Google Fiber for Austin: Biggest Network So Far

Google Fiber is coming to San Antonio, with 1.4 million residents, representing the biggest market Google Fiber has entered, to date. Some might note that the move by Google Fiber suggests Google now is starting to reap experience curve benefits (getting more efficient with experience).

It is an imponderable, but moves such as this, along with the cable TV industry’s dominance of the U.S. fixed network high speed access market, raise questions.

Telcos have been facing erosion of their enterprise, small/medium business and consumer markets for some time. A variety of competitors, ranging from local exchange carriers (especially cable TV companies) to municipal broadband providers, plus over the top apps of all sorts, not to mention product substitution by their own mobile operations, have taken market share, while profit margins have been attacked as well.

Let us reasonably assume that the function of access to high speed Internet, voice, messaging, entertainment and other services remains intact in the future.

How much share can all the competing platforms take? How does the business model for a fixed network telco change? How drastic might the change ultimately be, and how will telcos react?

Some former rural telcos already have provided us with one answer. Both Frontier Communications and Windstream are driving growth by selling service to business customers.

In fact, Windstream approaches the market as does a CLEC, choosing to service business customers with selective networks, and avoiding the consumer market altogether.

Windstream, for example, has expanded its fixed wireless platform to serve Boston, Mass.

The service also is offered in Chicago, New York, northern New Jersey and Milwaukee.

AT&T and Verizon have gotten most of their growth from mobile services. But at least for AT&T, linear video turns out to be a cash flow generator, if not necessarily a “growth” business, as it has become the largest U.S. linear video provider.

Cable TV providers now are the market share leaders in high speed access, however, and remain key players in the consumer market, even as they scale up operations in the SMB and enterprise communications markets. And mobile lurks in the medium term.

The point is that it might not be reasonable to assume the present leaders in any customer segment or application will be the leaders forever. No matter how long the history of leadership in communications markets, everything seems to be changing.

DirecTV had to sell itself. Dish Network will become a mobile provider. CLECs, Google Fiber, municipal networks, cable TV, Wi-Fi-based service providers and eventually others are challenging telco revenue streams, products and market share at every turn.

One bit of business strategy I had imprinted on me  many years ago is that, in a competitive market, the low cost provider wins. Generally speaking, telcos are the high cost provider in every market.

Mobile, cable TV, municipal networks, CLECs, over the top providers and even satellites (for linear video) have lower cost profiles. It isn’t yet clear where Google Fiber ranks, but it is likely Google Fiber also has lower operating costs than telcos tend to have.

If you want to know why network functions virtualization is so important, that is why. NFC helps lower operating and capital costs.

At Least 60% of U.K. SMEs Use Cloud-Based Apps

At least 60 percent of U.K. small and medium-sized enterprises (SMEs) polled already are using cloud-based applications, according to the latest research from BT Business and British Chambers of Commerce (BCC).

In truth, the percentage likely actually is much higher, if one assumes many cloud-based consumer apps are used as business tools.

Of those interviewed, 43 percent believed cloud-based applications cloud-based applications were a critical element of effective flexible working, while 52 percent said  remote access to company data was essential.

U.K. business’ reliance on Internet access was also highlighted by the research, with more than two thirds (68 percent) of respondents believing that their companies couldn’t survive more than a day or two without a connection.

Full 86 percent of businesses have one or more members of staff working from home on a regular basis.

Some 47 percent of respondents say they have staff working away from the office at least once a week, while 28 percent have someone working remotely every day.

About 50 percent of respondents also said Wi-Fi access when out of the office was an important capability.

Sprint Operating Metrics Improve, but T-Mobile US Takes Third Place in U.S. Mobile Market Share Rankings

Sprint reported improved churn performance and improvement in its net account additions, with a small loss for its first quarter of 2015, ending in June 2015.

But some also would note that, for the first time in recent memory, the market share rankings for the top-four U.S. mobile providers actually changed, with T-Mobile US becoming the third-largest U.S. mobile service provider, while Sprint slipped to fourth.

Sprint now has  57 million customers, while  T-Mobile US with 58.9 million. T-Mobile US gained two million net new customers while Sprint added only 675,000.

For the most part, the quarter was a continuing saga of reversing prior operating trends. Sprint platform postpaid churn of 1.56 percent was a record low, with total net additions of 675,000 accounts.

In addition, the company reported net operating revenue of $8 billion, operating income of $501 million and Adjusted EBITDA of $2.1 billion.

Sprint also raised guidance for its fiscal year 2015 Adjusted EBITDA outlook from the previous expectation of $6.5 to $6.9 billion to $7.2 to $7.6 billion, excluding any accounting impacts from potential lease financing.

Postpaid net additions of 310,000 compared to net losses of 181,000 in the prior year quarter, with an improvement of 491,000 year-over-year.

For the first time in nearly two years Sprint recorded monthly postpaid phone net additions in both May and June.

This marked the fifth consecutive quarter of sequential improvement and compared to losses of 620,000 in the prior year quarter.

The 608,000 year-over-year improvement was driven by lower churn and a 13 percent increase in gross additions, including a 47 percent increase in gross additions with prime credit quality, Sprint said.

Sprint also said it was net port positive for the second consecutive quarter, meaning it activated more transferred accounts than it lost to other providers.

On the Sprint branded platform, total net additions of 675,000 compared to net losses of 220,000 in the prior year quarter.

The 895,000 year-over-year improvement was mostly driven by fewer postpaid phone customer losses.

Prepaid net losses of 366,000 compared to net losses of 542,000 in the prior year quarter.

Wholesale net additions of 731,000 compared to 503,000 in the prior year quarter. The year-over-year growth was mostly driven by connected devices.

Still, operating revenues of $8 billion decreased nine percent year-over-year as consolidated adjusted EBITDA of $2.1 billion grew 14 percent from the prior year period.

Operating income of $501 million was relatively flat from $519 million in the year-ago quarter as higher depreciation expenses offset the growth in Adjusted EBITDA.

Net loss of $20 million, or loss per share of $.01, compared to a net income of $23 million, or earnings per share of $.01, in the year-ago period primarily due to higher interest expenses.

Cable Gets Another Hybrid Access Platform: DOCSIS Protocols Over PON

Cable TV operators notably have used the hybrid fiber coax access architecture, not "standard telco" access networks. But the industry is preparing for fiber to home, in a way compatible with the HFC approach.

That doesn't necessarily mean a wholesale switch of access technology, but in a typically hybrid manner, the ability to mix and match new fiber to customer access with the existing HFC networks.

As an example, Broadcom Corporation has announced a DOCSIS-compatible 10G Ethernet Passive Optical Network (EPON) residential gateway reference design.

Broadcom's new platform allows cable Multiple System Operators (MSOs) to provide multi-gigabit speeds over a fiber to home access network, instead of the traditional hybrid fiber coax network.

Broadcom's new 10G EPON residential gateway solution is currently available from multiple manufacturers.

The new gateway platform combines Broadcom's BCM55030, a 10G/10G EPON Optical Network Unit (ONU) system-on-a-chip (SoC), with the widely deployed BCM33843 DOCSIS 3.0 cable gateway device.

Broadcom's 10G EPON gateway adheres to the preliminary CableLabs DPoE 2.0 specification, which allows the PON gateway to look and function like a traditional DOCSIS gateway.

Built-in 10G symmetric EPON WAN technology supports multi-gigabit speeds, allowing multiple FTTH subscribers to achieve 1G symmetric performance simultaneously on a single PON.

"Our new residential gateway design enables cable MSOs to bridge a fiber network into their existing DOCSIS infrastructure without costly network re-design," said Jim McKeon, Senior Director of Product Marketing, Broadcom.

Carriers Believe Their Own Region Will Lead 5G

For good reason, mobile executives surveyed by Heavy Reading about expected 5G developments believe Asia will be in the forefront of 5G deployments. Some 58 executives were surveyed, with support from the Telecommunications Industry Association and Interdigital.

In fact, 71 percent of respondents expect Asia to lead in 5G. Some 52 percent think , to lead North America will lead, while 45 percent of respondents believer Europe will lead.

Heavy Reading analyst Gabriel Brown believes this is consistent with plans by Japan and Korea to deploy early.

DoCoMo says it will launch a first release of 5G at the 2020 Summer Olympics in Tokyo, and in Korea, leading operators, such as SK Telecom plan to demonstrate prototype 5G systems at the 2018 Winter Olympics.

North American operators are very much more likely to think that North America will lead (73 percent of North American operator respondents think so), whereas European and Asian respondents both think Asia will lead.

AT&T Offers First Nationwide "Linear Video Plus Mobile" Service

The first new consumer offer AT&T has made, in the wake of the approved acquisition of DirecTV, is going to draw yawns in some quarters. Sure, the new bundle of DirecTV and AT&T Wireless service could save some new customers money.

Beyond that, critics will say, the package is not that innovative. That might be true, in a sense. Bundling multiple services to increase value and save a buyer money is not new. Bundling video with other services is not new.

Predictably, the touted saving occur during the first-year promotion period. That also is routine.

But there is one element of the new plans that are a first. AT&T has become the first U.S. service provider able to sell linear TV and mobile service nationwide.

The offer for new customers includes HD and DVR service for up to four TV receivers, unlimited talk and text for four wireless lines, and 10 GB of shareable wireless data for $200 a month, an annual savings of $600 or more in the first 12 months, for new subscribers.

As part of this launch on Aug. 10, and for the first time nationwide, new DIRECTV subscribers will have immediate access to programming on their mobile devices, even before the satellite dish is installed.

They can view content on their compatible mobile devices immediately.

Additionally, DIRECTV and U-Verse TV customers who switch to AT&T wireless service from another mobile provider will receive a $300 bill credit when they buy a smartphone on AT&T Next and trade in an eligible smartphone.

AT&T is now the largest linear TV provider in the United States, and, for that matter, globally.

Innovation was never the immediate upside, though. AT&T expects to harvest the cash flow from DirecTV, and also gain the ability to sell linear video, mobile services and high speed access nationwide.

Any future upside in the video entertainment space would necessarily take longer to realize.

So yes, the critics might be right: the latest offer is not terribly innovative. It doesn’t have to be. The new offers only have to increase AT&T’s subscriber base, its average revenue per account and margins, driving incremental cash flow. That’s enough, for the moment.

Deutsche Telekom Partners with Boingo

Deutsche Telekom has enabled business users to use Boingo Wireless hotspots globally.

Boingo’s network of more than 1 million hotspots around the globe is now available to Deutsche Telekom’s business customers in more than 50 countries especially the world’s largest airports, major hotels, and shopping and city centers.

In addition to Deutsche Telekom, Boingo has similar agreements with AT&T, Sprint, Verizon, LG U+ and NTT DOCOMO.

Though virtually no legacy mobile providers would endorse an “unlicensed spectrum only” approach, still valuing licensed spectrum for the core of the network facilities, it also is true that virtually all mobile operators now recognize that Wi-Fi forms an essential part of the infrastructure.

That change also extends to emerging shared spectrum policies. Spectrum sharing is expected to rather routine, and some mobile executives now believe spectrum sharing will be “essential” for fifth generation mobile networks.

That belief is especially strong among Asia mobile operators, far less so among North American operators.

Some 26 percent of 58 global mobile operator executives say spectrum sharing  it is “essential” to 5G, while another 32 percent say it is “important.” Together, 58 percent of respondents think spectrum sharing is crucial for 5G.

A quarter of respondents think spectrum sharing is  “nice to have,” while 17 percent are negative on the concept, a study about expected 5G attributes found. The study was conducted by

Gabriel Brown Senior Analyst, Heavy Reading, with support from the Telecommunications Industry Association and Interdigital.

There are now more examples of mobile operators seeking to use shared spectrum and it appears very likely that this model will be used more extensively over time, said Brown.

LTE in the unlicensed 5GHz band (LTE-U or LTE-AAA), and the recently released 3.5GHz shared access Band 42 in the United States provide potential examples.

Asian respondents are more likely to view shared access spectrum as critical to 5G (40 percent) than Europeans (28 percent) or North Americans (13 percent).