When to Shut Down the PSTN Remains an Issue

The fixed network communications industry has yet to accomplish a key transition mobile service providers already have learned how to finesse, namely the challenge of decommissioning an out-of-date network with a next-generation replacement.

Among the chief problems are the “carrier of last resort” and universal service obligations imposed on some former monopoly providers. At some point, the legacy network must be completely shut off, and all customers migrated to the next-generation network.

But how to do so, and when to do so, remain contentious. Some policy advocates, for example, demand full legacy network coverage even as the next-generation network gradually is built.

But there is a fundamental economic problem. At some point, with dwindling numbers of customers on the legacy network, it becomes uneconomic to keep operating the legacy network.

At that point, economics matters: a network that cannot sustain itself cannot provide any service, to say nothing of universal service.

So the timing of any shutdown of the old public switched telephone network is one important issue. As any knowledgeable observer would attest, fixed network operators are anything but oblivious to the inevitability of the change.

That is one reason less capital, and fewer human resources, are allocated to maintaining the legacy network. But stranded assets are key. At some point, there will be so few remaining customers on the legacy network that it no longer makes sense to operate it.

In a sense, that is one reason why Sprint has asked the U.S. Federal Communications Commission to allow it to shutter the long distance voice network  it operates.

It is likely that the cost of running and marketing services on that network exceed revenues. In other words, the Sprint long distance voice business is unsustainable.

That eventually is a problem to be faced by virtually all fixed network telcos.

The problem then are rules and timetables that allow complete decommissioning of the older network, and interim steps that encourage rapid investment in the replacement network, while allowing service providers to more rapidly do what they must do, namely shift customers to the sustainable networks.

So it is that BT is calling on Ofcom to let it scrap the traditional telephone network, while also loosening regulations in the interim.

“We believe obsolete regulation should be rolled back, rather than clinging on until the last user dies,” said Mark Shurmer, BT’s group director of regulatory affairs. That is hyperbole, but understated.

In fact, the breaking point will come much sooner, at the point where revenue earned from the legacy network does not support sustainable and profitable operations.

It’s a tough issue, with heavy political implications. But it is undeniable that sustainability matters. Before the point where the legacy network becomes literally unsustainable, regulators and service providers must have made clear plans to decommission the olde network, and move all customers to the replacement network.

It will not make economic sense to support both legacy and replacement networks simultaneously.

Google-Backed Sidewalk Labs Will Use Ad-Supported Revenue Model

Ad-supported communications is not a new idea in telecommunications. But it is getting much more attention these days as service providers experiment with new business models.

Decommissioned payphone booths will become public Wi-Fi hotspots in New York, as part of an initiative by Sidewalk Labs, a Google-backed urban innovation startup that will rely on advertising to support its menu of free Internet access to anyone in a 150-foot radius, free phone charging, phone calling, Internet browsing and access to local services and information.

Sidewalk Labs leads a group of investors acquiring Control Group and Titan, among the companies working on the LinkNYC network to blanket New York City with free Wi-Fi.

The intent is to extend the concept to other cities.

I Pay, You Pay, Somebody Else Pays are the Only 3 Fundamental Business Models

In terms of business models, there really are only three of top interest for communications service providers: “I pay, you pay or somebody else pays.”

The traditional model is “you pay,” reflecting the salience of subscription-based revenue models.

Advertising and promotion represent the potential new “someone else pays” models.

Sponsored data and zero rating represent perhaps the newest models, where the service provider itself underwrites consumption of services by end users.

In fact, among the chief objections some might have about applying “network neutrality” principles to sponsored data or zero rating of app use is precisely that doing so forecloses one new innovation in terms of business models.

By barring zero rating or sponsored apps, regulatory bodies prevent exploration of new business models that provide direct end user and citizen benefit while p

O3b Revenue Accelerating Faster than Expected?

The fact that SES, an investor in O3b, might become majority owner of MEO constellation provider O3b in 2016, reflects a couple developments, both of which are positive for O3b, and might be indicative of the potential future opportunity for emerging LEO constellations.

Satellite fleet operator SES has noted that demand for capacity from the O3b Networks constellation of medium Earth orbit Ka-band broadband satellites is accelerating “faster than expected.

source: SES

That, in turn, would lead SES to become a majority shareholder before the end of 2016.

SES CEO Karim Michel Sabbagh said ownership of more than 50 percent of O3b always has been contingent on O3b’s early success. In that regard, O3b apparently is booking customer orders at a faster clip than expected.

O3b has more than 40 customers, mostly telecom companies that use O3b for trunking or backhaul.

SES earlier in 2015 indicated that O3b’s backlog stands at $530 million, including  the maritime segment, which represents perhaps 30 percent of backlog, energy customers represent about five percent of backlog while government customers represent perhaps one percent of backlog.

Trunking accounts for 60 percent of backlog and backhaul comprises four percent of backlog.

At present revenue growth rates, O3b should reach breakeven no later than the first quarter of 2016.

Perhaps the biggest unknown is the long-term relationship between mobile operators and O3b, though it is clear O3b primarily sees itself, and is seen by many mobile operators, as a supplier of long haul trunking, functionally equivalent to use of subsea fibers for backhaul or trunking.

O3b emphasizes that its earth terminals support 4G, 3G, 2G and Wi-Fi end user devices and networks, for example. That indicates the role O3b transport now plays, backhauling traffic to and from mobile data centers and switching offices and cell towers.

Far better latency performance is among the reasons for that potential, in enterprise solutions such as support for the energy exploration industry.

source: OneWeb

OneWeb Raises $500 Million, Places Rocket and Launch Orders

OneWeb has raised $500 million of funding from Airbus Group, Bharti Enterprises, Hughes Network Systems, a subsidiary of EchoStar Corp., Intelsat, Qualcomm Incorporated, The Coca-Cola Company, the Virgin Group, and Totalplay, a Grupo Salinas Company, owned by Ricardo B. Salinas.

The OneWeb user terminals are optionally solar powered, and support Long Term Evolution 4G, 3G, 2G and Wi-Fi access, suggesting the business model for OneWeb’s new fleet of low earth orbit satellites, namely trunking to mobile operator cell towers, with end user access using either Wi-Fi or mobile network protocols.

The network will also provide service to ships, planes, trains and oil platforms and interoperability with Intelsat’s fleet of Ku-band satellites.

Sunil Bharti Mittal, Founder and Chairman of Bharti Enterprises and Tom Enders, CEO of Airbus Group will be joining Sir Richard Branson, founder of the Virgin Group, Dr. Paul Jacobs, Executive Chairman of Qualcomm Incorporated, and Greg Wyler, founder of OneWeb, on the Board of Directors.

Each of the other founding shareholders also be board observers, will continue to advise the company and support OneWeb by providing  technical and manufacturing expertise, launch capabilities, and enabling access to potential customers.

OneWeb also said it has placed an order for more than 65 rockets including 21 Soyuz launch orders from Arianespace and 39 launches from Virgin Galactic’s LauncherOne.

The funding and equipment deals to follow are an important milestone towards actual launch of the constellation.

Sri Lanka Telecom to Deploy National Wi-Fi Hotspot Network

Sri Lanka Telecom is deploying a public hotspot network across Sri Lanka.

Sri Lanka Telecom plans to launch multiple offerings including: single-use prepaid service, bundled subscriptions for existing broadband customers, automated offload for mobile users, and partnerships with external providers for roaming and wholesale.

“SLT’s carrier-grade WiFi network provides a host of direct, targeted marketing opportunities for shop owners, companies and big brands within these environments,” said Dileepa Wijesundera, Sri Lanka Telecom Group CEO.

At least in part, the new Wi-Fi network might function as did an earlier generation of Internet cafes, as ways for people to gain Internet access.

Pre-5G, IMT-2020 Standards are Going to Influence Each Other

One always can get an argument about whether “official standards” shape technology more than “market-dictated standards.” The reason is that most popular communications standards are the result of some combination of end user adoption that creates de facto standards, as well as de jure work by standards bodies.

Something like that will have as fifth generation mobile standards are created. On the “official” side, there are the coming IMT-2020 standards. On the other hand, many “pre-5G” initiatives are in the works.

That means the pre-5G de facto standards will influence the “official” standards to some extent, even as understanding of what might emerge as IMT-2020 will shape pre-5G capabilities.

With the International Telecommunications Union targeting 2020, and major mobile companies, especially in East Asia, targeting pre-5G introductions possibly in 2017, the influences will work both ways.

It might be reasonable to suggest that the core specs largely will be reflected in the pre-5G introductions, or at least the ability to migrate seamlessly.