SpaceX Starlink Constellation Should be Active over Canada and Northern U.S. by June

SpaceX has successfully launched another 40 satellites into low earth orbit, bringing the Starlink constellation of LEO broadband satellites up to 175.

Assuming SpaceX continues putting satellites in orbit at a rate of 60 satellites per launch, 11 more Falcon 9-Starlink missions this year will meet the 800-satellite threshold for "moderate" levels of internet coverage. That could happen by June 2020. 

By the end of 2020, there should be about 1,500 Starlinks in orbit. Internet service providers in Canada and northern parts of the United States, take note: Starlink will be able to supply consumer and business internet access across those regions by about June. 

It is not yet clear how Starlink will price its service. Right now, geostationary bandwidth represents perhaps 0.6 percent of consumer internet access connections, according to Northern Sky Research. 

source: Northern Sky Research

Forecasts must assume dramatic reductions in earth station costs, with consumer pricing not too far from current expectations, if LEO-based internet access is to be competitive with GEO service and fixed networks (wired and wireless). 

In many regions, internet access does not reach high levels until consumer prices drop below about five percent of gross national income per person. In the United States and Canada, competing with other alternatives will require getting recurring service costs even lower, into the one percent range, most likely, as that is where existing consumer services are priced. 

source: NSR

Of course, in the early going, price subsidies are likely to be important, as earth station gear will likely not enable low consumer service prices. Longer term, it is possible that LEO service winds up being more important for business customers than consumers, though.

How Will Industry Replace $35 Billion in Annual Revenue Losses Every Year?

Globally, mobile operator voice revenue will drop to $208 billion by 2024 from $381 billion in 2019, Juniper Research now forecasts. That is not a new trend, as voice revenue has been under severe pressure for two decades, and not principally because of VoIP substitution. 

After about 2000, consumers began to place more and more of their long distance calls directly from their mobiles, instead of landline phones, in large part because of financial inducements to do so. The net impact, shown here in the U.S. market, was a decline in fixed network calling, a decline in purchasing of fixed network voice lines, and, as a consequence, a decline in voice revenue. 

source: National Exchange Carrier Association

In fact, one can argue that it was a shift of consumer demand to mobility, with domestic long distance calling included at essentially no charge, that drove mobile demand.

Starting about 2001, a domestic long distance call might still have cost an additional 10 cents per minute on a fixed line, but a zero incremental charge when calls were placed from a mobile device. 

That disrupted the industry profit model, which was built on long distance revenue. 

source: Technology Policy Institute

Of course, competition did not help, either, and that process had already been driving lower prices, since at least 1983. 

source: FCC

If Juniper Research estimates prove correct, $173 billion worth of revenue will be removed from service provider ledgers, in total, between 2019 and 2024, to the tune of roughly $35 billion annually. Those are significant numbers, as all that revenue has to be replaced, somehow. 

For any single service provider, no matter how large, $1 billion in annual new revenues is not easy to acquire, harder still to build. 

source: U.S. Department of Justice

All that is why some observers believe connectivity service providers must discover or create a few new and big sources of revenue to replace voice, messaging and now even video entertainment revenue. My own prediction is that the new revenues will have to have magnitude of about 50 percent of present revenue in 10 years.

More Fios Price Transparency

Some service providers may not like the idea, but greater price transparency seems to be coming to the consumer part of the fixed network business. 

For decades, U.S. cable TV and telco service providers have relied on service bundles (dual play, triple play, sometimes quadruple play) to create value, partly by offering discounts for such packages. The other angle was that bundling allowed service providers to sell more units of products consumers did not actually want. 

Many consumers buy triple-play packages containing landline voice only because the overall price is less than buying internet access and video entertainment. 

That strategy now is loosening, if not fully unraveling, in large part because two of the constituent services--voice and linear video--have diminishing demand. 

So Verizon has moved to what it calls Mix and Match on its Fios fixed network service, allowing  customers to buy Internet and TV plans without use of a traditional bundle. The upside for consumers is that it is no longer necessary to buy a bundle to get the best prices. 

Price transparency is a big advantage. In a traditional triple-play bundle, it is not possible for customers to determine what each constituent service costs. Under Verizon’s Mix and Match format, all prices are transparent: consumers know exactly what each component costs. 

Under Verizon’s new plans, it is clear that residential home phone service (probably before taxes and fees) is rated at $20 a month, internet access costs $40 to $80 a month, depending on speed tier, while video can cost $50 to $90. 

The building block, in most cases, will likely be internet access, the one service all fixed network service providers will use to anchor their business models. 

Customers then can buy linear service in a new way, choosing five channels from the palette of 200 networks, using YouTube TV or buying a linear package of 300 or 425 channels. 

Once upon a time, cable TV gross profit margins were in the 40-percent range. Today, most are probably lucky to get 10 percent net margins. Small telcos and cable operators never were able to earn much--if anything--offering video services. And there is some evidence that streaming service margins are lower than linear. 

Also, profit trends have flipped. A decade or two ago, video profit margins outstripped those of internet access. Up to this point, it has mostly been small telcos and cable companies in rural areas that have pondered abandoning video services. Now Verizon is signaling that it does not see the upside, either. 

source: Verizon 

Market Share Shifs after Disney+ Launch?

Market share shifts are inevitable as new video streaming services launch. Here is what one analyst believes will happen as Disney+ launched in late 2019. 

source: eMarketer

How Much Agility is Possible?

The problem is that large organizations with lots of regulatory scrutiny and long-lived, sunk assets might be incapable of agility, to a large degree. 

How Much Will Households Spend on Video Streaming?

Are U.S. streaming video subscription customers already showing signs of reaching the limit of willingness to spend on such services? One survey has been interpreted that way. The majority of respondents to a survey (59 percent) are not willing to pay more than $20 a month for any single streaming TV service, according to a recent survey of more than 2,600 U.S. consumers sponsored by The Trade Desk, a supplier of programmatic ad buying. The survey was conducted by YouGov. 

Some 75 percent of consumers indicated they would not pay more than $30 a month for video streaming. A couple of caveats are in order. Consumers taking surveys often casually say they will or will not do something. Those responses often do not match with their actual behavior. 

And, obviously, it is in the business interest of a programmatic ad buying firm to convince wider sections of the market that advertising support is required to reduce overall end user cost.

The money quote: “The survey indicates a willingness from consumers for streaming services supported by ads, particularly if the format and pacing of commercial breaks differ from traditional TV content,” The Trade Desk says.

The issue, as always, is that consumers prefer ad-free formats, but also prefer not to spend too much money on such content. Hence, the delicate balance of revenue models: recurring payment with no ads, recurring payment with some ads or lots of ads but no recurring payments. 

It’s all about perceptions of value, as consumers prefer no ads, but will tolerate them, up to a point, to save money. “Given the choice between getting something for free or paying for the exact same thing, they’ll make the choice to get it for free,” said Randall Rothenberg, Interactive Advertising Bureau CEO. 

“Consumers are willing to view ads if it means their subscription costs go down,” The Trade Desk notes. That tendency can be seen in toleration of advertising across multiple formats and venues.  

It is possible to argue that the willingness to spend responses will prove incorrect. Many of us would be quite comfortable with forecasts that total spending on streaming video could top $40 a month, and for significant numbers of consumers will reach about $80 a month to $100 a month. 

And there are heavy-user households that likely already are spending more than that on total video entertainment (linear plus over the top services). Another survey taken in 2019 already found at least five percent of consumers willing to spend $70 or more on video streaming services per month. 

The other issue is that content is going to fragment onto different services. And some surveys suggest a clear majority of viewers will buy a whole service to see one particular favored show. So no matter what consumers now believe, they will be confronted with a more-fragmented content market that creates new incentives to buy multiple streaming services. 

The point is that it is not unreasonable to expect that most households will not ultimately find they spend much less than they do at present, for video services.

Amazon Fire TV for Rural Service Providers

Amazon now is opening up its Fire TV platform to partnerships with communications service providers. The Fire TV Edition for Operators is available today in North America, Europe, India and Japan.

After successfully introducing Fire TV partnerships with Tata Sky in India and Verizon in the United States, Fire TV is now expanding the device offerings available to operators across several continents, including rural connectivity partners in rural U.S. markets where traditional linear video services are unprofitable for the service providers. 

Amazon is working with the National Cable Television Cooperative (NCTC) to enable its members the ability to deliver low cost Fire TV streaming media players directly to their customers. 

NCTC has over 750 members, including independent cable and telecommunication operators, delivering service to 16 million broadband and eight million video customers.

Analysys Mason 2020 Predictions

It is nice to see a set of predictions that are not "blue sky" for a single-year period. 

5G Millimeter Wave Will Drive Changes to Indoor Communications

Any way you look at it, different methods of handling indoor cell phone coverage will have to be created in the 5G era, partly because millimeter wave signals do not penetrate building walls, partly because energy-efficient glass blocks RF signals and partly because even mid-band and low-band signals are attenuated by building walls, hills, trees and other obstacles.

So what emerges might include new organizational or industry roles for indoor mobile communications, as well as more indoor transmission platforms, extending beyond traditional distributed antenna systems and built on indoor small cells.

Less clear are business models which might be built by third parties to supply indoor communications in business settings. Is there a possible new role for third parties that build, operate and maintain indoor 5G networks? How big is that opportunity? What is required and what sorts of firms might be positioned to capture any opportunity?

Organizations and consumers might also create their own infrastructure, businesses perhaps relying on use of private 5G or Wi-Fi, consumers relying mostly on Wi-Fi, but with possible signal boosting techniques becoming more commonplace.

Much depends on how difficult or easy, costly or not, creating indoor 5G coverage eventually becomes, as a practical matter. Roles for third party integrators and infrastructure suppliers increase if indoor 5G remains costly, but diminish to the extent end users can build their own networks affordably.

The best example are local area networks of all types, including Wi-Fi.

Millimeter wave spectrrum is the big change, because millimeter wave spectrum represents the biggest portion of new spectrum assets to be made available for mobile and untethered communications suppliers (licensed and unlicensed) for the foreseeable future, even if spectrum sharing and aggregation become key methods for increasing network capacity.

There simply is not that much available spectrum below 6 GHz that is not already licensed for use, as the National Telecommunications and Information Administration frequency allocation chart shows. 

In this illustration, the width of the bars corresponds to capacity. Note the skinny bars to the left, which are the traditional “mobile” bands. 

The horizontal axis represents the frequency spectrum from approximately 1 to 90 GHz. The orange bars show the approximately 11 gigahertz of new spectrum released by the FCC for both licensed and unlicensed use. Again, the width of the bars represents capacity, so compare the orange blocks with the “current IMT bands” in the one gigaHertz to 3 GHz range. 

source: Anokiwave

The red and green blocks show frequency allocations for the aerospace, defense and satellite communications industries, parts of which might ultimately be available using shared spectrum mechanisms.

As most are becoming aware, frequency and coverage are inversely related. Millimeter wave signals, compared with 4G signals in the mid-band (around 2 GHz), might be as much as 30 times less able to penetrate obstacles such as walls. 

source: SureCall

That makes indoor signal reception a big deal for 5G using millimeter wave spectrum. But indoor signal reception also has been a problem for 4G signals inside buildings. That is going to be true even for 5G signals in low-band and mi-band regions.

SureCall, a supplier of cell phone signal booster technology, has released what it calls the world’s first 5G signal booster, the Force8 for boosting 5G signals inside commercial buildings. 

The Force8 will boost 5G signal strength for T-Mobile users in commercial buildings throughout urban, suburban, and rural areas across North America, while also amplifying 3G and 4G LTE signals for all North American service providers, SureCall says.

The Force8 will amplify mobile signals for T-Mobile US 600 MHz signals and AT&T’s 2.3 GHz frequencies.

CTA Predicts $422 Billion in Consumer Tech Sales in 2020

The U.S. consumer technology industry will record $422 billion in retail revenues in 2020, up about four percent over last year, according to a new Consumer Technology Association forecast.

Spending on software and streaming services (including music, video and video gaming) is projected to reach a new high of $81.2 billion in 2020, representing 11 percent growth year over year.

Video streaming will grow to $24.1 billion in 2020, up 29 percent, while on-demand music services will generate $9 billion in revenue, up 15 percent.

Video gaming software and services category will grow five percent to $38.3 billion in revenue.

Smartphone sales will grow about three percent to  $79 billion in 2020. 5G devices alone will generate $15.3 billion in revenue, an order of magnitude increase over 2019.

Laptop sales will create $33.3 billion in revenue. Television sales will hit $23.4 billion. In 2020, 4K sets will account for $17.6 billion in revenue. 8K TVs will reach $1.6 billion on sales of 504,000 units.

Why Meetings Fail

In a recent McKinsey survey, 61 percent of executives said that at least half the time they spent making decisions, much of it surely spent in meetings, was ineffective. And just 37 percent of respondents said their organizations’ decisions were both high-quality and timely.

Part of the problem is that productive meetings require planning. The other problem is that some meetings should not be held at all. 

source: McKinsey

Some meetings, but not all, have topics or agendas that hint at goals. But less often do organizers clarify whether the meeting is meant to share information, discuss it, or decide something. 

“It may seem rudimentary, but we can all recall meetings (and large-group meetings in particular) where the lines between sharing, discussing, and deciding were blurred or absent—or where the very purpose of the meeting is unclear, as was true of the healthcare company’s growth committee and its ever-expanding list of discussion topics. In such situations, meetings may begin to seem frustrating and even futile,” McKinsey consultants note. 

What Happens if T-Mobile Merger with Sprint Fails?

Some analysts believe the T-Mobile US merger with Sprint will be blocked. Others believe the merger will be approved. But skepticism is higher than might have been expected at this point in the process.  Either way, more shuffling of assets is likely to happen. 

Neither T-Mobile US nor Sprint has the scale to compete long term in a U.S. market that virtually requires contestants owning both fixed and mobile assets.  And though it is possible that a major application provider could emerge as a buyer or investor, the most-likely combinations involve cable companies and any of the smaller or would-be mobile providers.

Altice USA could be interested in merging with either T-Mobile or Sprint, as might Comcast and Charter Communications. Dish has held talks to acquire Sprint and merge with T-Mobile in the past, so that is another possible combination. 

Dish faces a clock that is winding down, and would have to find some way to get its network built before the Federal Communications Commission takes away its mobile spectrum licenses.

Largest Mobile Operator IoT Vertical is Automotive

The 400 largest mobile operator IoT deployments together account for 279 million units, according to Berg Insight, representing perhaps 23 percent of the total number of mobile operator IoT connections worldwide at the end of 2018. 

The 400 projects will add an additional 652 million units by 2023, representing an overall compound annual growth rate of 18.5 percent, according to Berg Insight. 

Fleet management and mobile resource management is the largest vertical in terms of the number of projects, followed by retail applications, aftermarket automotive, utilities and OEM automotive as well as smart homes and buildings. 

OEM automotive is the largest vertical in terms of units, featuring 77 million units, ahead of utilities at about 44 million units and fleet management/MRMrepresenting 40 million units, Berg estimates. 

Smart Street Lights Growing at 35% CAGR

The installed base of smart street lights was 10.4 million worldwide at the end of 2018, according to Berg Insight.

Growing at a compound annual growth rate of 24.5 percent, the installed base will reach 31.2 million in 2023, Berg Insight predicts. Europe now accounts for nearly 40 percent of the installed base. 

North America accounted for around 30 percent of the global installed base in 2018. The Rest of World accounted for 31 percent of the global installed base in 2018, with China representing a significant portion of ROW deployments.

U.K.-based Telensa, plus Signify and Sensus account for a third of the global installed base of individually controlled smart street lights. 

U.S.-based Itron is a leading player in the networking segment, Berg Insight says. 

Other important smart street lighting vendors include China’s Rongwen Energy Technology Group; CIMCON Lighting, Acuity Brands, Current, LED Roadway Lighting and DimOnOff from North America; Lucy Zodion and SSE from the UK; Reverberi Enetec from Italy; Flashnet from Romania and Telematics Wireless from Israel, analysts at Berg Insight say.

IBM Predicts 80% More Artificial Intelligence Adoption Over 2 Years

A new survey commissioned by IBM leads the firm to predict that adoption of AI in the corporate world will climb dramatically over the next 18 to 24 months, exploding to 80 percent or even 90 percent. 

source: IBM

Global companies are planning to heavily invest in all areas of AI over the next 12 months, IBM says, including:

• Proprietary AI solutions: 35 percent
• Off the shelf applications: 34 percent
• Off the shelf tools to build their own AI models: 33 percent
• Reskilling and workforce development: 33 percent
• Embedding AI into current applications and processes: 28 percent
• R&D: 26 percent

Across industries, most global businesses have either deployed artificial intelligence in their business (34 percent) or are ramping up exploratory phases with AI (39 percent), meaning almost 3 in 4 businesses surveyed are in the AI game.

Large companies are leading AI adoption, with 45 percent of firms over 1,000 citing adoption of AI compared to 29 percent of companies under 1,000 employees.