Mobile Money Represents 13% of Safaricom's Total Revenue

If you want an indication of how big a deal mobile money services could be for some mobile service providers, consider that M-Pesa, operated by Safaricom, now accounts for 13.3 percent of Safaricom’s total revenue.

It is estimated that up to 364 million low-income individuals globally will be utilizing mobile money by the end of 2012, which would generate $7.8 billion in revenue. 

M-Pesa’s gross revenues amounted to $157 million in 2010, up 56 percent from the previous year. 

In 15 African countries, more than 10 percent of adults used mobile money in 2011. Globally, there are 137 live mobile money deployments, with 95 mobile money services in the planning stages, according to CSC.

It is estimated that two billion people have a mobile phone but do not have a bank account, suggesting the size of the potential market. Perhaps half of the world’s "un-banked" people can become mobile money users. 

You Might Not Recognize U.S. Telecom in 10 Years

"Every place we have FiOS, we are going to kill the copper," Verizon CEO Lowell McAdam recently said. "We are going to just take it out of service." That should hardly be controversial statement. The whole idea behind fiber to the home is to replace the copper access network.


Other Verizon assertions raise more issues, but should not. "Areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there," says McAdam.


For some, that means "dooming" rural users to slower services. At some level, it is hard to challenge the assertion. Rural areas have long loops. Long loops mean poor DSL speed, and costly fiber upgrades. The former means that where copper exists, broadband access speed will be limited.


But the business case for optical fiber on long rural loops, without benefit of subsidies, is challenging, and always has been. Some will argue that Verizon, and other incumbent telcos, have an obligation to upgrade their fixed networks that use wires.


Others would argue that doesn't make sense in a world that offers other options, some that are vastly cheaper, but not as fast as an urban fiber to home network. Other alternatives are moderately faster, and moderately costly, but less costly by far than a rural FTTH network that features mostly long loops.


Shorn of politics, the rational technology solution would be to use a mix of technologies, none of them perfect substitutes for FTTH, but each making eminent financial sense if the objective is getting the fastest feasible broadband to all users, in a variety of situations, right away.


With the launch of new high-power satellites by the likes of HughesNet (Echostar) and ViaSat, rural users will be able to get service at significantly-higher speeds, perhaps up to about 15 Mbps downstream. It won't be as affordable as urban cable modem services or DSL, but rural areas have different economics. What is financially possible in an urban or suburban area is not possible in a very-rural area.


Verizon is banking on faster Long Term Evolution networks in areas with enough users to support mobile service. Whether downstream speeds will be as fast as 15 Mbps remains to be seen, in each area.


But the point is that LTE will be feasible in many areas where it might simply be impractical to build FTTH networks without government subsidies. The first generation of LTE will not run as fast as later generations, but even first-generation LTE will provide much higher speeds than 3G networks are capable of providing.


In other cases, where cable operators are upgrading to DOCSIS, cable might always have the "speed" advantage. If telcos choose not to compete, they will lose customers. But, shorn of politics, that might be the best outcome in some markets.


As European and North American communications regulators already have discovered, in real life, there might be a trade off between maximum feasible competition and maximum feasible capital investment in networks.


And that's only part of the story. It is not entirely clear whether other alternatives, such as white spaces, might emerge as a significant factor in rural areas. White spaces might provide a new wave of competition in rural areas.


The other problem we will have worked through, in a decade, is the division of roles between fixed and mobile networks. Some services that today make eminent sense might not be so logical in a decade. Which network supplies those features, apps or services might also be less obvious today, than will be the case in a decade.


Everywhere in the world, mobile networks are getting faster, and application development has moved to the mobile realm as well. In a decade, we might all be very surprised at how the business, and consumer behavior, have changed.


In the future, more than today, fixed networks will be recognized as "better" at some roles, while mobile is seen as "better" for other roles. Beyond the matter of which access network is used, we are likely to be surprised by the way former "telcos" make their money, as well.


The point is that the way Verizon chooses to supply applications and access should not be viewed through the lens of the past, but the prism of the future.

Optus HFC Sold to NBN: Sometimes "Less" Competition is "More"

SingTel Optus has been providing services in Australia for quite some time. But with the launch of the Australian National Broadband Network, which will supply wholesale access services to all retailers who want to compete, SingTel Optus has decided it would not be able to compete, long term.

So it is selling its business to the NBN, with 400,000 HFC network customers, and also will decommission parts of the network, following the Australian Competition and Consumer Commission’s final approval of the AU$800 million HFC asset deal.

That puts a major cable operator out of business, which might be deemed "bad" for competition. But SingTel Optus, which seemed already to have put a halt to further expansion, likely would have begun to lose customers at some point to NBN-using competitors.

That would have raised operating costs per customer, as more and more assets would have been stranded. Ironically, the loss of SingTel Optus, a facilities-based competitor, arguably will not deter competition, as the former SingTel Optus customers presumably will be sold to one of the retail providers, eventually.

Still, it is somewhat odd to see a facilities-based cable competitor essentially put out of business by a monopoly access provider.

Viacom, DirecTV: Time Warner Cable, Hearst Agree to Terms

After a nine-day blackout, Viacom Inc. and DirecTV Group Inc.  reached a long-term deal to restore Nickelodeon, Comedy Central, MTV and other Viacom channels to DirecTV's system. Separately, Time Warner Cable and Hearst Corp. settled their contract dispute, returning Hearst broadcast channels to Time Warner Cable systems.


Terms of the agreements, as usual, were not released. But a reasonable person would say that Viacom got less than it wanted, while DirecTV paid more than it might have preferred.

FCC Sees "Striking" Broadband Access Improvements

The Federal Communications Commission reports “striking across-the-board-improvements” in U.S. broadband access services in its July 2012 “Measuring Broadband America Report.”

The study focuses on three primary improvements in residential broadband service over the last year, beginning with accurate delivery of advertised performance. Five ISPs now routinely deliver nearly one hundred percent or greater of the speed advertised to the consumer even during time periods when bandwidth demand is at its peak, the report says.

In the August 2011 Report, only two ISPs met this level of performance. In 2011, the average ISP delivered 87 percent of advertised download speed during peak usage periods; in 2012, that jumped to 96 percent, the report says. .

Performance also is more uniform, across providers. The 2011 study showed wide variances between top performers and bottom performers in meeting advertised speeds.

On average, customers subscribed to faster speed tiers in 2012 than in 2011. This is a result of both upgrades by ISPs to their network as well as some migration of consumers to higher speed services.

During the testing period for the August 2011 Report, the average speed tier was 11.1 Megabits per second. In the latest report, speed increased to 14.3 Mbps, an almost 30 percent increase in just one year.

The actual increase in experienced speed by consumers was even greater than the increase in advertised speed. End user experienced speeds rose from 10.6 Mbps to 14.6 Mbps, an  improvement of about 38 percent over the one year period.

The report expresses optimism that the U.S. market is moving toward the goal of equipping at least 100 million homes with actual download speeds of at least 50 Mbps by 2015, and 100 Mbps by 2020.

The August 2011 Report showed that the ISPs included in the Report were, on average, delivering 87 percent of advertised speeds during the peak consumer usage hours of weekdays from 7:00 pm to 11:00 pm local time.

The July 2012 Report finds that ISP performance has improved overall, with ISPs delivering on average 96 percent of advertised speeds during peak intervals, and with five ISPs routinely meeting or exceeding advertised rates.

On average, during peak periods, DSL-based services delivered download speeds that were 84 percent of advertised speeds, cable-based services delivered 99 percent of advertised speeds, and fiber-to-the-home services delivered 117 percent of advertised speeds.

This compared with 2011 results showing performance levels of 82 percent for DSL, 93 percent for cable, and 114 percent for fiber.

Peak period speeds decreased from 24-hour average speeds by 0.8 percent for fiber-to-the-home services, 3.4 percent for DSL-based services and 4.1 percent for cable-based services. This compared with 0.4 percent for fiber services, 5.5 percent for DSL services and 7.3 percent for cable services in 2011.

Average peak period download speeds varied from a high of 120 percent of advertised speed to a low of 77 percent of advertised speed. This is a dramatic improvement from last year where these numbers ranged from a high of 114 percent to a low of 54 percent.

In 2011, on average, ISPs had a six percent decrease in delivered versus advertised download speed between their 24 hour average and their peak period average. In 2012, average performance improved, and there was only a three  percent decrease in performance between 24 hour and peak averages.

Comcast will Launch a 305 Mbps Broadband Access Service in Verizon FiOS Areas

Comcast is planning to offer a 305 Mbps downstream tier sometime before the end of the year in markets where Verizon sells FiOS, DSLReports reports.

That is significant not only because it suggests Comcast wants to be competitive with Verizon FiOS, but also because it suggests the agency agreements Comcast and Verizon want to sign, giving each company the right to sell the other company's products, will not reduce competition.

Even if you think the upgrade is designed to reassure Department of Justice officials said to be skeptical about the agency agreements, any such move will force Comcast to market competitive services where it already competes with Verizon. Those are the very areas where some worry competition will be less, if the marketing agreements are approved.

Sprint Launches Integrated Insurance Solutions: This is What "Machine to Machine" (M2M) Looks Like

Sprint will market "usage-based insurance" (UBI) services designed specifically for the auto insurance industry, in a prime example of what machine-to-machine (M2M) services look like, why they add value, and how they can become a primary revenue growth driver for mobile service providers.

Sprint says it is the first wireless carrier to offer a low-cost turnkey trial program for insurance carriers to start their own trials and pilot programs.

"Integrated Insurance Solutions from Sprint" will give insurance carriers the ability to offer customers personalized discounts based on their driving habits, the company says.

The vehicle is fitted with a small device that easily plugs into the diagnostic port. It captures vehicle information and driver behavior data which is transmitted over the Sprint wireless network.

A cloud-based system analyzes the data with driver scoring software that enables insurance carriers to improve driver risk assessments, reduce costs and improve profitability.

M2M services use mobile networks to support applications where sensors communicate with servers, for some business purpose. As person-to-person accounts reach saturation, and "everybody uses a smart phone," M2M is expected to provide a key way of creating new services using mobile networks, without the need to sell additional mobile connections to people.