U.K. Service Provider Revenue has Dropped Since 2012

Connectivity traditionally has not been a “growth” business. Far from it, telecom had for most of its history been considered a natural monopoly, on a par with water, sewer and electrical service. Around the turn of the century there was some thinking that might have changed. 

Alas, the connectivity business still seems to be a slow growth--in some cases no growth--type of industry. The latest data from U.K. regulator Ofcom shows this. Since 2012, total service provider revenue in the United Kingdom has dropped. Monthly household spending on communications has remained relatively flat, growing about one pound per household, per month. 

source: Ofcom

Heavy Mobile Video Viewers More Likely to Drop Fixed Network Inrternet?

“Potential broadband cord-cutters rely on their mobile devices for entertainment,” says Parks Associates senior research director Brett Sappington. “They are significantly more likely to watch live video content via mobile, including live TV broadcasts and live streaming, averaging an hour more per week each compared to average broadband households.”

That is a partial answer to the question of whether heavier mobile video usage can lessen the value of fixed network internet access as well.

Parks Associates argues U.S. broadband households highly likely to drop linear video services  in the next 12 months watch more than six hours of video content on their mobile phone a week, compared to 2.5 hours among all US broadband households. 

“Roughly 10 percent of broadband subscribers are likely broadband cord-cutters, with half of them highly likely to make the change in the next 12 months,” said Sappington. 

source: Parks Associates

PTC Academy Bangkok

PTC Academy Bangkok: Executive Insight for Exceptional Leaders will be held 23 September through 25 September, 2019 at CAT Tower, 72 Charoen Krung Road, Khwaeng Bang Rak

Khet Bang Rak, Krung Thep Maha Nakhon 10500, Thailand. Registration is limited to the first 30 students. 

Register here.

The event begins with a dinner cruise on the Chao Phraya Princess, offering compelling views of the Bangkok metro area from the The Chao Phraya river. 

source: TripAdvisor

source: Bangkok.com

The first day of classroom instruction includes:

Pioneering Technologies: How Are They Breaking the Mold of Legacy Subsea Infrastructure? Learning Outcomes: What new technologies are changing long-haul networks? What new capabilities are most important? What apps/use cases will benefit? Presenter: Keith Shaw, VP Business Development EMEA, Equinix, Netherlands

Tea/Coffee Break

What is 5G All About, and Why Do You Care? Learning Outcomes: What is 5G? What will 5G mean for industry capabilities and competitors? How does 5G enable the Internet of Things? How does 5G enable edge computing? Presenter: Gary Kim, Content Developer, IP Carrier, USA

Lunch

What Unique Challenges Will You Face in Moving Towards a Next-Gen Future? Learning Outcomes: How will your own segment of the business change? What strategies are available to you? What organizational changes must you make? How can you make those changes? Presenter: Sean Bergin, Co-Founder & President, APTelecom, Cambodia

Tea/Coffee Break

Getting the Balance Right Learning Outcomes: How to manage revenue, social obligations, and costs Harvesting legacy revenue Building new revenues Presenter: Eric Handa, Co-Founder & CEO, APTelecom, USA

The second day’s class includes:

Evolution of OTTs and Their Impact on Traditional Revenue Streams: Opportunity or Threat? Learning Outcomes: Is OTT an opportunity or threat? What can executives do to convert threats into opportunities? What are the key threats to revenue? What are the key responses to create new revenue streams? Presenter: Tony Mosley, Director, Business Operations, Ocean Specialists, Inc. (OSI), Guam

Tea/Coffee Break

Capacity Procurement: Yesterday and Today Learning Outcomes: How has capacity procurement worked traditionally? How have interconnection models changed? Presenters: Eric Green, Senior Consultant, Cambridge Management Consulting Ltd., United Kingdom and Grant Kirkwood, Founder & CTO, Unitas Global, USA

Lunch

Using LinkedIn to Love a Career in Telecoms Learning Outcomes: Understanding the objectives of your LinkedIn Profile, and how to achieve them Learn how your routine use of LinkedIn can increase your knowledge, build your reputation, and grow your network Presenter: Russell Lundberg, CTO, Intelefy, LLC, and Bangkok Beach Telecom, Thailand

Tea/Coffee Break

Overview of the Mobile App Ecosystem Learning Outcomes: Understand how mobile apps monetize users Understand the importance of attribution for the app ecosystem Insights into app revenues by vertical Insights into the major players in the app ecosystem (advertisers, publishers, ad networks) Examples of telcos moving up the stack with apps and app partnerships Presenter: Jonah Kadish, Director, Learning & Development, APAC, AppsFlyer, Thailand

5G Spectrum Allocation Policies Differ in Japan, Korea

Communications policymakers in various countries will have to decide how to allocate additional mid-band and millimeter wave spectrum to various contestants. In some cases, policy might allow contestants to bid as vigorously as they like. In other cases, government policy might be more akin to “supporting a level playing field” by allocating spectrum on an equal basis. 

Here’s a look at mid-band spectrum held by the leading mobile operators in Japan, according to Gaku Nakazato of Japan’s Ministry of Internal Affairs and Communications. As you might guess, KDDI and NTT have the largest allocations. NTT and KDDI have the largest subscriber shares, and therefore arguably require the most spectrum. 

source: MIC

Policy in South Korea seems to aim for equal capabilities for the leading service suppliers. Both mid-band and 28-GHz millimeter wave allocations are virtually equal. 

source: Korea Ministry of Science and ICT

Is Network Slicing Underneath Vodafone UK's 5G Service Plans?

It seems highly likely that one of the most-important benefits of Vodafone UK's virtualized network is the ability to use network slicing to create consumer data access tiers that differ by speed.

The 5G launch by Vodafone UK contains at least a couple of novel developments. For starters, Vodafone’s 5G will come in speed tiers. Vodafone Unlimited Max features unlimited mobile data usage at speeds as fast as the device and the network will allow. 

Vodafone Unlimited offers speeds of up to 10 Mbps. Vodafone Unlimited Lite supports speeds up to 2 Mbps.

source: Telecoms.com

For customers accustomed to buying their data usage as a variable cost, the new Vodafone approach shifts offer differentiation to speed, much as fixed network offers do. Pricing is differentiated by maximum downstream speed, not usage buckets. 

The other development is that usage is unlimited for all plans, removing the usage allowance as the key difference between plans. 

Vodafone has not specifically said how it is creating the tiers, but network slicing network slicing is one conceivable approach, where customers are different plans essentially use different network slices, some of us would guess. 

source: Cisco

5G Drives Transport Protocols

Enhanced Common Public Radio Interface (eCPRI) and Optical Transport Network (OTN) topped the list of most important 5G transport technologies in a survey conducted by Heavy Reading.

The eCPRI protocol was developed specifically to meet the bandwidth and performance requirements for 5G fronthaul, so it is difficult to imagine 5G fronthaul without eCPRI, many would argue. 

OTN ranked high across all geographies, which many will take as a proxy for wavelength-division multiplexing. 

source: Light Reading

Marketing Spend: % of Revenue or % of Profit?

Would you be more comfortable spending three percent of revenue on marketing, or 33 percent of profits on marketing?

Daniel Brzezinski, GetResponse COO, has a seemingly breath-taking bit of advice for small and medium-sized business spending levels on marketing spend. 

The levels depend on where an SMB is in its lifecycle. A well-established company focused on retention rather than new customer acquisition “can spend around two thirds or only one third of your income on marketing and advertising,” Brzezinski says. 

We can assume he does not mean that percentage of gross revenue, but most likely percentages of profit. 

Newer companies “could spend up to three fourths of your profit on marketing,” he says. 

That sounds like an impossibly-high allocation, but compares reasonably closely to the perhaps more common metric of spending as a percentage of revenue. 

Firm Revenue	5,000,000	10,000,000	15,000,000
Profit %	0.11	0.11	0.11
Profit	550000	1100000	1650000
3% of Rev.	150000	300000	450000
7% of Rev.	350000	700000	1050000
33% of Profit	181500	363000	544500
66% of Profit	363000	726000	1089000

Source: IP Carrier

Rules of thumb that suggest marketing spend levels for small businesses generating less than $5 million annually be set at seven to eight percent of gross revenue. That includes both marketing and advertising, for firms  with a net profit margin, after all expenses, in the 10 percent to 12 percent range.

That, at least is the recommendation from the U.S. Small Business Administration.

More common rules of thumb call for spending two percent to three percent of revenue on marketing and advertising, but as much as 20 percent if a firm is in a competitive industry. 

As it turns out, at an 11-percent profit margin, spending three percent of revenue or 33 percent of profit winds up being relatively-similar commitments.