Wireless Powers AT&T Results

As expected, AT&T wireless services revenues excluding handset and accessory sales, were up 14.5 percent to $10.9 billion for the quarter. Total wireless revenues were up 15.8 percent to $12 billion.

The company also continued to grow its AT&T U-verse TV subscriptions. AT&T had a second-quarter net gain of 170,000 customers for a total of 549,000 subscriptions in service. AT&T has a goal of connecting more than 1 million subscribers by year’s end.

Text Messaging Still Dominates Mobile Data Use

Voice continues to be the dominant application most mobile customers use on a daily basis. Text messaging remains the dominant data application, according to researchers at the Yankee Group.

Teenagers, as you would expect, are the one demographic that uses text just a bit more than voice. About 63 percent of teen users surveyed say they use text on a daily basis, while voice is used daily by 61 percent of users in that age group.

Growth rates for mobile Internet access, mobile video and mobile email are strong, but are growing from a relatively smaller base of users.

Mobile email use grew 71 percent between 2006 and 2007, for example, while mobile Internet use grew 57 percent.

Satellite Broadband Penetration Now a Bit over 10%

Satellite broadband now is the growth focus for providers such as Hughes Network Systems and WildBlue, and the stated opportunity often is said to be rural users as well as residents of suburban or urban areas not yet wired either for digital subscriber line or cable modem services.

According to data from the Pew Internet & American Life Project, that might not be completely correct. Though 16 percent of respondents to a recent Pew survey reported they have satellite broadband, so did 10 percent of urban users as well as 10 percent of suburban users.

The usual assumption is that the remaining urban and suburban areas ultimately will be wired, with potential loss of nearly all the urban and suburban users, depending on the definition of "suburban" one uses.

In the separate video entertainment business, one can make a reasonable argument that availability of the wired alternatives is less an issue, as the satellite providers compete not only on "availability" but on image quality and program diversity.

Satellite broadband providers do not have that opportunity, as satellite generally offers speeds slower than DSL and cable modem services, for slightly to meaningfully higher prices. Satellite services clearly win when there is no other alternative but dial-up service.

Nor does satellite fare as well on price in wired areas. Both cable modem and DSL prices have dropped since 2004, Pew reports. The price drops arguably have been highest for "value" priced packages, as new "premium" services featuring more speed continually have been added at the high end.

Still, Pew researchers report that 62 percent of surveyed dial-up users say they "do not want" broadband. Overall, the remaining pool of dial-up users iucludes just about 36 percent of users who say they are willing to switch to broadband. One expects the base of resisters will continue to dwindle over time.

AT&T to Change Broadband Marketing Language

At the Federal Communications Commission Pittsburgh broadband hearing, AT&T Senior Federal Regulatory Vice President Robert Quinn is reported by Broadband Reports to have said the company would in the future stop advertising speeds "up to" a specified rate, and would instead "strive to provide service within the speed tier purchased by the customer."

When AT&T finds it is not providing service within the ordered speed tier, AT&T will take action either to bring the customer's service within the ordered tier or give the customer an option to move to a different tier," he said.

Today, customers can order service "up to 7Mbps" tier, while plant conditions limit them to lower real-world bandwidth. Under the new scheme, customers will be offered the expected speed the plant supports, and then supplied with the higher speeds actually possible on their chosen plans.

AT&T also says it will supply customers information about how much bandwidth various applications consume, so they can choose the right plans. To Broadband Reports, that sounds like a precursor to some form of usage-based billing. It may well be. AT&T has been pretty clear that usage will play a bigger role in future access plans. That is an issue many will argue about.

But giving users a better understanding of their bandwidth requirements is a good thing, as is the policy of selling actual service that matches the marketing claims.

Expect Continued Line Losses as Telcos Report Earnings

In the 12-month period between March 2007 and March 2008 U.S. telcos lost 8,647,000 access lines while cable companies added 4,508,400. That suggests the balance of lost telco lines either wound up in the "wireless" category, taken by independent VoIP providers or were part of business line contraction made possible, on the user side, by IP and broadband technologies that provide voice services over a broadband connection of some sort.

It is quite hard to avoid the conclusion that the lost lines taken by cable companies were solely due to "lower price," since cable digital voice normally has no new IP features, is provisioned in a "whole house" manner that mimics POTS, and differs mostly in its price, not its quality.

The drivers might be more complicated in the other cases. VoIP customers sometimes buy based on price, at other times because of the new IP features. Enterprise or business customers often simply substitute voice services delivered over broadband for "voice grade equivalents."

Make no mistake, telcos are behaving deliberately. They simply seem to conclude that losing lines is preferable to across-the-board price reductions. It wouldn't be the first time industry participants have decided that harvesting a declining business is the best course of action.

So long as that continues to be the case, there seems little prospect that the line losses will abate. That being the case, the metrics to watch for are how well broadband-based revenue streams are building. Wireless still will be a bright spot, of course. But telco wired network performance is all about broadband revenues.

Voice simply is being harvested.

Google Maps Adds Walking Directions

Starting today, July 22, 2008, you can tell Google Maps that you want walking directions, and Google will try to find you a route that's direct, flat, and uses pedestrian pathways when we know about them, says the Google Lat Long blog. Just get directions as you normally would, for distances of 10 km or less.

As is usual for a "perpetual beta," there are some refinements Google wants to make. Right now, walking directions work well for short trips in urban areas, but Google says it does not presently always know if a street has a sidewalk, or if there's actually a special pedestrian bridge for crossing a busy street. Or for those of you navigating certain parts of Chicago's downtown loop, whether there are elevated roadways in your path that have to be navigated.

Google says it is working on ways to improve those sorts of features. Very useful, though, for those of you who travel and will be walking to a destination instead of driving.

Where Enterprises Buy Internet Access

Enterprises buy Internet access where you would expect: mostly from larger service providers. About half of all buying is from the former Regional Bell Operating Companies and Sprint.

Level 3 Communications, TW Telecom and Savvis have notable shares as well. About 37 percent of ISP access services are bought from a variety of other service providers, say reseachers at BackChannel.