China Shows Broadband is a Product, Like Any Other, and can Mature

For more than a hundred years, fixed network voice seemed to be a product that defied the "product life cycle." Demand only seemed to grow.


As it turns out, fixed network voice now is behaving as a normal product. Demand in some markets is declining, while substitute products arguably are taking share.


The question therefore is whether fixed network broadband access also will turn out to be a product, with a life cycle. In China, the answer already might be "yes."


Internet users reached 530 million over the past six months, but its broadband subscriber base actually shrank as mobile became the most popular way for users to get online for the first time, the study suggests.


Of those users, some 380 million were fixed broadband users, down from 396 million in December 2011, and 388 million were mobile internet users, up from 356 million, according to the report by the Chinese government. :

75% of Planet's People Have a Mobile Phone

Some 75 percent of all the world’s people now have a mobile phone, according to the World Bank and infoDev, its technology entrepreneurship and innovation program. In fact, the number of mobile subscriptions in low- and middle-income countries increased by more than 1,500 percent between 2000 and 2010, from 4 to 72 per 100 inhabitants, the World Bank says.


The number of mobile subscriptions in use worldwide, both pre-paid and post-paid, has grown from fewer than one billion in 2000 to over six billion now, of which nearly five billion are in use in developing countries. 


Ownership of multiple subscriptions is becoming increasingly common, suggesting that their number will soon exceed that of the human population, the World Bank also says.



Before the expansion of mobile networks, agricultural producers were often unaware of these prices and had to rely on information from traders and agents to determine whether, when, where, or for how much to sell their crops.


The resulting  “information asymmetry” often results in price dispersion—drastically different prices for the same products in markets only short distances apart—and thus lost income for some farmers and higher prices for consumers.


Numerous studies have shown the benefits of communications in promoting access to price information, including increases of up to 24 percent in incomes for farmers and up to 57 percent for traders and price reductions of around four percent for consumers depending on the crop, country, and year of study, the World Bank says. 



One study conducted in Niger from 2001 to 2006 found that the introduction of mobile phones had reduced grain price dispersion by 6.4 percent and reduced price variation by 12 percent over the course of one year, the report says. 







Applications now are moving to the forefront as "access" becomes nearly universal, the report also maintains. 


Download the report here. 

Do People Really Want to Use Mobile Broadband for Their Tablets?

Mobile service providers hope that tablet users will want to connect their tablets using the cellular network, instead of using Wi-Fi. New shared mobile data plans are intended to encourage such choices. Will it work?


Some don't believe so. The share of tablets with built-in cellular connectivity will decline over the next four years despite the expected proliferation of multi-device data plans designed to encourage their adoption, according to a new forecast by CCS insight. 


The study suggests 48 percent of tablet shipments in 2011 were cellular-enabled. The firm expects the share of cellular-enabled tablets will slowly diminish to 37 percent in 2016.


"Most users do not regard cellular connectivity in tablets as a must-have, especially given the current price of tablets and mobile data subscriptions," says CCS Insight,

For most users, that is because tablets mostly are used inside the home, where a Wi-Fi connection is available. 

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.