Verizon Dismisses Wi-Fi-Based Mobility. But Just Wait

It never is unusual when a major incumbent dismisses a new rival offering a lower-end product without all the features of the existing product. That happened when Skype and other VoIP products started appearing, or when instant messaging services arose.

Cable TV operator business communication services arguably were “not as good” as service supplied by the historic suppliers.

More than 45 years ago, MCI’s long distance service was not as good as AT&T’s service.

So it will come as no surprise that Verizon argues any Wi-Fi-only mobile service, or even a Wi-Fi with default to mobile service offered by cable operators might not “be as good” as Verizon’s arguably industry-leading service.

One present issue is the seamlessness of transitions between Wi-Fi networks and mobile networks. But it seems only a matter of time before that capability improves dramatically. Seamless use of any available network is, in fact, a design goal for coming fifth generation networks.

So it would not be surprising is a present weakness disappears over time, as it has in many other segments of the business, when new technology, networks and platforms are used to attack a legacy business.

India Mobile Prices are About to Rise

It is a truism that consumers (buyers) ultimately pay for all supplier costs of doing business. So it is that Indian mobile consumers are going to pay for all the spectrum recently purchased by the leading Indian mobile service providers.

That means retail prices are going to climb.

“We believe that telcos are likely to raise prices in response to high spectrum prices,” said Fitch Ratings. Also, “most telcos will report negative free cash flow in 2015 as they need to pay a quarter of the committed amount up front.”

At the same time, the spectrum acquisitions will put pressure on balance sheets and cash flow, limiting supplier ability to invest in networks and compete. That, in turn, means the Indian mobile market will consolidate from about 10 contestants to six in the wake of the recent spectrum auction, says Fitch Ratings.

India's spectrum auction raised US$17.7 billion, a sum that now will have to be raised or shifted from other uses, and will prove too heavy a burden for some contestants, Fitch believes.

The biggest four mobile companies--Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications--won 82 percent of the licenses. Bharti spent about US$4.7bn. Vodafone invested US$4.2 billion.

Idea Cellular committed US$4.9 billion, while Reliance spent  US$693 million.

As logical as it might be for governments to view spectrum auctions as a way to raise money, spectrum costs ultimately are paid for by consumers who buy mobile services.

As mobile operators seek to recover the sums spent on spectrum, they primarily will have to turn to retail buyers of mobile service. On the other hand, consolidation might help the surviving carriers raise prices.

One Way or the Other, U.S. Cable TV Market Changes

Bright House Networks might be called a consolation prize for Charter Communications if the Comcast bid to buy Time Warner Cable is approved by regulators. As structured, a Charter offer to buy Brighthouse is contingent on regulator acceptance of the Comcast offer.

Charter had made a bid of its own to buy Time Warner Cable, but its offer was topped by Comcast’s own offer. The $10 billion offer for 2.5 million subscribers values Bright House at about $4,000 per subscriber, a valuation metric not used in the broader telecom business.

U.S. cable TV operator rankings will change, in almost any conceivable set of decisions and deals. Comcast, which became the largest U.S. cable TV operator when it acquired the assets of AT&T Broadband, was trailed by Time Warner Cable as the clear number two cable company, ranked by number of subscribers.

If Comcast is successful in gobbling up Time Warner Cable, Charter gets Bright House, creating a new number-two provider for the first time in decades. For decades, Time Warner has been the second-biggest U.S. cable TV provider, behind either Tele-Communications Inc., which sold to AT&T, or AT&T Broadband itself, which then was purchased by Comcast.

Charter has held the number-three spot in the rankings, but with a wide gap between it and a Comcast that has added Time Warner Cable.

If the Comcast bid is scuttled, observers expect Charter to reemerge with a bid to buy Time Warner Cable. That would also create a new number-two provider, but far larger than a Charter that had purchased Bright House.

AT&T Launching Gigabit Service in Cupertino, Calif.

AT&T will launch its “GigaPower” 1-Gbps Internet access network in Cupertino, Calif. The symmetrical network is the first to be supplied by AT&T in California. AT&T also said it is considering other San Jose areas, including Campbell, Mountain View and San Jose, as candidate municipalities for the service, as well.

In April 2014, AT&T announced it was evaluating deployng GigaPower in as many as 100 communities.  AT&T already has deployed the service in neighborhoods in Austin, Dallas and Fort Worth, Texas.

GigaPower networks also are being deployed in Charlotte, Raleigh-Durham, Greensboro and Winston-Salem, N.C.; Houston and San Antonio, Texas;  Jacksonville and Miami, Fla.; Nashville, Tenn. and Overland Park, Kan.

CenturyLink, for its part, is building symmetrical gigabit service now to residential and business customers in select locations in 17 cities, serving residential and business customers in 11 cities, including Columbia, Mo., Denver, Jefferson City, Mo., Las Vegas, Minneapolis-St. Paul, Omaha, Orlando, Portland, Salt Lake City, Seattle and Platteville, Wisc.

CenturyLink is selling gigabit services to business customers in Albuquerque, N.M., Colorado Springs, Colo., Phoenix, Sioux Falls, S.D., Spokane, Wash. and Tucson, Ariz.

Google Fiber Files Paperwork to Support Operations in Colorado

Google Fiber has filed paperwork for Google Fiber to operate in Colorado, though Google Fiber says it has no immediate plans to construct a gigabit network in Denver. 

The filing only means Google Fiber could base equipment and employees in Colorado, some note.

CenturyLink might not be so sanguine, as that firm has ramped up gigabit Internet access offerings in a number of Colorado communities, including Denver. 

"Bandwidth Doesn't Matter Much"

There are lots of reasons why Internet access headline speed and actual end user experience vary so widely, and why, for a typical user, higher speeds (capacity) do not translate into enhanced experience.

In fact, some would argue that more bandwidth doesn't matter much.  

The amount of resource sharing can be affected by headline speed, as when multiple users share a single access connection, either at work, home or a public hotspot.  

Ofcom, the U.K. communications regulator, has found that, for any single user, speeds below 5 Mbps do affect end user experience, on the local access link. Speeds above 10 Mbps, however, have negligible or no impact on end user experience.

The caveat is that experience can benefit if a single connection is widely shared.

On the other hand, one might well argue that latency is the bigger problem for most users, accessing most applications, most of the time. That means better latency performance is an important objective for ISPs and app providers.  

source: Mike Belshe

The larger point is that headline speeds mostly are about marketing platforms, not end user experience, once per-user local connection capabilities reach 10 Mbps per user.

Mobile Traffic Gets Asymmetrical

Oddly enough, for networks designed for symmetrical traffic, Internet traffic now drives bandwidth demand on mobile networks, and that traffic is highly asymmetrical, one reason access to Wi-Fi and other non-traditional networks has become so important.

Telefónica O2’s customers, as an example, are using 60 percent more data than they were 12

months ago, and 600 percent more than at the end of 2010, according to Real Wireless.

The uplink:downlink ratio, on a mobile network supporting 3G or 4G, is now about 1:7, and much of the downstream traffic is bandwidth-intensive video.

Eventually, most believe, new Internet of Things sensor traffic will add other types of load, namely demand for smaller messages of lower bandwidth, but requiring low power performance and high reliability.

LTE was not optimized for this type of usage, so Wi-Fi and other specialized connections

will likely be important.

That is why spectrum sharing, and the move towards dynamic spectrum allocation, are cornerstones of Ofcom’s plan to open up more spectrum for mobile broadband. Currently, around 29 percent of spectrum is shared between public and private sector users, and increasing that percentage is vital to achieving the government goal of opening up 500 MHz of new sub-5 GHz frequencies.

Cloud-based services featuring constant streaming of data and content, rather than

more periodic application and data downloads, also are affecting thinking about the design of networks.

The GSMA believes that mobile cloud traffic will account for 70 percent of total by 2020, as compared to 35 percent in 2013.

While the dominant design of a mobile network will continue to be based on support for roughly symmetrical traffic, future requirements will be for support of asymmetrical traffic.