Myanmar to License More ISPs, Long Haul Network

Myanmar is planning to invite bids for providing Internet services and building a national fiber optic network, after awarding two new national mobile licenses.

“There are lots of opportunities in Myanmar’s telecom sector. While we have called for tenders for the two telecom licenses, our plan is to invite participation for providing Internet services,” said Thaung Tin, Myanmar deputy minister for communications and information technology.

What is not so clear is how Myanmar might go about licensing ISPs or infrastructure providers.

Myanmar Teleport (formerly Bagan Cybertech), Yatanarpon Teleport, Information Technology Central Services (ITCS), Red Link Communications, and the state-owned Myanmar Post and Telecommunication are the Internet service providers in Myanmar at the moment.

Winners of Myanmar Telecom Licenses Won't Have Much Spectrum to Work With

With the two winners of new Myanmar telecom licenses set to be announced June 27, 2013, some firms are starting to line up local mobile network employees.

Qatar Telecom has said it would invest $15 billion in rolling out a telecommunications network across Myanmar, should it win one of two licences being tendered in the Southeast Asian country.

The proposed third generation mobile network would reach 90 percent of the population within two years, according to Qatar Telecom Chief Strategy Officer Jeremy Sell.

The licenses are based on 2×5 MHz worth of spectrum at 900 MHz, as well as 2×10 MHz worth of spectrum at 2.1 GHz. Some might say that limited amount of spectrum is not going to support much use of mobile Internet.

You might think a market where only 10 percent of people use a mobile phone is a huge opportunity. But there might be issues.

For whatever reason, China Mobile and Vodafone, bidding as a consortium, voluntarily withdrew from the license competition.

The Myanmar government has distributed low-cost SIM cards (about US$2) through a lottery system. That indicates people will not be able to buy and use a mobile phone as freely as one might otherwise believe.

Mobile Will in 2013 Surpass Radio as a Content Consumption Platform

At current rates of growth, mobile soon will overtake radio as the third biggest media consumption "platform," possibly in 2013, if current rates of change continue at their present magnitude. 

In fact, with the exception of "online" content consumption, all other channels except mobile are losing share of end user time spent  with media. 

"Smart" or "Dumb," Value is the Issue for Networks

The chief business reason communications executives hate the term “dumb pipe” is that it has the connotation of “low gross revenue” or “low margin” earned by services without distinctiveness. The term implies that communications services are “commodities.”

The real problem therefore is not whether the “pipes” (networks) are dumb or smart, but whether the profit margin is high or low.

So the problem with competitive markets and new technology often is that profit margin gets wrung out of a business.

That appears now to be the case for high-frequency trading, which relies on ultra-low latency communications connections. At least some communications service providers care about high-frequency trading because they supply the ultra-low latency connections that help provide the trading advantages.

Fast, powerful computers and algorithms are the primary driver of high-frequency trading. But acting on what the algorithms suggest is where the low-latency connections come in.

Trading firms have spent millions to maintain millisecond advantages by constantly updating their computers, collocating in data centers and connecting distant computers using low-latency networks.

Of course, once the trading exchanges saw how valuable thousandths of a second were, they raised fees to collocate, and hiked the prices of their data feeds.

“Speed has been commoditized,” says Bernie Dan, CEO of Chicago-based Sun Trading, one of the largest high-frequency market-making trading firms.

And that is precisely the problem: when real advantage is seen, a competitive market tends to reduce the value of the advantages when all competitors adopt the latest technology and approaches.

But the economic downturn is a factor. Overall trading has declined since the 2008 Great Recession, and high-frequency trading might now represent about half of all U.S. trades, according to the Wall Street Journal.

At one point high-frequency trading represented more than 80 percent of transactions, according to the Financial Times.

But U.S. stock-trading volumes declined since at least 2010 and in 2013 are running 35 percent below the industry's peak in 2009, when an average 9.8 billion shares changed hands a day, according to Sandler O'Neill + Partners.

Precisely how much additional value service providers can create in their networks is a legitimate issue. Ultra-low latency networks to link exchanges are one example of how even “dumb networks” can add value.

The problem isn’t whether the networks are dumb or smart: the low latency networks are no smarter than the “normal” networks. They simply use the shortest routes.

Value is the issue.

You Might Question the Value of a College Education: Google Now Does

"One of the things we’ve seen from all our data crunching is that G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation," says Laszlo Bock, senior vice president of people operations at Google. 

Google doesn't ask for transcipts, test scores or GPA, unless a candidate is straight out of school and hasn't worked anywhere else. "We found that they don’t predict anything," Bock says. 

In fact, some teams at Google have about 14 percent of associates who never have gone to college.

Anecdotes such as this are a reason some believe a big disruption of higher education both is coming, and is needed. People might be essentially wasting money and time in hopes of getting a job, when the experience does not predict success at work. 

Clearwire Board Now Recommends Sprint Buyout Offer

Sprint has raised its buyout offer for Clearwire Corp to $5 per share, causing the board to reverse course again, and recommend that shareholders accept the Sprint offer, after previously recommending support for the Dish Network offer of $4.40 a share. 

In addition to reversing course again, Clearwire also postponed a June 24 shareholder vote until July 8, meaning there is yet more time for more developments in the see-saw battle between Sprint and Dish Network for control of Clearwire and its spectrum. 

As fixated as investors might be on the outcome both of the SoftBank and Clearwire acquisition efforts, some might say it is time for the deals to be finalized, so the eventual victors can try and gain some traction in a U.S. mobile market that Verizon and AT&T simply dominate. 

And there are precious few new accounts to be activated in the U.S. market. In the first quarter of 2013, 1.1 million net new mobile connections were activated, a decline of 60 percent, year over year. But most of those net additions were of the prepaid variety.

U.S. operators added 200,000 postpaid subs and 1.2 million total net new subscribers. Verizon got 720,000 of the net adds. AT&T got 291,000 and T-Mobile added 5,000.

So between them, Verizon and AT&T accounted for 86 percent of the net adds.  

On top of that, Verizon and AT&T have at least 66 percent share of the U.S. mobile market, by customers.

Data Revenues Might Hit 50% of Total in 2013

Data revenues now represent nearly 45 percent of U.S. mobile industry service revenues and the 50-percent level might happen in 2013.

After that point, data will represent the majority of U.S. service provider revenue, for the first time, according to projections by analyst Chetan Sharma.

The U.S. mobile data market grew 14 percent year-over-year to reach $21 billion in mobile data revenues, according to Sharma.

In 2013, U.S. mobile service providers will earn $90 billion in mobile data service revenues. Verizon and AT&T between them represent 70 percent of the mobile data services revenue and 66 percent of the customer base.

The data also illustrates how the maturing market now will be lead by changes in revenues per account, as the number of new human accounts (not machine to machine connections) that can be added is dwindling.

In the first quarter of 2013, 1.1 million new connections were activated, a decline of 60 percent, year over year, Sharma says. But most of those net additions were of the prepaid variety.

U.S. operators added 200,000 postpaid subs and 1.2 million total net new subscribers. Verizon got 720,000 of the net adds. AT&T got 291,000 and T-Mobile added 5,000.

So between them, Verizon and AT&T accounted for 86 percent of the net adds.  

Though overall average revenue per user increased 35 cents, voice ARPU declined by 42 cents. Average data ARPU grew by 87 cents, sequentially.

Smart phones represented about 85 percent of the devices sold in the first quarter of 2013.

And it never is too soon for service providers to get ready for the next wave of growth after mobile data.

The next wave of growth might be significantly more challenging, though, as it might involve creating new lines of business beyond today’s voice, messaging, Internet access framework, and involve multiple lines of business such as cloud computing, commerce, payments, connected home or connected automobile, identity management and analytics that each will face serious competitors.

Beyond that, each of the new businesses are vertical rather than horizontal, meaning each new opportunity is a niche, compared to the universal “voice, data, messaging” appeal of basic mobility.