More Book Reading on Smart Phones than Tablets, Study Finds

People actually spend more time reading books on their phone overall compared to tablet usage, according to Readmill CEO and cofounder Henrik Berggren. 

Smart phones are dramatically ahead of tablets when it comes to time spent reading books, according to a new study which tracks usage of the one billion smart devices now active in the world.

According to mobile app researcher Flurry, almost 90 percent of time spent reading books on these devices is done using smartphones. 

Amazon is 5X Bigger Than All Other Cloud Vendors Combined

AWS is simply dominant, at the moment, in cloud computing, you might conclude from a Gartner analysis that shows Amazon's AWS is five times bigger, in terms of the utilized compute capacity, of the other 14 cloud providers Gartner looked at. 

Telcos and telco-related entities probably still will be found most often in the infrastructure as a service part of the business. 

Czech 4G Auctions Coming in November 2013

The Czech telecoms regulator has restarted the country’s 4G spectrum auction process, after a halt because of concern about excessive prices. The previous licensing process was cancelled when the bid amounts massively exceeded the reserve prices.

The CTU concluded that if the licensees had to pay such high prices, they would have less capital available to actually build out the networks, and furthermore would be under pressure to keep prices high.

The spectrum auction will begin by mid-November after a previous attempted sale was aborted in March.

As has been the pattern elsewhere, regulators indicate their belief that a minimum of four national suppliers are necessary.

The CTU intends to reserve a large block of spectrum for a potential newcomer to the market, which already includes Telefonica, T-Mobile and Vodafone.

The three incumbents also are worried that the new entrant might be able to acquire spectrum at a discount. But it might be reasonable to assume that the fourth entrant will have a tough time competing against the three incumbents. In most Eastern and Central European markets, the three top providers have substantial market share.

In Hungary, Vodafone, the smallest of the three mobile providers, has 23 percent share. T-Mobile, the leader, has 46 percent. Telenor has 31 percent share.

In Croatia, T-Mobile has a roughly equivalent market share, while VIPnet has almost that much share. The point is simply that the established providers are entrenched. But most mobile markets are concentrated.

Whether, over the long term, that can change is the question. Many would argue the capital intensity and maturation of mobile markets makes the prospects for new disruptors difficult.

OTT Messaging is Not Cannibalizing Text Messaging, Portio Research Says

Trying to figure out how much “damage” Skype and other over the top voice apps have done to international voice is a difficult exercise. Skype gets used where the alternative would have been “no call,” so Skype usage volumes partly represent incremental usage that actually does not cannibalize existing revenue.

On the other hand, there also are instances where Skype or other over the top apps will be used as a substitute for a long distance call using the public network.

The same sort of issue applies to messaging apps displacing text messaging. Some over the top messaging is activity that would not have happened were text messaging the only alternative.

And some OTT messaging gets used in place of text messaging.

Also, as typically is the case for Internet apps, usage is not the same thing as revenue.

“During 2012 and 2013 we have seen many reports that operators are losing $20 billion to $30 billion in SMS revenue to OTT messaging apps,” said Karl Whitfield, a Director at Portio Research. “We see reports that OTT traffic will be double that of SMS by the end of 2013. This is wrong on both counts.”

It may be true that SMS revenues are levelling off and that OTT is on the rise, but SMS is still generating revenues of $15.3 million per hour, 24/7, that’s a massive $133.8 billion in 2013, Whitfield says.

Over the top apps generate about $3 million an hour, by way of comparison.

Worldwide SMS revenue has gone up year after year since the early 1990s and will continue to be above 2010 levels until 2017, Whitfield said.

In fact, in some markets, SMS and OTT apps are coexisting, serving end users in different ways.

There is a huge uptake of OTT messaging in Japan, particularly with local player LINE, yet the SMS market remains healthy and stable, he says.

The same goes for South Korea, where KakaoTalk is enjoying huge success; here again the SMS market remains stable and is not declining as many predicted.

Where SMS has seen a decline, in markets such as Spain and Greece, there has been an overall fall in subscribers and revenues at the same time.

“Our research into mobile messaging completely contradicts what some other industry observers are saying,” said Whitfield.

 

Karl Whitfield

                                                                                                                                                                                                                                                                                                    

Global OTT and P2P Messaging Traffic (Billions)

	2010	2011	2012	2013F	2014F	2015F	2016F	2017F
P2P SMS	5,812	6,546	6,623	6,687	6,654	6,522	6,304	5,931
OTT Messaging	1,494	3,840	6,774	10,452	14,970	20,437	26,359	32,141

source: Portio Research

Will You Save Money Buying Future Online TV?

Even though everybody sort of assumes that in some future time, when consumers can buy video content channel by channel, if not program by program, most consumers will save money. That might not be the case.

Bandwidth consumption that today is bundled into the cost of the entertainment video subscription will become disaggregated. Users will pay separately for Internet access and content. And that might mean users pay more for Internet access, as well as more for their content.

Assume a one-hour TV show streamed to a TV requires 1GB at standard definition, and 2 GB, for an hour of HDTV. Assume you are a typical users and consume five hours of video a day. Assume half your consumption if HDTV and half is standard definition.

That implies 75 hours of standard definition TV consumed per person, per month. At 1 GB per hour, that’s 75 GB of data. The 75 hours of HDTV represent 150 GB of data consumption, for a total of about 225 GB of data consumption a month, for linear entertainment television.

For those of you who believe you could save money someday by buying only the channels you want online, and assuming there is only one person in your household, the cost of watching TV would include the cost of your bandwidth and the cost of your subscription or subscriptions.

That might not be an issue for a single-person household with a monthly usage allowance of 300 GB. Assume the monthly cost is about $70 for such a plan.

The math gets trickier for multiple-person households, especially if many users are watching different programs. But assume 300 GB will do.

Assume a household now pays $120 a month for Internet access and video entertainment service.

Assume the TV service is dropped, in favor of buying online alternatives. If there was a bundled plan discount, and that is lost, assume the household pays $75 a month for Internet access (300 GB), and then buys five channels costing $12 each. That implies $60 for the five channels, plus $75 for the access, for a total of $135 a month.

Surprise, surprise. You wind up paying more than you used for, for just five channels of video and Internet access.

The economics become worse as you add more channels, or if multiple users or higher viewing mean you need to buy more bandwidth, at about $10 per gigabyte.

Bundles Lift Revenue per Customer, Drive Revenue Growth, Reduce Churn, Even in Tough Markets

Portugal Telecom provides instructive guidance on the importance for fixed network service providers of triple play packages and video services, even in markets with negative growth of voice services and tough economic conditions a a backdrop.

In the second quarter of 2013, overall revenue fell 5.5 percent. But in Portugal, broadband access revenues grew 8.5 percent. Video entertainment revenues grew 9.8 percent. Uptake of triple-play bundles grew 16.7 percent and fiber to home revenues grew 25 percent.

Without those revenue contributions, results would have been far worse. Also, bundles reduce customer churn and raise average revenue per unit because consumers are buying more than one product.

Despite Earlier Denials, Apple Will Ship a Low-Cost iPhone in September 2013

Apple used to deny categorically that it would sell a low-end iPhone. Then the stance softened in public to something like "we'd never sell a product that sucked." 

Some observers thought that "we'll never sell a low-cost iPhone" stancewas destined to prove wrong, if only because of the need to compete in emerging markets where the historic price of an iPhone is a prohibitive barrier to adoption.

And some would have pointed to Apple's own history of selling iPods in multiple price ranges and models as a precedent. 

But it now appears Apple will indeed ship a low-cost iPhone in September 2013. Many financial analysts have worried about that particular event, since it has direct implications for Apple iPhone average selling prices. 

Some worry that the lower end device could cannibalize sales of the standard models. But a lower cost iPhone is a risk Apple simply has to take, unless it wants to watch other smart phone suppliers dominate emerging markets. 

Morgan Stanley's Katy Huberty thinks the lower-cost device, tentatively dubbed the iPhone 5C, will add 13 points of market share for Apple in China.