Wednesday, November 19, 2014

People Spend 40% of Waking Hours Communicating or Consuming Media

Benedict Evans - Mobile Is Eating the World
If it seems that everyone you know is staring at a mobile screen during the day, that is because they are. 

During most parts of the day, 40 percent of all U.S. consumers are interacting with media and content or communicating, according to . 

In the evening hours, that percentage can rise to 70 percent, according to venture capitalist Benedict Evans.

U.S. consumers spend about three hours a day interacting with their mobile devices, about two hours and 48 minutes watching TV, according to the US Bureau of Labor Statistics

In other words, the number one screen, for content consumption,  is the mobile phone.

The television, which once was known as the “first screen,” and the personal computer, once known as the “second screen,” now have yielded their positions. Mobile has become--in terms of engagement time--the first screen. 

TVs possibly are the second screen, while PCs and tablets are the third screens.

In fact, U.S. consumers now spend more time on smartphones than PCs.

There also is a virtual certainty that people are looking at their mobile screens even when in front of the TV, so engagement with TV content arguably is dropping. According to Flurry, time spent on mobile devices grew by 9.3 percent in the past nine months.


Tuesday, November 18, 2014

Declining Voice, Texting Revenues Pressure Mobile Ops in South Asia, SE Asia

Declining voice and text messaging revenues, plus huge investments in next generation networks will put extreme pressure on South Asia and Southeast Asia mobile service provider cash flow, resulting in minimal or negative free cash flow, Fitch Ratings said in November 2014.

“Revenue growth will be limited to low-to-mid single digit percentages as fast-growing data services offset declines in traditional voice and SMS revenues,” Fitch Ratings said.

Mobile service providers in the Philippines, Sri Lanka and Thailand plan to invest 25 percent to 30 percent of their revenue to build new networks or acquire new spectrum.

In Singapore, the issue is dividends, as service providers there plan to distribute 80 percent to 100 percent of net income to shareholders in the form of dividends.

Overall, the noteworthy observation is that mobile service providers in South Asia and Southeast Asia face the same sorts of problems as service providers in developed regions: cannibalization of voice, text messaging and international revenues, as well as competition.

90% Adoption of Mobile by 2020, Globally

It often is helpful to note problems the world has solved. 

So it is that Ericsson now predicts 90 percent of people aged six years and over will use mobile phones by 2020, when the number of smartphone subscriptions is set to reach 6.1 billion. 

It will have taken a couple of decades, but we will fundamentally have solved the problem of providing voice and text communications to everyone.

The new challenge is to build on those accomplishments by providing Internet access and apps to everyone. The Ericsson report suggests we are well on the way. The number of mobile broadband subscriptions grew 30 percent year over year, reaching 2.5 billion accounts.

Some 65 percent to 70 percent of all mobile phones sold in the third quarter of 2014 were smartphones. That has contributed to 60 percent growth in mobile data traffic during the 12 months since the third quarter of 2013.

Notably, subscribers in Asia Pacific, the Middle East and Africa are exchanging their basic phones for smartphones. By 2020, global mobile broadband subscriptions are predicted to
reach 8.4 billion. at which point mobile high speed access will account for 90 percent of global high speed access accounts.

As a direct result, network traffic will primarily be generated by smartphones, as total monthly smartphone traffic over mobile networks will increase around 800 percent between 2014 and 2020.

Video is the largest and fastest growing segment of mobile data traffic, expected to grow by
45 percent annually through to 2020, by which time it is forecast to account for around
55 percent of all global mobile data traffic.

Social networking will drive 15 percent of total traffic. Web browsing will represent about five percent of total traffic.

Norwegian Regulators Oppose App Zero Rating

Zero rating of any apps is a violation of network neutrality, according to Frode Sørensen, senior advisor at the Norwegian Post and Telecommunications Authority. "Internet users are entitled to an Internet connection that is free of discrimination with regard to type of application, service or content or based on sender or receiver address."

As with most aspects of network neutrality, the issue is complex and confusing, in part because bumper sticker slogans (“treat all bits alike;” “protect the Internet”) so often are used to simplify the argument in ways that can distort understanding.

The problem is that zero rating is a relatively common way of favoring consumption of some products, at the expense of others. When a value-added tax is not levied on many types of food and beverage, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water and sewage services, books and other printed publications, children's clothing, and financial services, that is clearly “discriminatory,” but also furthers some valuable social objectives.

So yes, zero rating is unfair to the apps not being offered on a zero rated basis. But such favoritism can also be a good thing.

Ignore for the moment the issue of paid prioritization as used by content delivery networks.

Sørensen argues that even offering free use of some apps (zero rating), without requiring purchase of a data plan, is “discriminatory.” Some will argue that offering free access to some apps is a reasonable way to acquaint poor Internet non-users with some of the value offered by the Internet and its apps, and has potential to help connect billions of new users by creating demand for using the Internet.

As do most observers, Sørensen explicitly notes that traffic grooming is a necessary part of network management. In fact, outright blocking of access might sometimes be necessary, and in fact happens all the time when networks become congested. The only issue is whether reasonable steps can be taken--or ought to be taken--to manage congestion at peak hours.

“The goal of net neutrality is not that all traffic should be handled identically, which would never be possible in practice,” Sørensen notes.

The hard part, in that sense, is reconciling Internet openness and issues such as congestion.

Zero rating of apps “would constitute a violation of the guidelines,” Sørensen says. By the same logic, offering toll-free phone calls also violates the open nature of the telephone network, even if it provides direct value to consumers.

Protecting Internet openness for its users is a worthy and important goal. But keep in mind that zero rating typically applies to “non-subscribers” or “non-users,” and is an effort to connect those who cannot afford to use the Internet, even if in initially limited ways.

“Openness” might mean one set of things to people who use it. “Access” is the issue for those who cannot afford to use it. As always, there are contradictory goals for Internet policy, as for communications policy in a larger sense.

Competition is good, but so is investment, and the two goals ultimately are inversely related. “Equality” and “access” are in some ways also inversely related, in many markets where people can barely afford food and water. Providing wider access might require unequal treatment.

Many would agree that “the user decides” what they want to do when on the Internet. For those not able to use the Internet, offering some access, to some apps, also allows them to decide, with some obvious constraints. But that is true for all users, since not all Internet apps are available to all, at least not without payment of some kind.

Monday, November 17, 2014

Mobile, Video Subscription Satisfaction is "Neutral" But Low

Sometimes, a satisfaction score just above “neutral” is a good thing.

A new survey of consumer satisfaction with various products and industries by YouGov contains a couple of findings that mirror other studies of consumer satisfaction with cable TV and mobile service: both those industries rank at the very bottom of satisfaction ratings.

That is not as bad as it sounds, though not by any means “good.” YouGov uses a 200-point scale, with +100 the highest and -100 the lowest, with a neutral score being zero. Cable and satellite TV scored 13, while mobile services scored 21. So both industries are slightly above “neutral.”

And that might be an improvement of sorts. Perhaps U.S. consumers do not “love” mobile or video service, but they are at least neutral, in this instance.

You might think consumer satisfaction with social media apps such as Twitter, Facebook and LinkedIn would be dramatically higher than for Internet service providers, cable TV companies or telcos.

After all, those these service provider industries traditionally rank at the bottom of satisfaction ratings produced by the American Consumer Satisfaction Index.

But you would be wrong. At least according to ACSI rankings, consumers are less satisfied with the popular social media apps than they are with fixed telephone service and mobile phone service.

On average, those social media apps get higher satisfaction ratings than video entertainment providers and significantly higher satisfaction ratings than Internet service providers. ISPs scored 63, while video services ranked collectively as a 65 for satisfaction.

Time Warner Cable scored an even-worse 60, while Comcast scored 63. AT&T U-verse and DirecTV both scored a 69.

In 2014, Twitter got a score of 69, Facebook earns a score of 67 and LinkedIn has a ranking of 67 as well.

In other words, according to the ACSI ranking, consumers are only about as satisfied with Twitter, Facebook and LinkedIn as they are with their ISPs and video providers. That puts satisfaction with those social media apps near the bottom of all industry rankings.

Among search engines, Google got a high score of 80. Bing and MSN both scored 73.

Major news portals earned an average score of 74.

Perhaps the most surprising finding is that the leading social media apps do not score much higher than ISPs or video entertainment providers, which have been ranked at the bottom of satisfaction rankings.

The top social apps can be used for no incremental cost, where Internet access service and video entertainment are significant cost items.

And one might draw a couple of  conclusions. Consumers are relatively unhappy, but continue to buy because they need the products. Also, consumers are unhappy and feel they have no workable alternatives that are sustainably better than the others.

Also, there are differences between providers in the same categories. Verizon FiOS, for example, garnered much higher scores than most other ISPs in the ACSI study.  


source: YouGov

Google, Telstra Testing Balloon-Based Internet Access

Google has partnered with Telstra to test a balloon-based Internet access service in Australia.  

Google will supply the balloon platform, while Telstra supplies the spectrum. In the trial, 20 balloons will be launched in western Queensland, aiming to deliver  Internet services to consumers in remote areas of Australia.
The Project Loon balloons feature antennas that can broadcast fourth generation Long Term Evolution mobile services, which allow the balloons to provide as much as 42 Mbps to a ground antenna and 15 Mbps to a handset.

Separately, Facebook’s Internet.org initiative appears on the brink of becoming an ISP serving Africa, according to the Telegraph.

As rumored, Internet.org could contrat with U.K.-headquartered satellite provider Avanti, which owns two broadband satellites positioned over Africa, plans to launch two more in the next three years to increase capacity and coverage.

Zuckerberg reportedly tried to entice mobile service providers to do so, but was rebuffed.

Telstra, apparently, does that think that a wise approach.

And there lies a conundrum often faced by incumbent service providers, namely whether to cooperate, or not, with a potential competitor.

Facebook has been open to partnerships with ISPs. But as with Google, Facebook does not appear to be willing to let partner opposition deter it from extending Internet access as widely as possible, as quickly as possible.

Facebook also has been looking at use of unmanned aircraft as a potential Internet access platform.

Is Facebook on Verge of Becoming an ISP?

Is Facebook about to become an Internet service provider, as Google has done? It seems increasingly likely, though the actual operations would be under the auspices of the Internet.org initiative, according to the Telegraph.

As rumored, Internet.org could contrat with U.K.-headquartered satellite provider Avanti, which owns two broadband satellites positioned over Africa, plans to launch two more in the next three years to increase capacity and coverage.

Zuckerberg reportedly tried to entice mobile service providers to do so, but was rebuffed. And there lies a conundrum. Facebook has been open to partnerships with ISPs. But as with Google, Facebook does not appear to be willing to let partner opposition deter it from extending Internet access as widely as possible, as quickly as possible.

Facebook also has been looking at use of unmanned aircraft as a potential Internet access platform.

Avanti supplies spot beam Ka-band service to sub-Saharan Africa, using a “HYLAS” (“Highly Adaptable Satellite”) bird built by Orbital Sciences Corp. A second satellite extends coverage in Africa, and also reaches the Caucasus and the Middle East. A third satellite covering Africa is expected to be launched in 2015.

The HYLAS satellites feature use of spot beams that can provide extra capacity within the coverage area of the spot beams. The HYLAS 2 satellite, for example,  features 24 active Ka-band user beams and six gateway beams intended to be used by national service providers as a single uplink/downlink connection. The HYLAS 4 satellite supports 66 spot beams, with a total capacity across all beams of 28 GHz.

The use of spot beams allows the satellites to achieve high spectrum efficiencies and high data rates, at the cost of coverage. By limiting coverage, the satellites are able to reuse frequency, much as a mobile network does.

In some ways, Facebook and Google becoming Internet service providers is an ironic development. As traditional vertically-integrated telcos now have partly become suppliers of loosely-coupled Internet apps owned by third parties, Google and Facebook now are becoming suppliers of access and apps, with at least some elements of vertical integration.

AI Will Not "Inevitably" Increase Productivity

Most of us, if asked, would likely say we believe artificial intelligence will have a positive impact on firm and worker productivity, at le...