Reliance Communications Halts Free Basics, at Least Temporarily, After Government Request

The Telecom Regulatory Authority of India has asked Reliance Communications to stop the Free Basics service, at least temporarily.

"We have asked them (Reliance Communications) to stop it and they have given us a compliance report that it has been stopped," a senior government official said, the Times of India reports.

It always is hard for any firm regulated by a government entity to resist such "requests."

Free Basics, called by many a zero rated approach, allows mobile consumers to use and sample a selection of Internet apps without incurring a data plan charge, or even if they do not have a data plan.

In India and elsewhere, including the United States, regulators, policymakers and policy advocates have been arguing that zero rated apps are a violation of network neutrality principles.

Others argue the practice is a business policy, like offering coupons, discounts and other promotions.

In the United States, the Federal Communications Commission has requested more information from mobile service providers about programs that allow users to listen to streaming music, or watch streaming video, without incurring usage charges on their mobile data plans.

The T-Mobile US "Binge On" program provides an example of that effort. AT&T, meanwhile, offers a sponsored data program where advertisers can sponsor data consumption by consumers, much as toll-free calling works. Verizon, for its part, also is working on a sponsored data program.

Internet Access by Smartphone Now Depresses Fixed Network Internet Access

As wireless substitution has been a major trend in voice communications, it now is measurably an issue for high speed access as well.

About 67 percent of U.S. adults have access to fixed network high speed Internet access, according to the Pew Research Center, down slightly from 70 percent in 2013.

Reliance on mobile Internet access appears to account for the change. More Americans are “smartphone-only” in 2015 than was the case in 2013.

Some 13 percent of adults rely on their smartphone for online access at home, up from the eight percent who did so in 2013.

The increase in “smartphone-only” adoption largely corresponds to the decline in home broadband adoption, according to Pew Research Center.

Smartphone adoption has reached parity with home broadband adoption (68 percent of U.S. adults report they use a smartphone, the same percentage as report using at-home fixed network Internet access.

The bottom line is that 80 percent of U.S. adults have either a smartphone or a home broadband connection, a small change from 2013, when 78 percent had one of these two access means.

Will OTT Video Save Consumers Money? It Depends

Though it is not a consumer’s task to worry about product provider profit margins, revenue, stock prices and such, consumers, in the end, pay for all costs of developing and supplying any product.

So it matters whether new video delivery platforms will lead to lower prices, irrespective of what happens with content volume, the number of channels or shows.

That noted, one might question whether cost per hour of consumption of over-the-top video will necessarily be a better value for most consumers than linear video.

With the caveat that all prices will change over time as the market moves in the direction of over the top, on demand or a la carte delivery, it is not true that over the top video now available to consumers costs less than linear video subscriptions do, on a cost per hour basis.

True, consumers might not care. They might only care about out of pocket costs. On that basis, for some consumers, OTT video offers higher value.

For heavy users, though, OTT video costs more, per unit. The cost to use an hour of linear TV (expanded basic only, not including any premium services such as HBO), might be about 25 cents an hour. Using Hulu already costs $1.69 per hour, while using Netflix costs 89 cents per hour.

To be sure, all that depends on how much video actually is consumed each month. How many Netflix customers actually watch 34 hours of video every week, as is quite common for most linear video subscribers?

It might easy enough to predict the outcome of a market that moves massively in the direction of over the top video. Economic viability of most programming networks will be called into question, as advertising-dependent business models will not work for networks with small audiences.

Independent channels, especially, will suffer as affiliate revenues (payments made by distributors for rights to carry a channel) also dwindle because of skinny bundles and lower gross revenues for linear services.

For better or worse, content diversity will take a hit. That might, or might not, be such a problem, in one sense. Out of hundreds of options, most linear video consumers watch 17  or fewer channels on a regular basis. So, arguably, not many actually want to spend money for most content, and most channels.

source: Nielsen

source: The Atlantic

What if Telecom Consumers Can Not be Made "Really Happy?"

“Compared to what?” often is a reasonable principle to be kept in mind whenever we look at consumer satisfaction ratings.

Some industries, including the Internet service provider, cable TV, airline, mobile services and fixed network voice services, typically score towards the bottom of multi-industry surveys of consumer sentiment.

There are some logical potential strategy implications for service providers who want to do better.

If a whole industry tends to score poorly, then it likely does not make sense to invest “too much” to improve consumer experience, to obtain higher consumer satisfaction ratings. In fact, it might well not be possible to improve scores all that much.

Some industries--such as the airlines--simply never rank anywhere but near the bottom of satisfaction ratings, undoubtedly for structural reasons. Cable TV and telecom services likewise always are at the bottom of multi-industry satisfaction ratings.

Most people could think of plausible reasons why dissatisfaction would be high for airlines, communication services or health insurance.

Insurance claims processes are complex and arguably more frequently used than other types of insurance interactions. That means the odds something will prove irritating is higher than for some other products.

High premiums, deductibles and co-pays also provide easy sources of irritation. Constant price hikes for video subscriptions are a constant irritant. It might be harder to understand the unhappiness with Internet access services, though prices (value, compared to price) is an issue.

Airlines have very high “experience” barriers. Airline service unhappiness due to perceived low service quality has declined as providers have struggled to provide the low fares people want, and still earn a profit.

People want low fares, but the effort to do so has lead to base fares and add-on costs for baggage and so forth. The additional charges are an irritant, even when people also say--and act as though they value--they want low fares.

And even under the best of circumstances, travel delays and other irritations are a constant threat.

Granted, suppliers arguably can, and should, invest enough to gain advantage.

But it might not be wise to spend “any amount,” since the best that often can be hoped for is relatively better scores compared to key competitors, not a breakout compared to all other industries.

In other words, it is possible that--no matter how much is done--even the best providers in some industries can only advance so much.

One survey of mobile Internet access by Vasona Networks found improving satisfaction with mobile Internet access.

In the U.S. market, though, satisfaction with nearly every consumer communications or entertainment service fell in early 2015.

Customer satisfaction scores for subscription TV, Internet, mobile and fixed line telephone service, plus computer software, collectively dipped 3.4 percent to an ACSI score of 68.8 on a 0 to 100 scale, the lowest level in seven years.

Some segments fared worse than others. Customer satisfaction with subscription TV service dropped to 63, the absolute worst score among 43 industries covered by the Index.

But Internet access service, which one might think would fare better, had the same score of 63, at the bottom of the index, across industries.

ACSI says the decline results from poor customer service and higher prices. The price issue is a bit of a paradox. For the most part, ISPs have been boosting speeds, while holding prices roughly steady, while adding higher-performance tiers, sold at higher prices.

In a survey conducted by Vasona Networks, 67 percent of U.K. consumers said they expect “good mobile data performance all of the time, with no temporary hiccups or outages.”

On the other hand. those same consumers do not appear to base their buying decisions on mobile data performance. When choosing a provider, mobile data remains a low priority in the minds of consumers.

Only 23 percent of respondents say they choose a carrier based on its mobile data experience.

Also, as often is the case, the access provider gets the blame when devices or apps do not work well. Some 53 percent of responsdents blame their mobile operator if apps do not work.

Some 40 percent of U.K. respondents think switching suppliers would help, the corollary being that 60 percent believe even switching providers would not help.

Vasona's research highlighted that improving web page loading speeds is a key area which mobile operators should focus on to alleviate the biggest problem which consumers have with current networks. Some 63 percent of respondents say “web pages loading slowly or not at all” is the single most frustrating issue with mobile broadband.

FCC Clears Altice Acquisition of Suddenlink

The Federal Communications Commission has found the acquisition of Suddenlink by Altice “in the public interest,” clearing the way for transaction approval, assuming there is no objection by antitrust authorities.

Altice is a holding company incorporated in the Netherlands, providing fixed and mobile voice, video, and broadband services in France, Belgium, Luxembourg, Portugal, Switzerland, Israel, the French Caribbean and Indian Ocean regions, and the Dominican Republic. Altice serves approximately 34.5 million subscribers worldwide.

The Suddenlink transaction represents the first major entry into the U.S. cable TV market by an international operator. Japan’s Softbank already is among the top four U.S. mobile operators, as is Germany’s T-Mobile US (although T-Mobile is expected to sell those assets and exit the U.S. market, eventually).

Suddenlink is the seventh largest cable operator in the United States, providing broadband Internet access, cable television, Voice over Internet Protocol (VoIP), and certain competitive telecommunications services to more than 1.5 million customers in 17 states.

almost half of its current existing network serves rural areas, and approximately 85 percent of Suddenlink’s nearly 900 cable franchises have fewer than 2,000 customer homes per franchise.

Suddenlink offers a high speed data product to more than 97.5 percent of its homes passed on a nationwide basis: 80 percent of these homes have speeds of 150 Mbps or faster, and another 10 percent have access to speeds of at least 50 Mbps.

Suddenlink also is in the midst of a program to upgrade most locations to gigabit speed Internet access.

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