Telecom "Structural Decline" is Spreading

“Structural decline” of the market is not a phrase the provider of any good or service wants to hear.

Nevertheless, that is precisely what has happened in a number of segments of the communications business, including  long distance voice, business and consumer voice overall, mobile voice and mobile texting.

Now we can add linear video subscriptions to the list. The Cabletelevision Advertising Bureau estimates that about 40 percent of third and fourth quarter TV ratings declines can be attributed to over the top  subscription online video services.

Total TV viewing fell about 10 percent in the third quarter and about nine percent in the fourth quarter, according to an analysis of Nielsen data by Sanford C. Bernstein.

In the first quarter of 2015, so far, TV viewing appears to be down about 12 percent, according to Bernstein estimates.

“We believe the U.S. television industry is entering a period of prolonged structural decline, caused by a migration of viewers from ad-supported platforms to non-ad-supported, or less-ad-supported platforms,” wrote Bernstein analyst Todd Juenger.

The only “legacy” business that has not yet reached saturation, and begun to decline, is high speed Internet access. And some would argue that is because it is a “new” product line.

But high speed access will eventually become saturated as did the earlier products lines. That is why the search for big new revenue streams is so important, and why some believe industry regulation should aim to foster growth, not damp it down.

US Telecom Filed Lawsuit Challenging Net Neutrality Rules

The first of several lawsuits challenging the new Federal Communications Commission network neutrality rules has been filed, this one by the USTelecom, the trade group representing U.S. telcos. 

Broadcasters, TV White Spaces Supporters Disagree About Database "Problems"

Any database-driven approach to spectrum sharing will hinge on the accuracy of the databases, it goes without saying. Citing errors in the databases, the U.S. National Association of Broadcasters has asked for an immediate halt to TV white spaces operations in the United States.

The Wireless Innovation Alliance, which supports TV white spaces deployment, counters that NAB provided no evidence of interference, no evidence that any FCC requirement is not being met, and no instance of any harm to a broadcaster from the data-entry rules and processes it criticizes.

NAB alleges there is evidence of “false entries.”

“The current database design allows--and may encourage--users of TV white space devices (also known as TV Band Devices or TVBDs) to falsify information they are required to enter into the database when they register certain fixed and mobile devices,” NAB argues. “This information includes, among other things, the location information upon which the Commission premised the entire concept for spectrum sharing in the TV band.”

NAB says it has conducted multiple analyses of the TVWS database in 2014, and, that at various points, more than a third of the devices in the database contained “patently inaccurate” location information.

The Wireless Innovation Alliance counters that test entries are a necessary part of the verification process.

The "discrepancies" between location and address are not indications of a messy database, the Wireless Innovation Alliance says.  

The database contains two entries for each device: Its actual location and a contact record for the operator of the device.

The “location” is where the device is; the “address” could be where the responsible company can be contacted.

The skirmishing is not terribly unusual. Struggles over allocation of spectrum often pit broadcasters against communications interests or satellite interests against mobile interests.

Bharti Airtel Joins Amazon Web Services Direct Connect

It’s good to be “on network,” rather than “off network.”

Bharti Airtel has joined the AWS Partner Network (APN) and will deliver private network solutions for enterprise customers across the globe using Amazon Web Services (AWS).

This will help Airtel’s enterprise customers across the globe establish a dedicated network connection between customers’ premises and Amazon’s data centers.

That in turn, will help  reduce network costs, increase bandwidth throughput, and experience a more consistent network connectivity experience.

AWS Direct Connect will allow Airtel enterprise customers to establish a dedicated network connection between their network and one of the AWS Direct Connect locations.

Using industry standard 802.1q VLANs – any dedicated connection can be partitioned into multiple virtual interfaces, allowing customers to use the same connection to access public resources such as objects stored in Amazon Simple Storage Service (Amazon S3) using public IP address space, and private resources, such as Amazon Elastic Compute Cloud (Amazon EC2) instances running within an Amazon Virtual Private Cloud (Amazon VPC) using private IP space.

Airtel customers will benefit from AWS Direct Connect in a number of ways.

By transferring data to and from AWS directly, customers can reduce their bandwidth commitments, and save money. All data transferred over the dedicated connection is charged at the reduced AWS Direct Connect data transfer rate rather than Internet data transfer rates.

Bandwidth on demand will be easier, as AWS Direct Connect provides 1 Gbps and 10 Gbps connections, while customers can easily provision multiple connections.

Management also is easier, as customers use the AWS Management Console, providing a single view to efficiently manage all connections and virtual interfaces.

"Data Center to Data Center" Traffic is Growing Faster Than "Intra-Center" or "Data Center to End User" Traffic

Once upon a time, global wide area network traffic was relatively limited, and mostly represented connections between tandem switch and central office switch locations.

These days, traffic tends to be dominated by server-to-server traffic, within data centers, between data centers and then from data centers to end users.

A recent Bell Labs study forecasts total metro traffic will increase 560 percent by 2017, largely driven by IP video and the increasing adoption of cloud and data center services and applications.

According to the study, metro video traffic (including subscription TV and Internet video) will increase 720 percent by about 2017.

Metro cloud and data center traffic will increase 440 percent by 2017, the study predicts.

As the demand for video content increases, video caching is now being implemented within metro networks, moving content caching deeper into the network.

As a direct consequence, traffic between data centers in metro areas will grow, keeping much traffic off the backbone networks. That’s a significant change.

On the other hand, a growing percentage of traffic also will be moving between data centers.

Traffic between data centers is growing faster than either traffic to end-users or traffic within the data center, and by 2018,  traffic between data centers will account for almost nine percent of total data center traffic, up from nearly seven percent at the end of 2013, according to Cisco.

Until recently, metro traffic had a “north-south” flow from a content source to the end user with content sources typically located at a national central location and delivered over the wide area backbone network.

But there is a change coming, Alcatel-Lucent says. The north-south flows increasingly will be replaced by “east-west traffic  flows for traffic flows from data center to data center, increasingly located within metro centers.

There are revenue implications for providers of high-capacity metro networks and long haul bandwidth providers alike.

How Much Enterprise Spending Could be Shifted to Cloud Alternatives?

If a traditional enterprise data center represents about 23 percent of the whole information technology budget, and data communications represents about nine percent of total budget, you can see where the potential for spending shifts lies: substituting cloud computing for owned data center operations.

Enterprises can shift data center costs in the direction of cloud facilities and bandwidth. Presumably some other existing costs, including IT management, application support, app development, IT service desk and end user computing costs likewise could be reduced.

source: AT Kearney

Device Barriers to Developing Market Internet Access Falling Fast

Though Apple will continue to sell at the high end of the smartphone market, volume will come in emerging markets, for devices costing less than US$100. That, in turn, will drive Internet access in emerging markets.

The rapid emergence of the sub-$100 smartphone category is one illustration of falling barriers to Internet usage in developing markets.

"The future of smartphones lies in emerging markets, sub-US$100 price points, and phablets," said Melissa Chau, International Data Corp. senior research manager. "In 2014, 73 percent of smartphones were shipped to emerging markets, 21 percent were priced below US$100, and 12 percent had screen sizes between 5.5 and seven inches.

By 2019, 80 percent of smartphones will be shipped to emerging markets, 35 percent will be priced below US$100, and 32 percent will have a 5.5-inch to 7-inch screen size.

As recently as 2010, PCs still made up the lion's share of the total “smart connected device” market, with the combined desktop and notebook categories accounting for almost 53 percent of shipments compared to nearly 45 percent for smartphones and three percent for tablets.

By 2014, smartphones had grown to represent almost 73 percent of total shipments, while PCs had slipped to nearly 17 percent and tablets had increased to about 13 percent.

By 2019, IDC expects the distribution to be nearly 78 percent smartphones, almost 12 percent PCs, and about 11 percent tablets.

Some 28.7 million mobile phones were shipped in Vietnam in 2014, representing 13 percent year over year growth.

Smartphones represented 41 percent of all mobile phones shipped to Vietnam in 2014, or 11.6 million units, and are expected to eclipse feature phones in 2015.

Smartphone sales grew 57 percent in 2014, International Data Corp. says. As is the case elsewhere in Asia, lower-priced smartphones are driving the trend.

"The low-cost segment has been the main driver, with six out of ten smartphones as budget models priced below US$150 are shipped to Vietnam," said " Võ Lê Tâm Thanh, IDC senior market analyst.