64% of U.S. Commercial Buildings Do Not Have Fiber Access

You might think that after decades of activity by service providers to provide direct fiber connections to business customers, more than 36 percent of U.S. commercial buildings already would have been reached. You would be wrong.

Some 64 percent of U.S. commercial buildings do not have direct fiber access, according to Vertical Systems Group.

To be sure, business fiber availability has more than tripled since 2004, when the penetration rate was 10.9 percent. But the distance yet to be covered shows the work which remains. To be sure, the use of copper connections does not necessarily mean most businesses are “underserved.”

One can make the argument that for most small businesses, business class Internet access using either cable modems or digital subscriber line facilities supplies enough value to be workable today.

And most businesses do buy Internet access service, according to the U.S. Small Business Administration. In 2010, 90 percent of small businesses used the Internet. Excluding small businesses that do not have any computers, the level of broadband adoption jumps to 95 percent.

That might not be so true everywhere, though. 



That is not to say small businesses, or other businesses, “do not need” or “would not use” an optical access service if it were available, only that, at the moment, other copper access networks seem to work well enough.

"The U.S. fiber gap has been steadily closing each year and this trend will continue,” said Rosemary Cochran, principal at Vertical Systems Group.

On the other hand, service providers only have incentive to extend direct fiber connections to business when the demand exists, or the demand can be supplied profitably, and for most small business locations, either “willingness to buy” or “ability to supply at a profit” is lacking.

One might therefore expect slow, but continued progress on the “fiber to business” front, but no major leaps.

20% of U.S. Residents Do Not Use the Internet

Quite often, our assumptions about broadband access or Internet usage is that we have failed in some way to provide it. For the most part, that is not the current "problem" with use of the Internet and broadband access services.  But value, not availability, is the main barrier now, in the U.S. market.

More than 20 percent of U.S. adults above the age of 18  do not use the Internet today. Some don’t feel Internet access is essential for meeting their information or communications needs, while others simply don’t know how to use it.

But that's a different problem than "supplying" access. Making the service available requires that a person sees value there, and wants to use such access. 

ARCEP Warns it Might Prosecute Skype

ARCEP, the French communications regulator, says it might prosecute Skype for failing to register its "SkypeOut" service as an " electronic communications operator" in France. 

Regulators operate by one simple principle: if something quacks like a duck, and walks like a duck, it is a duck. 

One Recurring Problem for Mobile Service Provider Innovation

There is a recurring and major issue where it comes to new lines of business mobile service providers might like to launch, namely the smallish size of the opportunity. Some might point to location-based services as obvious candidates for mobile service providers. 

That is a reasonable assumption at a high level. At a practical and granular level, it is more difficult to achieve revenue commensurate with effort, in many cases. Consider the "new $300 million"  network-based location information opportunity. 

“We see a range of new "location information services" emerging around insurance, banking, analytics, M2M/MRM, advertising, hospitality and IVR," says ABI Research senior analyst Patrick Connolly.

That might be true, but will not immediately be so attractive to any single tier-one service provider. More likely, third parties will take the lead. 

Tablets Will Generate 35% of $25 Billion App Revenue

Tablet apps will generate $8.8 billion in revenue in 2013, compared to the $16.4 billion expected from smart phone apps, according to ABI Research. 

Of the combined $25 billion, 65 percent will come from Apple’s iOS ecosystem, 27 percent from Google’s Android, and the remaining eight percent from the other mobile platforms.

Tablet apps will steadily increase their share of the market over the coming years, in 2017 nearly matching the amount of smart phone application revenues and surpass them in 2018, when the combined revenue base will reach $92 billion, ABI Research says. 

Location's Role in Mobile Ad Effectiveness

It is drop dead simple why mobile has a unique advantage in the advertising and promotions business. Simply stated, people are more likely to interact with ads or messages or promotions when they are physically in proximity to a particular business using mobile for messaging. 

Telecom Capital Investment 2013 to 2030 will be $9.5 Trillion

If one assumes a global requirement to invest $57 trillion in non-telecom infrastructure between 2013 and 2030, about 60 percent more than was invested in global infrastructure in the most recent 18 years, there are some rather obvious conclusions for telecom investment.

Competition for capital roads, power, bridges and other infrastructure will be severe. The telecom itself will need to invest about $9.5 trillion  between 2013 and 2030, McKinsey Group estimates.

Given debt loads most countries face, it is not likely there will be too much extra funding available to help service providers create all that new infrastructure. So the growing trend of serious regulator thinking about how to create incentives for investment is not misplaced.