When is a Terabyte Household Data Consumption Limit a Problem?

When is a terrabyte of usage on a single consumer Internet access account a problem? When a consumer user is part of the “one percent.” That is one percent in terms of data consumption on a Comcast network in a month’s time.

Roughly, that corresponds (Comcast’s estimates) to a household consuming about 21.7 hours of high-definition format video entertainment every day of the month, based on a terabyte supporting between 600 and 700 hours of HD video, and using 650 as the median case.

Netflix estimates an hour of its HD video consumes about 3 GB per hour, though. In 2014, according to Sandvine, a cord cutter household consumed about 212 GB a month (video and all other uses).

As a rule of thumb, a typical household using Netflix and streaming video should not experience any data consumption limit issues if a 500-gbyte cap is in place, according to WhistleOut.

India Spectrum Auction Nets about 11% of Government-Forecast Revenue

India’s big spectrum auction of 2,300 MHz worth of spectrum has ended, with spectrum sold at about 11 percent of what the government projected would be the case, or roughly US$9.8 billion (if I have converted the crore properly). The government had projected sales in the $83 billion range.

As mobile executives had warned, prices for 700 MHz spectrum were simply wildly overpriced. They behaved as they spoke: nobody made a bid for any of the 700-MHz assets. Mobile executives had suggested the government lower the prices and wait before auctioning the 700-MHz assets.

Of the total of 2,300 MHz of assets, the government sold 964.8 MHz of spectrum. Mobile operators purchased about 34 percent of spectrum in the 800-MHz band, about 75 percent in the 1800-MHz band, all of the spectrum available in the 2300 MHz band and about 60 percent of spectrum in the 2500 MHz band. About 20 percent of spectrum in the 2100 MHz band was bought.

Vodafone India and Bharti Airtel were the biggest buyers of 4G spectrum, followed by newcomer Reliance Jio Infocomm and Idea Cellular.

Vodafone spent over Rs 20,000 crore, Airtel Rs 14,244 crore, Jio Rs 13,672 crore and Idea Rs 12,798 crore.

The auction results, and the squabbling leading up the auction, illustrate several important facts about the Internet ecosystem. From a mobile operator’s perspective, though spectrum access is a necessary precondition for being in business, operators cannot pay “any amount” for that access.

And mobile operators demonstrated with their wallets that spectrum prices set by the government were too high. There is experience behind that thinking. In the past, mobile operators have overpaid for 3G spectrum, for example, in India and elsewhere.

Operators have learned, from experience, that the cost of spectrum has to be weighed in view of expected revenues that can be generated by those assets.

There also are a few larger points.

Since, in the end, consumers or advertisers are the ultimate sources of all ecosystem revenue, all costs--anywhere in the ecosystem--must be matched by revenues from those sources.

The Indian auction shows that government officials and mobile operators have vastly-different expectations about the revenues that can be generated by using mobile spectrum.

There are reasons mobile operators and others might rationally expect spectrum to prices to begin dropping. For starters, much more spectrum will be made available as 5G standards are set and regulators start to release brand new spectrum in the millimeter regions.

The role of unlicensed spectrum also is growing, reducing, to a real extent, the need to buy licensed spectrum.

In some markets, spectrum sharing also will add even more resources. Finally, small cell architectures are allowing service providers to make better use of any amount of finite spectrum.

Can Internet Access be "Future-Proof?"

Remember when fiber-to-home was touted as “future-proof?” That statement is only partially true, as it was even when originally argued. The “future-proofing” is correct to the extent that physical media does not have to be replaced when a bandwidth upgrade happens (at least for perhaps 15 to 20 year lifetime of the cables).

But continual speed upgrades are part of the market dynamic. Yesterday's ceilings become today's floors. In that sense, no network is fully future proof.

To a large extent, the United Kingdom has succeeded in upgrading most locations to superfast speeds of 24 Mbps. In fact, by some estimates, about 91 percent of U.K. locations can buy Internet access at 30 Mbps. The extent of superfast coverage was about 83 percent in 2015.

Now the near-term goal is to connect 97 percent of U.K. locations at at least 24 Mbps by 2019. Back in 2009, when the idea of upgrades to “superfast” speeds became part of the national agenda, the typical U.K. consumer got speeds of perhaps 4 Mbps.

So a boost of about an order of magnitude in less than a decade is significant, if not unusual. An increase of another order of magnitude is coming, at least in part because other suppliers, using their own facilities, have leapt ahead.

Perhaps instructively, in the U.K. market, cable TV operators supply 56 percent of all “superfast” Internet access connections, though having only about 19 percent of connections.  

In late 2014, for example, the top speed supplied by BT was 65 Mbps. The top speed supplied by Virgin Media was 159 Mbps.

Since virtually all fixed network Internet access connections now are broadband, the ongoing issue is how to define “broadband.”

Source: Ofcom

AT&T to Compete with Verizon, CenturyLink Local Access Networks

AT&T now says it is deploying fixed wireless using millimeter wave frequencies to apartment complexes in Minneapolis, outside its traditional 21-state wireline service area.

In case you miss the implications, this is the first time AT&T is going to compete head-to-head with CenturyLink in the consumer local access business, in CenturyLink’s footprint, aiming to supply 100 Mbps access service to each unit in a building. AT&T says it already plans to boost speeds to 500 Mbps to each living unit.

Up to this point, AT&T's consumer operations in the fixed network area have been confined to the 21-state region where AT&T has had operations growing out of the old Regional Bell Operating Company territories.

The move is akin to Comcast announcing it is going to serve customers in a Charter Communications franchise area.

While AT&T competes directly with Verizon in the mobile business, and with both Verizon and CenturyLink in the enterprise accounts business, AT&T has not overbuilt another telco in the consumer business.

There are many reasons for that situation. For one thing, AT&T wants to avoid running afoul of informal antitrust guidelines that tend to be triggered whenever a fixed network provider serves 30 percent of available U.S. homes.

By competing out of region as a CLEC, AT&T avoids increasing the number of U.S. homes passed by its incumbent provider fixed networks.

“If successful, this will give us the ability to offer a combination of Internet, DirecTV and wireless services to apartment complexes and multifamily communities in additional metro areas.” said Ed Balcerzak, AT&T SVP.

Additional areas under consideration where AT&T might do the same include Boston, New Jersey, New York City, Philadelphia and and Washington D.C., all in the Verizon Communications footprint.

AT&T says it also is looking at Denver  Phoenix and Seattle, in the CenturyLink region.

All those efforts would have AT&T operating as  a competitive local exchange carrier competing with Verizon and CenturyLink for the first time.

"Smart Cities" Benefits Likely Will be Smaller than Projected

Asset-light business models such as Uber and Lyft are about monetizing dark vehicle assets. Airbnb perhaps is about monetizing dark room and lodging assets, also using an asset-light approach.

Wi-Fi often is an asset-light approach to mobile device access. Netlfix might be considered an asset light approach to video entertainment, at least in terms of access assets.

In other cases, big data and Internet of Things networks aim to enable more efficient use of in-use assets.

Arguably, the most-powerful trends happen when multiple values can be realized, such as combining dark assets with asset-light business models with peer-to-peer transactions and “leasing rather than owning” consumption patterns.

All those potential changes in business models should eventually affect prospects for many proposed Internet of Things services, such as “smart parking.” If vehicle ownership declines as much as some expect, there will be less demand for urban area parking, and therefore less value and demand for smart parking services.

In other words, all currently-projected markets essentially extrapolate from existing conditions. But those conditions will change as IoT and IoT-assisted ecosystems change.

Similarly, smarter transportation systems that allow users to evaluate transportation options in real time will reduce the amount of vehicle congestion the smart systems aim to solve.

Where it comes to the impact of IoT systems, feedback loops will operate, changing the context even as the systems come online. In other words, non-linearity will be a key aspect of future IoT systems. In the process of solving specific problems, the magnitude of the actual problems will diminish.

That likely will mean the expected benefits will be smaller than forecast.

AT&T Launches New Internet of Things Data Plans

AT&T’s new data plans for Internet of Things developers and businesses shows you how AT&T believes IoT apps will use the mobile network. In contrast to “use by humans,” the emphasis is on transferred data, not the speed of transactions.

Available in October 2016, the IoT data plans are differentiate by the amount of data devices and sensors are expected to transfer, over a year’s time.

AT&T IoT data plans include:

• Option 1: 1 GB for $25.00 (valid up to 12 months)1; includes 500 text messages
• Option 2: 3 GB for $60.00 (valid up to 12 months)2; includes 1000 text messages
• Option 3: 5 GB for $100.00 (valid up to 24 months)3 includes 1500 text messages

India is Key Mobile Growth Market, Says GSMA

India now has become the mobile industry’s key growth market, says the GSMA Global Mobile Trends report.

More than one billion additional people worldwide will be connected to mobile networks by 2020 and 33 percent of these new users will come from India (337 million)

China is forecast to add more than 200 million subscribers and there will also be major net subscriber contributions from Indonesia, Pakistan, Bangladesh and Myanmar.

In total, these six Asian markets will account for approximately 60 percent of the 1.1 billion new subscribers added globally by the end of the decade.

source: GSMA

The GSMA report also argues that the “mobile Internet is the Internet.” Today, some 46 percent of the global population gets access the internet by a mobile device and network. By 2020, mobile Internet access will grow to 60 percent.

New mobile subscribers are more likely to be younger and are also more likely to be ‘mobile-first’ or ‘mobile-only’ internet users.

As there will only be a minimal increase in the number of fixed internet households over this period, the increase in mobile phone ownership will therefore be the key factor driving global internet penetration, GSMA says.