Will AT&T Phase Out U-verse TV in Favor of DirecTV Access?

AT&T Inc. is phasing out the U-verse TV service, a Bloomberg report argues, citing analyst Chris Ucko of CreditSights. “AT&T is going to actively get out of the U-verse business,” said Ucko. AT&T predictably denies the report.

Ucko argues that AT&T is shifting linear video operations to DirecTV, a strategy some had suggested would be the case in territory, as well as out of region, while others believed DirecTV would be relied on primarily where AT&T did not have fixed network footprint.

As evidence, Bloomberg notes that AT&T has stopped building U-verse set-top boxes.

That might be a premature conclusion, though it clearly makes financial sense for AT&T to serve new linear video customers using the DirecTV network.

As an example, per-subscriber content costs are about $17 a month higher for U-verse customers than for DirecTV subscribers, Chief Financial Officer John Stephens has said. That is a meaningful difference for a service that has pressured profit margins and likely faces continued decline.

That is a function of subscriber volume, as programming contracts feature lower prices as volume builds. DirecTV has about five times as many customers as AT&T has U-verse video subscribers.

In part, that is a result of relatively limited U-verse access network coverage.

Of the 57 million households AT&T passes with its broadband service today, only 13 million have U-verse, and only about half could receive U-verse TV, where all 57 million can be sold TV now as part of a bundle from AT&T that uses DirecTV for linear video delivery.

source: Beyond Devices

It generally makes sense to harvest cash flow from any declining legacy business, so that would be one explanation for why AT&T might prefer to use DirecTV as the linear video delivery platform of choice.

Of course, capping the incremental revenue from linear video makes the business decision on upgrading the access network more difficult. In essence, high speed access has to carry the load, where it comes to incremental revenue from deploying a next-generation network.

But AT&T might see other alternatives in that area as well. New fifth generation mobile networks might provide another way to supply high speed access, without a full fiber to home upgrade.

Likewise, there might be new opportunities to use fixed wireless, in 5G spectrum, for fixed high speed access as well.

The other angle is that if linear video bandwidth can be repurposed--as cable TV operators already do--then U-verse networks will be able to support higher Internet access speeds as well.

source: Bloomberg   

DOCSIS 3.1 Full Duplex Will Support Symmetrical 10 Gbps High Speed Access

CableLabs has embarked on a new development effort to craft a “full duplex” use of hybrid fiber coax networks that breaks significantly with the traditional frequency division method used to support high speed access on cable TV networks, where one set of frequencies is reserved for upstream, and a different set of frequencies for upstream communications.

In full duplex communication, the upstream and downstream traffic use the same spectrum at the same time, roughly doubling efficiency, CableLabs says

A DOCSIS 3.1 full duplex network provides the peak speeds and flexibility of time division duplex solutions, but outperforms both time division and frequency division multiplexing in terms of bandwidth efficiency.

Full duplex will help evolve cable-provided high speed Internet access to support symmetric multi-gigabit service up to 10 Gbps on 1-GHz HFC networks, with the potential for even higher performance by utilizing spectrum that is currently available for future expansion above 1 GHz.

Today’s Technology Duplex: Time Division Duplex

Today’s Technology Duplex: Frequency Division Duplex

T-Mobile Reports Strong 4Q 2015 Results, Predicts Strong 2016

T-Mobile US had another strong fourth quarter of 2015. In fact, T-Mobile US CEO John Legere argues that T-Mobile US acquired 108 percent of all industry net account growth over the year.

T-Mobile US added 2.1 million total net accounts in the fourth quarter (8.3 million in 2015). Among those gains were 1.3 million branded postpaid accounts (4.5 million in 2015), a metric widely considered the most-crucial “type of account” metric.

Service revenues grew a strong 11.7 percent year over year in the quarter and 10.9 percent, year over year, for all of 2015.

Total revenues grew 1.1 percent, year over year for the quarter and  8.4 percent for the full year.

Adjusted earnings (EBITDA) of $2.3 billion in the fourth quarter and $7.4 billion for the full year represented growth of 30.2 percent for the quarter (year over year) and 31.2 percent for the full year.

T-Mobile US expects branded postpaid net customer additions for 2016 between 2.4 million and 3.4 million.

For the full-year 2016, T-Mobile expects Adjusted EBITDA to be in the range of $9.1 to $9.7 billion.

India, Indonesia, Vietnam, Thailand are Places to Watch for App Growth

For many in the app industry, India is the key market to watch in 2016. “Not only does India have the brightest economic outlook of the BRIC markets, but smartphone adoption is progressing rapidly with plenty of runway to grow,” argues App Annie.

“Some of the biggest app success stories can be found in India’s sensational mobile commerce growth, resulting in considerable investment for leading companies such as Flipkart and Snapdeal,” App Annie says.

Indonesia also say 40 percent growth in app downloads in 2015. In Indonesia, the sustained increase in mobile transactions fuelled incredible growth for marketplaces such as Tokopedia and Bukalapak in 2015.

Download growth rose as high as 60 percent, year over year, in Vietnam.

“Vietnam was the standout emerging market in 2015,” says App Annie.

source: App Annie

While game downloads and revenue tend to be an early indicator of a booming app economy in most emerging markets, the gaming sector was notably robust in Vietnam in 2015.

Mobile games represent nearly 50 percent share of downloads on both Google Play and iOS in 2015.

In the local market, social, entertainment and games publisher VNG’s card and casino games ZingPlay - Tiến lên and ZingPlay Tá Lả proved popular. VNG also offers the most-downloaded messaging app in Vietnam,  Zalo.

In Thailand, messaging app LINE is a leader.  In 2015, the LINE app led combined iOS and Google Play revenue in Thailand. Facebook also maintained a huge presence in social networking in Thailand.

Photo apps also remain a key part of Thailand’s app economy. The photography category trailed only tools in Google Play downloads--outside of games--and grew 25 percent  year over year.

Nine Operators Form App and Service Alliance Reaching 1 Billion Customers

Nine telecom companies have created a “Partnering Operator Alliance” that aims to promote new apps and services for a billion mobile and fixed network customers in more than 80 countries.

Current members of the alliance include BT, Deutsche Telekom, Reliance Jio Infocomm, Millicom, MTS, Orange, Rogers, TeliaSonera and TIM.

The Alliance hopes to promote all relevant product categories within an operator’s business, mobile as well as fixed, B2C as well as B2B. The Alliance will be expanding to additional operators soon.

The Alliance focuses on exchanging best practices on how to bring partner propositions to the market, on joint efforts in partner scouting and will also exchange knowledge about upcoming trends and services amongst the group.

Already, the Alliance has established relationships with 30 innovative partner businesses including AirBnB, Celltick, Disconnect, Idoomoo, Magisto, Mojio and Spotify.

The alliance is an open network of like-minded operators worldwide with complementary geographic footprints.

Poor Customer Satisfaction Does Not Always Lead to Churn Behavior

For whatever reason, another survey of consumers shows that Internet service providers and linear TV providers are among the lowest-ranking entities, in terms of perceptions of customer service.

Mobile service providers, airlines and rental car agencies also rank relatively low, a finding other studies also tend to confirm.

But those perceptions are not always directly related to customer churn  rates, even when consumers say they are quick to change suppliers when customer service is deemed inadequate or faulty.

Despite the fact that mobile service providers tend to rank relatively low in satisfaction surveys, churn rates in the U.S. market, for example, are relatively low, at least for some of the leading providers. For AT&T and Verizon, for example, churn rates are lower than one percent a month, a rate many would consider quite low for a consumer service.

Higher churn rates obviously lead to lower customer relationship durations.

Surprisingly, then, AT&T and Verizon mobile churn rates are quite low, compared to some other consumer products, but quite similar to churn rates for many common products.

Sprint and T-Mobile US have higher churn rates, if now approaching the lower rates seen by AT&T and Verizon.

U.S. credit card companies typically have annual customer churn rates of around 20 percent, a monthly rate of about 1.7 percent.

European cellular carriers experience annual churn of between 20 percent and 38 percent, between 1.7 percent and three percent a month.

Many retail banks have annual churn rates of between 20 percent and 25 percent, or about 1.7 percent to two percent per month.

Even when they say they will switch suppliers within a day or week of a poor customer service experience, that obviously is not how consumers act. They obviously do not act as they say.

Costs of switching likely provide one explanation. While the costs of switching fixed services providers might be relatively low, it is not frictionless, as consumers frequently have to pay install charges, equipment rental or other upfront charges.

For smartphone account owners, especially those which are multi-user or multi-device accounts, switching costs are substantial, including a need, in many cases, to replace multiple smartphones, each representing $600 or more in costs.

That is one reason why mobile service providers now frequently offer payments of up to $650 when consumers switch suppliers. In many cases, even a $650 subsidy does not cover the cost of buying new devices and terminating device payment plans.

For many consumers, there might also be a belief that switching to another provider will not, in fact, lead to better experiences, as all the suppliers--or most--within a category are deemed to be roughly equivalent.

To some degree, the fact that legacy U.S. mobile air interface standards are bifurcated might have something to do with the churn rates. To some degree, half the market uses GSM, while half the market has used CDMA. Switching across air interfaces necessarily entails scrapping the existing devices and buying new ones.

The bottom line is that, at least for mobile services, relatively low satisfaction does not lead to the churn rates one might expect. That is at least partly because switching costs are substantial.

The latest survey tends to confirm that behavior.

source: [24]7

Industrial Internet of Things Market Growing 7% Annually

The global industrial internet of things (IIoT) market is set to grow faster than seven percent, on a compound annual growth rate basis, to 2020, according to Technavio.

Asia Pacific (Asia) will be the biggest market for IIoT, according to Technavio.

The IIoT market in Asia was valued at close to US$38 billion in 2015 and is expected to reach over US$54 billion in 2020.

Though most would expect China, Korea and Japan to be leading growth markets, India also is predicted to be a driver of much growth.

The global IIoT market will drive US$132 billion in revenue by 2020.