5 Billion Mobile Phone Users in 2017

In 2017, 5.1 billion people around the world will be mobile phone users. Asia, the region that will see the most growth, is already home to the most mobile phone users. Some 2.4 billion people in Asia use mobile phones, growing to 2.9 billion by 2017.

There's almost no surprise, in that regard. "Everybody" will use mobiles. 

Internet of Things Forecasts Vary by an Order of Magnitude

The Internet of Things (sometimes known as machine-to-machine communications) will represent technology and services revenues of $4.8 trillion in 2012 and $8.9 trillion by 2020, growing at a compound annual rate of 7.9 percent, globally, according to IDC.

IDC expects the installed base of the Internet of Things will include 212 billion "things" globally by the end of 2020.

Others think that figure is wildly inflated, and might suggest 50 billion connected devices, including PCs, smart phones and tablets, might be connected by 2020. That is the problem with such forecasts, which mix machine to machine (sensor apps) instances with devices people use (PCs, smart phones, tablets, game players).

Simply conflating consumer devices using the Internet with machines using the Internet confuses the issue. For one thing, service provider revenues are likely to be quite distinct when providing communication and other services to humans, and when providing enterprise customers with support for their sensor devices and networks.

The IDC forecast includes 30.1 billion "connected (autonomous) things" in 2020, consisting of sensors for intelligent systems that collect data.

With the caveat that many analysts and observers consider mobile Internet connections for tablets to be “machine to machine” connections, or part of the “Internet of Things” revenue segment, there is a reason “connected car” and M2M services appeal to mobile service provider entities, namely the sales model.

As is the case for communications service sales to large multinational enterprises, compared to consumers, the size of opportunities, and sales process, arguably are “easier” when selling solutions to business partners (enterprises) who then package services for actual sale to end users.

In other words, M2M and connected car sales are more akin to wholesale operations than retail operations, and more like enterprise sales efforts than retail sales.

Where enterprise sales can efficiently be conducted using in-house sales forces, consumer sales normally are handled by channel partners and retail operations. In the former case, a relatively small number of prospects exist. In the latter case, many millions of prospects exist, and cannot be marketed in the same way as an enterprise or wholesale account.

In other words, the potential revenue return from providing connected car services directly to General Motors outweighs the revenue return from selling connected car services to individual end users, one at a time.

More than 20 percent of vehicles sold worldwide in 2015 will include embedded connectivity solutions, the GSM Association suggests.

More than 50 percent of vehicles sold globally in 2015 will be connected, while every new car sold will be connected in multiple ways by 2025, a study conducted for GSMA now suggests.

Connected car services will constitute a €24.5 billion revenue stream, based only on in-vehicle services, such as traffic information, call center support and web-based entertainment (up from €9.3 billion in 2012).

Perhaps €4.1 billion will be earned providing connectivity, such as mobile data traffic (up from €814 million in 2012).

The study by SBD predicts 10 million cars sold in 2018 will be fitted with tethered solutions (nine percent penetration), up from 2.6 million cars in 2012.

In revenue terms, embedded systems are likely to dominate the sector over the next

five years. They will account for almost 83 percent of the revenues generated by connected cars in 2018. Tethered systems are set to generate 10 percent of the revenues and smart phone integration systems the remaining seven percent of revenue.

Target Launches Own Branded Mobile Service "Brightspot"

Target is becoming a mobile service provider, launching “brightspot,” a prepaid service,  joining Walmart with its Straight Talk prepaid service.

Target will sell two plans: a $50 plan with unlimited voice and text messaging and 1 GB of data on T-Mobile US networks, and a $35 unlimited talk and text plan with no data.

It isn’t clear whether brightspot will include access to the new T-Mobile US Long Term Evolution network.

Target Launches Own Branded Mobile Service "Brightspot"

Target is becoming a mobile service provider, launching “brightspot,” a prepaid service,  joining Walmart with its Straight Talk prepaid service.

Target will sell two plans: a $50 plan with unlimited voice and text messaging and 1 GB of data on T-Mobile US networks, and a $35 unlimited talk and text plan with no data.

It isn’t clear whether brightspot will include access to the new T-Mobile US Long Term Evolution network.

KPN Votes to Sell E-Plus to Telefonica

KPN shareholders approved the 8.55 billion-euro ($11.6 billion) sale of the phone company’s German business E-Plus to Telefonica, immediately creating Germany’s largest wireless carrier, measured by number of customers.

E-Plus and Telefonica’s O2 would have a customer base of 43.8 million, surpassing Vodafone’s 32.2 million and Deutsche Telekom’s 37.5 million customers in Germany.

Regulatory approval still is required and will be an early test of regulator willingness to allow further concentration of mobile and fixed network firms within each European Union country, if not cross-border consolidation on a bigger level, immediately.

Among the signs observers will be watching for is regulator willingness to allow the number of mobile service providers in each country to drop from four to three, as many regulatory authorities have been insisting that a minimum of four providers is required to sustain vigorous competition and innovation.

It probably goes without saying that many investors would prefer three, not four providers, in each national market.

Amazon Denies Phone Reports, Keeps Working on Them

Amazon keeps denying it has any interest in producing a smart phone, and yet rumors persist that it is indeed working on potential devices. 

Most assume Amazon would have interest primarily in creating a device that is commerce oriented, as Google has interests in information-related devices, Facebook in social networking or Apple benefits from content-capable devices. 

So TechCrunch suggests Amazon is working on a multi-camera device that would enable three-dimensional features that would obviously provide a better visualization of products. 

Other technologies said to be under development are image recognition features that would allow a user to take a picture of an object and then find that object, or similar objects for sale on Amazon. 

FreedomPop "Free" Mobile Phone Service Relies on Freemium Revenue Model

FreedomPop now has added a "no incremental cost" mobile phone service to the Internet access plans it originally launched. The base service includes 500MB of data, 500 text messages, and 200 voice minutes, for no cost, after purchase of a compliant HTC Evo smart phone. 

FreedomPop plans to add other devices, eventually. 

There are, of course, some novel elements here, beyond the Freemium revenue model. FreedomPop says 45 percent of subscribers regularly pay for an additional feature or service plan, and the company is hoping to see that figure inch closer to 55 percent for its phone service.

The service also relies exclusively on use of the Sprint WiMAX data network. FreedomPop does not buy any wholesale "voice network" service, and therefore is a "data only" approach to mobile communications. 

That raises the issue of whether other service providers (especially those with an over the top approach) might try to do so as well. 

Of course, at some point all the leading U.S. mobile service providers will provide voice, messaging and data services using only the Long Term Evolution network, rather than using a hybrid approach, where voice is provided by a 3G network and all IP services use the data connection. 

But the "data channel only" approach is one reason FreedomPop is able to give away a base service, while building its revenue model on selling incremental services to users of its free basic service. 

For Sprint, the use of WiMAX to support mobile virtual network operator partners allows Sprint to make better use of a legacy network that does not represent the future of the business. 

The new FreedomPop offer represents the first direct challenge to mobile service provider retail packaging. But the FreedomPop initiative also represents a test of whether a small upstart can successfully achieve a major market disruption. 

Some might argue that disruption of the mobile business, so far, has required the intervention of a large, well-heeled ecosystem player, such as Apple. In the fixed network business, some would argue it has taken the entry of Google Fiber to challenge the fixed network high speed access value and price packaging.

So some will be watching to see whether FreedomPop can make significant inroads without an eventual entry by some other contestant with huge scale and deep pockets.