EE Launches LTE, Promising 48 Mbps to 60 Mbps Speeds

EE is launching Long Term Evolution fouth generation service in twelve U.K cities on the 4th of July, 2013, at speeds EE says will at double current LTE speeds offered elsewhere in Europe, typically ranging from 24 Mbps to 30 Mbps.

That implies EE 4G network speeds of between 48 Mbps and 60 Mbps, "faster than mobile networks in the United States and Japan, and equal to the best in South Korea," EE says. 

The faster services, made possible because EE has doubled the amount of spectrum available for the 4G network, will initially be available in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester and Sheffield.

EE got permission from Ofcom, the U.K. regulator, to use some existing 1,8 GHz spectrum for 4G, before other service providers are able to deploy new 2,6 GHz 4G spectrum won in the recent U.K. spectrum auctions. 

Speeds up to 300 Mbps could be possible after EE adds its new 2.6 GHz spectrum.

EE Launches LTE, Promising 48 Mbps to 60 Mbps Speeds

EE is launching Long Term Evolution fouth generation service in twelve U.K cities on the 4th of July, 2013, at speeds EE says will at double current LTE speeds offered elsewhere in Europe, typically ranging from 24 Mbps to 30 Mbps.

That implies EE 4G network speeds of between 48 Mbps and 60 Mbps, "faster than mobile networks in the United States and Japan, and equal to the best in South Korea," EE says. 

The faster services, made possible because EE has doubled the amount of spectrum available for the 4G network, will initially be available in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester and Sheffield.

EE got permission from Ofcom, the U.K. regulator, to use some existing 1,8 GHz spectrum for 4G, before other service providers are able to deploy new 2,6 GHz 4G spectrum won in the recent U.K. spectrum auctions. 

Speeds up to 300 Mbps could be possible after EE adds its new 2.6 GHz spectrum.

Sometimes "Just a Little Bandwidth" is Quite Valuable

Though gigabit networks now have assumed a higher profile on policy and ISP agendas in some markets, the real challenge in many other markets is making "just a little bandwidth" available to billions of people with no Internet access. 

O3b Networks says it has successfully place four new satellites into orbit, part of a fleet of eight satellites to be placed into “medium earth” orbit. That means the satellites will not be “geosynchronous,” or constantly transmitting from a single location above the earth.

And though its marketing emphasizes "fiber" capacity arguments, no satellite fleet can match optical fiber backhaul capacity or access speed.

But that isn't really the point. In many cases, it is the ability to provide what we might call "just a little bandwidth" that is important, especially where people have no Internet access.

The advantage of the MEO approach is latency performance, since the roundtrip distance between earth stations and satellite, and back to earth, is far less than for a geosynchronous satellite. A geosynchronous satellite has 500 millisecond latency. Ob3 says it will have latency of about 150 milliseconds.

When the network is completed, O3b satellites will provide Internet backbone connectivity between 45 degrees north and 45 degrees south latitude, covering roughly 70 per cent of the world's population, especially in the global south.

The current business model calls for sales to distributors rather than end users, so O3b will be a “backhaul” provider.

As with any satellite service, aggregate bandwidth does not indicate what amount of capacity will be available to any single distributor or location. That is partly a matter of buyer desire (how much bandwidth can I afford to buy?) and transponder limits.

As one example, O3b has sold capacity to an ISP in the Democratic Republic of Congo, providing an aggregate 500 Mbps of capacity for the whole nation. What isn’t clear is whether this means 500 Mbps distributed across all potential access points, or 500 Mbps at each of the contracted distribution points.

O3b will provide higher satellite bandwidth than has been available before, and that is a good thing. But the new capability probably will get other people thinking about what else might be possible in the near term and medium term, using satellite and other network platforms.

It is in some real ways as big a challenge to get megabits to places with no access, as it is to get a gigbit to places that only have access to megabits.

Scale Matters

The telecom business no longer is thought of as a natural monopoly, but retains the characteristic of a business where economies of scale matter. Were that not the case, dozens of networks would get funding in the local access business, for example, because the business case would be robust enough to support that level of competition.

In fact, economists and policy analysts at the Phoenix Center for Advanced Legal & Economic Public Policy Studies consistently have argued that the facilities-based access business is so scale intensive that only a few providers in each market can hope to make a business out of local access.

But there now are even more reasons why scale matters in the communications business. In many markets, revenue is flat or declining. Scale means the ability to grow, when organic growth is difficult.

Scale also means the ability to achieve greater economies of operating cost and some advantages in capital cost as well.

Under those conditions, scale is even more important, as it might make the difference between profit and loss, or a bigger profit compared to a smallish level of profits.

But scale also affects a firm’s ability to create or enter new markets, or create new applications. Only a large firm can hope to create an application business with enough users to sustain a good revenue opportunity.

Smallness, in other words, works against the ability to create compelling and profitable applications and services.

Our investment thesis is simple: scale matters," said Tribune CEO Peter Liguori.

Liberty Media Corp. John Malone, likewise says "the whole name of the game in the cable business is scale."

The only issue is how the need for scale will play out in other market segments.

Does Microsoft Make More Money from Android than Google Does?

How does Android help Google? In many ways, it is hard to demonstrate clearly. Google doesn’t charge device makers for using Android, so there is no direct licensing revenue stream.

Ironically, Microsoft gets a royalty on each copy of Android used, and can quantify what it earns from each sale of an Android device.

In fact, Microsoft makes more money, directly, from Android than Google does.

Royalties are the reason. Some estimate Microsoft earns $1 per Android device, from those manufacturers who have decided to pay Microsoft to avoid patent lawsuits. Others peg the costs higher.

If Microsoft earns an average of $8 per Android device, Microsoft would earn $3.4 billion in 2013 from Android device sales, assuming Microsoft gets royalties on half of Android devices sold globally.

By 2017, Microsoft could earn almost $5.9 billion from Android royalties. If Microsoft collected royalties on 75 percent of Android devices sold, by 2017 that could be worth over $8.8 billion.

Device makers don’t have to pay Google to use Android, but the majority are paying Microsoft, which holds patents over multiple technologies used by Android.

Microsoft has licensing deals with almost two dozen Android device makers, including Samsung, HTC, LG, and Amazon, as well as Hon Hai, the parent company of Foxconn and China’s ZTE.

Microsoft has said that 80 percent of Android devices sold in the United States and more than half of Android devices sold worldwide are covered by Microsoft licensing agreements.

But others would argue that Google never has intended to make money directly from the spread of Android.

A more reasonable answer is that Google expects to make money when people buy apps from Google Play, or use Google search or other apps.

But even that argument is true only some of the time. A good case in point is Amazon's version of Android, where Google Play Store is not available, even though Amazon uses a modified (“forked”) version of Android.

So some make the argument that Android’s share will not, in the end, help Google very much.

So why does Google support Android, if it gets no direct benefit? You might say the obvious answer is “advertising,” since Google's primary business is selling advertising.

To the extent that web services are distribution channels for ads, then Android is a distribution channel. Google's primary motivation for incurring the cost of creating and subsidizing Android is to ensure their services always have access to market.

Skeptics might argue that Apple wins, in the end, because Apple’s revenue model aligns application provider and Apple interests, while Android might, or might not, do so.

Some might point to data suggesting Apple users spend more money buying apps, or spend more time using the web and apps.

Flurry data shows that Apple users spend more time interacting with apps than do Android users, for example.

Some would note that Apple's App Store is generating $5.4 million a day in app sales for the top 200 grossing iPhone and iPad apps.

Google Play revenue, on the other hand, has been estimated at $679,000 for the 200 top-grossing apps.

On the other hand, the indirect value of Android for Google’s revenue prospects arguably is large, if hard to calculate directly.

Some argue that Android is important because Android users tend to make more extensive use of Google apps. In part, that is because each of the major operating systems tries to drive usage to ad networks and apps affiliated with the ecosystem.

So Google might be said to rely on the ndroid ecosystem to drive a certain portion of an expected 2016 $12 billion in ad revenue.

"Wireless" Has Changed Since 1990

Spectrum is the necessary foundation for wireless services of all kinds, and over the last several decades, the number of services, and types of services, have multiplied. 

Though some industry professionals will rightly point to scenarios where waveguides (optical fiber, coaxial cable, twisted pair) are better choices, wireless has assumed a dominant role for communications. In 1990, broadcast radio and broadcast TV were arguably the top wireless apps most consumers used.

By the turn of the century, mobile phones had clearly become the major new service consumers were familiar with, and used.

By 2010, Wi-Fi had become a highly-popular and familiar application used by consumers.

What might have changed by 2020 is not yet so clear, but at least expect that new ways of sharing spectrum could emerge by that point, with Internet access likely the main application.

By 2030, it is conceivable that new lead uses or apps might have emerged as well. 

All of that will begin with regulators in many countries making decisions to enable innovative new uses of spectrum. 

EU Roaming Costs Drop Again

As planned, the European Union’s plan to lower the cost of mobile roaming within the EU has set a new stage on July 1, 2013, with additional limits on prices for use of roaming data by about 36 percent.

Data roaming now is as much as 91 percent cheaper in 2013, compared to 2007, the EU says.

The EU also has mandated price caps on voice roaming and text messaging as well. As a result of the wholesale price caps retail price reductions of over 80 percent have happened since 2007.

The new price caps set maximum service provider wholesale rates at new lower levels.

Roaming data charges now are set at 45 cents per megabyte, down 36 percent from 2012 levels.

Placed roaming calls are capped at the wholesale level of 24 cents a minute, a 17 percent reduction from 2012 levels.

Charges for receiving a roaming call call dropped to seven cents a minute, down 12.5 percent compared to 2012.

The cost of sending a roaming text message declines to eight cents, an 11 percent reduction compared to 2012 levels.

Operators are free to offer cheaper rates, and some have already begun to remove roaming premiums altogether for voice and text messaging, or offer a roaming-free area region across one section of Europe or another.

On July 1, 2014, another planned price reduction will happen, dropping roaming data charges to 20 cents per megabyte, while initiated voice calls will decline to 19 cents a minute.

The cost of receiving a roaming call will dip to five cents a minute. The cost of sending a text message will drop to six cents.