Rogers exploring potential of LTE

Rogers CEO Nadir Mohamed says Long Term Evolution will allow Rogers to create over-the-top entertainment video services that resemble Netflix more than traditional cable TV, and be available both on mobile devices such as smart phones and tablets, as well as TVs equipped with Internet access, or Internet-connected game consoles.

The remarks appear to refer to ways video entertainment can become a revenue stream for Rogers in areas where it does not provide fixed network cable TV services, for example.


Rogers, which provides cable television services in New Brunswick, Newfoundland and Ontario, says it won't provide cable TV services it offers to those customers, to connected tablets and televisions outside those areas.



At least in part, that would be necessary since content owners do not seem likely to allow such uses of their licensed video content. Rogers exploring potential of LTE

The Diffusion Group (TDG) predicts that by 2020 the consumption of Internet video — content stored and distributed over an IP architecture — will eclipse the consumption of broadcast TV programming.Internet video forecast

With the caveat that consumption does not equal "revenue," the growing amount of online and mobile video consumption is creating the environment where providers will have growing opportunities to test new types of services and revenue models. But content owners will have to agree.

Cord Avoiders the Big Issue Now

About 200,000 fewer subscribers will buy entertainment video services in 2012, analysts at Credit Suisse predict. In large part, the modest contraction can be blamed on weak formation of new households and a growing number of new households that are avoiding subscription TV subscriptions altogether. More than "cord cutting," the abandonment of video services by customers that used to buy such services, the new weakness is among people who would otherwise have been starting their own households or becoming potential consumers for the first time.

The Credit Suisse analysts emphasized that they remain optimistic on cable and satellite sector businesses, but see the developing new problem as "cord-avoiders," households that are relying on video alternatives in an arguably new way. 

Many new households are not signing up for cable or satellite, the analysts said. While there were 1.8 million households formed, according to U.S. Census estimates cited by the report, only 16.9 percent of them signed up for video entertainment services.

 Analyst Stefan Anninger says he now expects the multi-channel video universe to contract by around 200,000 subscribers in 2012 instead of the gain of 250,000 that he had previously forecast. "We do not expect the pay TV universe subscribers 'to fall off a cliff' over the next year or two," he said. Base business okay But there is trouble brewing.

For the 12 months ending Sept. 30, 2011, total pay TV industry subs have remained unchanged at 100.8 million, according to Anninger. "Over the same period, however, occupied households have grown by 1.25 million," he said. "In turn, pay TV penetration has fallen from 84.1 percent in the third quarter of 2010 to 83.2 percent."


Cable and Satellite TV Subscriber Rolls to Shrink in 2012

Could Deutsche Telekom Buy Sprint-Nextel?

Though virtually all the acquisition and merger talk involving T-Mobile USA has involved some other entity buying the Deutsche Telekom unit, at least one observer speculates about whether T-Mobile USA could be a big acquirer.

The notion is that Deutsche Telekom could buy Sprint Nextel, for roughly one times that firm's annual revenue. Sprint’s market cap is $7.2 billion. Its long-term debt is $16.3 billion against a cash position of only $3.7 billion. The total cost of an acquisition would be $30 billion if shareholders got some premium. That is nearly as much as Sprint’s annual revenue of $32 billion. Will Deutsche Telekom Buy Sprint-Nextel (S)? - 24/7 Wall St. Could DT Buy Sprint?

The $4 billion break-up fee if AT&T cannot get regulatory approval to buy T-Mobile USA would help. Some will question how much help that amount could provide. DT faces significant investment challenges related to the coming Long Term Evolution network that must be funded.


Some will challenge the notion that DT can afford to spend scarce capital in the U.S. market when it faces key challenges in its arguably more important European markets. Others will simply say merging a number three and number four in the market will help, but not enough to justify the investment. Will Deutsche Telekom Buy Sprint-Nextel

But there also is an expectation that further consolidation of mobile and other telecom assets around the world is on the agenda, one way or the other. Mergers inevitable?

Top 10 Cloud Predictions for 2012

The cloud computing market will face some bumps as it continues to grow, says Forrester Research analyst James Staten. In part, that is because greater reliance on cloud services will raise the risk of exposure to outages, for example.


But one of the subsidiary challenges for some parts of the enterprise and business computing ecosystem. In particular, cloud services might pose a direct challenge to channel partners who typically serve the smaller and mid-sized business segments. 

"The channel will face the music," says Staten. "Reselling isn’t good enough anymore."


"For years I and my analyst brethren have been telling the value-added reseller market that they need to move away from revenue dependence on the resell of goods and services," Staten says. "Many have listened and now garner more revenue from consulting and unique intellectual property.
Here's the fundamental problem, he argues: "the cloud doesn’t need you."


Cloud services are a direct-sell business and standardized, Internet-resident services don’t need local relationships to reach their customers. 


There’s nothing to install, customization is minimal and margins are thin and volume-based. 


For the channel to survive it must add value around cloud services. While cloud services are standardized, how each company uses them is not and that’s where all the opportunity lies. Top 10 Cloud Predictions for 2012

67% of Indian E-Commerce is Mobile

About 67 percent of e-commerce in India happens in mobile and consumer appliances, says Rajan Anandan, managing director of Google India. 


Smartphone adoption is growing in the country at a rate of 56 percent year-over-year, with 21 million smartphones sold in India in 2011 so far. He said that the sector was expected to reach sales of 100 million units per year by 2015, a 476 percent growth in a span of four years. Mobile search queries highest from India at Google

AT&T Revising T-Mobile USA Bid?

AT&T is revising its proposal to buy T-Mobile USA, emphasizing asset sales that could reach 40 percent of T-Mobile USA assets. Presumably the plan would build on AT&T’s argument that the deal should be considered market by market, and involve asset divestitures in some local markets.

That might bolster the argument that some more regional players, such as MetroPCS Wireless and Leap Wireless, could become more-national challengers with the new assets.  AT&T proposes T-Mobile USA sales

The issue, some would note, is that the local divestiture has been a staple of mobile acquisitions in the recent past, and none of that activity appears to have slackened the growing concentration at the top of of the mobile market, as much competition might be argued to exist more broadly within the mobile market, or in the broader communications market.

In city after city, and in the country as a whole, Federal Communications Commission data show the wireless market has grown more highly concentrated.. Possible divestitures




To measure market concentration, the Department of Justice uses a formula known as the Herfindahl-Hirschman Index. It considers markets to be highly concentrated when the index tops 2500. The score for the U.S. wireless industry as a whole at last measurement, in June 2010, was 2848, up from 2151 in 2003.

Some cities score much higher, including Oklahoma City at 3100; Springfield, Mo., at 3662; and Lafayette, La., at 4703.

The Justice Department says if AT&T were allowed to buy T-Mobile, the index would rise to more than 3100 nationally, including significant increases in 91 of 97 major markets.

The Federal Communications Commission also appears to believe the market is too concentrated. Ironically, then, the FCC’s 15th “Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile Services”  makes no formal finding as to whether there is, or is not, effective competition in the industry.”

That report contains  no stated conclusion on the U.S. wireless market, in terms of effective competition, a surprise to some observers, who had predicted that the FCC report would declare the U.S. market “not competitive” in some substantial respects. FCC report doesn't mention "market concentration"

On the other hand, one standard test of industry concentration shows a "high degree of concentration." But many observers would simply ask what other state of affairs could possibly be the case.

The report does use the “Herfindahl-Hirschman Index,” (HHI), which is calculated by summing the squared market shares of all firms in any given market, and is a commonly used measure of industry concentration.

Antitrust authorities in the United States generally classify markets into three types: Unconcentrated (HHI < 1500), Moderately Concentrated (1500 < HHI < 2500), and Highly Concentrated (HHI > 2500).

In the mobile wireless services industry, the weighted average of HHIs (weighted by population across the 172 Economic Areas in the United States) was 2811 at the end of 2009, compared to 2842 at the end of 2008.

By that measure, the U.S. wireless market is “highly concentrated.” But observers will argue about what that means. Access services of any type are “highly concentrated” in almost every market, in the sense that there are typically two dominant wired providers.

Wireless markets typically have more providers than that, but even wireless is “highly concentrated.” Whether access markets, wireless or wireline, can be anything but highly concentrated seems to be the issue. There is a good reason why access markets traditionally have been “monopoly” markets. Until recently, it was thought impossible to have facilities-based competition in access markets.

In fact, in most markets globally, that will still generally be the case. Hence we see wholesale networks being built in several countries, the theory being that markets will not support more than one optical access network.

Mobile voice coverage would not strike most observers as being anything but competitive. The report states that 89.6 percent of consumers can buy service from five or more suppliers, for example. To be sure, the number of competitors is higher, across the board, in more-populated areas, as you would expect.
Wireless broadband coverage is relatively consistent with the voice findings, as 68 percent of U.S. consumers have a choice of four or more providers. The caveat is that the. competition is mostly confined to more-densely-populated areas, again as you would expect. Rural consumers clearly do not have as many choices.

Telcos Will Lead, App Providers Will Gain, in Mobile Payments

The existence of mobile wallet services operated by Google, PayPal and Isis raises an obvious question: which contestants will “win” the battle to become the dominant or leading wallet services? In principle, one might argue that over-the-top application providers, mobile service providers, clearinghouse networks such as Visa or MasterCard, banks or other payment specialists could emerge as the leading providers of such services.



Researchers at ABI Research say it is the likes of Google and Apple that ultimately will lead the market, though mobile service providers are highly likely to claim the most share initially.



While mobile service providers will havethe majority of NFC-based mobile wallet users early on, their market share will erode between 2012 and 2016 as Google and Apple assume greater share.

“By the end of 2012, Google will prove that Google Wallet is a hit with consumers,” says Mark Beccue, ABI Research senior analyst. “By 2014, we will see Google Wallets supported alongside competing MNO offerings globally.”



Mobile service providers might have 75 percent mobile wallet share in 2012, shrinking to 63 percent in 2016.  Over the top providers will win wallet war


Google Wallet also will succeed in markets where mobile service providers prefer not to spend capital to develop and support mobile wallet infrastructure. In such cases, application providers such as Google, Apple and others will have an advantage.



Though Apple is not yet in the market, ABI Research believes Apple will enter the market. “Apple will launch a mobile wallet product in 2012,” Beccue argues.



ABI Research also predicts that near field communications will support 594 million users in 2016.

That is not to say banks, payment providers or merchants will fail to attempt their own offerings. Starbucks, for example, operates one of the most-successful mobile wallet and payment programs in 2011.



In most cases, such efforts will have suffered in the face of successful programs offered by the likes of Google, Apple and the mobile service providers, ABI Research believes. Who wins wallet war?



Apple has yet to launch a mobile payment service, though it is widely believed from patents and whispers in the corners of the industry that the company will equip its iPhones with payment-enabling NFC sensors and software in 2012.



As with Google and its carrier partners, AT&T and Verizon will allow Apple to offer its mobile wallet to consumers who have iPhones, regardless of whether or not the carrier has a competing mobile wallet, Beccue noted.



Still, most observers believe PayPal says 2016 will be the year when some industry executives believe U.K. shoppers will be able to use their mobile phones to shop, instead of using cash, checks or credit and debit cards.



PayPal’s conclusions are based on a Forrester Consulting survey of 10 senior executives from major U.K. retailers and other businesses.



Some 49 percent of mobile buyers surveyed by Forrester Consulting use their mobile phones to purchase products at least once every three months.



“By 2016, you’ll be able to leave your wallet at home and use your mobile as the 21st century digital wallet,” says Carl Scheible, Managing Director of PayPal UK.



“We’re not saying cash will disappear entirely, but we’ll increasingly use our phones and other devices rather than our wallets to pay in-store as well as online,” argues Scheible. 2016 key for U.K. mobile payments


Some might even argue  that mobile wallet functions will have more substantial impact on the retail shopping experience, however. “Payment” using a mobile device might be the least-important new reason people use new mobile commerce applications.



In fact, some might argue, consumers will be using mobile payment apps because the value of the mobile wallet offers clear value.



“PayPal’s vision is a one-stop shop for retailers to engage their customers directly during every part of the shopping lifecycle, generating demand from consumers through location-based offers, making payments accessible from any device, not just from the mobile phone, and offering more flexibility to customers even after they’ve checked out,” Scheible says.



“As well as paying for goods without having to queue, the report reveals shoppers can look forward to being able to carry digital loyalty cards, promotional offers and receipts on their phones – keeping everything in one place creating a virtual shopping hub,” PayPal says.