Windstream Selling Data Center Business

In the data center business, scale matters. Even if data centers are the new central offices, in terms of aggregating edge traffic for transport across the wide area networks, smaller providers competing against Amazon Web Services, Microsoft and Google, plus other providers, will find it tough to compete.

So it is that Windstream is pondering a sale of the data center business  it purchased in 2010.

That will free up capital Windstream can deploy elsewhere, but might also dent its enterprise revenue streams. Windstream earns nearly 80 percent of its revenue from the business segment.

In its second quarter of 2015, Windstream had revenues of $1.4 billion. Consumer revenues represented just $314 million--about 22 percent--of total revenues.

Since about 2010, both Windstream and similar profile service provider Frontier Communications have earned most of their money in the business segment, despite the continuing preponderance of consumer accounts.

Cable One Doubles High Speed Access Speeds, Moving to Gigabit

Cable ONE, a quadruple-play service provider with 700,000 customers in 19 states, is doubling downstream speeds for new and existing residential high speed Internet access customers in more than 90 percent of its markets beginning October 2015.

The Streaming 50 Mbps plan will double to 100 Mbps; the 75 Mbps Premier plan will double to 150 Mbps and the 100 Mbps Ultra Plan will double to 200 Mbps.

Cable ONE will invest $67 million in 2015 on network upgrades and enhancements, a necessary step in providing gigabit service to residential customers. The company plans to announce residential gigabit markets in September 2015.

Who Can Afford to "Educate" Small Business About Value of New IT, Communications Services?

In case you needed a reminder why channels are so important for sales of information technology and communication technology products, consider new research from

Parks Associates, which looks at spending on IT and Support Services for Small Businesses.

The study finds that small and mid-sized businesses, which have between one and 250 employees, spend only $90 to $150 per month for IT services, including server maintenance, virus protection, and backup services.

“SMBs rely heavily on computing devices, but their spending on IT services, such as network security, cloud storage and IT support, has not matched this growing dependence,” said Patrice Samuels, Research Analyst at Parks Associates. “

In part, that might result from the laborious effort to communicate actual value in a sales environment where the potential buyer is quite busy, generally not so sophisticated in terms of IT knowledge, and very conscious of value and price.

SMB decision makers who are familiar with the benefits of an IT service are more than nine times more likely to subscribe than decision makers who are unfamiliar with the service, says Samuels.

The issue is whether most channel partners, indeed at such levels most mass market sales efforts, can cost effectively communicate value.

In other words, how much time can a sales associate afford to spend educating a customer who’s spending might represent $100 incremental per month?

Can a sales associate even be an effective channel, under such circumstances? There is a reason small business generally is lumped in with “mass market” by tier one service providers.

The hard reality is that no tier one service provider can afford to spend very much on “educating” buyers in that space. The other problem is that a relatively low percentage of very small business owners are highly interested in buying new IT services.

Comcast DOCSIS 3.1: Gigabit Everywhere by 2016; 10 Gbps Built In

Comcast’s timetable for supplying gigabit connections to all of its present and potential customers is stretching out. Comcast originally had suggested it might be able to do so in 2015. Then the schedule lengthened to 2016 first quarter.

Now Comcast says it will happen “as soon as” 2018. That slipping timetable is not unusual for massive technology projects.

That might not be terribly important. Right now, “gigabit” is more a marketing platform than a core end user requirement.

Perhaps more significant: though the access network might need reinforcement, the new DOCSIS 3.1 platform Comcast is introducing is capable of supporting 10 Gbps in the downstream.

Australia’s National Broadband Network is introducing the same platform. Some question how soon cable companies really can deliver downstream speeds close to 10 Gbps without allocating more bandwidth, which would have to be taken from video services.

Some of us would argue that is coming. The large video bundles are increasingly out of favor, providing incentives for cable operators to reallocate bandwidth to high speed access, and away from video.

Internet of Things Likely Will Follow Normal Technology Adoption Curve

The Internet of Things, many believe, is the future of revenue growth for the mobile business, with a very simple logic: there are only so many locations or people to connect.

There are an order of magnitude more human beings than places to serve. And there are an order of magnitude more devices to connect, than humans to serve.

But “necessary” is not “sufficient.” Future revenue growth might hinge on IoT success. But necessity does not guarantee success, or success in a measurable business horizon, for most firms.

If Internet of Things does emerge as the new industry many predict, it would clearly qualify as an important technology innovation. And important, successful technology innovations tend to follow a maddening development path.

There normally is less progress early on than people expect. That means many firms get in too early. But then, after a longish period of quietude and disappointment, there is an inflection point, where adoption suddenly zooms beyond expectations.

That undoubtedly will be the case for IoT, as well. Commitment and patience, as well as serious effort, will be required. Internet of Things pioneers will attest to that.

Australian National Broadband Network Will Reach 9.1 Million Locations by 2018

Large and unusual (“one off”) construction or development programs are very hard to model, cost wise. So many will not be surprised that the Australian National Broadband Network plan has been revised to reduce costs from original forecasts, but upwards from the level the adjusted plan conceived.

In a new report, the cost overrun is estimated at greater than AU$10 billion.

The latest 2015-2018 corporate plan (PDF) suggests that by 2018, the NBN will require at least $9.6 billion in peak funding beyond what the government is prepared to supply in the form of equity or grants.

Put another way, the business plan is not fully funded, though few would doubt ability to secure lenders, by about 2017, to close the gap.

The maximum “peak funding” will be in the range of AU$46 billion to AU56 billion, with a median estimate of about AU$49 billion.

Over the period of the current three-year plan, the network will reach four million premises, of which 20 per cent will be served by fiber to the premises. About 72 percent of locations will use fiber to the node (FTTN) and hybrid fiber coax (HFC).

About 400,000 locations will be served by satellite connections, while 590,000 locations will be served by fixed wireless.

That assumes that by 2018, 1.67 million premises will be activated on FTTN, along with about a million HFC premises, and 1.3 million on fiber to home networks.

The wholesale-only network presently aims to provide downstream data rates of at least 25 megabits per second (25 Mbps) to all premises and at least 50 Mbps to 90 percent of fixed line premises.

AT&T Mobile Revenue Squeezed on High and Value Parts of its Market

AT&T has to compete with Verizon in the premium segment, but also T-Mobile and Sprint in value segment. That is pressuring gross revenue and profit.

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