"Europe Falling Behind" is Temporary, as was "U.S. is Falling Behind"

Far too much is made of “leadership” in communications. For what seems like a decade, observers “worried” that U.S. consumers lagged Europeans, the Japanese or the South Koreans in use of mobile phones or text messaging. One might simply note that the gaps closed, arguably once service providers got serious about making mobile services a mass  market product, and once consumers grew to understand the value.

Similarly, some observers decried, or sometimes continue to decry, lagging U.S. Internet access speeds, prices or both. Ignore for the moment conflicting evidence about whether that remains the case, or to what extent there are differences.

Still, European observers now worry that “Europe is falling behind” in next generation fixed broadband or mobile Long Term Evolution.

European service providers lead the deployment of a succession of technologies, from GSM to early deployments of LTE in the nordic countries, for example. And then there was the leadership of firms such as Nokia. Nokia’s fall is part of the present worry.

With the advent of the smart phone era, innovation and perceptions have changed. the success of Apple and Android's devices, operating systems and apps moved the center of innovation to the United States, while Asian companies are more relevant than ever, according to Analysys Mason.

As once too much attention was paid to European leadership and U.S. “gaps,” now too much is made of U.S. leadership and European lagging.

It might be reasonable to say that since U.S. firms tend to lead with software, a shift to a software-driven mobile Internet would potentially shift fortunes. One might also argue regulatory regimes in North American and Europe have had direct impact on both the level of competition and investment.

LTE connections as a percentage of mobile connections, selected regions, 2010–2017 [Analysys Mason, 2013]

One might also note that European operators adopted faster versions of 3G networks at level that matched customer demand for speed, resulting in less need to upgrade to 4G.

The point is that investment, consumer demand, software and hardware supply will shift, from time to time. Over time, adoption, supply and impact tends to equalize, from one developed region to the next.

Also, at some point, the issue is what value a given nation or region can wring out of its investments, not the mere fact that investment in faster networks has been made. That always will be tough to measure.

Though the hand wringing about Europe “falling behind” is real, it has to be kept in perspective. Many would have noted U.S. “lags” in broadband and mobile adoption as well. Sustainable “advantage” seems to be as elusive in communications technology as it is in the life of firms.

Google Builds First "Middle Mile" Network

Google has for some time operated one of the world’s biggest global long haul networks. Google also operates access networks in several U.S. cities. Now Google also provides a regional fiber backbone network that apparently can be used by access providers in Kampala, Uganda.

Google’s Project Link is a regional fiber network that apparently will sell capacity to any local mobile operator or Internet service provider operating in and around Kampala.

Project Link’s network is one more way Google has built its own infrastructure, including a global long haul network, local access in three U.S. cities and now a regional backbone network in Kampala. Of those networks, the Kampala network is the first of the “middle mile” type, and also the first intended to sell capacity to third party access providers.

Is Privacy an Anomaly on Social Networks?

Google's chief internet evangelist, Vint Cerf, suggests that privacy--at least in the context of social networks--might be an anomaly. 

That is not a blanket statement about government data collection or privacy in some other contexts, only a recognition that the whole point of social networks is sharing. 

As was true for most people in prior historical periods where most people lived in small villages, and where "everybody knew everything" about other people in the community, something of that same process affects online social networks as well. 

Will 90% of Mobile Traffic Be Terminated on Wi-Fi?

Public Wi-Fi hotspots will represent about 22 percent of tier-one mobile operator mobile Internet facilities in 2013, according to a survey of 200 executives in the Wi-Fi ecosystem. The survey respondents also believe that 78 percent of new small cell capacity will feature public Wi-Fi capabilities as well.

Public Wi-Fi capacity added by mobile service providers will grow at a 13 percent compound annual growth rate between 2012 and 2018, representing an additional  10.5 million sites in 2018.

The Asia-Pacific region will account for 55 percent of the deployments by 2018.

The total installed base of public Wi-Fi hotspots will reach over 55 million, globally, in 2018.

Residential access points where some capacity is left open for public access, is likely to top 100 million nodes by the end of 2018, the survey finds.

Outdoor hotspots were expected to drive most of the deployments, 46 percent of the respondents said.

As you might expect, the business model was a key issue for executives considering wider use of public Wi-Fi as part of the mobile network infrastructure, according to the Wireless Broadband Alliance.

If those forecasts are correct, one wonders how much traffic actually will be terminated using the mobile networks, since some mobile service providers already find that up to 80 percent of total traffic is terminated on a Wi-Fi network, mostly at-home or at-work fixed networks.

If just 10 percent of mobile network traffic is shifted to public Wi-Fi, it conceivable that 90 percent of total mobile handset traffic will be terminated on Wi-Fi networks, public and private.

The  survey of about 200 Wi-Fi ecosystem players was conducted by Maravedis-Rethink.

Czech 4G Auction Fails to Bring New Competition

Communications regulators and lawmakers frequently have incentives to “do something” about competition in communications markets. Whether or not such efforts succeed in the long term, there is value in being seen to “do something” in the near term.

In other words, what is eminently rational in political terms does not have to be equally rational in economic terms. It still is quite rational to “do something” widely viewed as promoting competition, even if there are reasonable expectations that the policies will not work.

Set asides for new competitors, spectrum caps or spectrum limits are some of the steps regulators can take to promote market entry by new competitors.

It isn’t so clear whether such tactics work, even in the short term.

The Czech Telecommunications Office, for example, had set aside rules for some blocks of Long Term Evolution spectrum in recently-held spectrum auctions. Only new entrants could bid for those blocks, initially.

Still, the auction, which raised CZK 8.5bn (EUR  311 million), was won by the three existing mobile phone companies (Spain's Telefonica, T-Mobile--the mobile arm of Germany's Deutsche Telekom AG and the U.K.'s Vodafone Group).

Telefonica CR and T-Mobile CR bought two 800 MHz blocks, while Vodafone bought one 800 MHz block.

The three mobile companies also bought spectrum in the 1,800 and 2,600 MHz bands.

Revolution Mobile and Sazka Telecommunications dropped out of the bidding, even though

a 2x10 MHz block of spectrum was made available exclusively for new operators.

Will Amazon Web Services Be Worth $76 Billion in 2015?

If this revenue forecast is close to accurate, then Amazon Web Services, at a multiple of about eight times revenue, would be worth about $72 billion. Seriously. 

Mobile-Accessed Sites More Important in Some Industries Than Others

Mobile sites arguably are more important in some verticals than others. Travel comes to mind. But restaurants and bars might be among the industries most amenable to value created by mobile apps and websites.

After analyzing  traffic statistics of 14,000 websites over four years, Let's Eat, a builder of mobile app sites for the restaurant industry, notes that about half of all visits to restaurant websites consist of mobile traffic.

During the week, about a third of visits to restaurant-related sites come from mobile devices. On weekends, the percentage shoots up to nearly half of all visits. You can probably guess why that pattern exists.

During the week, when many people are at desks, it arguably is easy enough to check for a place to go eat from a PC. On weekends, when people are more likely to be out and about, using a mobile will often make more sense.

Mobile traffic has increased at a fairly regular rate over the last four years, from just three percent of traffic in October 2009 to 43 percent of restaurant site traffic in October 2013.

You also might not be surprised that population density affects use of mobile devices to get restaurant information. In urban areas associated with higher population density, people are more likely to be out and about during hours when restaurants are open, and needed.

Also, in smaller communities, it is more likely that people generally know where to find a particular restaurant or type of food.