45% of Millennials Do Not Buy Linear TV

It is bad news when 45 percent of potential customers do not want to buy one of three core consumer communications or entertainment products, as the latest survey from Limelight Networks suggests. Though 55 percent of surveyed Millennials say they do buy linear video TV, that also means 45 percent do not buy.

That is an issue for all triple-play providers, but especially for cable TV and satellite TV firms, who have most of the market share.

Price is an issue for many Millennials, as it is for most other demographic groups. Or, perhaps it is fair to say, price is an issue because value is challenged. The single greatest reason for disconnecting was “higher prices,” as you would expect. About 35 percent of subscribers said higher prices would cause them to consider disconnecting.

Some 19 percent suggested the ability to watch the channels they want online would be the reason for cancelling service. About 11 percent seem to be waiting for sports and live events to be available online.

Almost five percent say they would quit buying linear service when they are able to get all the channels they want over the air, using a TV antenna. Since that is not going to happen, we can discount the responses, and assume the key issue for such respondents is “no incremental cost.”

They seem to prefer paying nothing extra to watch all the channels they prefer, but that is not going to happen.

One issue that cannot be assessed is how typical spending might change, over time, as over the top streaming services proliferate and much content is available from a few dominant distributors.

What is unlikely to happen is that one single provider has content rights to “everything” a consumer might wish to watch. That will mean it is uncertain how spending might change, as consumers will have to buy more than one subscription, in all likelihood, to get most of what they want to view.

Some mix of “skinny bundles,” plus use of over the top subscription services, is likely to be the intermediate pattern for many consumers. More than 40 percent of Millennials, and 34 percent of all other consumers, already buy an OTT streaming service.  

source: Limelight Networks

source: Limelight Networks

What a Small Looks Like, Commercially Deployed

A real-world Verizon Wireless small cell in San Francisco. Interesting since there is controversy in my own neighborhood about deployment of a new cell site, not sure whether it is a macrocell or a small cell. Doubt the fuss is about a small cell deployment.

source: RCR

Average Speed Globally is 5.1 Mbps; Does Not Matter So Much

“Averages” do not always mean too much where it comes to the Internet. Though the global average access speed is 5.1 Mbps, according to Akamai, speeds in India average 2.5 Mbps.

In Singapore, the average speed is 137 Mbps.

In the Philippines, speeds average 2.8 Mbps; in Indonesia three Mbps; in Vietnam 3.4 Mbps.

All of that makes the concept of "average" a bit like having one foot in boiling water, one foot in nearly-freezing water. "On average" temperature means very little.

Keep in mind that the platform used also makes a difference, as access speeds usually are higher on fixed networks than on mobile networks, and most consumers in Asia who use the Internet do so on a mobile device. In addition, most mobile networks in much of Asia are of the 2G or 3G variety, not yet 4G.

Beyond such differences, speeds tend to be lower, or non-existent, in rural areas. Though the cost disparities are lesser, where it comes to mobile, compared to fixed networks, the gap remains.

In the United Kingdom, for example, the percentage of homes not able to buy a 10-Mbps service rises as density falls. In other words, more rural areas get lower speeds. The more rural, the lower the typical speed.

source: thinkbroadband

The reason is largely the cost of infrastructure, which is both more extensive, and yet also serving fewer customers per unit of investment. In other words, an ISP has to spend more, burt earns less.

In fact, in most very-rural areas, it might be impossible to earn an actual return. The difference in a business model can be transfer payments and universal service support.

In contrast, where density is very high, the business case is best, or close to best. “Average” is a squishy concept, where it comes to Internet access.

source: FCC

Like it or Not, Future of Competitive Business Services is Based on Facilities

It will not come as any surprise that competitive access services providers argue incumbent telcos still have market power. That is the argument that motivates the Federal Communications Commission to protect wholesale access for firms with little to no willingness or ability to build their own access facilities.

Since roughly 2002, though, the FCC has made clear its preference for facilities-based competition in the local loop, something cable TV companies, Google Fiber and now a growing number of independent Internet service providers are doing, especially in the arguably harder business case of consumer customers.

Some ISPs serving enterprise customers in urban cores use wireless access rather than digging trenches, so that provides yet another model for investment in access facilities.

Some have estimated that Google Fiber’s first gigabit access network in Kansas City (Missouri and Kansas) cost about $563 per location. With more experience, Google Fiber undoubtedly will drive those costs lower.  

Customer acquisition and customer premises add more costs, but you get the point: building gigabit Internet access plant using fiber to the location does not cost as much as it used to.

Not every service provider--in fact, very few, historically--wants to build such plant. There are many reasons, among them the danger of creating stranded assets if a customer disconnects. In cases where a customer account lifecycle is three years, that is a problem.

In other cases, capital cannot easily be raised to do so. And while enterprises often are very happy to buy gigabit IP connections, many smaller businesses still buy legacy T1 and DS3 connections.

In fact, cable TV operators are gearing up for a major assault on enterprise and mid-size business customers, proving that a facilities-based approach is possible. It just is not possible for every contender in a market.

Cable TV firms have been aggressively targeting the small and medium-sized business with growing success, and generating at least $10 billion in revenue annually and growing in excess of 20 percent annually.

Enterprise services are the next big evolution.

Not all business models, consumer or business-focused, work forever. The FCC wants facilities-based competition. Not every contestant will benefit. But a growing number of initiatives by facilities-based providers show what can be done.

Across Southeast Asia, Mobile Data is the Incremental Revenue Opportunity

source: Ericsson

Between 2015 and 2021, mobile subscriptions will grow at a compound annual growth rate (CAGR) of four percent, reaching around 1.3 billion subscriptions by the end of the period. 

The reason for the moderate rate of growth is that adoption across most of the region already is at 100 percent.

In practice, that tends to mean use by people ranges far upwards of 50 percent, as many customers use multiple accounts multiple subscriber identity modules.

That rather slow rate of growth attests to widespread mobile usage across the region.

Revenue growth, on the other hand, is going to come from incremental sales of mobile Internet subscriptions, even if room remains for adding new accounts.

Mature markets such as Australia and Singapore, where LTE is widely available, have a very high mobile broadband penetration, already exceeding 90 percent.

Developing market mobile Internet penetration is 25 percent. That, obviously, is where the revenue growth opportunity lies.

source: Wearesocial.net 

Trade Finance Using Social Media to Assess Creditworthiness

Connecting small business owners and entrepreneurs with trade finance is the mission Rwandan company Kountable accomplishes using mobile phones and a method of assessing creditworthiness using social networks. The whole point is fast and accurate due diligence on ability to repay a loan.

Launched in May 2015, deals ranging from as low as US$2500 and as high as $500,000 have been facilitated, says Chris Hale, Kountable CEO.

Kountable is not a loan originator, however. It provides assistance to lenders and borrowers. Basically, Kountable reduces risk when a supplier and financing entity agree to enable delivery of  goods to a merchant.

“We help you purchase raw materials, stock or inventory and get paid by your end client so you don’t have to worry about funding these purchases as part of your transaction,” says Hale.

“We are focused on business finance needs that require short term support which does not exceed one year and though there are no limits on how much, we want to benefit as many businesses as possible so we want to keep the bulk given to each business within the range that we have handled in the past ($2500-500,000),” Hale says.

Kountable measures creditworthiness by evaluating an entrepreneur’s social capital—their network of contacts and relationships. In cases where an applicant does not actively use social networks, a score can be constructed from email data.

The scoring alogorithm, as with any other method, assumes that one’s past business relations, activities and behavior tend to predict future behavior.

Ideally, though, an applicant’s kScore is generated by measuring the activity and size of social networks (social networking sites) as well as phone and text messaging contacts and email profiles.

Based on an algorithm that looks at several dimensions of all that data, applicants are scored with a numerical value between 500 and 1000 that is a proxy for creditworthiness based on social capital.

The company says it can make a credit score in five to 10 working days.

Kountable works to raise funds in the United States for such entrepreneurs using the kScore, offering lower rates than otherwise would be available.

The Kountable business model is a two-percent-per-month financing fee on the value of loans made by third parties.

The significance is that, since about 1995, private activities have vastly surpassed the value of official development assistance as sources of capital inputs in developing countries. Kountable is part of that trend.

source: World Bank

U.S. Internet Access Costs 0.4% of Gross National Income Per Capita

International comparisons always are difficult. National domestic product or income, currency exchange rates, population size, country size, household size and size of rural population all make a difference.

In the developed world overall, Internet access costs about 1.7 percent of gross national income per capita, according tot he International Telecommunications Union.

On that score, U.S. Internet access costs 0.4 percent of GNI per capita, about third best in the world.

1. Macao China -- .2% of GNI per capita

2. Kuwait -- .4%

3. United States -- .4%

4. Switzerland -- .6%

5. Luxembourg -- .6%

6. Andorra -- .6%

7. United Kingdom -- .7%

8. Japan -- .7%

9. Norway -- .7%

10. Hong Kong -- .7%

As with all cross-country comparisons, one has to adjust for conditions on the ground.