61% Annual 3G Growth for India Mobile

India will have 236 million mobile Internet users by 2016 and 314 million by 2017, according to a report by KPMG produced on behalf of the Internet and Mobile Association of India.

India also will have over 500 million total Internet users by 2017. In June 2015, there were more than 350 million Indian Internet users.

The 3G user base in India is projected to grow at a CAGR of 61.3 percent compound annual growth rate  from 2013 to 2017.

There were approximately 82 million 3G subscribers in India at the end of 2014 and will reach 284 million by end of year 2017.

“With more than 300 million Internet users, India has the second largest internet user base in the world,” said Ashvin Vellody, KPMG partner. Still, Internet penetration has reached only about 19 percent.

The next wave of growth will driven by adoption of mobile internet, the report argues.

In 2014, the active Internet user base in rural India was 6.7 percent of the overall rural population of 905 million and accounted for 61 million users.

Some 4.4 percent of the total rural population used a mobile device to access the Internet, up from 0.4 percent in 2012.

But bandwidth might continue to be an issue. The report suggests 2G technologies will dominate in rural areas for at least a few more years.

In June 2014, 38 percent of active Internet users in rural areas did so using their mobile phones as the primary access venue.

"Over the Top" Will Challenge U.S. Cable TV Operator Collegiality

When and how it happens is not so clear, but moves by Comcast and other U.S. cable TV operators into the streaming media and mobile businesses are going to raise business issues that have not had to be grappled within the past.

Some might argue those issues might occur with business voice services as well. Though there no longer is any reason in law why one cable company, in area A, does not compete with another cable operators in area B, that is basically the unwritten industry rule.

Cable companies historically have not competed against each other, in their franchised territories. That isn’t so unusual in the fixed network telco business, either. Historically, only one telco was authorized in any geographic area.

In the U.S. market, since the latter 1980s, telcos began to compete head to head, in the same regions, first in the long distance industry, and then in the mobile industry.

At some point, hosted services, cloud services and all other over the top apps will raise new issues about “where” a cable company competes, and whether that means competition with another cable operator.

To be sure, operators are likely to try and maintain the old rules to the greatest extent possible. Industry collegiality virtually requires that approach.

But a nationwide mobile service will necessarily cover all or most cable TV areas, no matter who the “local” operator happens to be. In the same manner, a hosted voice service can, in principle, be sold anywhere, on “any broadband connection, not just in those areas where a given cable TV operator has a fixed network.

Right now, Comcast will sell its over the top streaming service only to customers who buy it high speed access service, supplied by Comcast’s own networks. But that’s akin to Google allowing people to use YouTube or search only when they buy Google Fiber.

“Over the top” apps are not inherently bound by geography, though they might well be confined to some countries, or barred from some countries, for other reasons.

In the past, when cable operators have thought about ways to create a “cable version” of mobile service, the approach was to federate along existing cable operator across geographies. That never really worked very well.

Any eventual successful “cable version” of Netflix is likely going to be sold across all U.S. geographies, to gain scale. Whether federating will work is the issue.

The same might  be said for any other national U.S. business services: scale requires working nationwide. Cable likely will try and federate in some way.

But it might ultimately be the case that this is unworkable. And that might mean that a few large cable companies wind up competing, more or less directly, in “new” services consumed using the Internet. That would be hugely disruptive, but might be inevitable.

SK Telecom to Support LoRaWAN

Among important mobile service provider network initiatives, 5G gets the most media attention. Methods of bonding Long Term Evolution spectrum across carriers, or bonding LTE with Wi-Fi, tend to get less attention.

But there’s also LoRaWAN, a low-power wide area network intended to support Internet of Things and machine-to-machine devices and services.

SK Telecom now is the first Asia-based mobile service provider to join the LoRa Alliance (http://lora-alliance.org),  the group working to create a new protocol to enable the Internet of Things (IoT).

LoRaWAN uses spread spectrum technology to support data rates range from 0.3 kbps to 50 kbps and provide long battery life.

SK Telecom plans to develop meters using the protocol, and launch trial services such as location monitoring and smart street light control solutions.

Sprint Testing Carrier Aggregation for its LTE Network

Sprint has promised performance upgrades of its U.S. network, and it appears carrier aggregation (the equivalent of fixed network channel bonding) is one way it plans to do so.

Sprint apparently is testing a bonded 40-MHz channelization (2×20), which will boost data speeds in more than 40 U.S.  markets.

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Electronic SIMs are Part of a Pattern

Apple and Samsung are in advanced talks to join the GSMA push for standardized electronic subscriber identity modules (SIMs) used by mobile operators to activate service for any subscriber and device.

The GSMA wants to create a standardized and embedded SIM that would allow for instant activation or porting of devices to any network with the right frequency support, without the need to manually insert the traditional SIM.

Networks expected to support the plans include AT&T, Deutsche Telekom, Etisalat, Hutchison Whampoa, Orange, Telefónica and Vodafone.

As with much in the mobile business these days, you might attribute the move to machine-to-machine and Internet of Things devices and applications.

Many M2M modules will not be easy to activate using a manual process that requires a physical swap of a subscriber identity module. Nor will the cost of manual swaps be amenable.

In the traditional mobile phone business, the embedded electronic SIM might be a mixed blessing. While it should lower activation costs, it also will make marginally easier the task of leaving one carrier for another.

So the innovation might both help and hurt, depending on each carrier’s market position. A large carrier with lots of activations might well conclude that the advantages (lower operating cost) outweigh the disadvantages (easier churn).

Device suppliers might also see advantages, as the electronic SIMs lead to more user-friendly devices.

At the same time, we might arguably see a trend at work, whereby access providers gradually lose “control” over the user experience, the applications and perceived value, to other parts of the ecosystem.

That broad process has been underway because of deregulation, the Internet and key importance of devices.

FCC to Deny Dish Network Spectrum Discount

The Federal Communications Commission reportedly will reject $3.3 billion in spectrum discounts requested by partners of satellite-TV provider Dish Network Corp., for spectrum awarded in the recent AWS-3 auction.

After a review of $13.3 billion of winning bids by two small companies backed by Dish, FCC officials concluded that the two entities didn’t qualify for the small-business discounts, the Wall Street Journal reports.

FCC Chairman Tom Wheeler is said to have circulated a draft order denying the discounts to the FCC’s other four commissioners.

Aside from forcing Dish to pay more for its spectrum, the denial of bidding discounts will not likely affect strategic thinking at Dish, but will force Dish to come up with the full $13.3 billion amount of the bids, rather than the lower $10 billion amount the discounts would have provided.

At the same time, though, there are rumors that Dish Networks talks with T-Mobile US parent Deutsche Telekom about an acquisition of T-Mobile US by Dish Network, are faltering.

Perhaps not surprisingly, the two parties do not agree on how to structure the deal, and how to value it. Charlie Ergen is known to be a fierce negotiator, while Deutsche Telekom likely prefers a deal weighted mostly to cash, rather than stock.

Observers speculate that it is possible other bidders could emerge, especially Comcast Corp., Altice SA and Sprint Corp.

Any bid by Sprint might seem doomed to failure, given the consistent antitrust rejection of any proposed combinations of any of the leading four U.S. mobile companies, including a proposed Sprint bid to buy T-Mobile US that was specifically rejected.

The other possibilities would likely face lower hurdles. Deutsche Telekom reportedly has approached Comcast about a potential bid.

U.S. Smartphone Demand Drops 8% Year Over Year

U.S. smartphone demand is declining, with an eight-percent drop in smartphone demand in June 2015, compared to June 2014, according to researchers at Argus Insights.

“The smartphone market may have reached a point of saturation, as consumers are failing to demonstrate the same amount of interest as they were during the same time just last year,” Argus Insights says.  

After an initial boost in demand just as Samsung’s flagships were released, consumers became less and less interested, the researchers note.

Demand for the Galaxy S6 and S6 Edge began to drop shortly after their release. Samsung’s flagship phones failed to challenge Apple for more than a month, even with the aid of promotions.

New Galaxy S6 and S6 Edge customers are becoming less satisfied as time goes on while their more obscure handsets are boosting brand delight.

Smartphone manufacturers have yet to present novel features to greatly improve the consumer experience, and until this happens, consumers continue to flock to iPhones, Argus argues.