80/20 Rule for Fixed Networks?

CenturyLink, Frontier Communications, Windstream and Lumos Networks are examples of former rural telcos that have transformed themselves into companies that make most of their money from business customers.

In the case of Lumos Networks, the strategy was to spin out the former competitive local exchange carrier assets from Ntelos, the independent telco. After that transaction, Ntelos  itself was acquired by Shentel, another Virginia-based independent telco.

Headquartered in Waynesboro, Va., Lumos provides products and services over a 5,800 route-mile network in six states, including Virginia, West Virginia, Pennsylvania, Maryland, Kentucky and Ohio.

In large part, incumbent telcos have repositioned by creating their own out of region competitive local exchange carrier operations, or acquiring other CLECs.

Over the long term, the unsettled issue is the sustainability of traditional telco operations serving both consumers and business customers, in region.

In many ways, the dilemma is the Pareto principle, commonly known as the “80/20 rule,” where 80 percent of results come from 20 percent of actions or operations. In the case of incumbent telcos, the issue is that the access network serving consumers often is necessary to create the economies of scale to support services aimed at business customers.

In much the same way that undersea carriers serve both retail and wholesale segments of the business, fixed network operators might find that serving consumers is required to attain the scale to support the more-profitable operations supporting business customers.

That might be as true for Verizon and AT&T as well as smaller telcos. The ability to support  small cell backhaul networks covering wide areas,  for example, often depends on dense fixed networks that piggyback on residential service assets.  

Android Smartphone Launches for $87, Reaching 1/3 of Africa's Population

Many initiatives now are underway to bring Internet access to billions of users in developing countries, fast, ranging from new access platforms to less-costly smartphones.

Infinix is selling its first Android One smartphone, the HOT 2, in Nigeria, at a recommended retail price of N17,500 (US$87).

It’s also available to purchase online from distributor Jumia in Egypt, Ghana, Ivory Coast, Kenya, and Morocco. That makes the device available to about a third of Africa’s total population.

Android One, Google’s low-cost version of the Android operating system, is designed to allow manufacturing of low-cost smartphones.

The Infinix HOT 2 phone features a quad-core MediaTek processor, dual SIM slots, front and rear-facing cameras, a FM radio tuner, and 16GB internal memory (expandable).

The Infinix HOT 2 runs the latest version of pure Android (Lollipop 5.1), which provides up to two times better battery performance. The device also automatically gets upgraded to the next version of Android.

Separately, Google is releasing a new offline feature within the YouTube app later in 2015 that allows people to watch offline. That feature is important in areas where there is limited or intermittent Internet connectivity.

Once taken offline, videos can be played back without an Internet connection for up to 48 hours.

Biggest U.S. Linear Video Subscriber Loss in History in 2Q 2015

source: Wall Street Journal

There now is a steady drip of news and metrics indicating that the linear video business is reaching some sort of inflection point. The latest numbers show double-digit declines in viewership at a number of the leading linear video networks in the month of July 2015.

USA Network and History declined 14 percent each, but A&E dropped 36 percent.

Those figures were made public just days after another report showed the linear video business had its biggest-ever subscriber decline, in a single quarter.

The industry lost more than 600,000 video subscribers, its biggest quarterly drop ever, SNL Kagan said.

Sprint Moves Toward Phone Leasing, Not Sale

Sprint seems to be moving in device strategy direction that is different from all three of the of the other largest mobile service providers in the U.S. market. Sprint unveiled a new device program for iPhone customers that dispenses entirely with the “ownership” model and instead substitutes a “lease your phone” approach.

The “iPhone Forever” program offers new and upgrade eligible Sprint customers the lease of an iPhone for $22 per month.

Any customer on the plan can return their current model iPhone and get the latest model.  

“They bring their iPhone, upgrade on the spot and away they go,” Sprint says. The iPhone Forever plan presently offers a 16GB iPhone 6 model at Sprint branded retail stores, Sprint.com, 1-800-Sprint-1, Best Buy and Target.

T-Mobile US had abandoned contracts two years ago. AT&T has kept the option, though AT&T is encouraging customers to move to its installment plans.

Verizon Wireless, meanwhile, has decided to get out of the contract business as well, replacing contracts with the ability to buy a phone on an installment plan .

Through Dec. 31, 2015, customers on any other carrier or existing Sprint customers who are upgrade eligible and turn-in any smartphone will get a promotional rate of just $15 per month on a new iPhone. When they upgrade to the latest iPhone after Dec. 31, their monthly lease rate returns to current lease pricing, $22 per month.

The point, though, is that Sprint might further shift in the direction of leasing phones, not selling them.

Optus Pioneers 3X Carrier Aggregation for LTE, Delivering Speeds up to 317 Mbps

Australian mobile operator Optus has become the first telecommunications provider in the world to aggregate three different frequency bands, using both frequency division and time division multiplexing to support its fourth generation Long Term Evolution services.

The Optus “3x Carrier Aggregation” (3x CA) system combines 1x FDD and 2x TDD1 formats to supply the Newcastle NSW suburbs of Lambton, Mayfield and Mayfield West.

The move means Optus customers with the latest LTE category 9 smartphones, such as the Samsung Galaxy S6 edge+ and Samsung Galaxy Note 5, will experience speeds as high as 317 Mbps.

“We plan to switch on 3x CA technology in the Melbourne CBD in early September and roll out to the Sydney CBD early next year, followed by the Brisbane and Adelaide CBDs from mid-2016,” said Dennis Wong, Acting Managing Director Optus Networks.

TV White Spaces Inches Closer, In India and United States

Global technology giant Microsoft will be working with the Andhra Pradesh government on a TV white spaces pilot project providing four schools in Srikakulam with Internet access.

As a part of the project, the Z.P. High School will act as the base station, while three other campuses would be receivers and will be located at a distance of 10 km or more from the base station.

Wi-Fi has a range of only about 100 meters, whereas the 200-300 MHz spectrum band available in the white space can reach up to 10 kms, making TV white spaces a new way to provide Internet access, without using licensed spectrum.

TV white spaces also moved a bit closer to reality in the United States as the Federal Communications Commission issued new rules on the upcoming 600-MHz spectrum auctions that will enable TV white spaces nationwide, creating technical rules for use of the duplex gap, guard bands, 600 MHz service band and channel 37.

As always, where it comes to license-exempt spectrum, concern about interference issues is a reason for concern. It also is fair to note that such expressed concerns also represent contestant business issues.

Where entities that benefit from use of licensed spectrum will express concerns about interference from additional license-exempt services, so entities that benefit from license-exempt spectrum will raise issues about potential interference from licensed entities.

Precisely how much TV white spaces spectrum will be available in any specific market will vary. But TV white spaces potentially can be used in channels 14 to 20. In principle, that means more than 50 MHz of new spectrum could be made available for TV white spaces.

LTE Devices Were 58% of Global Smartphone Sales in 2Q 2015

Fourth generation Long Term Evolution network smartphones represented 58 percent of global smartphone sales in the second quarter of 2015, up from 26 percent in the second quarter of 2014, according to research firm GfK.

LTE-based smartphone unit growth was 129 percent year over year.

"India is expected to be the largest contributor of absolute smartphone unit growth globally this year,” said Kevin Walsh, GfL director of trends and forecasting.

In the second quarter of 2015, smartphone sales value grew eight percent over last year while unit sales grew by six percent.

In China, high-end device demand increased 49 percent year over year in the second quarter of  2015, though overall LTE device sales fell 10 percent.