By 2020, Mobile Will Drive More Than Half of All Internet Access Revenue in 75% of Countries

By 2020, mobile will account for more than half of all of Internet access revenue in more than 75 percent of countries, researchers at PwC now predict.

Total global Internet access revenue will increase at a 6.8 percent compound annual growth rate, reaching global levels of about US$634.8bn in 2020.

Between 2015 and 2020, 13 countries, mostly emerging markets, will see double-digit revenue growth rates.

In sum, more than 1.3 billion people will start paying for mobile Internet access for the first time, bringing the total number of global subscribers to 3.8 billion.

Just as important, by 2020, 54 percent of mobile Internet connections globally will be high-speed (delivering 30 Mbps or higher), while a further 42 percent will be capable of medium-speed service between 4 and 30 Mbps.

Also, note the on-going changes: Anything below 4 Mbps is “low speed.” Once upon a time, the classic definition of “broadband” was any access speed of at least 1.5 Mbps.

In some markets, such as the United States, 25 Mbps now is the minimum functional definition of “broadband,” where the Federal Communications Commission is concerned.

Be clear, the PwC forecast now predicts that 54 percent of mobile connections will operate at 30 Mbps or faster, by 2020.

Consumer behavior is likely to change quite substantially, as a result.

Mobile in the past has been speed challenged, limiting consumer experience. Higher speeds will mean that  watching online videos, streaming high-quality music and making video calls on the move are more pleasant and reasonable operations.

As speeds increase, new applications like ultra-high definition video will gain traction, and operators will seek to retain customers by upgrading them for free or at low cost, PwC predicts.

So consumers will increasingly choose high-speed mobile Internet services that enable new applications. That point is among the most significant for “access providers.” Consumers always buy connections because they want to use apps.

That means networks must be built to support popular, high value apps that people and businesses want to use. In addition to requiring ever-higher speed requirements, the ability to “tune” networks to support popular apps will matter, one might argue.

Where is Value in Agriculture Internet of Things?

Most of us do not have “domain knowledge” in more than a handful of areas, so it can be tough to envision the business model drivers for many Internet of Things apps. Home security we tend to get. We know the value proposition and the revenue model.

Connected car we can envision (safety, car trouble, vehicle diagnostics), with several possible revenue models (ads, subscriptions, car or device sales).

In principle, we can see how distribution and logistics might benefit (tracking where packages or shipments are, right now).

Agriculture, where few of us likely have domain expertise, is harder to grasp. Sure, we understand the value of understanding moisture content of the soil. But the incremental value, and business model benefits, are less clear.

Specialty crops might provide one example. The payback from wheat, whose retail value might be $500 an acre, is not as high as berries, where retail value might be $100,000 an acre.

Also, berries are highly perishable, wheat is less so. So yields and market prices at time of harvesting are key for berries, and likely for some other produce that has relatively higher value and is highly perishable.

Other specialty crops might be similar: higher value, highly perishable, highly susceptible to last-minute weather changes just before intended harvest. Specialty organic produce might generally be the sort of product where high value and high perishability make better knowledge more valuable, particularly in the days leading up to harvest.

Though it seems (and is) wasteful, a farmer might make a rational choice to allow some produce to essentially "rot in the fields" rather than bringing it all to market, putting huge pressure on the whole harvest, unless better knowledge allows for other choices.

source: Visiongain

Record Number of DDoS Attacks in 1Q 2016, Says Akamai

The first quarter of 2016 saw a record for the number of DDoS attacks, more than doubling when compared with the previous year quarter of 2015, Akamai says.  

The  increase was largely driven by repeat attacks on customers rather than a broadening of the number of targets. In the first quarter, targets were attacked an average of 29 times each.

One customer was attacked about three times per day, Akamai says.

More than half of the attacks (55 percent) targeted gaming companies, with another 25 percent targeting the software & technology industry.

Web application attacks increased nearly 26 percent compared with the fourth quarter of 2015.

As in past quarters, the retail sector remained the most popular attack target, targeted in 43 percent of the attacks.

source: Akamai

source: Akamai

Can Telcos Succeed at Content?

AT&T reportedly is going to launch a new video subscription service targeting viewers interested in anime, video games, niche action sports and other niche content, while Verizon is bidding to buy Yahoo, adding to its content assets anchored by AOL, and launching the Go90 mobile video service.

Some will be be skeptical. The traditional argument is that content is not a telco core competence, which is a valid concern. But content was not a core competence of cable TV operators, either, and they long ago became owners of content businesses.

Nor was linear video subscription a “core competence,” but telcos have successfully entered that business.

Also, as we now see commonly within the Internet ecosystem, firms routinely enter segments of the value chain. That is especially the case for app providers.

Google, Amazon, Netflix, Facebook, Microsoft and Apple are among the firms that moved into ecosystem adjacencies, manufacturing consumer devices, fostering the creation of content and now creating whole access platforms, while fostering new network infrastructure architectures and leading open source, lower-cost network equipment and software approaches.

Such movements into adjacencies are not new even in the telecom business, though such moves in the past rarely have been terribly successful. Many telcos have tried to enter various parts of the computing business, without success, in the past.

In fact, AT&T even owned the largest U.S. cable TV business, before selling those assets to Comcast as part of a deleveraging move. More recently, leading telcos have tried to create roles for themselves in content as well, again without success.

In 2002 the former BellSouth was licensing content from firms such as Disney to create programming assets and services using the then-prominent “portal” strategy.

One might argue there is room for more optimism now. For starters, firms learn from experience, including from what has not worked in the past. It now is quite doubtful whether the traditional “not invented here” syndrome is as big a problem as in the past.

Large service providers arguably are more willing to admit they do not know how to create or operate new assets, and therefore hopefully are more able to allow those business units to succeed.

Still, the outcome is open to some question, in some quarters. Perhaps the template is set by the U.S. cable TV industry, which primarily makes its money from access operations, but now also makes significant revenue by its ownership of content firms.

The overall approach is to “own some of the content and apps you deliver.” If telcos have learned the lessons, they might be able to follow the cable TV model.

Whether telco managements have learned from their prior mistakes, including what many would say was excessive interference with business unit independence, is the issue.

What cable TV executives have managed to do is generally allow content firms to be good at creating content, and profiting from the revenue upside. Telcos will have to learn to operate in the same way.

M2M Fastest-Growing Connected Device Category

Machine-to-machine (M2M) connections will be the fastest-growing category of connected devices, growing nearly 2.5- fold during the forecast period, at 20‑percent CAGR, to 12.2 billion connections by 2020, Cisco now predicts.

Machine-to-machine connections generally are considered a major subset within the broader Internet of Things category. Where M2M generally refers to machines communicating with machines, IoT includes a wider range of personal devices used by people, such as smartwatches, fitness monitors or perhaps medical monitors.

Global Devices and Connections Growth, source: Cisco

By 2020, machine-to-machine (M2M) connections will be 46 percent of total connected devices and Internet access accounts, Cisco now forecasts.

That total includes devices such as smart meters, video surveillance, healthcare monitoring, transportation, and package or asset tracking.

Globally, M2M connections will grow nearly 2.5-fold, from 4.9 billion in 2015 to 12.2 billion by 2020.  

For many, that is almost a secondary matter. The bigger question is which markets will grow fastest, and reach mass market status, soonest.

Connected home applications, such as home automation, home security and video surveillance, connected white goods, and tracking applications, will represent 47 percent, or nearly half, of the total M2M connections by 2020, Cisco predicts.

Connected healthcare, with applications such as health monitors, medicine dispensers, first-responder connectivity, and telemedicine, will be the fastest-growing industry segment, at 49-percent CAGR.

Connected car applications will have the second-fastest growth, at 37-percent CAGR.

Global M2M Segment Growth, source: Cisco

Global M2M Connections Growth, source: Cisco

Though many M2M applications will require connections of modest bandwidth, video will drive traffic volume, as is the case in the smartphone and consumer Internet spaces.

Although the number of connections is growing threefold, global M2M IP traffic will grow sixfold to 2020.

Video applications such as telemedicine and smart car navigation systems are prime examples.

Mobile, Wireless Will Drive 66% of IP Traffic by 2020

Traffic from wireless and mobile devices will account for 66 percent of total IP traffic by 2020, says Cisco.

In 2015, wired devices accounted for the majority of IP traffic at 52 percent.

Also, by 2020, global fixed broadband speeds will reach 47.7 Mbps, up from 24.7 Mbps in 2015. In other words, typical global fixed network speeds will double in five years. Some providers (most notably Comcast), in some markets, have been able to double speeds about every two years, since the dial-up era began.

The point is that creating more restrictions on suppliers, rather than removing barriers, in such a fast-changing market continues to strike some as unhelpful.

And though mobile Internet access is not the only platform people will use, mobile data traffic will grow at a compound annual growth rate of 53 percent between 2015 and 2020.

By way of comparison, global mobile data traffic will grow three times as fast as fixed IP traffic from 2015 to 2020. On the other hand, fixed networks will continue to represent most of the transferred bits.

Global mobile data traffic was five percent of total IP traffic in 2015, and will be 16 percent of total IP traffic by 2020.

IP traffic is growing fastest in the Middle East and Africa, followed by the Asia Pacific region.

Traffic in the Middle East and Africa will grow at a compound annual growth rate (CAGR) of 41 percent between 2015 and 2020, while IP traffic in Asia Pacific will grow at a CAGR of 22 percent.

IP traffic in North America will grow at a CAGR of 19 percent, while IP traffic in Western Europe will grow at a CAGR of 20 percent.

IP traffic in Latin America will grow at a CAGR of 21 percent, while IP traffic in Central and Eastern Europe will grow at a CAGR of 27 percent.

Exabytes per Year, 2020
	Consumer	Business	Total
Internet	1,288	281	1,569
Managed IP	345	52	397
Mobile data	313	54	367
Total	1,947	386	2,332

Can Regulators Impose Universal Service Obligations When There is No Dominant Service Provider?

Even before passage of the 1996 Telecommunications Act, “non-dominant” access providers had been using their rights to “cherry pick” where they build communications facilities for some time.

First “alternate access” providers got into business to provide high-bandwidth connections for business district enterprises and their designated long distance providers.  

After passage of the Telecommunications Act, competitive local exchange carriers used a combination of leased and owned facilities to provide voice and data services to business customers.

Then Google Fiber convinced city regulators that allowing Google Fiber to build gigabit access facilities neighborhood by neighborhood, and only where there was demand.

That might well be one reason why Verizon suddenly reversed course and decided to build FiOS in at least some neighborhoods in Boston, where it previously had held off from doing so.

Basically, “cherry picking” (selecting to serve only some customer locations) became lawful in an ever-widening number of cases. That new flexibility comes on top of the typical “ubiquitous build” required for the incumbent telcos and cable TV companies.

Eventually, harder questions will have to asked about how the social function of “universal service” is satisfied, when there is no dominant provider with monopoly profits to “tax” for such purposes. We already have taken a half step away from the notion. ISPs and competitive local exchange carriers other than the former incumbent telephone operator have no universal service obligations.

But what happens when the former incumbents are clearly not dominant, because they have lost so much market share?

Assuming some form of universal service requirement will be imposed, in some way, on service providers, the issue is how to apportion the cost among a range of providers, none of which truly is “dominant.”

It is not hard to imagine markets where three fixed networks and three mobile networks all provide high speed access, and eventually all six networks can offer gigabit service over at least significant portions of their coverage areas, and none is “dominant.”

Collecting the tax is not difficult. We already tax telecom bills. We already disburse funds, in rural areas. In urban areas, there has not traditionally been an issue. Eventually, there will be.