IP Transit Prices Fall 14% Annually

IP transit is a case of  “different quarter; different year; same story.”

According to TeleGeography, median 10 gigabit per second Ethernet (10 GigE) port prices across key global transit markets decreased an average of 14 percent compounded annually between 2012 and 2015, and 22 percent in the past year.

The median 10 GigE port price in London, which serves as a critical international traffic hub for Europe, Africa, and parts of Asia, fell 16 percent compounded annually over the past four years to reach $1.00 per Mbps per month in the second quarter of  2015 and is among the lowest in the world.

Median prices in both Los Angeles and Miami, which serve as traffic hubs for Asia and Latin America respectively, fell 14 percent per year to $1.20 per Mbps per month.

Prices have fallen much less, and transit is more expensive, in regions that still are largely dependent on long-haul links to Europe or the U.S. to gain access to international connectivity.  

To the extent that long haul pricing is based on distance, that pricing disparity is understandable and logical, if not welcome by buyers.

10 GigE IP Transit Prices & Price Declines

Source: TeleGeography

For example, in São Paulo, where most Internet traffic is ultimately exchanged remotely in Miami, the median 10 GigE port price fell only five percent compounded annually between 2012 and 2015 to $16 per Mbps per month.

Service in Sydney, for which a significant amount of Internet traffic is exchanged in Los Angeles, costs $18 per Mbps per month for a 10 GigE port.

As content gets pushed closer to the end users, port prices should fall faster, as less distance will have to be traversed. So IP transit prices will keep falling.

Call Drops a Problem, But Billing and Broadband Seem to be Bigger Issues in India

About 6.5 percent of consumer complaints filed with the National Consumer Helpline in India in July and August of 2015 suggest call drop and network issues are problems for users of India mobile services.

But complaints about slow or “not working” Internet access represented an even bigger source of complaints. And billing issues were commonly reported irritations as well.

Mobile Services Could Raise India Farmer Incomes vy $9 Billion a Year

Simple mobile services could improve incomes of 70 million Indian farmers by US$9 billion a year by 2020, estimates a study conducted by Accenture Strategy with support from the Vodafone Foundation.

The study found that six mobile services could enhance earnings by an average of US$128 a year for almost two-thirds of Indian farmers.  

• Agricultural information services can provide early warning of weather events, information on the best times to harvest and advice on crop techniques to enhance yields. These services could increase an estimated 60 million Indian farmers’ annual incomes by an average of US$89 a year in 2020.

• Receipt services can provide greater transparency in daily commodity supply chains, allowing farmers to raise their incomes by improving efficiency and eliminating fraud.

• Payments and loans can provide farmers access to financial products and services using mobile money payment systems such as Vodafone’s M-Pesa. Access to highly cost-effective micro-finance and quick and transparent electronic payment systems could provide an annual benefit of US$690 for some farmers in 2020, representing a 39 percent increase in their average farming income.

• Field audits monitoring quality, sustainability and certification requirements, and using electronic reporting by tablets and mobile data, could increase annual average income by US$612 for some farmers.

• Local supply chains could allow small-scale producers to transact with local co-operatives, boosting some farmers’ annual incomes by US$271 in 2020; a 50 percent increase.

• Smartphone-enabled services could provide deeper functionality and richer sources of information than is possible using basic SMS and voicemail services. Advanced and affordable mobile services could lead to an increase in average annual farming incomes of US$675 for more than four million farmers in 2020.

Vodafone also is sponsoring a Farmers’ Club initiative in four additional emerging market countries: India, Ghana, Kenya and Tanzania.

The Vodafone Farmers’ Club is a social business model which offers a range of mobile services to help farmers boost productivity. It was first launched by Vodafone in Turkey in 2009; around 25 per cent of the Turkish population work in agriculture and the Farmers’ Club programme has benefitted 1.2 million farmers, helping them to enhance crop yields and increase farm gate incomes.

Specific Farmers’ Club services offered in each country will vary but will include information services, virtual marketplaces in which farmers can sell their produce and mobile money financial services and products.

Google Play Reduces Game and App Prices In India

The Internet ecosystem, it bears repeating, is loosely coupled. It takes any number of participants, all aligned, to provide high quality of experience, at affordable prices, for everyone.

A robust local access capability won’t do much good if the access domain is impaired, in terms of its connections to all other relevant application domains. LIkewise, even superior long haul connectivity plus excellent local access, plus connections to all relevant content stores, will not have as much value if end user access prices are too high, if devices are expensive and if desired apps are too costly.

So it is that Google Play recently lowered the minimum purchase price for games sold on Google Play in India, from Rs. 50 to Rs. 10.

Developers from India and around the world have decided to reprice their apps for Indian users. Now, you can find many of your favourite apps and games starting from only Rs. 10.

One might argue that is precisely the insight Facebook and others had with the Internet.org initiative, which provides access to useful apps without the requirement for buying a mobile data plan, at least for an introductory period.

In the Philippines and elsewhere, for example, high mobile Internet adoption rates occur within the first 30 days of use of Internet.org zero rated apps, Internet.org says.

In the Philippines, mobile Internet adoption doubled within a year, for example. That’s one example of important app providers and mobile service providers partnering to reduce the cost of sampling use of Internet access.

Thailand is Mobile First

Mobile phone adoption in Thailand shows why some consider Southeast Asia the first “mobile-first” region.

Mobile mobile adoption in Thailand has reached a point the average Thai person has 1.4 mobile phones or accounts, representing 140 percent adoption.

Mobile Internet penetration in Thailand has jumped from a one percent in 2009 to 56 percent in 2013. Perhaps more to the point, Thailand has more mobile phones connected to the Internet than there are Internet users.

LTE and Unmanned Aerial Vehicles are a Fit, Verizon Ventures Says

Is there a role for mobile networks in the unmanned aerial vehicle ecosystem? Verizon Ventures believes there is a clear role.

“Wide area wireless technologies, like LTE, have made it possible for drones to transmit vast amounts of data at farther ranges and faster speeds,” says David Famolari, Verizon Ventures director.

A typical UAV flight in a commercial application can generate more than 500 MB of raw visual and sensor data, often from entirely unique perspectives that would have been otherwise unobtainable, Famolari says. “UAVs range too far to rely on Wi-Fi, and transmit too much data to use 3G networks, but LTE solves both the range and capacity challenges, said Famolari.

LTE networks also can be used for UAV command-and-control as well.

Flight coordinates could be delivered over the network to dynamically update flight plans, reroute missions, and clear airspace when necessary, Famolari argues.

LTE connectivity gives UAV operators real-time visibility beyond the line of sight, allowing them to better manage their fleets, track aircraft, and run more efficient operations.

Mobile Money is Among the Most Successful Examples of Mobile Operators "Moving up the Stack"

Since its commercial launch in March 2007, M-PESA, the mobile money service created by Vodafone and Safaricom, has provided one of the more stunning successes of the “move up the value chain” strategy in the whole mobile business.

Keep in mind, text messaging exists as a service because it is a byproduct of network signaling. Text messaging itself was the transformation of a network signaling feature into a popular retail product.

Mobile money services using the text messaging channel are an example of adding new value to what might otherwise be viewed as a commodity messaging service (a dumb pipe).            

For customers, the benefits are even greater. The income of rural Kenya recipients increased by up to 30 percent since they started using M-PESA one study found.

In 2013, 43 percent of Kenya’s GDP flowed through M-Pesa, with over 237 million person-to-person transactions.

The percentage of adults with access to formal financial services since 2009 was about 41 percent of adults had access. Now 67 percent of Kenyans use formal financial services.

According to one study sponsored by the World Bank, 77 percent of rural residents reported an increase of household income after they started using M-Pesa between five and 30 percent of income, in large part because urban wage earners sent more money back to their home villages.

Also, in part the boosts might have happened because villagers no longer needed to travel to urban areas to get their money.

M-Pesa resulted in lower costs to use banking services as well. Sending 1,000 Ksh (US$13.06) through M-Pesa cost US$0.39, which is 27 percent cheaper than the post office’s PostaPay (US$0.52) and 68 percent cheaper than sending it via a bus company (US$1.16).

Urban users say they prefer M-Pesa because it is faster (the transfer occurs almost instantaneously), easier to access (there is a wide agent network), and safer (they don’t have to travel with money).

For Safaricom, M-Pesa also has been a marketing tool. Relatives in urban areas asked rural villagers to sign up and use M-Pesa, since it is cheaper to send money to a registered user.

For example, it costs 30 Ksh (US$0.39) to transfer 1,000 Ksh (US$ 13.04) if the user is registered. If the recipient is not registered, Safaricom charges a higher total fee of 75 Ksh (US$0.98) to the sender.

About 20 percent of the unbanked interviewees in Kibera use M-Pesa as a substitute for informal methods of savings, especially keeping money at home.

Most say they prefer to store money with M-PESA because it is safer. They do not need to worry about household members finding, and stealing, their money.

Many of the unbanked further note that they keep money in M-PESA because they trust Safaricom, whereas they feel that money stored in a bank is at a high risk of being lost.

The point is that mobile money has emerged, in some markets, as a prime example of how mobile operators have “moved up the stack.”