Turning Off Whole Networks is Becoming More Common

Though telecom service providers globally have yet to begin turning off the old public switched telephone network, one day they will have to do so, the time division multiplex network having been largely replaced by newer IP-based networks.

In the meantime, the cost of operating legacy and IP networks continues to grow, as fewer customers remain to pay the costs of maintaining the TDM network. At some point, it simply becomes uneconomical to continue doing so.

Mobile operators know quite a lot about such transitions, but so do TV broadcasters, each industry having done so at least once.

Mobile operators in Singapore will shut off 2G services in April 2017, freeing up more spectrum for 3G and 4G services.

There are about a quarter million 2G subscribers remaining in the Singapore market, down from about two million in 2011, or about three percent of all mobile subscribers. The 2G network was launched in 2004, so it will have had a lifespan of about 10 years.

The 2G shutdown would not be the first time a mobile network has been closed, as the analog networks globally also had been shut down previously,

The U.S. analog networks likewise were shut off in 2008, for example. The point is that mobile network operators, unlike fixed network operators, have experience with shuttering an older mobile network, completely.

Regulator IDA Singapore has approved a plan from the operators to shutter their 2G networks on April 1, 2017,  allowing 2G subscribers to continue with their existing plans at no extra cost after migrating to 3G, and being provided with low-cost 3G phones.

Australian carrier Telstra has announced plans to shut its 2G network by the end of 2016. AT&T will do so on Jan. 1, 2017.

Telenor plans to turn off its 3G network in 2020, and its GSM network in 2025,

Companies around the world also now have experience shutting off broadcast TV networks. Norway plans to turn off its FM radio networks in 2017, as well.

LTE Will Grow 35% Annnually

Global Long Term Evolution subscribers will grow 35 percent annually over the next five years, increasing the installed base of customers from 516 million to 2.3 billion,  TeleGeography forecasts. forecasts.

Still, 2G remains the dominant mobile platform in 2015, accounting for 61 percent of global mobile subscribers.

In fact, 90 percent of India’s 950 million subscribers are still connected to 2G networks.

Global 3G subscribers are expected to surpass 2G subscribers in 2019.

“LTE is growing at a faster rate than 3G ever did,” said TeleGeography analyst Mark Gibson. “However, while 3G subscribers are declining in the US and Europe, they continue to grow in all other regions—most notably in Africa where they are expected to increase 19 percent compounded annually over the next five years. Therefore, despite its rapid growth, LTE may not surpass 3G on a global basis until early into the next decade.”

Indian Mobile Providers Reliance Communications, Sistema Explore Merger

Reliance Communications (RCOM) and Russian conglomerate Sistema are in talks to merge their Indian telecom businesses, a move many would guess will occur on a wider scale as the mobile industry in India consolidates to a more sustainable number of providers.

The fragmented Indian mobile market, many would argue, must consolidate to fewer providers to create a sustainable market structure based on actual profits.

The Indian mobile market will consolidate from about 10 contestants to six in the wake of the recent spectrum auction, says Fitch Ratings, while consumer prices are likely to rise.

“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.”

The consolidation will happen because spectrum acquisitions will put pressure on balance sheets and cash flow, limiting ability to invest in networks and compete.

The consumer price hikes will occur because the operators have to pay for the spectrum. And much of the acquired spectrum was re-acquired only to support existing operations.

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.

Bharti now has the best spectrum assets with its ownership of about 40 percent of the 900 MHz spectrum considered best for coverage, Fitch says.   

Communication markets do not seem to conform very well to market share patterns one tends to see in many other industries where market entry is less capital intensive.

Put simply, a predicted pattern would have the market leader having share and profit margins double that of number two, which in turn would have double the share and profit margin of supplier number three.

Mobile service provider markets do not conform to the pattern. That is because, many could easily argue, mass market communications tends to be an oligopoly, not a monopoly or highly contested market with few barriers to entry.

In an oligopolistic market, a reference market share structure might be something like:

Oligopoly Market Share of Sales
Number one	41%
Number two	31%
Number three	16%
source: economicsonline

U.S. mobile service provider market structure deviates from the “classic” pattern one might expect. One might note the same is true in other mobile service provider markets, such as the Russian Federation. The same divergence exists in the Indian mobile market.

One might argue that a coming wave of U.K. industry consolidation could lead to a more traditional industry structure. That also could happen in the French mobile market, which still in 2012 had an “uncharacteristic” structure.

source: Economic Times

Wi-Fi to Carry 60% of Mobile Data Traffic by 2019

Wi-Fi networks will carry almost 60 percent of smartphone and tablet data traffic by 2019, reaching over 115,000 petabytes by 2019, compared to under 30,000 PB in 2015, representing almost 400 percent growth, according to Juniper Research.

With the caveat that usage is not revenue, value or sessions, that 60 percent figure indicates the amount of traffic a network operator might expect is carried on a Wi-Fi network rather than the core mobile network.

A few contestants--especially cable TV operators--might value more than others. as they have extensive backhaul networks that can be used to create dense residential public hotspot networks.

According to Wi-Fi service provider iPass, there were nearly 40 million community hotspots in 2014 and expects this to more than double this year to nearly 90 million.

Global mobile data traffic generated from devices including smartphones, feature phones and tablets forecast to exceed 197,000PB in 2019.

North America and West Europe will together account for over 50 percent of the global mobile data being offloaded in 2019, Juniper Research estimates.

Developing markets such as the Indian Subcontinent are forecast to witness higher growth rates and increased market share of the total mobile data traffic over the next five years. In fact, mobile operators in India already are seeing close to 100 percent year over year growth in data consumption.

Latency Will be a Big issue for LTE Satellite Backhaul

Geostationary satellites, long used for 2G mobile backhaul, are going to have a tougher time supporting Long Term Evolution networks, for the simple reason that LTE latency performance is so much more stringent than 2G, notes David Burr, O3b VP.

LeoSat, Thalesn Aenia Space Move to Next Stage of LEO Constellation System Design

LeoSat and Thales Alenia Space say they continue to study the architecture and performance of the LeoSat proposed low Earth orbit  satellite constellation, which will provide high-speed, low-latency, cost-effective broadband services worldwide, ranging from 50 Mbps on the low end to 1.2 Gbps on the high end, per end user device.

This study phase, started nine months ago, has already resulted in a preliminary system design for the LeoSat constellation.  

In the coming months, LeoSat and Thales Alenia Space will assess architecture and performance of the overall system, including both the ground and space segments.

The LeoSat constellation is initially planned to include 80 to 120 high-powered, Ka-band satellites in low earth orbit, providing worldwide coverage specifically for large private corporations and government agencies.

The system will be designed to provide point-to-point data connections to and from anywhere on Earth without the need for any interstitial terrestrial landings or transport. In other words, signals will be carried satellite to satellite.

The data will be able to travel in its native format, encrypted and secured from end to end.

The satellites will fly in polar orbits at an altitude of approximately 1,400 kilometers, Each satellite will be fitted with a dozen steerable spot beams, providing an aggregate throughout of greater than 10 Gbps.

India Mobile Internet Subs Grew Faster than 2% Between February and March 2015

India’s telecom service providers grew mobile data subscribers at a better than two percent a month rate between February and March of 2015, according to the Telecom Regulatory Authority of India (TRAI).

Service provider revenue also grew 9.5 percent between December 2014 and December 2014, according to the Telecom Regulatory Authority of India (TRAI).

Revenue grew from Rs 583.55 billion for the quarter ended December 2013 to Rs 639.55 billion for the quarter ended December 2014.

Subscribers grew by six percent to 970.97 million over the same period.

Mobile subscribers increased by 6.5 percent to reach 943.97 million subscribers at the end of 2014.

There were  267.39 million Internet access customers at the end of December 2014, including 18.86 million fixed network  subscribers and 248.53 million mobile subscribers.