Is T-Mobile US success boosting its subscriber numbers between the second quarter of 2013 and the end of the third quarter of 2013 evidence of success with its "Uncarrier" marketing, bring your own device policies and "no contract" plans, or the right to sell the Apple iPhone?
Some might argue it was the the Apple iPhone, which T-Mobile US began selling in 2013, which accounts for the subscriber gains.
Not the sharp uptick between the end of the first quarter of 2013 and the end of the second quarter of 2013.
Some likewise would say it was the exclusive right SoftBank had for a time to sell the Apple iPhone, starting in 2010, that likewise fueled SoftBank's rapid gain in market share .
More recently, NTT Docomo blamed a quarterly subscriber loss on limited inventory of Apple iPhones.
The answer might matter.
Perhaps the ability to sell the iPhone is what affected subscriber gains, not "no contract" plans or device installment plans. Perhaps it was the perception of "lower price" that mattered.
That's the problem when attributing gains to one policy, when several changed at once.
Friday, December 13, 2013
What Drives "UnCarrier" Success?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Thursday, December 12, 2013
Is Utopia in Utah a Potential Investment Target for Google?
Is Google Fiber, now the owner of Provo, Utah’s municipal fiber access network, about to buy or invest in Utopia, the other municipal-owned fiber access network in Utah?
It appears that is at least possible, as officials from the 11 municipal investors in Utopia recently have signed nondisclosure agreements with Utopia, in advance of revealing talks with a new investor said to be an “Internet giant.”
To be sure, talks might be possible with any number of “Internet giants,” Google Fiber likely is the logical potential entity interested in investing.
Utopia is a financially-challenged supplier of open access gigabit fiber to the home networks in Brigham City, Centerville, Layton, Lindon, Midvale, Murray, Orem, Payson, Tremonton
and West Valley City, Utah.
Utopia operates a wholesale network used by Beehive Broadband, Brigham-net, Dish Network, Fibernet, InfoWest, SumoFiber, Veracity Networks, Webwave and XMission.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
How Important is Ownership of Mobile Access Assets?
Bharti Airtel, India's largest telecom company by market capitalization and revenues, has entered into an infrastructure sharing deal with the telecom arm of Reliance Industries.
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The deal will give Reliance Jio pan-India access to Bharti's nationwide tower and radio infrastructure while giving Bharti access to the optical fiber backhaul capacity created by Jio in the future.
In April of 2013, the two fierce competitors had signed an agreement under which Bharti provided capacity on its i2i submarine cable to Reliance Jio.
The companies said the deal preserves capital and avoids duplication of investment. Bharti will gain lease revenue while Reliance Jio gets to market faster.
Also, Reliance is building a fiber backhaul network at a time when Bharti has only about 10 percent of its tower locations connected by optical fiber.
It has been clear for some time that ownership of mobile cell sites is not necessarily “strategic” for a mobile service provider. Carriers often lease space on towers owned by third parties, sharing those sites with rivals.
In India and some markets in Africa, mobile service providers have agreed to share the cost of tower facilities. Some service providers outsource actual operations of their radio networks as well.
So it isn’t unusual anymore for a group of mobile operators to agree they will share tower site passive elements.
In another such example, mobile carriers Cellcom Israel Ltd., Pelephone Communications Ltd., and Golan Telecom Ltd. have agreed to build and operate a shared Long Term Evolution fourth generation radio network.
Cellcom and Pelephone also signed an agreement for the sharing of passive elements of cell sites for existing networks and an Indefeasible Right of Use (IRU) agreement with Golan Telecom for Cellcom's 2G and 3G networks.
The infrastructure sharing also might save Cellcom and Partner Communications as much as $57 million a year, according to an estimate of the brokerage unit of Ramat-Gan, Israel-based Excellence Nessuah Investment House.
What might be more unusual is cooperation in obtaining spectrum for the 4G network. Though the language is open to interpretation, and the sharing deals might require regulatory approval, it also appears the consortium will attempt to acquire common 4G spectrum as well.
That would be unprecedented, if it happens.
So the longer term issue is what else some mobile service providers might in the future decide is “strategic,” and must be owned, and what is increasingly tactical, and can be shared or outsourced.
Granted, spectrum is essential for a mobile operator. But it is not clear sole ownership of such spectrum is necessary. Under some conditions, mobile service providers might be better off reducing investment risk by jointly securing necessary spectrum.
That would a historically rather unprecedented development, but is possibly no different, in principle, from the practice of sharing backhaul, towers or radio infrastructure, or outsourcing the network operations and maintenance.
But such moves also would illustrate that the “unique core competence” for a mobile service provider might not necessarily lie in the actual full ownership of access assets, including spectrum.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
The New Demand for Asymmetrical Networks
Oddly enough, though communication networks traditionally have been designed to support symmetrical bandwidth, and though fixed network access providers have tried to increase the return bandwidth performance of their networks, Sprint sees advantages in using an air interface (time division duplex) that can be configured asymmetrically.
Sprint CEO Dan Hesse noted that TDD allows a service provider to allocate maybe three or four times as much bandwidth to the downlink, compared to the uplink. As communication networks become dominated by entertainment content, that makes a big difference, as traffic flows start to look like functional content delivery networks (TV, radio, cable TV, satellite, web browsing).
Though communication networks still require symmetry of bandwidth, the huge proportion of bandwidth demand, not and in the future, will come from content delivery.
And though the outcome of 600 MHz auctions will not be known for some years, if Sprint only keeps pace with its major competitors (AT&T, Verizon, T-Mobile US), it will continue to own much more spectrum than any other mobile service provider.
Sprint says it will be able to support downstream speeds of perhaps 150 to 180 megabits per second at some point, by deploying its spectrum assets across three distinct bands, including spectrum reclaimed from the older 2G and 3G networks.
Sprint’s “Network Vision” project represents “a complete rip and replace of the entire network, all the 3G equipment coming out, every base station, all the backhaul, every switch, and in almost all cases the vendors changed as well,” according to Sprint CEO Dan Hesse, speaking at the UBS global media conference.
The scale of the network transformation project is something Hesse argues no other mobile carrier ever has attempted before, on this scale. But the upside for Sprint is clear enough.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
One Way Google Fiber Has Changed Regulator Thinking
Google Fiber has, in one respect, changed the way service providers and regulators look at deployment of local access networks.
Traditionally, telecom and cable TV regulators have expected and demanded full coverage of all homes in a service territory.
What is different now is that regulators have embraced the notion that high-performance networks get deployed faster when they can be “spot deployed” in some neighborhoods first, with no regard for end user demand.
And Internet service providers increasingly are timing their new builds on a “fiberhood” basis, responding to demand from residents.
And some would say that is why AT&T thinks the economics of gigabit networks look better.
The business case, where demand for gigabit services can be proven, “is really strong,” according to AT&T, and not a case of “experimenting.”
Instead, AT&T now believes it can deploy ubiquitous networks offering 45 Mbps, for example, and then spot build gigabit access on top of that, but only in neighborhoods where demand is high enough to warrant the extra investment.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Installment Plans are Similar to "Device Subsidies;" Service Provider Operating Income Impact is Quite Different
One might argue there is little difference between mobile device subsidies and offering consumer financing plans. That is likely more true from a consumer perspective than from a service provider perspective.
Whether a consumer buys a device on an installment plan, or has the subsidy embedded in the recurring cost of service arguably is a matter of indifference, if the installment charge and the embedding of that cost is recovered over the term of a two-year contract.
But the difference could matter significantly for a service provider. Since few consumers willingly will pay outright for a $600 smartphone, it was necessary for service providers to lower the adoption barrier by bundling the device and the service.
"When you're growing the business initially, you have to do aggressive device subsidies to get people on the network," Randall Stephenson, AT&T CEO, has said. At 90 percent or higher adoption, the economics arguably change.
In the subsidized device model, the carrier actually buys the phone, not the end user, and then the service provider recovers the cost over the length of the contract. But that has a financial impact, hitting earnings.
In principle, if the customer buys the phone, but the carrier offers an installment plan, the device purchase no longer is carried on the mobile service provider’s books, but can be recorded as a device sale.
Reducing the earnings drag devices represent will become more pressing when data revenue growth tied to smartphone adoption reaches saturation.
It isn’t the first time mobile service providers have had to deal with saturation. Similar concerns about the next wave of revenue generation happened when feature phone penetration got to about the 70 percent or 80 percent range, and revenues from basic subscriptions and then text messaging began to slow.
Internet access revenues associated with smartphones supplied the revenue answer. But as that revenue source slows, in terms of growth, operating costs become more crucial. So changing device inventory costs becomes important.
If device costs can be contained, if average data consumption by each smartphone user continues to grow year-over-year at a 50 pace, if most people using phones use smartphones and if mobile service providers can benefit from consumption-based usage plans, the revenue growth issue takes care of itself.
The other issue is that as 4G becomes the network for postpaid users, and as users migrate off 3G to 4G networks, the 3G network becomes the platform for prepaid and value users, in a way that preserves a product distinction between postpaid and prepaid products.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
The Song that Eventually was Released by the Rolling Stones as "Street Fighting Man." Just for 3 Minutes Relaxation
For those of you who remember 1968 in London, Paris or Chicago, this is the song that eventually become the Rolling Stones hit "Street Fighting Man."
It still rocks!
It still rocks!
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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