Supporters Hope Carrier Wi-Fi Will Create New Business Models

In the near term, hotspot network business models will be driven by existing business models--faster access, advertising, location and venue services, according to Maravedis. For the most part, business models rely on indirect value--such as churn reduction or data offload--rather than direct subscription revenue or advertising, for example.

The search for new business models, at the moment, centers on the ability to create seamless carrier quality connections, to support voice subscription revenue or enterprise services.

The installed base of carrier-grade hotspots will rise at a compound annual rate of growth between four percent and 14 percent,  depending on the region.

Asia-Pacific will still account for 66 percent of the total world base in 2020, despite the expansion in other regions.

On average, each country  has over 200,000 hotspots (excluding homespots) deployed under its direct control and one million available to its subscribers by roaming or wholesale deals. The figurs are skewed by a few larger telcos.

source: Maravedis

Vodafone Expands Gigabit Networks in Ireland, Portugal

Vodafone Group has begun deploying gigabit Internet access services in Ireland as part of its initiative to connect small towns (4,000 homes or more) to fiber-to-home networks by the end of 2018.

Carrigaline in Country Cork is the first of 51 Irish towns to receive access.

Ireland is the first country in Europe to use electricity infrastructure to deploy end-to-end fiber directly to the premises on a nationwide basis.

Vodafone Group also announced a €125 million expansion of its FTTH network in Portugal, offering speeds of up to 1 gigabit per second to 2.75 million homes and businesses across the country by the end of 2016.

To date, Vodafone has connected 2.2 million Portuguese homes and businesses to FTTH networks,

Vodafone is also building a new gigabit FTTH network in Spain serving more than two million homes and businesses, and is in discussions with Italian electricity company Enel which has announced plans to create a new infrastructure company to build a national FTTH network open to all operators across Italy.

What Must be Done Next to Stimulate Faster Internet Adoption Across South Asia?

Spectrum Futures has posted a new white paper: Increasing Internet Access Availability Across South Asia: What to Do Next. 

In many cases, the answers start with an understanding of where and how Internet access will be used. 

By 2020, for example, 54 percent of South Asia mobile customers will be using smartphones, according to GSMA estimates.  Those choices by consumers necessarily drive demand for more bandwidth.

Between 2015 and 2021, data consumption per smartphone will grow nine times in Western Europe, five times in Central and Eastern Europe, nearly six times in the Middle East and Africa, nearly seven times in Asia Pacific, nearly six times in North American and five times in South America.

In much of Asia, as in some other regions, the smartphone is the gateway to use of the Internet. In India, for example, about 57 percent of the time, the smartphone is the access device of choice, according to the Google Consumer Barometer.

In the Philippines, about 39 percent of the time, the smartphone is the preferred or more-used access device.

Smartphone adoption therefore will be a key driver of bandwidth demand, since mobile Internet consumption on smartphones is growing at a compound annual growth rate of 50 percent.

It also goes without saying that attractive applications and services are the reasons people want to use smartphones and the Internet, which is why many believe programs such as "Free Basics" make sense. 

Many who do not yet use the Internet across South Asia say they do not have a need, or do not know why they would want to use the Internet. So allowing people to sample the Internet is a proven way to boost demand by allowing people to discover the value of Internet apps.

And though it will not be the only platform for Internet access, there can be no denying mobile's huge role. 

There will be 2.51 billion mobile phone users in the Asia-Pacific region in 2015, a figure equal to 62.5 percent of the population, rising to 69.4 percent by 2019, according to eMarketer.

Also, Asia will account for 39 percent of global data consumption by 2019, as a result, according to Cisco. And India will represent a huge part of the growth.

India is on track to surpass half a billion mobile subscribers by the end of the year, according to a new GSMA Intelligence study. By 2020, India will account for almost half of all the subscriber growth expected in the Asia Pacific region.

The Mobile Economy: India 2015 notes that 13 percent of the world’s mobile subscribers reside in India. At the  end of 2014, India’s mobile subscriber penetration rate was about 36 percent of the population, compared to a 50 percent global average.

But that is going to change, fast.

The subscriber penetration rate in India is forecast to reach 54 per cent by 2020 as many millions more are connected by mobile.

India had 453 million unique mobile subscribers at the end of 2014, but is forecast to surpass 500 million by the end of 2015 and add a further 250 million subscribers by 2020 to reach 734 million.  

ISDN Used to be the "Next Generation Network"

Some of us can remember when ISDN was the "next generation network." Then we shifted to broadband ISDN (Asynchronous Transfer Mode). Then the Internet hit. Now the next generation network is built on Internet Protocol. 

That wasn't the way network architects in the telecom world expected matters to unfold. 

Calling Service Ringo Gets Blocked in India

Calling service Ringo, which has been offering international calling and recently launched domestic calling service in India, says domestic calling on the service has been blocked, apparently by its own wholesale service provider. Ringo says it is “a fully legal, compliant service, and follows all aspects of the DoT and TRAI regulations.”

Ringo uses wholesale minutes purchased from an underlying carrier, and is not an over the top service, so the reason for the blocking of domestic calling on Nov. 30, 2015,  is unclear.

“Until we manage to get an intervention from relevant regulatory authorities to unblock our service, none of our domestic calls are going through,” Ringo said.

The blocking is curious. Ringo buys minutes in bulk from carriers, offering local calls for as low as 19 paise/min (less than a cent). To put that in comparison, Airtel charges around ₹1.40 (20 cents) per minute, and if you're on a reduced tariff plan, that comes down to 40paise per minute (six cents).

That existing mobile service providers would not be happy about the additional competition is  understandable. Why an apparently lawful service is being blocked, however, is not clear.

The Ringo app allows users to call any landline or mobile in the country at a flat rate of 19paise per minute (less than half a cent), without any additional charges.

Unlike other VOIP apps, Ringo uses carrier networks instead of phone data or the Internet for a phone calls.

Using Big Data to Slice Cost of Assessing Creditworthiness for Microloans

By some estimates,  4.5 billion people do not have any kind of formal credit score that could help them qualify for loans, but up to 90 percent of the world’s population does have access to mobile phones.

As it turns out, mobile phone behavior can establish a  “financial identity” that provides many of the advantages of a credit score, when entities want to make loans, typically microloans. By reducing risk of non-payment, such measures could enable loans made with smaller lending fees.

That, obviously, would help borrowers as well as lenders. Firms such as Branch (a nod to its mission of serving as a branchless bank) use phone data to assess borrower likelihood to repay on loans of $25 or less in Kenya, and mobile phones as the means to send money and receive repayments.

The app, available on Google Play, can make a loan determination and deliver a result to the mobile phone in five minutes.

Branch collects data from the potential borrower’s phone, including information about the device, text message logs, call logs, and contact lists. Branch then uses the  information to assess creditworthiness.

In some cases, the value comes from use of the phone to record spending and saving data entered manually.

In other cases, non-financial behavior can be used to create a proxy for a credit score. Kreditech says it can use 20,000 measures based on phone behavior to make an assessment. Traditional banks might use 300 measures.

In addition to new commercial microlending apps and efforts, the original impetus might have been non-profit microlending by outfits such as Kiva, which works with dozens of commercial partners.

The use of algorithms to assess risk obviously will help to cut the costs of screening, which in turn arguably contributes to the high interest rates microloans tend to feature.

source: Wall Street Journal

Will Service Provider Costs Have to Decrease 40% by 2020?

There are several reasons why services delivered over fixed networks are going to face tougher competition from mobile services, ranging from orders of magnitude more mobile bandwidth to lower mobile network sunk costs to higher network utilization rates to changing end user demand.

Simply put, demand for consumer-focused mobile services now vastly outstrips demand for fixed network services.

According to the International Telecommunications Union, fixed telephone subscriptions have declined from 15.2 to 14.5 per 100 persons, globally. That abandonment of fixed network voice is occurring at the same time that mobile subscriptions have reached 98.6 percent.

To be sure, demand for fixed network Internet access grew, but slowly, in 2014. Fixed network Internet access subscriptions grew from 10.3 percent to 10.8 percent.

Also, relatively speaking, it is going to be easier to wring cost out of mobile platforms, compared to fixed platforms, in most markets.

Mobile networks cost less than fixed networks, and can be deployed and upgraded faster.

Though the pattern is by no means uniform globally, the cost of a mobile network, including spectrum purchases, is less than that of a comparable fixed network.

But mobile markets typically feature multiple mobile operators (three to five, for example) operating with their own facilities, while many fixed network markets feature only a single network operator, or possibly two, in some markets.

In addition, mobile network infrastructure costs are described in terms of costs to serve “people,” while fixed network costs are “per location.”

That makes direct comparisons somewhat more difficult. But a study of U.S infrastructure costs showed mobile or wireless networks were less costly than fixed networks when loop length requirements  were 12,000 feet, for example, when the comparison was a single new mobile network and a single new fixed network.

Total investment might differ if multiple mobile networks overbuild a single fixed network. In some cases, the total cost of all the mobile networks could be higher than that of a single fixed network.

Operating costs often also are lower for mobile than fixed networks, sometimes because the fixed networks have cost structures typical of former-monopoly providers, while mobile service providers often start with lower cost structures.

Also, as customers abandon the fixed network, more of the assets are stranded, and unable to generate a financial return. Rare is the cell tower that does not serve paying customers, or enough paying customers to earn an actual profit.  

And ability to reduce costs is going to be essential, if one believes, as does the International Telecommunications Union, that retail consumer communications service prices are going to drop by 40 percent by 2020.

To be sure, prices might not drop by 40 percent for every service, offered by every provider, in every market. Prices for fixed services might even rise, as consumers opt to buy more-expensive services running at higher speeds up to a gigabit per second in some markets, but easily to hundreds of megabits in more markets.

The analogy there is smartphone prices, which are higher than what consumers used to pay for feature phones.

Still, stranded assets and shifting demand are going to create increasing pressures for fixed network service providers. Mobile operators will not be exempt from the pricing pressures, either.

Some might already argue that many fixed network providers, and even some leading mobile providers, have business models that are going “upside down.”