IoT, AI, Edge Computing, 5G, Fiber-Deep Networks All Related

The internet of things, artificial (or augmented) intelligence, edge computing, low-latency application requirements, 5G, fiber-deep networks and mobile small cell architectures all are related trends. IoT, in many cases, will require low-latency computing, using advanced AI techniques with processing necessarily localized.

That, in turn, dovetails with the use of 5G and other communication networks that will have to support low-latency communications and highly-distributed computing nodes using 5G air interfaces, small cell architectures and fiber-deep distribution networks.

source: CB Insights

Google Launches IoT Platform

One example of the challenges telcos will face as they ponder moving into platform portions of the internet of things ecosystem are moves by rivals with business advantages. Consider that Google has officially launched its Google Cloud IoT Core service into public beta.

Google Cloud IoT Core is a fully managed service on Google Cloud Platform (GCP) that helps businesses secure and manage their connected IoT solutions.

Google Cloud IoT Core integrates with other Google analytics services such as Google Cloud Pub/Sub, Google Cloud Dataflow, Google Cloud Bigtable, Google BigQuery, and Google Cloud Machine Learning Engine.

Pricing is based on the volume of data exchanged with Cloud IoT Core.

Rate of Cord Cutting Slowing?

“The number of current pay-TV customers who plan to cut the cord has actually declined, and the number of hours spent watching old-fashioned, time-slot television is growing,” said Peter Cunningham, Technology, Media, and Telecommunications Practice Lead at J.D. Power.

To be clear, a new J.D. Power survey only shows that the rate of decline has slowed. The percentage of customers who say they plan to cut the cord on pay-TV during the next 12 months has declined to eight percent this year from nine percent in 2016, the company says.

source: Mary Meeker

The study might be interpreted as suggesting streaming and linear viewing modes are reaching some sort of equilibrium. We will have to wait and see. Many other forecasts suggest that newer modes (mobile, especially) are growing, though that does not directly speak to the issue of linear versus on-demand viewing.

Despite growing satisfaction with streaming video services and widespread use of DVR and video on-demand, the number of hours spent watching regularly scheduled television programs has increased by nearly an hour between 2015 and 2017, J.D. Power says.

In a typical week, households have spent an average of 17.4 hours watching regularly scheduled programming in 2017, up from 16.6 in 2015.

source: BCG

Why Voice is Not Central for Next Generation Networks

A fateful decision was made when the global telecom industry decided the next generation network would be based on Internet Protocol, and not some traditional architecture such as ATM.

All of today's strategic issues around "over the top" services and value grow directly from that architectural choice, since IP fundamentally separates network access and all applications that run over the IP networks.

By definition, all apps are "over the top," no matter who owns those assets. In choosing to build the next generation networks on IP, the industry also chose to create the "dumb pipe" business model.

Even when telcos sell carrier voice, those services architecturally will operate "over the top."

At the same time, voice is receding as the core revenue driver.

According to Reza Arefi, Intel director of spectrum strategy, nobody is working on voice as part of 5G at any of the core standards bodies. That might come as a shock to many observers, but simply seems to point to the changing value of various revenue streams in the access business, and the fundamental way applications are created and delivered on modern networks.

The lack of focus on voice also is a reflection of changes in the core requirements for modern communications networks, where the growing range of capabilities come in the “connecting computing devices” area, not voice or messaging.

Also, the growing reality is that voice is a feature, less a key revenue driver. It is a key function, to be sure; just not the driver of revenue growth.

That, in part, explains the lack of work on voice as a core feature of 5G. That “neglect” is not new. You might recall that the 4G standard also did not originally support voice, either.

It might be reasonable to argue that 5G standards work does not include voice support because voice is seen as a service supported on 4G. Others might argue some extension of voice over Wi-Fi will be part of the solution.

Consider revenue drivers for the industry globally, which are predicted by STL Partners to continue declining significantly.

source: STL Partners

Nearly 1/2 of Linear Video Customers Might Consider Switching Next 6 Months

source: Tivo

Nearly 84 percent of respondents to the most-recent Tivo survey of consumers still buy a linear TV service, while 16 percent of respondents do not. “Price” was cited by 85 percent of the non-buyers as the reason for not subscribing. About 46 percent reported using a streaming service as an alternative.

Even if the top reason for not buying a video subscription is “price,” the actual reason likely is “value,” including both demand for video and its price.

Of the 83.9 percent of respondents who subscribe to pay-TV service, 8.9 percent have switched providers in the last three months, Tivo says. When asked if they planned to leave their current service providers in the next six months, 6.3 percent said they plan to cut their pay-TV service entirely.

Another  8.1 percent plan to change to another provider. In addition, 4.5 percent plan to switch to an online service or app. About 30.6 percent report they might make a change.

Altogether, 49.5 percent of respondents could potentially leave their current entertainment video provider in the next six months, Tivo says.

Fully 56.1 percent of respondents report they would stay with their current provider if they could choose and pay for only the channels they typically watch. Another 38.8 percent would stay if all video providers (Netflix, Hulu, Amazon Video and so forth) were combined into one place.

IoT Awareness Still Low

Many executives, in many industries, might be unaware of internet of things business value, a survey by Analysys Mason suggests.

In a survey of 1600 IT and telecoms decision makers in enterprises worldwide, Analysys Mason found 12 percent of small/medium businesses and 18 percent of large enterprises already had IoT systems operating.

On the other hand, 52 percent of SMEs and 40 percent of large enterprises were “unaware of IoT or not interested in it,” Analysys Mason found.

“Overcoming a lack of awareness in IoT is more important than technology issues,” Analysys Mason suggests.

None of those findings would surprise many observers. Present use of sensor networks is common in some industry verticals and for some applications, but it would be reasonable to argue that the big growth has yet to begin.

                     Percentage of enterprises at each stage of IoT development, 2017

The U.S. market currently has the highest levels of adoption of IoT solutions, but China is expected to surge.

              Percentage of enterprises with operational IoT solutions, by country/region, 2017

source: Business Insider

Enterprises Might Drive Incremental 5G Revenue

source: Bell Labs

If you work in the telecom industry long enough, you are likely to discover yourself changing focus from time to time. Having started out in cable TV, consumers were really 100 percent of my focus. When I switched to the competitive side of telecom, enterprises, wholesale and small and mid-size businesses became the focus.

When the internet hit, it was clear that consumer apps were going to drive growth and change, so I switched back to following consumer apps, business models and revenue streams almost exclusively.

I’m pretty sure that another shift back to enterprise is coming, since 5G is likely to be about enterprise, in terms of business success, incremental revenue and growth. Internet of things is the driver, since IoT will be “purchased” by enterprises and businesses, either to serve business users or consumers.

Some other inklings are that even enterprise wireless traffic looks to be on the cusp of significant change, according to Bell Labs.

Looking only at video, which is driving bandwidth requirements globally, there might be a shift there as well. Where today video is driven by consumer content and video, in the future it is possible that video will be driven by IoT devices.

Those are huge shifts. This time around, though, the emphasis likely will be on vertical industry shifts to IoT, not the particularities of access platforms.

source: Bell Labs