India to Launch Major Cable TV-Based Broadband Initiative?

Of India's 100 million Internet users, about 12.5 million have broadband. India's government seems to want to change that, and seems to want to rely on cable TV networks that already reach about 90 million Indian households, Businessweek reports.

A new telecom policy that would ease foreign investment rules for cable TV providers of broadband access seeks to boost the number of broadband connections to 175 million, by 2017, reaching 600 million by 2020.

The new policy might not have immediate implications for rural broadband, though. Right now there are about 260,000 broadband connections in rural India, though 800 million people live in those rural areas, including at least 600,000 villages. 

One has to assume wireless is key to any future progress, as the cost of  building a kilometer of fixed network plant costs about $60,000 to $70,000. Those costs have tended in the past to encourage experiments with kiosks  and other methods of getting connectivity to a village. 

Separately, the Indian government is building a $4.5 billion National Optic Fiber Network (NOFN), to take broadband connectivity to the villages by 2014. But some earlier efforts have failed. 

Called Bharat Broadband, the project will connect 250,000 self-governing bodies at the village level across the country. 

Though Indian rural Internet access might be as low as two percent of households at the moment, we should expect to see enormous changes over the next 10 years.

The number of users is expected to climb from 120 million to 350 million by 2015, for example,  according to McKinsey, largely in urban areas, as you would expect. 

According to the Internet and Mobile Association of India and Indian Market Research Bureau there are 38 million people in rural India who have used the Internet at least once in their life, and this number is expected to reach 45 million by December 2012.

That would boost rural India Internet penetration  has grown from 2.6 percent in 2010 to 4.6 percent in 2012. 

At least 90 percent of Indian villages have inadequate communications facilities, according ot the World Bank. "With few exceptions, their telecommunications connection to the outside world amounts to one public telephone," the World Bank has said. 

Sprint Seeks to Buy Rest of Clearwire for $2.1 Billion

Sprint Nextel Corp. has offered $2.90 per share of Clearwire Corp. as part of its effort to acquire the roughly half of Clearwire it does not already own, Bloomberg reports. 

The $2.1 billion bid is among the most-significant early developments since the Softbank purchase of Sprint for about $70 billion. 

Many observers might speculate that Sprint needs better control over the Clearwire assets if it fact it plans to launch a disruptive attack on the U.S. mobile market, as Softbank itself did in Japan. 

Data services are likely to be the focal point for any such effort, for obvious reasons. Voice and messaging services are a declining source of revenue for most providers, and Softbank already earns perhaps 66 percent of its Japanese revenue from data services. 

Add in the possibility of enticing consumers to buy subscriptions for tablets and other devices and ultimate mobile data penetration of three hundred to five hundred percent is conceivable, a claim Verizon Wireless itself made years ago, referring to machine-to-machine services as an example. 

It already is clear that Softbank has vaulted into the top ranks of global mobile service providers, measured either by subscribers or revenue. 


Some believe, based on past evidence, that Softbank will try to disrupt the U.S. mobile market, probably using pricing in some way. 

The reason for thinking Softbank will launch a pricing war, or perhaps better stated, a “value-price” war, is that it was what Softbank did earlier in the Japanese market. 

That might lead some observers to speculate about whether the Softbank-owned Sprint will try to become the “Free Mobile” of the U.S. market.In France, the Illiad-owned “Free Mobile” has disrupted the French mobile market. 

Already, FreedomPop is trying to disrupt mobile broadband pricing, as the Illiad Free Mobile effort already has done in the French mobile market.

In 2006, when Softbank decided to buy Vodafone KK assets, it likewise was criticized in some quarters for undertaking a risky gambit.

Some will argue Softbank is taking another huge risk by entering a country where iit has no previous operating experience, and by assuming a huge new debt load, after only recently shedding a similar debt load.

Softbank argues it is a reasonable risk, and that its prior experience taking on NTT Docomo and KDDI show it can compete in a market dominated by larger service providers.

Softbank, many believe, will use the same strategy it used in Japan, which some would describe as providing a large number of complementary features or services to create a “sticky” relationship with the end user.

Others will point to the pricing strategy. In Japan, Softbank’s 2006 acquisition of the Vodafone unit was not universally considered wise. 

But in just one year, Softbank managed to boost its subscriber base from 700,000 in fiscal 2006 to 2.7 million. By the beginning of 2008, Softbank had grabbed 44 percent of Japan’s new mobile subscribers, well ahead of KDDI’s 35 percent and NTT-DoCoMo’s 11 percent.

Some think Softbank will be willing to launch a price war, as well. 

In Japan, Softbank was willing to sacrifice voice average revenue per unit to make market share gains.Back in the 2006 to 2008 period, Softbank was willing to accept a $13 a month ARPU decline to build market share.

Spectrum will among the assets Softbank will be able to leverage. Hence the presumed need for full control of Clearwire.

Between 2000 and 2010, Global Internet Users Grew 2-3 Orders of Magnitude, Globally

Growth of global Internet users of about eight percent on 2011 might not sound like too much, given the 2000 to 2010 rates of growth. After all, Internet users in Africa grew 2357 percent between 2000 and 2010. 

In Asia, growth was a more modest 622 percent. And global growth masks much-higher growth rates in some regions and areas. India's 2011 growth rate was 38 percent; Indonesia's growth rate was 22 percent; while in the Philippines Internet users grew 44 percent. 

 

The Mobile VoIP "Problem"

Analysts at Juniper Research now estimate there will be about one billion users of mobile VoIP apps and services by about 2017. 

For some, that is an opportunity, though the magnitude of the opportunity might be questionable. 

For mobile service providers, mobile VoIP is probably more a problem than an opportunity.

"As with Skype on the desktop, only a very small proportion will pay for the service," Juniper Research says.  “Wi-Fi mobile VoIP is potentially the most damaging of all VoIP traffic, as it bypasses the mobile networks altogether."

“We forecast that mobile VoIP over Wi-Fi will cost operators $5 billion globally by 2015,” says Anthony Cox, Juniper Research analyst.

In fact, a recent forecast by Visiongain suggests 2012 mobile VoIP revenues will reach only about $2.5 billion, globally. 

“Many subscriber sign up to an OTT service without ever planning to pay a cent for it, and some industry players do not have a short-term revenue model at all,” says Cox.


Still,  researchers at Analysys have in the past predicted that, as early as 2012, mobile VoIP services would generate revenues of $18.6 billion (EUR15.3 billion) in the United States and $7.3 billion (EUR.6.0 billion) in Western Europe, compared with fixed VoIP revenues of $11.9 (EUR9.8 billion) in the United States and $6.9 billion (EUR5.7 billion) in Western Europe.



It seems doubtful those levels of revenue have been realized, though. In fact, analysts seem to have overestimated the revenue mobile VoIP would represent, rather consistently. 

In fact, though fourth generation networks and Long Term Evolution virtually require that carriers embrace IP-based voice, the business model is less certain, and could "potentially accelerate the decline in overall voice revenues," says Cox.

The question is how fast new and alternate revenue streams, such as advertising or premium features and services, can gain acceptance.

Asia-Pacific Region Will Lead Service Provider Revenue Growth

Though Brazil, Russia, India, China and South Africa have been leading economic and communications adoption growth for much of the past decade, it now appears that those nations are reaching maturity, and that growth of communications services will be lead by a new list of nations in the emerging markets.

Overall, that growth–on a percentage basis–will likely be lead by countries in the Asia-Pacific region, exclusive of China and India.

Globally, emerging markets remain crucial for global telecom service provider growth. IDC predicts that emerging markets will contribute for 53 percent of 2012’s global information and communications technology growth.

And a poll  of 675 global IT and business professionals suggests Indonesia, Vietnam, Qatar and Myanmar are the countries to lead that growth. But Israel, Iraq, Uganda and Cambodia were other countries also viewed as countries where growth could occur.

Notably, just five percent of respondents chose Brazil, Russia, India, China or South Africa as among the nations having the strongest growth, though the so-called BRICS nations have been at the top of global growth lists for some years.

Global Youth Can't Live Without Their Smart Phones

About 90 percent of Gen Y surveyed worldwide said they check their smart phones for updates in email, texts and social media sites, often before they get out of bed, according to the 2012 Cisco Connected World Technology Report. 

Global youth are remarkably consistent in those attitudes, as it turns out. 

FCC Approves Dish Network Long Term Evolution Plan

Federal Communications Commission members unanimously approved a plan to allow Dish Network Corp. to re-use its mobile satellite spectrum to build a new Long Term Evolution mobile network, one more example of how the U.S. mobile market is being challenged. 

All five FCC members have voted on the rules. Dish is required to build out at least 70 percent of the new network within six years, and will have to reserve some of its spectrum as a guard band to prevent interference with other licensed users, a problem LightSquared encountered as well. 

Dish has said that provision would be a "game changer" for Dish that would make the proposed LTE network "risky." 

Some observers have argued all along that Dish would simply sell its spectrum at some point, and not bother getting into the mobile business. Others are not so sure, given Dish's largely saturated video entertainment business and CEO Charlie Ergen's comments that, if he had to do it all over again, he might not choose satellite delivery as his way of attacking the video entertainment market.