Entertainment Video Drives 62% of Data Consumption on North American Android Devices

In North America, on Android smartphones, entertainment video represents about 62 percent of total data consumption.

The typical North American household now has over seven active devices in use each day, with six percent of households having more than 15 active devices, according to Sandvine’s Global Internet Phenomena Spotlight: Inside the Connected Home report.

As you might guess, that also means traffic is fragmenting. PCs now account for less than 25 percent of total traffic on fixed access networks.

Conversely, mobile devices (tablets and smartphones) now account for almost 30 percent of North American fixed access traffic.

Looking at applications, the big change is video streaming, which now accounts for 65 percent of bandwidth consumption, across all devices.

Game downloads drive about 25 percent of  bandwidth consumption.

30% Smartphone Adoption in Philippines

Mobile data will drive mobile revenue in the Philippines: just about 30 percent of people already use a smartphone, even if most people use feature phones. 


source: Pawn Hero

What is a Good Wave Worth?

What is a wave worth? By one estimate, waves ridden by surfers represent $51 billion in economic activity.

source: Save the Waves

That is the result of a study of 5,000 locations by Oxford University economists Thomas McGregor and Samuel Wills, who studied night-time light emissions as a proxy for economic activity.

“We find that high-quality surfing waves boost activity in the local area (<5km 0.15-0.28="" 18-22="" 1992-2013="" amounts="" between="" billion="" by="" comparable="" from="" globally.="" his="" locations="" log="" low="" million="" or="" per="" points="" ppp="" quality="" relative="" researchers="" say.="" span="" the="" to="" us="" wave="" waves="" with="" year="">

Another study of Australian activity over a two-month period of about $20 million for local economies.

The notion of applying market forces to conservation or preservation of natural assets sometimes is criticized as applying a market test to non-material values. Surfers who think about it might agree that highlighting the value of waves can contribute to preservation, conservation, cleanliness and other non-material values.

$45 per day is an estimate of the economic value of surfable waves found near the coastal community of Huanchaco, Peru, the non-profit Save the Waves organization has estimated.

In Pichilemu, Chile, for example, the average surf tourist spends $168 per day.  In Uluwatu in Bali, Indonesia, the typical surf tourist spends $150 per day.

Google Researchers Apply Artificial Intelligence to Image Compression

Google has applied artificial intelligence to the problem of optimizing energy usage in its data centers, and researchers now say they have developed a way to use AI for compressing  images more efficiently than using JPEG.

Such practical applications for artificial intelligence will be needed to push machine learning into the mainstream of business processes.

Global Enterprise Spending Flat Through 2020, Garner Predicts

source: Gartner

With several caveats--that global trends are not necessarily reflected in every local market; that some spending is disguised (open source investments, for example); that market share shifts are happening; and that some sectors are growing while others decline--Gartner says global telecom spending by enterprises is flat in 2016, and likely will stay that way through 2020.

The other caveat is that major global upticks and downturns tend to affect enterprise capital investment as well. So any synchronized global downturn will have more negative impact than current projections incorporate.

Also, currency fluctuations also affect the reported level of spending. On a constant currency basis, information technology spending would be up about 1.5 percent.

At the same time, productivity improvements mean enterprises can spend less, while gaining greater advantage from any fixed amount of spending.

 

Separately, Ovum says second quarter 2016 earnings by public service providers show that service provider revenues overall grew about one percent in the second quarter, year over year.

That, Ovum says, is the first his year-over-year growth since the third quarter of 2014. Those figures include both consumer and business segments, and likely reflect revenue gains in consumer segments of the business.

Much small business spending on cloud services or mobility often gets disguised as consumer spending on such services, as well.

U.K. Business Telecom Spending Falls, but SME Grows

If 2015 enterprise and business spending on telecommunications services has relevance for the U.S. market, business segment revenue likely is down (fixed and mobile), but small business buying of voice and Internet access lines is up.

Leased line and web hosting revenue likely climbed fractionally.

Web hosting grew 1.3 percent, while Ethernet or leased-line services grew 1.5 percent.

IP-VPN services revenue fell slightly (0.8 percent), while frame or cell (ATM) services revenue plummeted 53.5 percent.

Total U.K. business revenue fell by £0.2 billion (2.4 percent) to £9.1 billion in 2015. This was driven by a £0.2 billion (7.6 percent) decrease in fixed voice revenues and a £0.2 billion (5.4 percent) fall in mobile revenues, partly offset by a £0.1 billion (14 percent) increase in non-corporate internet services.

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The decline in business monthly retail revenue per fixed line was due to call volume and price declines.

The proportion of business calls that originated on mobile networks was 56 percent in 2015, representing a 1.2 percentage point increase on 2014.

source: Ofcom

But total business call volumes fell by 2.2 billion minutes (4.9 percent) in 2015, driven by a fall of 1.5 billion (7.5 percent) fixed business minutes and 0.7 billion (2.9 percent) mobile business minutes, excluding use of IP telephony services.

At the end of 2015 there were 7.6 million business fixed lines and ISDN channels, a year over year fall of 0.3 million (4.3 percent), and 2.0 million (21 percent) fewer than there had been at the end of 2010.

The number of small and mid-sized business broadband lines increased by 0.1 million (5.2 percent) in 2015. Between 2010 and 2015 SME broadband lines increased by 0.6 million (a five-year CAGR of 5.4 percent).

At the end of 2015 there were 9.5 million business mobile connections (excluding the 6.7 million M2M connections), equivalent to 13 percent of all such connections.

Some 77 percent of businesses’ dedicated data subscriptions were M2M connections.

U.K. Households Increase Data Consumption 41%, Year over Year

In 2015, the average U.K. household buying fixed network Internet access consumed 82 GB of data each month, a 41 percent increase compared to the 58 GB per month recorded in June 2014.

Higher consumption of over the top entertainment video was a driver of the change, as well as faster speeds. As always, faster speeds mean more data can be consumed in any given unit of time. Also, faster speeds mean each household user can consume more data in any given unit of time.

source: Ofcom

That noted, well over half of all U.K. household telecom spending (54 percent) is for mobile services. Some 18 percent of telecom spending is for fixed Internet access. About 28 percent of spending is for fixed network voice (inflated, to a certain extent, because digital subscriber line service also requires purchase of voice service).

U.K. telecom revenue grew in 2015, up £0.2bn (0.5 percent) to £37.5 billion, propelled by  (Figure a £0.5 billion (4.2 percent) increase in retail fixed revenue, itself driven by a 12.6 percent rise in fixed internet revenues. Some 0.9 million more Internet access connections were added in 2015, representing growth of 3.9 percent.

Mobile revenue actually fell 0.4 percent, while wholesale revenue fell 4.2 percent.

Enterprise data revenue also fell by one percent.

In the consumer segment, average revenue per account drove a 3.2 percent increase in telecom spending.

U.K. telecom services spending spending now accounts for 3.5 percent of total spending (not total household income).

Fixed network voice lines decreased 0.3 million, or one percent. Mobile subscriptions grew 1.8 percent (including machine-to-machine accounts).

Fixed network voice call minutes fell by seven billion minutes (9.2 percent) to 74 billion minutes in 2015 and mobile voice call minutes increased by five billion minutes (two percent) to 143 billion minutes.

The total number of outgoing SMS and MMS messages continued to fall in 2015, down by eight billion messages (7.6 percent) to 101 billion messages, although this was a smaller fall than in either 2013 or 2014, in large part because people are shifting to over the top messaging alternatives.

source: Ofcom

Termination Charges Now a Key Business Issue for India Mobile Operators

Arcane network interconnection rules are anything but irrelevant for service providers (mobile or fixed) whose revenues are directly affected by such rules. So it is that a proposal to change interconnection fees for service providers terminating calls has become a big  business issue for India’s mobile operators.

Now, an interconnection charge for terminating a mobile call generates 14 paise about two-tenths of a U.S. cent) per minute (some call this “calling party pays”).

Conversely, no termination charges are levied on calls made from one landline to another or from a smartphone to a landline number, using the “bill-and-keep” method for interconnection.

But the Telecommunications Regulatory Authority of India (TRAI) wants to change mobile interconnection to a “bill and keep” approach as well.

The has big implications. In the U.S. market, “bill and keep” was viewed as favorable to upstarts and attackers, for reasons related to traffic flows.

Simply, small challengers tend to terminate more traffic on other networks than the big legacy networks terminate on the small networks. Using one methodology, the network that terminates a call gets paid for doing so.

Using “bill and keep,” carriers are not paid for terminating calls.

So why the proposed change? TRAI believes a shift to bill and keep would make IP telephony services more competitive, as IP telephony providers would not have to pay the termination charges. As it happens, Reliance Jio, the big new player in the Indian mobile market, will use IP-based voice.

Incumbent mobile service providers would lose revenue under the bill and keep framework, which is why they accuse TRAI of setting policy in ways that favor Reliance Jio, the big new challenger.

Of course, regulators always get accused of that, irrespective of their intended objectives. It is not possible for any regulatory policy to be completely neutral in its impact. And, often, the desired impact is to upset the existing order of things. That appears to be, in substantial part, what TRAI intends.

As always, arcane network interconnection rules have real-world business effects.

50% Discount on Spectrum Futrures

As a member of PTC's Advisory Council, I’d like to extend a personal invitation for you to attend PTC's Spectrum Futures 2016 event, taking place from 19-21 October 2016 at the Marina Mandarin Singapore.

As one of my contacts, I am able to offer you a special VIP pass, for a 50% discount on registration. There are a limited number of VIP passes, so the sooner you register the better.

Organized by PTC, Spectrum Futures explores the ways new capacity—and the business models needed to sustain it—can be brought online, fast, to connect two billion additional Internet users across South and Southeast Asia.

The attached flyer includes additional information, along with several of the subject matter experts on spectrum that will be participating. I think Spectrum Futures 2016 will be particularly relevant to you, and I expect you'll find many of the discussions at this year's event important to your business.  

Use this link to register for the VIP Pass: https://www.regonline.com/SpectrumFutures2016.

Select VIP Pass, then Standard Rate (if you are not currently a PTC Member). Enter discount code SF1650 to receive the 50% discount rate.

I hope you will be able to attend Spectrum Futures 2016!

From 10 Mbps to 1,000 Mbps in 15 Years

Consolidated Communications has launched gigabit Internet access in Roseville, Calif., just after

AT&T has launched its GigaPower gigabit Internet access service in the Sacramento market, in parts of Placer County (Roseville, Rocklin, Lincoln, and their surrounding communities).

That is notable in some ways because the Roseville market was one of the first in the United to get fiber to the home services from SureWest Communications, formerly Roseville Telephone Company, back in 2002. Back then, state of the art was symmetrical 10 Mbps service.

These days, that doesn’t even qualify as “broadband,” according to the Federal Communications Commission.

In roughly a decade and a half, we have gone from state of the art as 10 Mbps to 1,000 Mbps, two orders of magnitude.

Careful market selection, plus operating cost advantages, arguably are key to all the independent gigabit Internet access provider efforts springing up around the United States. That is as true for Google Fiber as for AT&T, Rocket Fiber, Ting or any other independent entity.

By definition, capital cost is basically not a source of material advantage: all technology is available to all potential buyers. Construction costs, with some exceptions, also are what they are, for all would-be suppliers. The difference is that some suppliers arguably must use union labor, while others have a choice.

Of all choices, it is the market geography which is most important, at the moment. When Google Fiber decided to build in Portland, Ore., there were no other gigabit ISPs in the market. Now, both CenturyLink and Comcast are doing so, making Google Fiber the possible third supplier in the market.

Some observers think Google Fiber’s decision to delay the Portland, Ore. build, and some in the San Francisco Bay Area, are driven by changing competitive dynamics. Google Fiber arguably once aimed--among other things--to spur key ISPs to upgrade their services.

But now that the ISPs are doing so, it apparently is more difficult for Google Fiber itself to sustain its own operations. Google Fiber arguably has succeeded in getting major U.S. ISPs to boost access speeds. So much so that Google Fiber itself has to rethink its own prospects and business model in many markets, apparently.

Have FTTH Costs Mostly Hit a Limit?

“A decade has passed since the first FTTH network deployments, yet the cost of building
a network remains the primary obstacle to ubiquitous fiber connectivity for every household,” says Commscope.

From 2005 to 2015, the cost per home passed dropped from $1,021 to just under $700, Commscope notes. Those costs likely are fairly standard, no matter how big or small a firm might be.

The problem is that most of the cost of building a fiber-to-home network comes from civil engineering, not network elements.

Construction, civil works engineering, obtaining permits and right-of-ways account for roughly 67 percent of total cost, while the equipment accounts for about 33 percent.

So while GPON and fiber equipment costs have indeed fallen, skilled labor rates have risen.

In other words, a fiber-to-home network mostly represents construction costs, not network element cost.

My simple way of explaining this is that most of FTTH cost comes from “digging holes, then closing the holes back up.”

If so, then the cost of FTTH cannot be reduced too much more.

That is a key reason for the resurgence in interest in fixed wireless, which now is on the cusp of reaching gigabit speeds, and also soon will reap the benefits of new research efforts related to radios.

Also, spectrum costs will drop, partly from spectrum sharing, partly from use of unlicensed spectrum, partly from huge new allocations of spectrum that can support fixed wireless.

That is why fixed wireless and millimeter wave will be such a big focus at the upcoming Spectrum Futures conference. It is possible, perhaps highly likely, that fixed wireless will upstage fiber as a means for supplying consumer gigabit Internet access.

Here’s a  fact sheet and Spectrum Futures schedule, illustrating the planned discussion of access network business issues.

Verizon Still Leads U.S. Mobile Market Performance, RootMetrics Finds

All marketing hype aside, Verizon still leads U.S. mobile service provider performance, according to Rootmetrics studies.

“Verizon’s performance in our testing of the United States was outstanding,” RootMetrics says.

For the first time since we began testing the whole of the US in the second half of 2013, Verizon won United States RootScore Awards outright across all six RootScore categories: Overall performance, Network Reliability, Network Speed, Data performance, Call performance, and Text performance.

Perhaps just as impressive is that Verizon won the United States Overall RootScore Award for the sixth consecutive time.

AT&T finished second to Verizon in five out of six categories at the national level, including overall performance, network reliability, network speed, and data performance.

The only area in which AT&T didn’t rank second behind Verizon was in the Call RootScore category. There, Sprint again narrowly edged past AT&T to finish second.

This marks the first time in five test periods that AT&T didn’t win or share the United States Text RootScore Award.

AT&T has remained a strong number-two performer behind Verizon in our United States RootScore testing for six consecutive test periods.

OTT is a Perennial Strategy Issue for Access Providers

Over the top apps are a perennial issue for access providers, even if OTT success has been very rare in the broader telecom business, for one key reason: OTT represents product substitution for core telecom products. That is most evident in voice and messaging, but starting to be seen in video entertainment services as well.

OTT voice now represents a major form of product substitution for carrier voice, and the same is happening to text messaging.

That noted, some argue OTT actually is not a direct competitor, a statement most true for Internet apps other than those related to communications.

source: Vision Mobile

“As OTT players put increasing pressure on traditional telco profit centers, it is tempting to see them as direct competitors,” Vision Mobile says. “Yet, OTTs do not compete for telco service revenues; instead, they compete to control key links in the digital value chain, with business models that span consumer electronics, online advertising, software licensing, e-commerce and more.”

That might not strictly be true: in a growing number of cases, app providers do compete for telco service revenues. But the larger point remains valid. App providers work mostly in different parts of the ecosystem.

But competition generally exists in the content, distribution and access parts of the Internet ecosystem, between “telcos” and app providers, to some extent.

source: Analysys Mason

It is easy to say telcos must “compete” with app providers. It is hard to do, and likely virtually impossible in consumer realms.

Better prospects arguably lie in any number of potential business areas, where it is easier to identify opportunities and arguably easier to create services. That is why connected car and industrial Internet of Things businesses have made sense to tier one service providers such as AT&T and Verizon.

It will make more sense for other app and device providers to pioneer consumer apps, in areas such as health and wellness, for example.

That is why app development will be such a big focus at the upcoming Spectrum Futures conference. Apps now are created mostly by third parties, so access providers mostly have to partner to create bundles of value featuring apps.

Here’s a  fact sheet and Spectrum Futures schedule, illustrating the planned discussion of how and where ISPs and app providers can partner, as well as the business issues to be confronted.

Venture capitalists will explain what they are looking for, as well.

What Happens to "Unused Data?"

Yield management (differential prices) always seems to make sense in markets for perishable goods, ranging from grocery store produce to airline seats to electricity or mobile data.  

The point is that a retailer often sells products that have no value past a certain point in time. Airline seats are worth “zero” when the plane takes off. Electricity not consumed and paid for by a customer is lost, as it cannot be stored.

The same is true for data capacity now used by customers in any block of time. What can be “rolled over” are usage rights.

But here's a funny look at what happens to unused data.

New Reality: Gigabit Providers Have to Pick Their Markets

Careful market selection, plus operating cost advantages, arguably are key to all the independent gigabit Internet access provider efforts springing up around the United States. That is as true for Google Fiber as for Rocket Fiber, Ting or any other independent entity.

By definition, capital cost is basically not a source of material advantage: all technology is available to all potential buyers. Construction costs, with some exceptions, also are what they are, for all would-be suppliers. The difference is that some suppliers arguably must use union labor, while others have a choice.

Of all choices, it is the market geography which is most important, at the moment. When Google Fiber decided to build in Portland, Ore., there were no other gigabit ISPs in the market. Now, both CenturyLink and Comcast are doing so, making Google Fiber the possible third supplier in the market.

Some observers think Google Fiber’s decision to delay the Portland, Ore. build, and some in the San Francisco Bay Area, are driven by changing competitive dynamics. Google Fiber arguably once aimed--among other things--to spur key ISPs to upgrade their services.

But now that the ISPs are doing so, it apparently is more difficult for Google Fiber itself to sustain its own operations. Google Fiber arguably has succeeded in getting major U.S. ISPs to boost access speeds. So much so that Google Fiber itself has to rethink its own prospects and business model in many markets, apparently.

In the wake of the Telecommunications Act of 1996, many would-be competitors launched operations where they believed the incumbents would be most vulnerable. For some, that was business customers in tier-two markets. For others, customers in adjacent markets were the obvious targets.

It l

For a brief period, even consumer customers who could be reached using wholesale discounts were viewed as a viable target.

The point is that new gigabit Internet access businesses likely cannot be built "anywhere." Would-be suppliers now must pick their markets, mostly avoiding tougher markets where the incumbents have chosen to upgrade to gigabit speeds.

Market selection always is important for competitive service providers. It likely now is the most-important consideration.