Verizon FiOS Goes Symmetrical: No Extra Cost

Though some will complain, Verizon is making an important change to its FiOS service, namely making all services, at all speeds, symmetrical, at no extra cost.

The expected complaints will take the form of "it's still not good enough."

But that's unfair. It's an important and useful improvement.

Verizon, which is seeing much higher take rates for faster access services, also seems to believe symmetrical bandwidth now is increasingly important to a growing percentage of customers.

Verizon now says 40 percent of FiOS Internet customers buy services at 50 Mbps or faster.

Verizon says it will "transition qualifying current residential customers to higher upload speeds for free throughout the coming months."

Existing and new FiOS small-business customers also will receive this upgrade later in the year.

The level of upload activity on the FiOS network is expected to double by late 2016 and to continue to grow from there, according to Verizon's projections.

Will Voice Drop to Third Among Top Telco Revenue Sources?

Virtually nobody would be surprised if told mobile data revenue will exceed voice revenue by 2018. Many might be surprised if told that will be the case globally.

In 2012, Japan became the first country where data revenues exceeded voice revenues. That happened in 2013 in Argentina.

In the United States, mobile data revenue surpassed voice revenue in the first quarter of 2014.  

That likely will happen in the United Kingdom in 2014 as well.

Nor would many observers be shocked if told that many fixed networks providers likewise earn more money from Internet access than from voice services.

Right now, AT&T earns $33.6 billion annually from its “data” category, which includes all U-verse video revenues.

Voice services generate about $20.3 billion annually.

What might be more surprising, though, is that video might even surpass voice revenue, at least for some firms. AT&T provides a case in point. But European telcos including Vodafone and Telefonica are themselves growing the percentage of video revenue in their portfolios.

Assume video accounts generate $960 annually ($80 a month per video account), and that AT&T has 5.5 million such accounts. That implies annual revenue of about $5.3 billion in video revenue.

But DirecTV alone earned $31.8 billion in 2013.

In other words, should AT&T succeed in its bid for DirecTV, video entertainment would possibly reach $37.1 billion, eclipsing even data services--at about $28.3 billion in annual revenue--as drivers of AT&T fixed network segment revenues.

After a DirecTV acquisition, voice would be only the trailing third most important revenue source for the fixed network segment.

Of $89.7 billion in total revenues, voice would represent 22 percent of fixed segment revenues.

Video would represent 41 percent of total fixed network revenues. Internet access and other data services would represent 32 percent of total fixed network revenues.

The picture at Verizon might be different. Verizon had $30.8 billion in first quarter 2014 revenue. About $18 billion was generated by mobile services, and though

About half of Verizon’s fixed network segment revenue comes from enterprise or wholesale sources.

So $17.3 billion is earned from “mass markets,” including small business. Removing small business accounts, the consumer business generates about $14.7 billion annually.

Verizon has about 5.3 million FiOS video customers. Assuming the same $80 a month contribution from a video account, Verizon might earn $960 per account, or about $5.1 billion from video services.

So video would represent about 35 percent of consumer segment revenue.

Assuming only $480 in annual revenues from Internet access, Verizon might generate about $4.3 billion from consumer Internet access, or 29 percent of consumer fixed network revenues. Voice might contribute about 36 percent of total fixed network revenues earned from consumers.

So, at Verizon, video entertainment and voice might be about equal contributors of revenue, while Internet access provides less revenue, in the consumer segment.

But keep in mind that the whole consumer segment is only half of fixed network revenue. Overall, voice and data revenues are much more significant at Verizon, than at AT&T.

It is a sign of how much has changed in the telecom business that voice might soon be the third largest revenue contributor, not the biggest.

When 80% of Work Can be Done on a Tablet

The new collaboration between IBM and Apple, and Microsoft's new announced strategy to focus on productivity naturally raises the question of how often someone at work could do all, or the vast bulk of all that work using only a tablet or a smartphone. 



IBM, Accenture, Salesforce.com and Worday are among enterprise technology suppliers working to help big firms create mobile apps that complement or replace PC programs. 



The success of such programs in many cases will depend on the type of work tasks conducted by people.



One might argue that a CEO could, as Apple CEO Tim Cook claims, do 80 percent of all his work on an iPad. In part, that is because most of what CEOs at large firms do is communicate with people and review content. They rarely have to create such content, which might require a PC.



Conversely, field service and sales forces also likely can use tablets and smartphones to conduct most of their computing-related or app-related work. Some customer service reps might also be able to do so.



Many sales professionals in the field likewise might be able to do so. 



Though some say tablets will be used, more frequently, to create content, not simply interact with it, at the moment it remains the case that jobs where existing content needs to be retrieved or viewed, with simple transactional operations, are best suited to replacement of PCs with tablets or smartphones. 



That especially is true for "in the field" apps and operations. 

Will Myanmar Mobile Penetration Grow from 10% to 50% in 4 Years?

Mobile penetration in Myanmar has roughly doubled in about a year, after the awarding of new mobile licenses, according to government sources.

Noting that in Thailand and Vietnam mobile adoption rates grew from 10 perent to 50 perent in about three to four years, Myanmar possibly can get there in a year, a government official says.

According to International Telecommunications Union data, mobile penetration in mobile penetration in Africa hit an inflection point at five percent. Roughly five years later, adoption reached about 35 percent. 

That is a relatively normal adoption curve. According to Market Intelligence Center, developing nation mobile penetration rates grew from about 10 percent to 45 percent in about five years.

Content Business Now is "in Play"

When does a rejected acquisition bid nevertheless have consequences? When a big rejected bid means a target company is “in play.” So it is with the rejected $80 billion bid by 21st Century Fox to buy Time Warner.

Despite the rejection, other potential bidders now will have to evaluate whether their own bids to acquire Time Warner might now be on the agenda.

But one might also argue that lots of companies could likewise be candidates for acquisition, using the same deal logic that drove the 21st Century Fox bid for Time Warner.

If Time Warner is seen to be worth $80 billion, what other assets could be acquired for less?

Disney is big enough it is unlikely to be an acquisition candidate. But it could be a buyer.

Other content firms are more likely targets than buyers. Viacom’s market capitalization  is around $36 billion, while CBS has a market cap of about $34 billion.

And though the list of potential bidders would include other big media concerns, it sometimes happens that friendly overtures, if rebuffed, develop into hostile takeovers. So 21st Century Fox might craft another offer.

Time Warner might not be the only major content firm that gets acquired.

LTE the Big Winner for Connected Car?

Not every machine-to-machine or "Internet of Things" requires lots of bandwidth, or continual connection. But the connected car market likely includes a wide enough range of app requirements that Long Term Evolution, the highest-capacity mobile network, will lead growth.

“LTE will be the fastest-growing cellular technology in cars, expanding 135 percent annually between 2014 and 2018,” says Godfrey Chua, directing analyst for M2M and The Internet of Things at Infonetics Research. “A major boon will come from AT&T’s agreement with GM to deploy LTE for the OnStar service.”

Some service providers are seeing as much as 90 percent of their machine-to-machine (M2M) revenue generated from the connected car segment, Chua notes, and much of that opportuntity is, at present, centered in the United States.

North America accounted for 37 percent of global connected car service revenue in 2013.

Infonetics also expects revenue derived by service providers for the connectivity and other basic value-added services they provide to the automotive, transport, and logistics segment to more than triple from 2013 to 2018, to $16.9 billion worldwide.

The connected car services market additionally is growing at a compound annual growth rate of 25 percent, nearly 21 times the growth rate expected for traditional mobile voice and data services between 2013 and 2018.

Whatever one believes about the size of the connected car market, and how big revenue opportunities might be for app providers, automakers and connectivity providers, it is clear that not every “Internet of Things” application and market segment has the same requirements for bandwidth.

Energy meters, for example, generally do not require persistent connections, and feature small uploads quite reasonably handled by 2G networks.

Video surveillance apps, on the other hand, generally require higher bandwidth.

Bandwidth required to support connected car apps will vary. Some diagnostic apps might well only require episodic, bursty, low-bandwidth connectivity. In-vehicle content apps, on the other hand, might well be required to support video, which means Long Term Evolution 4G is almost mandatory.

Real-time navigation apps might do fine with 3G access. Over time, of course, 2G networks will be phased out of service, so all apps ultimately will be available only on 3G or 4G networks.

For the moment, though, the differential app requirements mean “just about any communications service provider, whether they have 2G, 3G, 4G, LTE or a combination of technologies, can find a niche in the connected car space,” says Godfrey Chua,

Of course, since lower-bandwidth apps easily are handled by higher-bandwidth networks, LTE is likely to be a big winner.

Thailand 4G Auction Postponement Could Affect Mobile Market Share

Communications spectrum, politics, money, market share and firm fortunes almost always are intimately connected. In Thailand, for example, a delay in holding of fourth generation network spectrum auctions might help the smallest service provider, and harm the biggest provider.

Advanced Info Service, for example, is the biggest mobile company, in terms of subscribers, but has the least amount of spectrum. True, the smallest of the three national carriers, recently got an investment from China Mobile, and the spectrum auction delay could slow AIS growth.

Planned fourth generation mobile network spectrum auctions originally planned for August 2014 have been postponed.

The planned auctions for 25 MHz in the 1.8 GHz spectrum band was due to be held in August 2014, with another 17.5 MHz in the 900 MHz band also expected to be awarded sometime later in 2014.

Some have suggested the auction delay could help one contestant, True, and limit gains by AIS, an expected bidder. So China Mobile gain,s while Telenor might lose, given the potential impact on their Thailand partners.

AIS, the largest service provider in terms of subscribers, does not have any present rights to any 4G spectrum. So spectrum scarcity could slow growth, as AIS could find it does not have enough capacity to provide reasonable levels of service to its customers, a problem other mobile service providers have, from time to time, also encountered.