Why Family Mobile Data Plans are Coming

There are a couple of good reasons why U.S. mobile service providers will offer multiple-device mobile broadband plans, at some point relatively soon. Historically, plans of this sort have been quite effective at encouraging the addition of incremental users and devices. 


Family plans worked well to create incentives for parents to outfit their children with mobile phones, by lowering the incremental cost of adding the next device. Family plans also discourage churn. 


In the past, family plans have lowered barriers to use of voice and text messaging services, but mobile broadband has to be bought for every discrete device on the plan, with no advantage to the end user for volume purchases. 


As users, especially the higher average revenue users, adopt and use multiple devices benefiting from mobile broadband access, the attractiveness of "family" data plans will grow. A big surge in tablet ownership in the December 2011 holiday and Christmas season illustrated what you might have expected, namely that wealthier households own and use more tablets and other gadgets. 


According to the Pew Internet and American Life Project, adults over the age of 18 tend to own and use many mobile and portable devices. That is especially true for tablet users and e-reader users, who are more likely to own mobile phones, desktop PCs and e-reading devices, for example. 

25% of Households Worldwide Now Have Wi-Fi

At the end of 2011, 439 million households worldwide had installed home Wi-Fi networks, equivalent to 25 percent of all households, according to Strategy Analytics. 


The firm predicts that the total worldwide number of Wi-Fi households will reach nearly 800 million in 2016, a penetration rate of 42 percent.

Wi-Fi Households – Penetration of Total Households: 17 Selected Countries in 2011

Wi-Fi Household Penetration %						2011
South Korea						80.3%
United Kingdom						73.3%
Germany						71.7%
France						71.6%
Japan						68.4%
Canada						67.8%
Italy						61.8%
USA						61.0%
Spain						57.1%
Australia						53.8%
Czech Republic						31.6%
Mexico						31.5%
Poland						28.0%
Russia						22.9%
China						21.8%
Brazil						20.4%
India						2.5%

Consumer Mobile App Revenues to Pass $50 billion by 2016

Juniper Research has projected that annual revenues from consumer mobile applications will approach $52 billion by 2016 as consumer smart phone adoption accelerates in tandem with the emergence of a mass tablet market. The forecast might raise some pertinent questions.


Just what will that new revenue stream indicate about the emerging role of tablets in the device universe, and what, in turn, tablet apps might mean for the devices we know as "personal computers." Much will hinge on how that new revenue is created. Some will consist of content purchases. Some will be provided by in-app purchases of digital and physical goods. Some of the revenue will come from advertising and promotion. Other revenue will be generated by app sales (software purchases). 


Some of those shifts will affect the way PCs are designed and used, more than the others. Kip Cassino, Borrell and Associates EVP argues that by 2016, most computers available to consumers are going to look and act just like today’s iPhones and iPads. That means they will be able to communicate like cell phones, they will all have built-in GPS, and they will feature cameras and touch-screen interfaces. 


Most importantly, Cassino argues, they will depend on apps instead of expensive, bundled software  In fact, what we now call computers will have largely faded from the scene, except for some business and gaming applications. Personal computers will be replaced by mobile devices of one sort or another, Cassino argues. 


You don't have to agree with the time frame to agree with the direction of the user experience Cassino describes. 

Windstream, Frontier Make More Money from Business Customers than Consumers

Windstream Corp. defines itself as "a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. 

Frontier Communications says it is "a provider of  voice, broadband, satellite video, wireless Internet data access, data security solutions, bundled offerings, specialized bundles for small businesses and home offices, and advanced business communications for medium and large businesses in 27 states."

What you might say about those statements is that they are as much "aspirational" as a description of where each firm gets most of its revenue right now. 

At December 31, 2011, Frontier had 3,103,800 residential customers and 309,900 business customers. 

Business revenue tells the story, though. For the six-month period ending Dec. 31, 2011, Frontier earned $692 million in business customer revenue, and $544 million in consumer revenue.  

For Windstream, results were even more pronounced. Business revenue in the fourth quarter of 2011 were $888 million, while consumer revenues were $118 million. 

That is not to say a "typical" independent or rural telco will have an opportunity to create that sort of revenue distribution. Both Frontier and Windstream benefit from a presence in some mid-sized markets as well as rural areas, so the opportunity to sell services to businesses is greater. 

But results at both firms show a strategy that will work for the larger independents, namely an out-of-region emphasis on business customers and revenue, compared to in-region customers. 

India Will be World's 2nd-Largest Mobile Broadband Market in 2016

India will become the world’s second largest mobile broadband market within next four years with 367 million mobile broadband connections, second only to China, which will have 639 million mobile broadband subscriptions in service, the GSMA predicts:


The U.S. market, in contrast will have 337 million mobile broadband connections by 2016. 


Mobile broadband connections currently stand at a bit more than 10 million HSPA connections across the country. That number is expected to grow by 900 percent to 100 million connections in 2014. 



Tablets are a new factor in some markets. So is Long Term Evolution, though not in the Indian market.

Is Skype a Service, App or Feature?

According to Reuters,  Facebook and Google separately are considering some form of deals with Skype.


Facebook apparently has had preliminary discussions about buying Skype, while Google is said to be considering a joint venture. 


Not to be silly, but is Skype a "service," a "product" or a "feature?" To be sure, Skype generates something on the order of $900 million in revenue, the last time we had access to published information, in 2010. At that revenue run rate, Skype said it lost a bit of money, though, so it is a "revenue neutral" business, in a literal way, or at least used to be. 


That isn't to say all consumer "VoIP" services or business IP telephony services have similar issues. 

VoIP will continue to expand at double-digit rates in 2012 followed by high single-digit gains, averaging 9.4 percent on a compound annual basis for the forecast period to $18.9 billion, according to the Telecommunications Industry Association. 

Still, to keep matters in perspective, "legacy" circuit-switched voice revenue, though declining at a 1.5 percent compound annual rate through 2015, still will represent, in 2015, a $127 billion revenue stream. VoIP will amount to about $19 billion in 2015.

In other words, as a revenue source, legacy voice is seven times bigger than VoIP.

That is not to deny the importance of VoIP in the consumer market. In 2012, VoIP access lines will be about 49 percent as large as circuit-switched lines, for example, suggesting that perhaps 58 million VoIP lines are in service. But the notable point is that VoIP does not represent all that much revenue, in an overall sense.

In 2015, declining circuit-switched voice will still represent an order of magnitude more revenue than VoIP.

In contrast, fixed network broadband access services will amount to about $46 billion in annual revenue by 2015. Entertainment video will contribute about $14 billion in annual revenue in 2015.

So VoIP will be a bigger revenue stream than entertainment television, but not by much. In 2015, legacy voice still will be the single most-important revenue stream for fixed-line service providers, by far, even though it is declining.

Skype revenue might or might not actually create earnings. 

Sprint Announces HTC Evo 4G LTE

Sprint just officially announced the HTC EVO 4G LTE, which is a variation of the HTC One. It features "speed and feed" advancements, but most users might not care about that, so much as the bigger screen, which measures 4.7 inches.

The new EVO also comes with a new Sprint service called HD Voice, a MicroSD slot and a 1.5-Ghz dual-core Qualcomm chip. Speeds and feeds get too much attention. If you have used the Sprint Evo, you know the kickstand is a big deal. Only now it will be red, and easier to see.

Seriously, the kickstand is really useful.