Telefónica Adds Windows Phone 8 to Firefox OS Support, Wants Alternatives to Apple, Android

Telefónica is among global tier one mobile service providers that are acting to support mobile devices running on operating systems other than Apple and Android, by announcing a new program to boost sales of Windows Phone 8 devices.

Initially for a period of one year, Telefónica will enhance marketing activities in support of its Windows Phone 8 devices in the U.K., Germany, Spain, Mexico, Brazil and Chile.

Telefónica also is supporting devices running the Firefox operating system. In any part of the Internet ecosystem, there are natural tensions between participants, over revenue shares, influence or control.

Mobile service providers naturally believe app providers and device providers have too much influence, compared to the service providers, in large part because of end user affinity for certain apps or devices, which gives app or device suppliers leverage.

The long term issue is whether mobile service providers, who do have much sway over packaging and pricing, can really shift consumer preferences in a significant way, where it comes to device choices. People want what they want, when they want it, how they want it and why they want it.

And though it would be a very-serious step, tensions within the ecosystem sometimes can break out in more serious ways. Channel conflict is a perennial problem in technology businesses.

Branded ISP operations by Apple or Google could be an example of how natural tensions could become inflamed to a more significant degree.

Singapore is Looking at Authorizing 189 MHz of White Spaces Spectrum

Singapore’s Infocomm Development Authority now is working on the framework for enabling use of former broadcast TV spectrum (TV white spaces) in Singapore, making Singapore among the first nations (United States, Canada and United Kingdom also are among the early movers) looking to commercialize use of TV white spaces for Internet access services.

The U.S. Federal Communications Commission  is allowing white spaces operations on a license-exempt basis, with the management of such devices through a database.

The Office of Communications in the United Kingdom is adopting a similar approach. IDA is also considering adopting the same approach to facilitate the initial deployment of white spaces in Singapore.

The IDA also seeks input about whether some white spaces spectrum should be licensed, however, allowing those licensees to gain more certainty about spectrum for services that require something more like a traditional mobile service.

The IDA has allocated the VHF spectrum between 174 MHz and 230 MHz and the UHF spectrum between 494 MHz and 790 MHz for white space operations. A total of 21 MHz in the VHF band is available, including 181 - 188 MHz, as well as 209 MHz to 223 MHz.

There is more spectrum in the UHF band, including 502 MHz to 518 MHz, 614 MHz to  622 MHz, 630 MHz to 710MHz, 718 MHz to  742 MHz, 750 MHz to  774 MHz and 790 MHz to 806 MHz, representing a total of 168 MHz.

In all, 189 MHz will be made available, a huge amount of spectrum in highly-desirable frequencies.

IDA also is inviting views on allowing operation of white space devices in the 694 MHz to 806 MHz band until IDA allocates these frequencies for IMT deployment, set for 2020.

What Does Network Element Unbundling Promote?

Unbundling of network elements (either of full loops or parts of local access networks) has been touted as a reasonable way to enhance competition in markets where only one broadband access network dominates. Many will argue it has, in some markets, done so. 

But there also is new thinking that unbundling of network elements, and allowing competitors wholesale access to those network elements, at healthy discounts, has had a downside: namely reducing next generation network investment.

Perhaps oddly, some in the U.S. policy community have advocated adopting unbundling policies prevalent in the European Union, precisely at the point that the EU is moving away from some of the features of such policies, such as the amount of wholesale discounts, for example. 

Some of us might argue the shift in thinking is because new problems emerge in new periods of communications policy. Solutions to older problems might actually be problems in newer periods. 

In essence, that is why new questions are being raised in markets where widespread unbundling policies are seen as having succeeded in promoting competition. It is hard to solve new problems with yesterday's solutions, especially when the older solutions are directly related to the reasons the new problems exist.

Competition remains an issue, but is not the chief issue. The main problem is that the risk of investing lots of money in next generation networks is higher than ever before, because the returns from such investments are smaller and more uncertain that similar investments have been in the past. Investors dislike higher risk and uncertainty. 

The new issues are the ways unbundling and investment are related. U.S. regulators have supported mandatory narrowband service unbundling, but not mandatory broadband access unbundling. 

European policymakers, on the other hand, have applied mandatory wholesale rules to broadband and narrowband services.

The implementation of unbundling requires European regulators to make a challenging decision on access prices, balancing short-term consumer benefits (from low prices) and long-run benefits from investment and innovation, argue Martin H. Thelle and Dr. Bruno Basalisco of 
Copenhagen Economics.

"Several European fixed telecom incumbents have refrained from investing aggressively in next generation access networks due to regulation affecting the business case for 
fiber investments," they say. 

The problem is that the "unbundling approach does not suit the challenge of promoting investment in fiber-based infrastructure," they say.

Unbundling has created retail competition, but has not been effective at creating incentives for investment in next generation networks, said Roslyn Layton of the Center for Communication, Media and Information Technologies, Aalborg University Department of Electronic Systems.

Gigabit Squared to Launch in Some Seattle Neighborhoods in 2014

Gigabit Squared plans to launch service in some neighborhoods of Seattle in 2014, featuring free 5 Mbps service for five years, 100 Mbps download/100 Mbps upload for $45 per month or a gigabit for $80 a month.

The Gigabit Squared fiber network will initially be made available to neighborhoods located within the University of Washington West Campus District, First Hill, Capitol Hill and Central Area of Seattle as part of a program called Gigabit Seattle.

Installation charges will be waived for customers signing a one-year contract for 100 Mbps service or greater.  Otherwise, a $350 installation fee is required.

Plan A offers 5 Mbps download/1 Mbps upload at no charge for five years. After five years renters or owners can convert to a 10 Mbps download/10 Mbps upload service plan for $10 a month.

Plan B offers 100 Mbps download/100 Mbps upload for $45 per month, with no installation charge with one- year contract

Plan C is a symmetrical gigabit connection costing  $80 per month with no installation charge with one-year contract.

The Gigabit Squared plans show the Google Fiber model is spreading.

Dynamic Spectrum Alliance Launches

Some 23 companies and organizations announced the launch of the Dynamic Spectrum Alliance, which will focus will be on policy and regulatory advocacy.

Dynamic spectrum sharing allows radio communications devices to transmit on any available radio spectrum assigned for such sharing.

Almost by definition, the Dynamic Spectrum Alliance will tend to be disruptive, allowing service providers to get ot market with lower barriers to entry.

That does not necessarily mean “non-licensed” or “no fee” access, but should lead to more efficient, lower cost spectrum costs.

Members include Microsoft and Ruckus Wireless, Taiwan’s Computer and Communication Research Center, Japan’s National Institute of Information and Communications Technology (NICT), the Singapore Institute for Infocomm Research, and White Space Technologies Africa.

Also members are 6Harmonics, Adaptrum, BSkyB, Carlson, Council for Scientific and Industrial Research – South Africa, Indigo Telecom, InterDigital, MediaTek, Network Startup Resource Center (University of Oregon), Neul, RealTek, StarHub, Strathclyde Centre For White Space Communications, Tanzania Commission for Science and Technology (COSTECH), Taiwan Institute for Information Industry, UhuruOne and WaveTek.

Internet Exacerbates "Competition" Issues, But Competition Still is the Key Market Change

It appears that IP messaging app WhatsApp has passed 250 million users, enough to put WhatsApp in the same league as Twitter (200 million users) and Skype (280 million), in terms of user base.

Others might say the real impact is that IP-based instant messaging services are becoming, for many users,  the primary social graph. That means a potentially important new revenue vehicle is being created.

“For whom?” is the issue, as seems always the case for service providers.

Seemingly endless amounts of speculation and argument will continue to be expended by executives, pundits and analysts about “what service providers should do.” That’s a fair enough question.

What should by now be abundantly clear is the strategic impact on service providers, no matter what they decide to do tactically (participate by buying into the business, create branded versions of such services, fight back by enhancing the value of any existing substitute products, or essentially ignore the attackers).

The analogy and historical precedent is the advent of competition within the facilities-based telecom business, even before the advent of over the top competition. A look at addressable market illustrates the primary change of strategic context.

Back in the monopoly days, a national carrier’s business case was fairly simple. Whatever other assumptions one might have made, the potential addressable market was nearly “100 percent of homes and business locations.”

That had implications for the “cost per subscriber” or “cost per customer” metrics. At very high customer penetration, “cost per customer” and “cost per passing” are fairly closely related metrics.

That is a relatively simple business exercise. Build out network, passing 10,000 new locations, and sign up 70 percent to 90 percent of those locations as customers.

All of that falls apart in a competitive environment. Assume just two strong contestants with networks, equally skilled and with some advantages (telcos with mobile or cable TV with video).

In that case, the math is quite different: build or upgrade a network and sign up perhaps half of those locations as customers. That can nearly double the “cost per customer,” based strictly on payback on network capital.

The other likely effect is an increase in marketing expense.

In other words, the effect of competition is a fundamental change in network economics and profit margin.

Over the top services pose the same sort of challenge. By now, it should be obvious that one clear implication of IP-based competition is that profit gets wrung out of any service or application that formerly was immune from such competition.

So whatever tactical response a service provider chooses to make, it will be within the context of radically-different gross revenue and profit margin assumptions.

India Illustrates Principle: Competition is Good, Excessive Competition Is Not

Mobile and fixed network service providers sometimes point out that excessive competition or excessive regulation actually can depress willingness to invest and upgrade networks. And mobile service providers have learned the hard way that overpaying for spectrum likewise can create stress that limits investment into network infrastructure.

That seems to be the case in the Indian mobile market, where Indian service providers will invest a substantially lower percentage of their revenue back into their networks, compared to service providers in China, Indonesia and the Philippines, according to research from ratings agency Fitch Ratings.