Value-Added Services--Free or For Fee--Boost Retention, Data Consumption, Perceived Value of Mobile Services

Value-added services--provided at no incremental cost as part of a mobile subscription--possibly can increase retention by about 11 percent, boost customer perception of network quality by about 55 percent, and boost data consumption by about a gigabyte each month.

In mature markets, offers are focused around video and music streaming services, primarily as a way of affecting customer perceptions of network quality or value.

That is one example of the way access providers partner with app providers to provide services that are seen to boost perceived value.

source: Nokia

Another important strategy involves creating and selling for-fee services, which might range from branded video or audio streaming to connected car services, home security and eventually, other Internet of Things or machine-to-machine (industrial Internet of Things) services.

40% of Mobile Operator Churn Driven by "Cost"

Not all customer churn is controllable by actions of the service provider. But about 40 percent of controllable churn still hinges on “cost and billing” issues, while 26 percent of churn is driven by network quality issues.

About 24 percent of churn is created by “customer care” issues, while “service and device portfolios” seem to drive about 10 percent of churn, a study sponsored by Nokia suggests.

In other words, prices deemed to be too high remain the biggest single driver of customer desertion, globally.

Perhaps also not surprisingly, prices are the top driver of customer decisions to choose a carrier. Asked why consumers chose a particular service provider, 45 percent indicated that “best prices” was the top reason.

Some 26 percent indicated that “network quality” was the chief reason for choosing a particular new service provider, while 25 percent said “geographical coverage” was the main reason for selecting a particular service provider.

source: Nokia

source: Nokia

IoT Eventual Winners Cannot Yet be Predicted

It always is hard to say which companies or industry segments will do best--or which will lead the disruptive attack--whenever an existing market starts to be disrupted by new technology and business models.

In the mobile payments business, various participants, from different segments of the value chain, and some intending to create space for themselves in the value chain, have made a run at mobile payments. Mobile service providers were the first to admit at least temporary defeat in the U.S. market, as the Softcard business was sold to Google.

Google, in turn, has struggled to make mass market inroads with its own Google Wallet and then Android Pay service. Apple Pay and Samsung Pay also are among the device or operating system providers trying to create a position within the ecosystem.

The retailer consortium, CurrentC, is the latest to fail. In some ways, Currentc had a potent argument: it represented major retailers who are the “buyers” of payments systems and services.

Banks and card processing services, plus PayPal and other app-based payment systems therefore remain in the race to win share in the new business.

Some believe the device or operating system suppliers will win.

At the moment, the same sort of uncertainty exists in every part of the Internet of Things ecosystem.

There is just no way, for example, to tell how the “access” or “connectivity” market ultimately will develop, or who the leaders will be. Similar uncertainty exists in terms of operating systems, chipset suppliers and most importantly, in terms of the applications and services to emerge first.

As with the mobile payments business, value must be proven before consumers or businesses will adopt any particular service or approach. And there is just no way to know for sure which services will prove to have the clearest business model, early on.

source: ABI Research

67 Million Connected Car Subscriptions by 2025

By 2025, 67 million automotive 5G vehicle subscriptions will be active, according to ABI Research. That largely explains Verizon Wireless and AT&T Mobility interest in the connected car market.

About three million of those accounts will be low latency connections mainly deployed in autonomous and driverless cars.

So the connected car might be an early “killer app” for 5G networks, enabling broadband multimedia streaming, cloud services for vehicle lifecycle management, the capturing and uploading of huge volumes of sensor data, and vehicle-to-vehicle and vehicle-to-infrastructure communication.

ABI Research suggests that 5G’s most promising capability for automotive will be its low latency, which could be as low as one millisecond.

European Regulators Try to Operationalize Net Neutrality and Network Management Rules

It might be easy to say in principle that Internet service providers must treat consumer Internet traffic equally. It is not easy to square that rule with the need to manage network traffic, on occasion, at times of peak load, to maintain network performance.

Though most network neutrality rules make allowances for network management, it is difficult to create specific rules that everyone agrees respect the “equal treatment” principles and yet allow for network management.

Proposed guidelines for enforcing network neutrality rules produced by the Body of European Regulators of Electronic Communications (BEREC) provide an example.

BEREC says that the task of safeguarding “equal and non-discriminatory treatment of traffic in the provision of internet access services” does “not necessarily imply that all end-users will experience the same network performance or quality of service (QoS).

The reason is simply that network operators sometimes have to management traffic across the whole network, or parts of the network, at times of high throughput, especially to protect the performance of some classes of apps that are highly susceptible to latency, jitter, packet loss, and bandwidth.

That has been a contentious network neutrality issue. On one hand, the point of such rules is to ensure that “providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used.”

On the other hand, networks have to managed, because networks are not built to handle all of the expected traffic at the most busy hour, on the most busy day. Instead, networks are built to handle typical levels of traffic.

So BEREC reiterates that “providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used.”

On the other hand, “reasonable traffic management measures applied by providers of internet access services should be transparent, non-discriminatory and proportionate, and should not be based on commercial considerations,” BEREC says.

In fact, BEREC even recognizes the issue of “peak hour of peak day” congestion. “Measures going beyond such reasonable traffic management measures might also be necessary to prevent impending network congestion, that is, situations where congestion is about to materialise, and to mitigate the effects of network congestion, where such congestion occurs only temporarily or in exceptional circumstances,” BEREC says.

“ISPs may prioritize network management traffic,” in other words, so long as it is not done for commercial reasons.

“In order to be deemed to be reasonable, such measures shall be transparent, non-discriminatory and proportionate, and shall not be based on commercial considerations but on objectively different technical quality of service requirements of specific categories of traffic,” says BEREC. “Such measures shall not monitor the specific content and shall not be maintained for longer than necessary.”

The guidelines confirm that Internet service providers “shall not block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories thereof, except as necessary, and only for as long as necessary” (for traffic management purposes).

As most regulatory bodies have concluded, “reasonable traffic management measures” are allowable. In other words, most networks must be managed, since nobody builds a network to handle any conceivable amount of traffic, at any given point in time. Instead, networks are “dimensioned” to support typical loads, not the absolute peak of traffic at the busiest hour of the busiest day, as telecom engineers used to describe the principle.

Common understanding of the compatibility between “equal treatment” and “network management” always has been an elusive matter, where it comes to network neutrality.

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