It No Longer Really Matters Whether "Users Need a Gig"

It probably no longer makes sense to argue about whether gigabit Internet access “should” be deployed at a time when “nobody needs a gig.” The reason is that the shift to gigabit networks is not driven by direct end user demand, at the moment.

Instead, gigabit access speeds are strategic matter, driven by the level of intensifying competition in fixed and mobile networks, all of which are moving rather swiftly in the direction of gigabit and multi-gigabit capabilities. And that is being done irrespective of immediate end user demand.

Australia’s National Broadband Network (NBN), for example, says “14 percent of NBN’s fixed line services used a 100/40 Mbps wholesale speed tier, 49 percent used a 25/5 Mbps wholesale speed tier and 32 percent used a 12/1 Mbps wholesale speed tier” in 2015.

In 2014, those tiers were at 18 percent for 100 Mbps plans, 42 percent for 25 Mbps plans and 35 percent for 12 Mbps plans.

Note that demand for 100 Mbps actually dropped, year over year, while demand for 25 Mbps plans grew.

It is one thing to argue that the cost of upgrading immediately to gigabit fiber-to-home networks will not yield sufficient return to justify making the investment.

It is quite another matter to argue that cable TV operators, using hybrid fiber coax, likely can justify selling gigabit speeds, and already are preparing for multi-gigabit speeds, over their hybrid networks, without resorting to fiber to the home.

Likewise, the global mobile ecosystem is preparing for “gigabit to every device” in the earliest versions of 5G networks, with clear development paths for multi-gigabit and 10 Gbps 5G speeds.

At the same time, 4G networks are using channel bonding to boost 4G speeds up to the multi-hundreds of megabits per second range, whether or not there is direct and immediate end user demand.

As has been the case in the past, next generation networks are being developed for strategic reasons, not driven by direct end user demand.

Some competitors not required to use fiber to home platforms are going to market gigabit services themselves, in large part to maintain or take a lead over their key competitors. Mobile operators, on the other hand, see an opportunity to take market share from fixed services, for the first time, on a widespread scale.

Under such conditions, it doesn’t make much sense to debate, any longer, whether “users need gigabit.” They do not, at present. That is not the point, however. Internet service providers see a need to provide such capabilities, for strategic reasons and as clear marketing tools.

AT&T Uses Drones to Check Cell Towers

AT&T is using drones to conduct cell tower inspections and find birds' nests that can potentially affect cell coverage. That involves perhaps thousands of technicians every year. But that is going to change, if AT&T gets its way.

Eventually, AT&T says it plans to use artificial-intelligence-equipped drones to help assess problems in the field autonomously, without requiring a technician to manually inspect a tower.

As with all important new technologies, there will be job impact. Without a drone, inspecting a bird's nest could take up to a week and often requires the assistance of an environmental scientist.

The specific use of drones to inspect towers without sending techs climbing up those towers will save on operating costs, part of AT&T’s wider effort to slice such costs as part of its aggressive software defined network initiative.

It will not be popular, but lots of other measures will have to be taken to streamline network capex and opex, to match expected costs with expected revenues. And with competition seemingly growing, revenue is going to get hit. That means costs have to fall.

And one person’s cost is another person’s income. There’s no way around that.

Study Suggests 3 Facilities-Based Competitors Unlikely to Succeed in U.K. Market

source: Analysys Mason

A new analysis of facilities-based competition in the United Kingdom tends to support the view that ubiquitous fixed network on a facilities basis will tend to be a duopoly; that a third network offering triple-play services would not be able to cover most of the country, even under the most-optimistic scenarios.

That conclusion likely comports with the notions most researchers have reached, namely that facilities-based and ubiquitous fixed access network markets are oligopolies, because that is all the market will tend to support.

The only issue here is whether the stable oligopoly structure (in terms of facilities) features two providers or can include three (and if so, under what conditions).

That is not to say an oligopoly at the retail level is inevitable: robust wholesale policies have proven effective at stimulating retail competition. What robust wholesale has tended not to promote is investment in new facilities.

Analysys Mason researchers estimate that, at about 25 percent market share, a third facilities-based provider would be able to sustain access to about seven percent (two million locations) of homes.

The study tends to reconfirm that housing density encourages investment. But the study also suggests that robust wholesale policies actually discourage investment.

source: Analysys Mason

The researchers note that the greatest degree of facilities-based competition elsewhere in Europe relies on duct and pole access by competitors in countries where there is no wholesale regime in place.

In other words, where competitors must build their own facilities, and have some clear incentives to do so, facilities-based investment is most robust.

Also, third parties seem to have been most successful where the percentage of high-density housing is high.

The study authors conclude that investment in a third facilities-based network is highly risky and unlikely to succeed in the U.K. market, on a wide basis, though the business case might work in some high-density areas representing about 1.1 million households.

The analysis concluded that "it is highly unlikely that a third operator will be able to reach 40 percent (FTTP) coverage on a commercially viable basis".

“Our economic modelling suggests that encouraging a third separate network to invest in covering more than five to 10 percent of the country will be extremely difficult to achieve,” the study states.

Some might point to the key role cable TV competition tends to play, as well. In several countries, the primary facilities-based competition comes from cable TV operators.

For All Networks, "Fiber to Where You Can Make Money" is the Issue

"Fiber to where you can make money" is a good way to evaluate various fixed network access methods. For cable TV operators, the issue is fiber deep into the neighborhood. For some telcos, that is the same issue.

For some telcos, fiber to the premises is the choice, but the issue of revenue generated by such networks remains.

For fixed wireless networks, the issue is fiber to tower or building. For mobile operators, the issue is fiber to the macrocell or fiber to the small cell.

In other words, the issue is not the choice of physical media, or the topology, but the revenue that any given deployment can generate. And, at a time when voice revenues are declining, and where facilities-based competition exists, the financial returns from fiber to the home often are questionable.

The choices are even more difficult for any telco operating in a market where cable TV firms are active, serious competitors. Stranded assets then are the real issue, as up to 60 percent of deployed assets can routinely be stranded (assuming cable TV gets 40 percent to 45 percent share, the telco gets 40 percent share, while other suppliers get 15 percent to 20 percent market share.

In other words, the issue is to deploy “fiber to where you make money.” That is true for all fixed network suppliers, including cable TV firms using hybrid fiber coax technology.

Assuming fiber is deployed rather deep into the network, coaxial cable can carry huge amounts of bandwidth.

25 Gbps on Hybrid Fiber Coax

Huawei has demonstrated 25 Gbps downstream speeds on a hybrid fiber coax network running DOCSIS, the cable modem protocol. As always, if one has enough capacity, huge amounts of throughput are possible. The Huawei demonstration used 3 GHz of spectrum on the simulated cable network.

Separately, Nokia has demonstrated symmetrical 10 Gbps bandwidth on an HFC network. There are a couple of important caveats. Achieving such speeds requires fiber fairly close to the end user location (about 200 meters in the Nokia demonstration), or new methods for extending the range of frequencies that can be carried over an HFC network (Huawei dem).

DOCSIS 3.0 supports use of 1.6 Gbps downstream bandwidth.

The DOCSIS 3.1 solution, with a 1.2 GHz spectrum, used with multi-channel bonding and orthogonal frequency division multiplexing (OFDM) technologies, already can support a downstream rate of 10 Gbps.

Huawei’s demonstration extended the amount of usable coaxial cable spectrum to 3 GHz for the first time.

Huawei believes a symmetrical 25 Gbps capability can be commercialized.

All Internet of Things Forecasts Slope Up and to the Right

It is impossible to find any Internet of Things forecasts, for any segment of the market, that fail to show an”upward sloping to the right” growth curve. In other words, virtually every forecast predicts significant to strong growth.

That seems to be true whether one looks at single-country or global forecasts. Of course, as always, global forecasts can obscure as much as they illuminate. Most of the near-term deployment of IoT will happen in a relative handful of countries.

So far, by some forecasts, North America represents as much as 45 percent of the global total, Asia perhaps 30 percent, Europe perhaps 20 percent.

source: Business Insider

source: marketsandmarkets

More U.S. Teens Watch YouTube Than Linear TV

Whether YouTube is a “substitute” product for linear TV is debatable. What apparently is harder to debate is that YouTube is a preferred venue for consumer video consumption among U.S. teenagers.

In a survey of U.S. teenagers, analysts at Piper Jaffray found teens spent more time watching YouiTube than watching linear TV. Though 37 percent of respondents reported watching Netflix, 26 percent said they watched YouTube, compared to 25 percent who reported watching linear TV.

And 40 percent say their top shopping website is Amazon, leading other sites by an order of magnitude.

source: Piper Jaffray