Sunday, September 18, 2011

New Verizon Policy on Heavy Users, Congested Towers


Verizon Wireless has instituted a new network management policy that some will call “throttling,” while others might say simply represents a more-nuanced way of managing network congestion.

The new plan affects what Verizon says is about five percent of Verizon’s user base, specifically those users of 3G services that use 2 Gbytes of more of data each month, from congested cell sites. The rules do not apply to users of the new 4G network, though. The easiest solution is simply to use 4G. It’s a better experience anyway. New Verizon usage scheme

One suspects that users are capable of making rational choices about their services, and also will rapidly adopt the “default to Wi-Fi strategy.” Most people already seem capable of quickly grasping the advantages.

Some 64 percent of smart phone consumers surveyed by Devicescape use Wi-Fi hotspots at least once a day. Most smart phone owners who use Wi-Fi also use it on the road.  The study showed 90 percent of those users report accessing Wi-Fi both at home and on the road. Smart phone users use Wi-Fi often

Of those who use Wi-Fi outside their home or office, most (24 percent) connect at a cafe or coffee shop, 17.3 percent at a hotel, and 15 percent at a school campus. See Facing data caps, consumers keep turning to Wi-Fi.

Historically, mobiles haven’t been used excessively for data connections. Average mobile data consumption increased from about 90 MBytes per month during the first quarter of 2009 to 298 MBytes per month during the first quarter of 2010, according to Nielsen.

This represents a year-over-year increase of approximately 230 percent, though.  While this increase is substantial, in the first quarter of 2009 more than a third of smart phone subscribers used less than 1 MByte of data per month and usage has dropped to a quarter in the first quarter of 2010.

About 20 million current smart phone users are hardly using any data.

But there is a reason frameworks for managing bandwidth use are important. As mobile data consumption continues to grow, the usage pattern is starting to resemble fixed-line patterns, and that is a problem for all mobile service providers, as there is not now, and never will be any way for mobile providers to match the bandwidth, or cost of bandwidth, that a fixed network provider can offer.

There is a telling statistic in Cisco's Visual Networking Index, namely that as mobile broadband users have rapidly grown, their usage pattern rapidly has assumed the familiar pattern seen in the fixed-line part of the business.

Consider heavy usage patterns. The top one percent of mobile data subscribers generate over 20 percent of mobile data traffic, down from 30 percent just a year ago. That 29-point swing in just 12 months suggests that as more "typical" users adopt mobile broadband, they bring behaviors much different from those of early mobile broadband adopters, namely less-intensive consumption.

Cisco also reports that mobile data traffic over the last year also now matches the 1:20 ratio that has been true of fixed networks for several years (one percent of users generate or consume 20 percent of total transferred bytes). Visual networking index

Similarly, the top 10 percent of mobile data subscribers now generate approximately 60 percent of mobile data traffic, down from 70 percent at the beginning of the year.

All of those instances of "reversion toward the mean" are driven by the broader adoption by "typical" users of smart phone service. That noted, average smart phone usage doubled in 2010. The average amount of traffic per smart phone in 2010 was 79 Mbytes per month, up from 35 Mbytes per month in 2009.

Saturday, September 17, 2011

PayPal Outlines Mobile Payment, Wallet Plans


  PayPal plans

IHS Screen Digest Does Think People are Substituting Online Video for Cable TV

The number of multichannel subscription TV households in the United States declined by nearly 380,000 in the second quarter of 2011 as traditional cable and satellite video providers continued to lose subscribers because of economic factors and lower-priced Internet video solutions, according to new IHS Screen Digest findings from information and analysis provider IHS.

The noteworthy angle here is that IHS does believe over-the-top online video is having an impact. Most observers say customers are "cutting the cord" to save money, or because they are not so interested in TV, but not specifically to watch online alternatives. IHS thinks the substitution is happening.

Total U.S. TV subscriptions in the second quarter—the latest time in which full figures are available— decreased to 100.9 million, down from 101.4 million in the first quarter.

Overall, the loss of approximately 378,000 households during the period was much greater than the increase of 345,000 seen in the fourth quarter of 2010. The decline also reversed much of the gains that occurred in the first quarter this year when some 461,000 subscriber households had signed on to new services. The last time a loss of this magnitude took place was a year ago in the second quarter of 2010, when the industry dropped approximately 249,000 subscribers.

How Much Effort Should Some Service Providers Put into Voice Innovation?

Voice services represent a troublesome issue these days, in most developed markets, for service providers. In the landline segment of the business, subscribers are abandoning their subscriptions and relying on mobile service for voice. Users also are talking less and per-unit prices are falling.

In the mobile segment, users in markets with high costs are figuring out ways to use alternate subscriber information modules to spend less, are switching to less-costly VoIP services or substituting text and instant messages where a voice call is another way to accomplish a task.

The troublesome issue is what to do, and how much to do, to innovate in voice. You might think those are easy questions, but they require investment, so the issue is “how much” a service provider ought to spend on a service that many would argue already is well past the peak of its product life cycle.

The typical advice for firms is to launch new products that will replace lost revenues as older products begin to decline. Some might argue that mobile service is that replacement product.

But there is an investment corollary to the product life cycle. At some point, a rational provider should stop investing in a declining product. Some people argue that innovation will extend the life of voice, or even create new markets for voice.

Others might bluntly argue that it isn't really worth the effort, though few might say so in public. The argument that "not much can be done" is weakest for business voice products, strongest for consumer voice products. In the consumer space, it might be tough to compete with Skype, Google Voice, MSN and others.

Consider "videoconferencing." Up to this point, appliance-based approaches have not made inroads, compared to use of Skype. That doesn't mean change is not possible; simply that in the consumer segment, Skype is hard to beat as a platform for consumer videoconferencing.

Innovation opportunities are strongest for IP telephony in the enterprise and business markets, many would say.

Another big issue is whether VoIP and IP telephony are replacement products for legacy voice, or only the latest version of the voice product. The earlier analogies would have included each generation of voice provided by a new generation of switches.

In other words, was voice provided by an analog switch a different product than voice provided by a digital switch? Or was the use of digital switches “merely” the next generation of an existing service? Your answer will determine whether you think of IP telephony as a “new product” or simply the “latest version of voice.”

Your decisions on investment might vary accordingly. To be sure, at some point, a complete transition to IP telephony and VoIP will be necessary. But there still is room for strategic choices that are "minimalist" in terms of investment, and other strategies that are "maximalist." 

Every voice provider will supply IP-based voice, it is clear. What is discretionary is the amount of effort a service provider wants to put into creating new applications around IP voice, in the context of pressing needs for investment in other areas such as mobility, broadband, video, machine-to-machine apps, mobile banking and payments, mobile advertising and vertical market applications for some key business segments. 

The decision will be easier for contestants that do not have realistic prospects of creating brand new businesses too far afield from basic data access, video entertainment and voice services, and primarily compete in the land-line segment of the business.

The point is that it is one thing to say "innovation is good." It is. But innovation is required across every product category, and resources will be limited, so choices have to be made. Different actors will choose different levels of commitment.

But some level of commitment is necessary. Consider the matter of “turning off the public switched telephone network.” At some point, as fewer and fewer customers are using the legacy voice network, the costs of supporting the network will grow to the point that it simply makes no sense to keep using it. At that point, we’ll have to shut down the PSTN, as mobile operators in the past have had to shut down analog mobile networks. The only issue is when it will be needed, and when to get started, much as set a date for turning off the analog TV network.

In fact, at its June 29, 2011 meeting, the Federal Communications Commission’s Technology Advisory Council ("TAC") received a report from its "Critical Legacy Transition Working Group" projecting that by 2018 only six percent of U.S. households will still retain a traditional copper wireline local exchange access line as their primary voice service, not having "cut the cord" and replaced their wireline phone with wireless or some other "new" technology.

By 2014, the United States will have fewer than 42 million voice access lines in service, the TAC predicts. By 2014,  U.S. consumers will use 31.6 million VoIP lines accounting for 42.5 percent of all U.S. voice access lines. TAC report highlights

Based on that projection, the Working Group proposed that the TAC call on the FCC to "target 2018 as the end of the PSTN."PSTN sunset

This will be a politically sensitive issue, as lots of participants in the ecosystem will be hurt by such a move. Some service providers and some suppliers whose business depends on the existence of the legacy PSTN will be harmed. Suppliers of gateway products, for example, explicitly assume the existence of the PSTN and the need to launder traffic and messages between IP and PSTN domains.

For some, the issue is whether 2018 should be the date. But no matter when the full transition happens, the practical issue will remain: how much effort should particular firms put into their voice innovation efforts?

The answer will depend on how much revenue a provider thinks that investment will yield.

Friday, September 16, 2011

Bad News: Your Company Name and "Scandal" in the Headlines

Lightsquared executives might be right that there is nothing untoward about its relationship to White House officials. Lightsquared might be right about not receiving any special treatment. But it has a bigger problem that GPS interference now. The words "scandal," "Solyndra" and "LightSquared" now are being mentioned in the same headlines and sentences.

It no longer matters why. It no longer matters whether it is "fair." It is becoming a political reality that bodes ill for LightSquared.

Words you never want to hear

LightSquared is "Disappointed," It Might Wind Up Very Disappointed

LightSquared is "disappointed" that it now is embroiled in a political mess, but it is a growing problem that seemingly now overshadows the technical issues about interference with GPS that it had been fighting.

“It’s just very disappointing that people are not seeing the facts here, and [that] this has become a real political issue,” said PhilFalcone, a senior executive at the hedge fund firm Harbinger Capital, LightSquared's chief backer.

Technology executives in the past have not understood the powerful role the Federal Communications Commission and other regulatory influencers have in the communications business. That's one level of issues. What now has happened is that LightSquared has become embroiled in a larger story including Solyndra. Once these sorts of things get started, they tend to grow.

Objections from the GPS and military interests were big enough problems. Now there is a larger problem, namely a potential political scandal of some scale.

"I kinda scratch my head every single day and say I can’t believe this is happening,” said Falcone.

LightSquared Hints at Interference Fix

The Federal Communications Commission said LightSquared's plans for terrestrial dominance need more tests. Seems their signals, even after they've been switched to a different part of the wave spectrum, may still interfere with GPS systems.

But LightSquared said it has new equipment that will make everything work. But they're not saying what the equipment is or who created it or what it does or even where it's located.

LightSquared has enough problems. It shouldn't seem to be hiding anything, from anybody. Perception is really important when a firm suddenly finds itself in the middle of a growing political mess.

What Declining Industry Can Afford to Alienate Half its Customers?

Some people believe the new trend of major U.S. newspapers declining to make endorsements in presidential races is an abdication of their “p...