note that, for the first time in recent memory, the market share rankings for the top-four U.S. mobile providers actually changed, with T-Mobile US becoming the third-largest U.S. mobile service provider, while Sprint slipped to fourth.

Sprint now has  57 million customers, while  T-Mobile US with 58.9 million. T-Mobile US gained two million net new customers while Sprint added only 675,000.

For the most part, the quarter was a continuing saga of reversing prior operating trends. Sprint platform postpaid churn of 1.56 percent was a record low, with total net additions of 675,000 accounts.

In addition, the company reported net operating revenue of $8 billion, operating income of $501 million and Adjusted EBITDA of $2.1 billion.

Sprint also raised guidance for its fiscal year 2015 Adjusted EBITDA outlook from the previous expectation of $6.5 to $6.9 billion to $7.2 to $7.6 billion, excluding any accounting impacts from potential lease financing.

Postpaid net additions of 310,000 compared to net losses of 181,000 in the prior year quarter, with an improvement of 491,000 year-over-year.

For the first time in nearly two years Sprint recorded monthly postpaid phone net additions in both May and June.

This marked the fifth consecutive quarter of sequential improvement and compared to losses of 620,000 in the prior year quarter.

The 608,000 year-over-year improvement was driven by lower churn and a 13 percent increase in gross additions, including a 47 percent increase in gross additions with prime credit quality, Sprint said.

Sprint also said it was net port positive for the second consecutive quarter, meaning it activated more transferred accounts than it lost to other providers.

On the Sprint branded platform, total net additions of 675,000 compared to net losses of 220,000 in the prior year quarter.

The 895,000 year-over-year improvement was mostly driven by fewer postpaid phone customer losses.

Prepaid net losses of 366,000 compared to net losses of 542,000 in the prior year quarter.

Wholesale net additions of 731,000 compared to 503,000 in the prior year quarter. The year-over-year growth was mostly driven by connected devices.

Still, operating revenues of $8 billion decreased nine percent year-over-year as consolidated adjusted EBITDA of $2.1 billion grew 14 percent from the prior year period.

Operating income of $501 million was relatively flat from $519 million in the year-ago quarter as higher depreciation expenses offset the growth in Adjusted EBITDA.

Net loss of $20 million, or loss per share of $.01, compared to a net income of $23 million, or earnings per share of $.01, in the year-ago period primarily due to higher interest expenses.

Cable Gets Another Hybrid Access Platform: DOCSIS Protocols Over PON

Cable TV operators notably have used the hybrid fiber coax access architecture, not "standard telco" access networks. But the industry is preparing for fiber to home, in a way compatible with the HFC approach.

That doesn't necessarily mean a wholesale switch of access technology, but in a typically hybrid manner, the ability to mix and match new fiber to customer access with the existing HFC networks.

As an example, Broadcom Corporation has announced a DOCSIS-compatible 10G Ethernet Passive Optical Network (EPON) residential gateway reference design.

Broadcom's new platform allows cable Multiple System Operators (MSOs) to provide multi-gigabit speeds over a fiber to home access network, instead of the traditional hybrid fiber coax network.

Broadcom's new 10G EPON residential gateway solution is currently available from multiple manufacturers.

The new gateway platform combines Broadcom's BCM55030, a 10G/10G EPON Optical Network Unit (ONU) system-on-a-chip (SoC), with the widely deployed BCM33843 DOCSIS 3.0 cable gateway device.

Broadcom's 10G EPON gateway adheres to the preliminary CableLabs DPoE 2.0 specification, which allows the PON gateway to look and function like a traditional DOCSIS gateway.

Built-in 10G symmetric EPON WAN technology supports multi-gigabit speeds, allowing multiple FTTH subscribers to achieve 1G symmetric performance simultaneously on a single PON.

"Our new residential gateway design enables cable MSOs to bridge a fiber network into their existing DOCSIS infrastructure without costly network re-design," said Jim McKeon, Senior Director of Product Marketing, Broadcom.

Carriers Believe Their Own Region Will Lead 5G

For good reason, mobile executives surveyed by Heavy Reading about expected 5G developments believe Asia will be in the forefront of 5G deployments. Some 58 executives were surveyed, with support from the Telecommunications Industry Association and Interdigital.

In fact, 71 percent of respondents expect Asia to lead in 5G. Some 52 percent think , to lead North America will lead, while 45 percent of respondents believer Europe will lead.

Heavy Reading analyst Gabriel Brown believes this is consistent with plans by Japan and Korea to deploy early.

DoCoMo says it will launch a first release of 5G at the 2020 Summer Olympics in Tokyo, and in Korea, leading operators, such as SK Telecom plan to demonstrate prototype 5G systems at the 2018 Winter Olympics.

North American operators are very much more likely to think that North America will lead (73 percent of North American operator respondents think so), whereas European and Asian respondents both think Asia will lead.

AT&T Offers First Nationwide "Linear Video Plus Mobile" Service

The first new consumer offer AT&T has made, in the wake of the approved acquisition of DirecTV, is going to draw yawns in some quarters. Sure, the new bundle of DirecTV and AT&T Wireless service could save some new customers money.

Beyond that, critics will say, the package is not that innovative. That might be true, in a sense. Bundling multiple services to increase value and save a buyer money is not new. Bundling video with other services is not new.

Predictably, the touted saving occur during the first-year promotion period. That also is routine.

But there is one element of the new plans that are a first. AT&T has become the first U.S. service provider able to sell linear TV and mobile service nationwide.

The offer for new customers includes HD and DVR service for up to four TV receivers, unlimited talk and text for four wireless lines, and 10 GB of shareable wireless data for $200 a month, an annual savings of $600 or more in the first 12 months, for new subscribers.

As part of this launch on Aug. 10, and for the first time nationwide, new DIRECTV subscribers will have immediate access to programming on their mobile devices, even before the satellite dish is installed.

They can view content on their compatible mobile devices immediately.

Additionally, DIRECTV and U-Verse TV customers who switch to AT&T wireless service from another mobile provider will receive a $300 bill credit when they buy a smartphone on AT&T Next and trade in an eligible smartphone.

AT&T is now the largest linear TV provider in the United States, and, for that matter, globally.

Innovation was never the immediate upside, though. AT&T expects to harvest the cash flow from DirecTV, and also gain the ability to sell linear video, mobile services and high speed access nationwide.

Any future upside in the video entertainment space would necessarily take longer to realize.

So yes, the critics might be right: the latest offer is not terribly innovative. It doesn’t have to be. The new offers only have to increase AT&T’s subscriber base, its average revenue per account and margins, driving incremental cash flow. That’s enough, for the moment.

Deutsche Telekom Partners with Boingo

Deutsche Telekom has enabled business users to use Boingo Wireless hotspots globally.

Boingo’s network of more than 1 million hotspots around the globe is now available to Deutsche Telekom’s business customers in more than 50 countries especially the world’s largest airports, major hotels, and shopping and city centers.

In addition to Deutsche Telekom, Boingo has similar agreements with AT&T, Sprint, Verizon, LG U+ and NTT DOCOMO.

Though virtually no legacy mobile providers would endorse an “unlicensed spectrum only” approach, still valuing licensed spectrum for the core of the network facilities, it also is true that virtually all mobile operators now recognize that Wi-Fi forms an essential part of the infrastructure.

That change also extends to emerging shared spectrum policies. Spectrum sharing is expected to rather routine, and some mobile executives now believe spectrum sharing will be “essential” for fifth generation mobile networks.

That belief is especially strong among Asia mobile operators, far less so among North American operators.

Some 26 percent of 58 global mobile operator executives say spectrum sharing  it is “essential” to 5G, while another 32 percent say it is “important.” Together, 58 percent of respondents think spectrum sharing is crucial for 5G.

A quarter of respondents think spectrum sharing is  “nice to have,” while 17 percent are negative on the concept, a study about expected 5G attributes found. The study was conducted by

Gabriel Brown Senior Analyst, Heavy Reading, with support from the Telecommunications Industry Association and Interdigital.

There are now more examples of mobile operators seeking to use shared spectrum and it appears very likely that this model will be used more extensively over time, said Brown.

LTE in the unlicensed 5GHz band (LTE-U or LTE-AAA), and the recently released 3.5GHz shared access Band 42 in the United States provide potential examples.

Asian respondents are more likely to view shared access spectrum as critical to 5G (40 percent) than Europeans (28 percent) or North Americans (13 percent).

SK Telecom to Test Maritime LTE with 100-Km Reach

SK Telecom plans to launch a test network for maritime communications using Long Term Evolution. Maritime networks normally are the province of satellite platforms, and the SK Telecom network will affect that reality only marginally: the test network works only to a distance of about 100 kilometers (60 miles) from shore.

LTE for Maritime Wireless Communications (LTE-M) network, as part of a research and development project led by the Ministry of Oceans and Fisheries (MOF).

The network actually is intended to enhance navigation safety for small ships that have relatively poor inbuilt communication and safety system, compared to large vessels.

SK Telecom plans to deploy the test network by May 2016 in the East Sea of Korea. Radio signals transmitted from a high-gain antenna located at high altitude in the eastern coast will be received by LTE-M router installed on a ship to be converted to Wi-Fi.

Mobile Internet and IoT Will Drive 5G Use Cases, Execs Believe

A survey of 58 mobile operator executives finds fifth generation mobile networks (5G) primarily will be driven by mobile broadband and Internet of Things use cases.

The survey, conducted by Heavy Reading, found 76 percent of respondents saw better broadband performance  key use case, while 74 percent found support for Internet of Things apps were a specific value of expected 5G networks.

A third of respondents expect their company to launch commercial service before 2021. However the majority do not expect full commercial service until after 2022.

Significantly, operator executives  strongly expect 5G will incorporate two, or more, radio interfaces — perhaps to support different frequency bands or use-cases. Some 66 percent say they believe that will be the case.

That is a bit of change from 4G, though was a reality for 3G and 2G.

A full 54 percent thought that 5G would include “multiple radios (more than two).” This expectation of multiple Radio Access Technology Systems (RATS) does not necessarily contradict a view held by some that there is a need for a new 5G radio that should be scalable across multiple modes of operations across different bands.

The study of expected 5G attributes was conducted by Gabriel Brown Senior Analyst, Heavy Reading, with support from the Telecommunications Industry Association and Interdigital.

Spectrum sharing is expected to rather routine, and some mobile executives now believe spectrum sharing will be “essential” for fifth generation mobile networks.

Some 26 percent of 58 global mobile operator executives say spectrum sharing  it is “essential” to 5G, while another 32 percent say it is “important.” Together, 58 percent of respondents think spectrum sharing is crucial for 5G.

A quarter of respondents think spectrum sharing is  “nice to have,” while 17 percent are negative on the concept, a study about expected 5G attributes found. The study was conducted by

Gabriel Brown Senior Analyst, Heavy Reading, with support from the Telecommunications Industry Association and Interdigital.

There are now more examples of mobile operators seeking to use shared spectrum and it appears very likely that this model will be used more extensively over time, said Brown.

LTE in the unlicensed 5GHz band (LTE-U or LTE-AAA), and the recently released 3.5GHz shared access Band 42 in the United States provide potential examples.

Asian respondents are more likely to view shared access spectrum as critical to 5G (40 percent) than Europeans (28 percent) or North Americans (13 percent).

Google and Apple Projected to Play Major Roles in Connected Car Market

By 2020, perhaps 31 million cars will be using Android Auto and 37 million will be using Apple CarPlay, according to IHS, and that will cover nearly all cars launching connected car services, according to BI Intelligence estimates.

Automotive Screen Projection Annual Sales
Brand		2015 Forecast*		2020 Forecast*
Android Auto		643K		31 million
Apple CarPlay		861K		37 million
MirrorLink		1.1 million		17 million

*Figures are rounded

Source: IHS Auto Tech Software, Apps & Services Forecast, (March, 2015).

Of the 220 million total connected cars on the road globally in 2020, Business Intelligence estimates consumers will activate connected services in 88 million of these vehicles.

source: Business Intelligence

Facebook Now the Second Big Technology Firm to Build its Business on Advertising

Google was the first major technology company to drive its revenues from advertising. Facebook is the second big tech firm to do so. But notice the rather steady contribution from payments.

Amazon, some would say, is the first big tech firm to build its revenue around commerce.

We might disagree about the threshold for calling a firm “major,” but payments is among the revenue streams that might someday support a major tech firm. Some might say Netflix is the first major technology firm to build a big business on content subscriptions.

To be sure, that somewhat relies on the adage that “every firm is a technology firm, these days.” Still, there is something to that appellation.

The point is that the discovery of business models is an important activity for would-be technology giants.

source: businessinsider.com

OTT Subscription Video Revenue Could Double in Three Years, Execs Believe

Premium over the top subscription video revenues are expected to grow from $4 billion in 2014 to between $8 billion 12 billion in 2018, a group of 45 industry entertainment industry and distributors believe.

But the eventual market is the $104 billion now spent on linear video subscriptions. But there are many uncertainties. It is unclear whether the new OTT market presents a revenue opportunity bigger, smaller or equivalent to today’s linear business.

Some would say history suggests the future market might be smaller than today’s market, while others would say logic suggests a market roughly as big as the current linear market. A few might argue for a much-bigger market over time, but that is likely the minority view.

Most likely would be happy with a near term outcome where OTT gains and linear losses result in a market that is the same size, in terms of end user buying.

The scenario where the market grows quite substantially relies on value creation and consumer perception. Since consumer budgets are limited, spending for new products tends to cannibalize current spending on other products.

So fixed network voice tends to shrink as consumers shift spending to mobile substitutes. In that instance, however, the overall market grows, in part because services “to a place” are replaced by “services for people.”

The pressure in entertainment video is that many consumers view current spending on linear products as “too high,” so OTT appeals because it costs less. Almost by definition, that tends to shrink the market, as mass adoption happens.

Netflix is expected to remain the largest single mass-market OTT provider in the United States, although participants expect its share to decline from 85 percent of the market in 2014 to around 50 percent in 2018 as other providers gain traction.

The report findings are contained in Prospects for Premium OTT in the USA and suggest executive belief that the future leaders will be found among today’s providers, though many niche providers also could flourish.

Industry participants envisage 15 to 20 specialist OTT providers acquiring 100,000 or more paying subscribers by 2018.

Opportunities for new mass-market OTT providers to challenge Netflix, Hulu and Amazon are likely limited to the leading linear video distributors Apple, Google and Facebook.

The reason is the assumed advantages of access to established subscriber bases, along with strong market share positions in an existing market (linear TV) that is expected to fuse with the emerging OTT subscription market.

In other words, if OTT is the substitute new product for linear, then linear providers are well positioned to supply OTT products as well, and have ample incentives to do so.

At the same time, OTT content providers have ample incentives to partner with big distributors to gain immediate volume, while gaining a less-expensive way to promote and bill for services. Few, if any, OTT content providers are set up to support retail billing and customer support, for example.

Industry executives believe that the underlying enablers for premium OTT services (broadband, connected devices, and payment infrastructure) are largely in place and are sufficient to support rapid growth in the next few years.

Greater availability of public WiFi, increased penetration of tablets, connected TVs and streaming media players, improved device interoperability, and standardization between heterogeneous client platforms would boost adoption.

The survey was sponsored by Vindicia and Ooyala, and conducted by MTM between May and June 2015.

Windows 10 Uses Peer-to-Peer for Software Updates: You Might Want to Tell Your OS If You Have a Metered Connection

A feature of Windows 10 designed to provide faster downloads of app and feature updates is the use of a peer-to-peer protocol that could result in one user’s bandwidth being used by the update feature to send data to other users.

“In addition to downloading updates and apps from Microsoft, Windows will get updates and apps from other PCs that already have them,” Microsoft says.

“When Windows downloads an update or app, it will look for other PCs on your local network that have already downloaded the update or app using Delivery Optimization,” Microsoft say.

Windows then downloads parts of the file from those PCs and parts of the file from Microsoft.

As do other peer-to-peer file sharing networks, Windows uses the fastest, most reliable download source for each part of the file.

Delivery Optimization uses PCs on a local network and PCs on the Internet.

When Delivery Optimization is turned on, your PC sends parts of apps or updates that you’ve downloaded using Delivery Optimization to other PCs on your local network, or on the Internet, depending on your settings, Microsoft says.

As with Windows 8.1, Windows 10 won't automatically download updates or apps if it detects that your PC is using a metered connection.

Similarly, Delivery Optimization won’t automatically download or send parts of updates or apps to other PCs on the Internet if it detects that you're using a metered connection.

But you have to manually configure the “I’m using a metered connection” status.

If you use a Wi‑Fi connection that is metered or capped, make sure you identify it as a metered connection.

Go to Start , then Settings > Network & Internet > Wi‑Fi > Advanced options. Use the toggle under Set as metered connection to set your Wi‑Fi connection as metered.

Content Consumption Now Shapes Computing

Where it comes to content, some “90 percent of the world consumes while only 10 percent creates,” according to Girish Mathrubootham Freshdesk CEO.

Many of the most-important trends in devices, applications, computing architecture and networking flow directly from that one main trend.

Despite the new trend of symmetrical Internet access connections, in perhaps 90 percent of cases, especially as bandwidth climbs towards the gigabit range, asymmetrical connections still work for most consumers, and even most organization locations.

Full-motion video is an example of one key app that does shape demand for faster uplinks, even if most of the bandwidth still is needed for downlink traffic.

The access network design economics might still, for quite some time, suggest that an asymmetrical bandwidth design, which often costs less, remains a suitable approach. As the cost of symmetrical connections drops, that will could change, however.

Since most users consume content, most of the time, rather than create it, mobile and portable devices are viable end user devices. Even the content that most people do create (messages or pictures) can be created easily on a mobile or portable device (tablet).

The other big architectural change is that most content people want to consume now resides in the cloud. So cloud computing is becoming the dominant computing architecture.

Cloud computing in turn shapes demand for global network capacity and performance, while creating a new role for mobile and untethered networks.

If the desktop PC was the signature appliance of the personal computing era, then the mobile phone is the signature appliance of the cloud era.

If computing is cloud based, then apps also must be cloud based. Cloud-based apps, in turn, are more consumable by users of mobile devices; easier to deliver and update.

But all the trends flow from the volume of tasks now required of modern computing. Where PCs might once have been used to create documents and reports by relatively few people, computing now undergirds content distribution and consumption, gaming, messaging and communications.

That is a profoundly asymmetrical process requiring large amounts of local bandwidth with more stringent latency, congestion and intruder protection requirements, in a growing number of cases.

Pervasiveness has been a trend within computing for some time, but will accelerate again as computing and messaging used by machines and embedded sensors becomes the next wave of growth for many industries related to computing and communications.

T-Mobile US Gains Phone Accounts, AT&T Gains Connected Car Accounts

The near term trend at the top of the U.S. mobile business is that T-Mobile US is taking market share from the other three big providers. Just how much, from which carriers, is a matter of some uncertainty.

Another trend is that AT&T and Verizon are focusing more attention on future markets such as Internet of Things and connected car, for example. In the most recent quarter, AT&T, for example, added many more connected car accounts than phone accounts.

In fact, half of AT&T's net adds were connected car subscriptions.

T-Mobile US, in its most recent quarter, added 760,000 branded postpaid phone net adds, about 400,000 more net adds than Verizon added.

And T-Mobile US says it topped AT&T in terms of postpaid phone net adds by almost 1.1 million in the quarter. Overall, T-Mobile US had 2.1 million total net adds in Q2 and one million branded postpaid net adds, while keeping churn down to 1.3 percent.

T-Mobile US says it has had nine quarters in a row where it took customers, on a net basis, in the postpaid area.

For  eight consecutive quarters, T-Mobile US has had a postpaid porting ratio of greater than two to one from Sprint. In other words, T-Mobile US has gained twice as many subscribers from Sprint as it lost to Sprint.

All that said, the U.S. mobile market remains unstable. Beyond what T-Mobile US might be doing in terms of market share, gaining on the other three providers, new contenders will be entering, at some point. Comcast, Dish Network and Google are among the contenders.

Nobody knows what eventually could happen to market structure, should all three, or even others in addition to those three, enter the market. The market undoubtedly cannot support seven leading operators, each with 30 percent share.

And some would argue a sustainable position in the U.S. market would require something on the order of 30 percent share.