Windstream Selling Data Center Business

In the data center business, scale matters. Even if data centers are the new central offices, in terms of aggregating edge traffic for transport across the wide area networks, smaller providers competing against Amazon Web Services, Microsoft and Google, plus other providers, will find it tough to compete.

So it is that Windstream is pondering a sale of the data center business  it purchased in 2010.

That will free up capital Windstream can deploy elsewhere, but might also dent its enterprise revenue streams. Windstream earns nearly 80 percent of its revenue from the business segment.

In its second quarter of 2015, Windstream had revenues of $1.4 billion. Consumer revenues represented just $314 million--about 22 percent--of total revenues.

Since about 2010, both Windstream and similar profile service provider Frontier Communications have earned most of their money in the business segment, despite the continuing preponderance of consumer accounts.

Cable One Doubles High Speed Access Speeds, Moving to Gigabit

Cable ONE, a quadruple-play service provider with 700,000 customers in 19 states, is doubling downstream speeds for new and existing residential high speed Internet access customers in more than 90 percent of its markets beginning October 2015.

The Streaming 50 Mbps plan will double to 100 Mbps; the 75 Mbps Premier plan will double to 150 Mbps and the 100 Mbps Ultra Plan will double to 200 Mbps.

Cable ONE will invest $67 million in 2015 on network upgrades and enhancements, a necessary step in providing gigabit service to residential customers. The company plans to announce residential gigabit markets in September 2015.

Who Can Afford to "Educate" Small Business About Value of New IT, Communications Services?

In case you needed a reminder why channels are so important for sales of information technology and communication technology products, consider new research from

Parks Associates, which looks at spending on IT and Support Services for Small Businesses.

The study finds that small and mid-sized businesses, which have between one and 250 employees, spend only $90 to $150 per month for IT services, including server maintenance, virus protection, and backup services.

“SMBs rely heavily on computing devices, but their spending on IT services, such as network security, cloud storage and IT support, has not matched this growing dependence,” said Patrice Samuels, Research Analyst at Parks Associates. “

In part, that might result from the laborious effort to communicate actual value in a sales environment where the potential buyer is quite busy, generally not so sophisticated in terms of IT knowledge, and very conscious of value and price.

SMB decision makers who are familiar with the benefits of an IT service are more than nine times more likely to subscribe than decision makers who are unfamiliar with the service, says Samuels.

The issue is whether most channel partners, indeed at such levels most mass market sales efforts, can cost effectively communicate value.

In other words, how much time can a sales associate afford to spend educating a customer who’s spending might represent $100 incremental per month?

Can a sales associate even be an effective channel, under such circumstances? There is a reason small business generally is lumped in with “mass market” by tier one service providers.

The hard reality is that no tier one service provider can afford to spend very much on “educating” buyers in that space. The other problem is that a relatively low percentage of very small business owners are highly interested in buying new IT services.

Comcast DOCSIS 3.1: Gigabit Everywhere by 2016; 10 Gbps Built In

Comcast’s timetable for supplying gigabit connections to all of its present and potential customers is stretching out. Comcast originally had suggested it might be able to do so in 2015. Then the schedule lengthened to 2016 first quarter.

Now Comcast says it will happen “as soon as” 2018. That slipping timetable is not unusual for massive technology projects.

That might not be terribly important. Right now, “gigabit” is more a marketing platform than a core end user requirement.

Perhaps more significant: though the access network might need reinforcement, the new DOCSIS 3.1 platform Comcast is introducing is capable of supporting 10 Gbps in the downstream.

Australia’s National Broadband Network is introducing the same platform. Some question how soon cable companies really can deliver downstream speeds close to 10 Gbps without allocating more bandwidth, which would have to be taken from video services.

Some of us would argue that is coming. The large video bundles are increasingly out of favor, providing incentives for cable operators to reallocate bandwidth to high speed access, and away from video.

Internet of Things Likely Will Follow Normal Technology Adoption Curve

The Internet of Things, many believe, is the future of revenue growth for the mobile business, with a very simple logic: there are only so many locations or people to connect.

There are an order of magnitude more human beings than places to serve. And there are an order of magnitude more devices to connect, than humans to serve.

But “necessary” is not “sufficient.” Future revenue growth might hinge on IoT success. But necessity does not guarantee success, or success in a measurable business horizon, for most firms.

If Internet of Things does emerge as the new industry many predict, it would clearly qualify as an important technology innovation. And important, successful technology innovations tend to follow a maddening development path.

There normally is less progress early on than people expect. That means many firms get in too early. But then, after a longish period of quietude and disappointment, there is an inflection point, where adoption suddenly zooms beyond expectations.

That undoubtedly will be the case for IoT, as well. Commitment and patience, as well as serious effort, will be required. Internet of Things pioneers will attest to that.

Australian National Broadband Network Will Reach 9.1 Million Locations by 2018

Large and unusual (“one off”) construction or development programs are very hard to model, cost wise. So many will not be surprised that the Australian National Broadband Network plan has been revised to reduce costs from original forecasts, but upwards from the level the adjusted plan conceived.

In a new report, the cost overrun is estimated at greater than AU$10 billion.

The latest 2015-2018 corporate plan (PDF) suggests that by 2018, the NBN will require at least $9.6 billion in peak funding beyond what the government is prepared to supply in the form of equity or grants.

Put another way, the business plan is not fully funded, though few would doubt ability to secure lenders, by about 2017, to close the gap.

The maximum “peak funding” will be in the range of AU$46 billion to AU56 billion, with a median estimate of about AU$49 billion.

Over the period of the current three-year plan, the network will reach four million premises, of which 20 per cent will be served by fiber to the premises. About 72 percent of locations will use fiber to the node (FTTN) and hybrid fiber coax (HFC).

About 400,000 locations will be served by satellite connections, while 590,000 locations will be served by fixed wireless.

That assumes that by 2018, 1.67 million premises will be activated on FTTN, along with about a million HFC premises, and 1.3 million on fiber to home networks.

The wholesale-only network presently aims to provide downstream data rates of at least 25 megabits per second (25 Mbps) to all premises and at least 50 Mbps to 90 percent of fixed line premises.

AT&T Mobile Revenue Squeezed on High and Value Parts of its Market

AT&T has to compete with Verizon in the premium segment, but also T-Mobile and Sprint in value segment. That is pressuring gross revenue and profit.

https://451research.com/report-short?entityId=86453&mkt_tok=3RkMMJWWfF9wsRokva7NZKXonjHpfsX%2B7eksT%2Frn28M3109ad%2BrmPBy92oUEWp8na%2BqWCgseOrQ8k18JV8SsRc0Vo6U%3D

Internet of Things Venn Diagram, Sort Of

Here's a sort of Venn diagram of Internet of Things potential connected devices. Caveat: the surface areas are not strictly indicative of revenue size or installed devices base. It’s just illustrative.

But some estimate there could be 50 billion "things" connected to networks by perhaps 2025.

source: VentureBeat

Spectrum Futures, Singapore, Sept. 10-11, 2015

What will it take, who will lead, and what new opportunities will develop as part of the effort to connect a billion or more new Internet users across South Asia? That is focus of Spectrum Futures, a conference sponsored by the Pacific Telecommunications Council.

Hear from executives at Facebook, Ericsson, Qualcomm, Cisco, Ciena and other leading firms about the immense changes that will enable widespread and powerful access.

Discover from Reliance Communications and Global Cloud Xchange how mobile, access, data centers and computing architectures are now a seamless fabric, and what that means.

Learn about new backhaul platforms that will allow mobile and other ISPs to serve new customers affordably.

Understand how ISP, mobile and capacity suppliers, networks and revenue streams will evolve.

Find out how 5G, SDN, cloud computing, new backhaul networks and app promotions play a role.

Listen as innovators in spectrum and business models share their thoughts on what will drive Internet adoption.

See who wins, and why.

Those are a few of the reasons to attend the Spectrum Futures conference, to be held 10-11 September 2015 at the M Hotel in Singapore.

Attendance is strictly limited to 150 attendees, with priority for national communications regulators and their staffs. Register here.

Regulators and sponsors will gather on 9 September for dinner. The conference officially begins on 10 September with an all-day program and evening reception open to all registered attendees, and continues on 11 September with a half-day program followed by a regulators-only symposium. View the complete agenda here.

Can you afford to miss it?

India Remains Flashpoint for Zero Rating

India remains one of the hotspots where it comes to policies on zero rating. Aside from governmental action that could happen, the Internet and Mobile Association of India also is considering what public stand to take on policies that encourage sampling of Internet apps by allowing access without the requirement to buy a mobile Internet access subscription, for an introductory period.

The Indian Department of Telecom is preparing regulations on network neutrality, and some believe zero rating should be banned as part of network neutrality rules, on the grounds that zero rating does not “treat all bits, or all applications, alike.”

Both Facebook and Google believe such promotional efforts have a direct and substantial impact on mobile Internet access adoption in markets across South Asia and Southeast Asia.

Google has done zero rated deals in India, notably with Airtel (the proponent of zero rated Airtel Zero service), as well for Free Zone (free Gmail, Google Search, Google+).

Google also has offered 200 MB free data for use of Google Play apps, and no data charges for over-the-air updates on Android One handsets.

Google reportedly was planning to roll out its own Zero Rated service in India, but put plans on hold after the net neutrality protests, especially those against Airtel Zero.

Both firms appear to believe that such promotional policies are helpful tools to boost Internet access across the region--Facebook perhaps more visibly than Google--and both also have joined the Cellular Operators Association of India.

As always, valid public policy concerns and perceived private financial interests both are in play. Google and Facebook have good reasons for believing they benefit disproportionately as hundreds of millions of new Internet users are added.

Smaller app providers might have their own vested interests in seeing that Google and Facebook do not gain access to that many new potential users. For few application providers is the direct link between “number of Internet users” and “our revenues” so clear.

In that sense, there is alignment between the interests of mobile service providers and ISPs and Google and Facebook. All gain directly from each incremental user or subscriber.

That is not so true for thousands of smaller app providers, who might well believe they are better off essentially slowing Facebook and Google influence.

Spellchecking in 3 Languages Simultaneously, on Chrome Canary

The developer version of Google's Chrome operating system (Chrome Canary) includes a feature allowing spellchecking of three different languages, simultaneously.

It's now enabled in the experimental Chromium Canary Chrome Canary browser on Windows, ChromeOS or Linux. 

Can 5G Fix Profit Per Bit Per Hertz Problem?

Mobile operators have faced a rather persistent problem where it comes to profit margins on Internet access services. Simply, revenue generation has lagged consumption.

Is that the sort of problem fifth generation networks can solve? In some ways, yes. Each generation of mobile networks tends to be more efficient, in terms of bits per Hertz, than the earlier generation, and that likely will be true for fifth generation networks as well.

Still, as we already have seen, perhaps it is ability to shift access to Wi-Fi that most accounts for greater efficiency. In other words, the radio networks become more efficient, and generate more revenue per bit, when significant traffic demand is offloaded to the fixed network.

Not surprisingly, that is expected to be a big feature of 5G networks. Still, the issue is whether data access actually can be priced so that revenue exceeds the cost of supplying demanded bandwidth.

That will remain a big challenge. For starters, people seem to use more data with each passing year, and video consumption is a huge driver of that trend. That is an issue.

Video consumes so much bandwidth, and yet video content is priced so low, relative to the consumption, that there are limits to what mobile operators can charge.

Consider the example of a Netflix subscription costing $8 a month and offering the ability to stream movies that consumer up to a gigabyte per movie. If you assume a mobile gigabyte of usage costs between $7 a gig and $15 a gig, you see the problem.

Any significant amount of usage will drive data charges beyond the consumer’s willingness to pay, unless offload to Wi-Fi is readily available.

Fixed Internet access networks with effective usage limits in the hundreds of gigabytes are one thing. Mobile allowances typically in single digits are another matter.

The point is that it might never actually be possible to price consumed Internet capacity in a way that closely associates price and consumed bits, in a linear manner, and with consistently satisfactory profit margins.

Ironically, the more success mobile operators are with low-bandwidth Internet of Things applications and sales, the better the odds profit margins can be sustained. Narrowband applications (voice, messaging) traditionally have had the highest profit margins in the mobile business, in a bits per Hertz sense.

And that likely is key to 5G and future profit margins, on a profit per bit per Hertz basis. Sell the apps, not the access.

Ericsson, SK Holdings to Collaborate on IoT Apps

Ericsson and SK Holdings have signed an agreement to collaborate on creating global Internet of Things platforms for industry sectors including healthcare and transportation.

In addition, the partners said they will work on solutions for disaster recovery related to IoT as well as IoT authentication and security in the Asia Pacific area.

There is a reason for the interest. Fixed networks connected places. Mobile connected people. IoT will connect objects. Each new segment represents a market an order of magnitude larger than the former.

So connected places might represent a universe of about a half billion places. Connecting people represents a potential market of five billion. Internet of Things might represent 50 billion objects.

How Much of $152 Billion in Connected Car Revenues Will Mobile Ops Get?

Services related to the connected car market will generate as much as $152 billion by 2020, including the value of hardware and software, according to Business Insider Intelligence.

Relatively little of the total revenue is likely to be generated by the “access” function (the equivalent of a mobile or fixed network Internet access subscription). Most of the revenue will be reaped by providers of services or apps, which suggests the direction mobile service providers are likely to continue taking in the connected car markets.

One reasonable hypothesis is that auto industry related firms are in position to win most of the revenue, as the biggest categories are vehicle management and safety. In those market segments, mobile service providers are likely to be supplies of access, more than the actual application or service providers.

Mobile providers logically should do best in the mobility management area, and could be significant providers in the driver assistance, entertainment or well being apps categories, to mention a few possible segments.

Investors Seem to Expect Reliance Jio to Damage Incumbents

When any well-heeled and experienced new competitor enters a market, especially with a business plan that includes offering big discounts and a different platform,  other contestants are likely to face some disruption.

That appears to be the case in India, where Reliance Jio is launching its mobile service. Equity values for Bharti Airtel and Idea Cellular, a couple of the incumbent service providers, have been dipping since July 2015.

Investors might signaling an expectation that Reliance Jio will cause revenue and profit damage at the incumbent firms.

source: livemint