Bitcoin or Blockchain?

What is the bigger opportunity: currencies, or the system of exchanging currency or conducting other transactions. In other words, is the store of value or trust the more interesting new development around virtual currencies?

Is Bitcoin or Blockchain the bigger innovation?

source: Business Insider

Nonlinear Rates of Change Pose Greatest Risk to Service Provider Transformation Plans

Nonlinear change is likely among the greatest dangers any business or industry can face, and that is true for cable TV, satellite TV and telco service providers alike. The overall direction of changes in revenue sources, the rate of growth or decline are fairly well understood.

But what could upset plans to replace revenue sources is an unexpected and large shift in the rates of change, especially from legacy services. As typically is the case, revenue losses in the legacy business will tend to affect business models more than unexpected upside surprises for growth businesses.

With the caveat that revenue is not profit, U.S. cable TV operator revenue trends are clear enough: business services and high speed access are projected to drive revenue growth through 2020. LInear video and voice will fall, while advertising remains roughly stable.

But everything hinges on what happens with high speed access, video entertainment and business services. A predictable pace of decline for video, with predictable growth of high speed access and business services, will allow a smooth transition of revenue sources.

The danger: nonlinear changes to the downside in video or high speed access could imperil revenue stability. The is the same set of strategic dangers faced by telcos, as well.

Cable TV providers face two sets of issues: declining units sold and declining profit margin on those units, even if average revenue per unit can eke out gains. Declining ability to wring free cash flow out of video means it is necessary to maintain high growth rates in business services and high speed access, while maintaining profit margins.

The rate of change makes a huge difference, even if the direction of change is anticipated. Small single-digit increases in abandonment of video, or a few digits annual change in revenue growth rates for high speed access, would put severe pressure on the business model, some argue.

Between 2015 and 2020, the leading cable operators might see a decline of 33 percent in video revenues, with margins dipping to nine percent from 24 percent.

High speed access revenues are forecast to grow 52 percent. Commercial revenues are projected to grow from $6 billion to $13 billion, an increase of more than 100 percent.

An accelerated rate of decline for linear video would seem the biggest downside risk, but a slowing rate of revenue growth in high speed access is likely the second-largest potential risk, as telcos shift to higher-speed access services and third parties such as Google Fiber take more share.

source: Business Insider

source: Business Insider

Canada Gets a Potential "Four Leaders" Opportunity in Mobile

The most important numbers in most mobile service provider markets are “three” and “four.”

Three tends to be the number many believe provides both competition and sustainability, while four is the number policy advocates and government regulators prefer, primarily because four contestants are believed to provide more robust levels of competition.

The Shaw Communications acquisition of Wind Mobile Corp., despite Wind’s small market share (about three percent) means there will be four national wireless carriers, all backed by four big national telecom conglomerates, instead of just three.

Wind says it is  Canada's largest non-incumbent wireless services provider, serving approximately 940,000 subscribers across Ontario, British Columbia and Alberta with 50MHz of spectrum in each of these regions.

Wind has a bit over three percent market share in the Canadian mobile market.

Wind has yet to begin building a fourth generation Long Term Evolution (LTE) network, so that undoubtedly will be on the agenda, as Shaw prepares to step up competition with the leading mobile providers in Canada.

Though Canadian regulators recently had used a familiar tactic--creating spectrum reserves for new and upstart providers--some would argue that no meaningful change happened.

In March 2015, Wind Mobile Corp., Videotron Ltd. and Eastlink Wireless won significant blocks of AWS-3 (advanced wireless services) spectrum covering most of the country for a combined total of less than $100 million, while Telus Corp. and BCE together will spent about $2-billion for the licenses they won.

The new entrants paid an average of 11 cents per megahertz per person (MHz-Pop)

Telus paid $3.02 per MHz/Pop and BCE paid $2.96 per MHz/Pop.

What Will Mature Internet Access Lifecycle Look Like?

How soon will Internet access become a legacy product, past its peak of growth, in the U.S. and other markets where fixed networks have been a typical access platform? And, when that happens, what form will the decline take?

In other words, how soon will high speed access start looking like voice and linear video, products that have become saturated, to be followed by a decline? And, when that happens, what form will the decline take?

In the prior maturations, people simply stopped buying the product altogether. It is in many ways hard to envision that scenario for high speed access, if one assumes it is a foundation product for most other entertainment, communications and transaction services.

One possible outcome is that the market saturates, but does not actually result in abandonment. The market simply stops growing, but consumers keep buying. Decline then does not take the form of abandonment, but revenue decline.

The pattern there would be different than the cases of voice or linear video, where the actual number and percentage of people stopped buying. 

Instead, perhaps the matuation takes a different form. It is possible that revenue first flattens, and then declines, as people keep their connections, but pay less. 

In that sense, maturity would not necessarily involve abandonment, but only lower prices paid by consumers, and declining revenue for suppliers.

A traditional pattern based on substitution would have fixed access abandonment in in favor of Wi-Fi or mobile or some other new alternative, for example. That is hard to see, at the moment, but 5G could represent a breakthrough.

To some extent there is mobile substitution, where people choose mobile access rather than fixed access. Whether 5G can accelerate that process is the issue.

That we are close to saturation is easy to see. In 2015, 85 percent of U.S residents say they use the Internet. And many of those non-users do not want to buy. Still, the point is that we are within 10 percentage points or so of virtually complete adoption.

Market share shifts are the other issue. One might argue that cable TV companies will continue to take share from telcos. One might argue that third parties will take share from telcos and cable TV.

But if the market is saturated, and if telcos continue to substitute fiber connections for copper, even market share shifts will be more difficult.

FCC Wants Information on Binge On, Comcast Stream TV and AT&T Sponsored Data Programs

As it said it would, the Federal Communications Commission is asking some leading U.S. Internet service providers for information about programs that provide access to apps without incurring usage charges on a data plan.

Letters asking ISPs to share information about their programs have been sent to AT&T, Comcast and T-Mobile.

"As you may be aware, concerns have been expressed about these programs, for example, some have argued that sponsored data unfairly advantages incumbent content providers," the letter to AT&T said. "We want to ensure that we have all the facts to understand how these services relate to the commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources."

The T-Mobile US "Binge On" policy that does not count some digital video services against data limits.

Comcast’s "Stream TV" does not count usage against data caps.

AT&T has a "sponsored data plan" programs that allow content providers to subsidize users' wireless data.

Some view any business practices that allow third parties to underwrite data consumption, or carrier programs to exempt video and audio traffic from data usage charges, as violations of network neutrality. Others disagree.

The T-Mobile US program is open to all music or video providers. So the issue is whether exempting a whole class of apps from data charges is a violation of network neutrality rules.

Others see sponsored data as a business practice no different than toll-free calling or ad-supported TV and radio.  

Comcast’s service appears to be a “managed service,” exempt from network neutrality rules, some would argue.

Project Loon Promised Help by Indian Telecom Minister

Though some government agencies have issues with Google’s Project Loon, Ravi Shankar Prasad, India’s minister for telecom and IT said that the government was in principle agreeable to pilots of Google's Project Loon.

Prasad also said he had also proposed a partnership with state run BSNL for Project Loon, which proposes a fleet of steerable balloons as a backhaul mechanism for mobile networks using the Long Term Evolution 4G protocol.

A few ministries--defense, home and civil aviation and the Department of Telecommunications have raised technical and security concerns over the project.

One of the primary concerns with the proposal is that the spectrum band required for the transmission a band between 700 to 900 MHz is occupied by telecom service providers and is currently unavailable. But security is another concern.

Prasad said the government would help Google in obtaining clearances from civil aviation and the defense ministries.

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