Is TV Becoming "Irrelevant?"

Perceptions of "irrelevance" are not helpful to any would-be supplier of a product. But at least for some segments of the U.K. population, TV is becoming irrelevant.

Some 17 percent of U.K. teens would miss television if they did not have it, but 53 percent of female respondents would miss their mobile phones if they did not have them, according to Ofcom.

There are potentially significant implications for the video entertainment ecosystem, if those behaviors on the part of teens become adult habits.

Conversely, TV is among the most-favored media used by older adults. When asked what media would be missed the most, people over 75 are far more likely to miss their TVs the most (65 per cent), followed by radio (15 per cent) and newspapers/magazines (eight per cent).

The picture is very different for young adults aged 16 to 24 who would most miss their mobile phone (28 per cent), followed by the internet (26 per cent) and TV (23 per cent). 

Kids spent 17 hours each week accessing the Internet, about the same amount of time they spend watching TV. Nearly all (90 percent) of 12 - 15 year olds in the U.K. access the Internet every day, and weekly Internet usage continues to rise steadily. 

The point, obviously, is that television, as a product, already is less popular among younger consumers than among older consumers. Internet and mobile seem to be essential. 

So television marketers have a big problem: how to change the product to create more relevance for some consumer segments who, at present, don't find they want the product.

Packaging and pricing won't matter if it is the basic product some consumers find irrelevant. 

Order of Magnitude More Small Cells in Metro Areas by 2015

The number of cells required to meet the capacity demands of just one square kilometer of a busy city center will increase to more than 40 by 2015, according to Actix, a supplier of analytics. Today, that same area often is served by five to seven macrocells. 

See infographic format here. 

By 2015, a new micro and pico small cell layer will need to be added to existing inner city networks, which today typically comprise five to seven 3G macro cells serving one square kilometer. 

For a typical central business district this could see the number of cells rising from 20 to more than 160, Actix says. 

“In the next three years, mobile data is projected to grow by at least ten times, which is equal to 3,000 GB per square kilometer per day," says Bill McHale, Actix CEO. 

What is the Best Way for AT&T or Verizon to Generate Billions of New Revenue?

What is the best way for a tier-one carrier to generate an extra $1 billion in annual revenue?

Long term, you might argue carriers will need to explore a range of potential new businesses. That’s why you hear all the movement around home security, mobile payments, mobile wallet, machine-to-machine applications, health care applications, content delivery networks, over the top apps and so forth.

In the near term, Verizon Wireless and AT&T might wring even greater returns simply by reducing original equipment manufacturer device subsidies, without taking what some might say are the “drastic” steps T-Mobile USA is undertaking to end all retail device subsidies.

Oppenheimer analysts think that AT&T and Verizon Wireless, for example, will be able to cut payments to device manufacturers by significant amounts.

AT&T’s subsidies could drop from 15 percent per phone to five percent over time, Oppenheimer predicts.

With more than 100 million phones being sold every year, Oppenheimer thinks the carriers could save up to as much as $100 per phone, or $10 billion dollars in annual savings. That’s a lot more new revenue than AT&T or Verizon Wireless are likely to generate from the other new initiatives.

Beyond that, Oppenheimer analysts even think there is a chance AT&T and Verizon Wireless could recapture some of the influence they used to have before the advent of loosely-coupled networks.

There is at least a possibility that carriers could host, invest in and own applications provided in a carrier context, with the greater importance both of mobility and cloud computing. Some might find that thesis a bit optimistic.

But there is little question AT&T and Verizon Wireless are in a different strategic position than their counterparts in other regions such as Western Europe.

Globally, telecom revenue is growing. But not in Western Europe, it appears. The mobile industry’s combined revenues from voice, messaging and data services in the EU5 economies (United Kingdom, France, Germany, Spain and Italy) will drop by nearly 20 billion Euros, or four percent a year, in the next five years, and by 30 billion Euros by 2020, according to STL Partners.

The obvious implication is that mobile service providers in the United Kingdom, France, Germany, Spain and Italy will have to create new revenue streams worth 30 billion Euros, just to stay where they are, by 2020.

T-Mobile USA to End Device Subsidies

T-Mobile USA says it plans to end all device subsidies in 2013, after finding that perhaps 80 percent of its customers choose a "bring your own device" or "buy your own phone" plan anyway.

To ease the "sticker shock," T-Mobile USA probably will offer installment plans that involve an upfront $100 payment and then monthly payments for as long as 20 months. 

T-Mobile USA also apparently will get the right to sell unspecified "Apple" devices in 2013. To be sure, the "value" approach fits T-Mobile USA's approach to the market. But there is risk.

In Spain, mobile service providers have had very mixed experience with ending device subsidies. But Vodafone Spain and Telefonica lost customers after they stopped subsidizing devices. 

In fact, Vodafone Spain lost a half million subscribers in a single quarter. Vodafone Spain later reversed course and restored the subsidies. T-Mobile USA will find out soon enough if different results can be obtained in the U.S. market. 

Taxes and Billing Issues Kept Google From Offering Voice in Kansas City

Google considered offering voice as part of its 1-Gbps service in Kansas City, Kan. and Kansas City, Mo., but the cost and challenge of billing for taxes was enough of a hassle to cause Google to drop those plans. 

Milo Medin, vice president of Google Access Services says the actual operating costs would have been trivial. Billing for taxes would not have been so easy.

“The cost of actually delivering telephone services is almost nothing,” Medin said. “However, in the United States, there are all of these special rules that apply.” Google would not be the first company to encounter the complexities of billing, and how that can affect a business case.

Retailers engaged in e-commerce, either throughout the United States or globally, know exactly what Medin means. 

People Spending Twice As Much Time with Apps as Web

Between December 2011 and December 2012, the average time spent inside mobile apps by a U.S. consumer grew 35 percent, from 94 minutes to 127 minutes, according to Flurry. 

By comparison, the average time spent on the web declined 2.4%, from 72 minutes to 70 minutes.  By our measurement, U.S. consumers are spending 1.8 times more time in apps than on the web.  

The study does not indicate that people are substituting interaction with mobile apps as a substitute for either web browsing or watching TV, since engagement with thoses activities seem to be stable. 

But end user time is finite. When users spend more time with mobile apps, while reported time watching TV and using the Web remain level, that time must either come from some other pursuit, or users are multitasking, most likely using more apps while doing something else. 

Why 1 Gbps Isn't Presently a Big Deal

You've probably read at least one story about Google Fiber, the 1-Gbps symmetrical fiber to the home network in Kansas City, Mo. and Kansas City, Kan.

I have not been recently in Kansas City, but have had a chance to work on a 1-Gbps connection. It did not change my life. It did not even seem to materially affect my normal use of the Web. As always is true, your local connection is but one element of end-to-end application performance.

What happens in between you and a remote server, and the set-up of the remote server's local connection, obviously controls the amount of data that actually can flow between two communicating computing devices.

Until most of the rest of all servers you interact with can match a local 1-Gbps connection on your end, one doesn't really see much difference, on a local gigabit per second connection, compared to using a much lower speed connection.

Granted, I wasn't uploading or downloading large files, using BitTorrent or watching YouTube. But you get the point. Had I not been told, I wouldn't have noticed anything special about the connection.