Mobile Internet Access is Big with Users 18-34; VoIP Much Less So

When asked what was most important in choosing their next mobile service provider, younger European users 18 to 34 reported they value “more data,” not more texting allowances or bigger voice buckets of use, a survey by Analysys Mason suggests.

The survey also suggests that use of mobile VoIP isn’t as common as sometimes thought.

In fact, Analysys Mason concludes, the conditions for mass market adoption of VoIP on smartphones “do not currently exist.”

Still, VoIP services are most popular with the youngest age group, with more than 10 percent of those under the age of 35 using a VoIP service, Analysys Mason says.

Nor has IP-based messaging fully displaced text messaging, though the process is underway, one might argue.

“Operators will note that despite the high penetration levels of IP-based alternatives, full messaging service substitution has not yet occurred,” says Stephen Sale, Analysys Mason principal analyst.

On the other hand, a bigger bucket of voice usage was the top desire of users in every age bracket other than 18 to 34.

The 18 to 24 and 25 to 34 age groups have widely contrasting approaches compared with older smart phone users, particularly in relation to VoIP, IP messaging and social media services such as Skype, WhatsApp Messenger and Facebook. That won’t surprise you.

More than half of surveyed smart phone respondents 18 to 24 year in the United Kingdom, for example,  use IP-based messaging.

The survey of 6610 consumers 18 or older in France, Germany, Poland, Spain, the United Kingdom and United States also found that only 20 percent of those 65 and over do so.

Text messaging is used by 91 percent of those 18 to 34 but only 67 percent of those 65 and over.

That isn’t to say mobile VoIP or IP messaging are not threats anywhere. In some markets, there seems to be quite a lot of substitution, in others the problem still is rather minimal.

But the survey results do show the wisdom of making Internet access the variable cost portion of a mobile bill. That is the service people increasingly value, above voice and texting, at least in terms of usage quotas.

Criteria for choosing next mobile service

Question: "Which of the following factors would most attract you to your next mobile tariff/contract?" n = 1073

UPC Bumps Top Speed to 500 Mbps, Responding to Reggefiber 1 Gbps

ISPs facing disruptive offers, such as Google Fiber, will have to respond, even if not countering such offers head to head. In the Netherlands, Liberty Global’s UPC operation in the Netherlands faces a competitor--Reggefiber--already offering a symmetrical 1-Gbps service.

“We had to address it head on,” says Bill Warga, Liberty Global VP. technology. By bonding more than 16 6-MHz channels, UPC was able to create a 500 Mbps service.

“We had to build a special modem because (DOCSIS) 3.1 chips aren’t out yet,” he said. “That was a reaction but that tells you how quickly in a marketplace that something can move.”

UPC’s most popular product is the 25 Mbps service costing 25 euros.

AT&T's Europe Interest is "Internet Access"

AT&T is looking to Europe for expansion in large part because U.S. regulators have signaled they will not let AT&T get any bigger in the U.S. market, because the U.S. mobile market is nearly saturated and because Europe, though arguably as saturated as the U.S. market is, holds more promise for broadband access revenue growth.

Chief Executive Officer Randall Stephenson has said Europe is ripe for high-speed Internet access innovation, for example. 

The GSM Association, for example, argues that the United States "has opened up a large lead in deployment of next-generation technologies."

By the end of 2013, nearly 20 percent of U.S. connections will be on Long Term Evolution networks, compared to fewer than two percent in the European Union. 

Average mobile data connection speeds in the U.S. are now 75 percent faster than those in Europe and by 2017 will be more than twice as fast.

Mobile investment in the United States has outpaced that in Europe, with capital expenditure in the U.S. growing by 70 percent since 2007 while declining in the EU.

All of that creates conditions for revenue growth, AT&T seems to believe. 

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.