Bharti Airtel Plans Urban, Not Just Rural Deployment of OneWeb Terminals

Bharti Enterprise’s  investment in OneWeb was substantial enough to earn it a seat on the board of directors. One might wonder why the investment was deemed important.

Aside from other considerations, likely includes favorable pricing terms for substantial deployments. And OneWeb might not be viewed simply as a way to reach rural areas affordably.

But that should be the initial reaction most observers should have: OneWeb should help Bharti Airtel in its rural India, Sri Lanka, Bangladesh, sub-Saharan Africa markets.

“These areas will benefit, because this will feed into my mobile network, and wherever, we cannot reach today,” said Bharti Chairman Sunil Bharti Mittal.

As planned, Bharti can drop in a solar-powered earth station and create a small cell providing 3G and 4G mobile signals over an area about 300 meters (985 feet) to 400 meters (1312 feet) in radius.

That suggests a cell site with a diameter of up to 2600 feet, or about half a mile square.

What observers might not have expected is that the same network will help Bharti Airtel with dropped calls, something that has been a problem even in urban areas.

Even if the percentage of dropped calls seems not especially high (one to two percent), dropped calls apparently are a big customer irritant. Even in many developed markets, dropped call rates of two to four percent would not be terribly unusual.

So urban applications might be as important as rural solutions, as it turns out. It often will be the case that an area requires signal reinforcement but there is no available fiber backhaul, or zoning permission cannot be quickly obtained.

That allows Bharti to rectify signal coverage issues immediately, and then bridge the gap until more traditional solutions are possible (new towers and required backhaul).

Bharti and Airbus are among the largest investors in the $500 million funding round.  

What Happened to Tablet Market?

source: Business Insider

As recently as 2011, annual global tablet shipments growth surged 305 percent over a year’s time. By 2014, total tablet shipments growth had slowed to just eight percent annual growth.

The issue might be that tablets, which might once have been viewed as the successor to the personal computer, are in turn now being cannibalized by phablets (smartphones with bigger screens).

If so, the smartphone is the replacement for the PC in a great majority of cases, not the tablet.

Between 2015 and 2020, tablet growth rates might fall further, to about a 2.5 percent compound annual growth rate.

LTE Still has Only 9% Adoption Globally

Long Term Evolution adoption has a long way to go, even as suppliers gear up efforts to create 5G standards. Globally, LTE has about nine percent adoption and three percent adoption in Latin America.

When to Shut Down the PSTN Remains an Issue

The fixed network communications industry has yet to accomplish a key transition mobile service providers already have learned how to finesse, namely the challenge of decommissioning an out-of-date network with a next-generation replacement.

Among the chief problems are the “carrier of last resort” and universal service obligations imposed on some former monopoly providers. At some point, the legacy network must be completely shut off, and all customers migrated to the next-generation network.

But how to do so, and when to do so, remain contentious. Some policy advocates, for example, demand full legacy network coverage even as the next-generation network gradually is built.

But there is a fundamental economic problem. At some point, with dwindling numbers of customers on the legacy network, it becomes uneconomic to keep operating the legacy network.

At that point, economics matters: a network that cannot sustain itself cannot provide any service, to say nothing of universal service.

So the timing of any shutdown of the old public switched telephone network is one important issue. As any knowledgeable observer would attest, fixed network operators are anything but oblivious to the inevitability of the change.

That is one reason less capital, and fewer human resources, are allocated to maintaining the legacy network. But stranded assets are key. At some point, there will be so few remaining customers on the legacy network that it no longer makes sense to operate it.

In a sense, that is one reason why Sprint has asked the U.S. Federal Communications Commission to allow it to shutter the long distance voice network  it operates.

It is likely that the cost of running and marketing services on that network exceed revenues. In other words, the Sprint long distance voice business is unsustainable.

That eventually is a problem to be faced by virtually all fixed network telcos.

The problem then are rules and timetables that allow complete decommissioning of the older network, and interim steps that encourage rapid investment in the replacement network, while allowing service providers to more rapidly do what they must do, namely shift customers to the sustainable networks.

So it is that BT is calling on Ofcom to let it scrap the traditional telephone network, while also loosening regulations in the interim.

“We believe obsolete regulation should be rolled back, rather than clinging on until the last user dies,” said Mark Shurmer, BT’s group director of regulatory affairs. That is hyperbole, but understated.

In fact, the breaking point will come much sooner, at the point where revenue earned from the legacy network does not support sustainable and profitable operations.

It’s a tough issue, with heavy political implications. But it is undeniable that sustainability matters. Before the point where the legacy network becomes literally unsustainable, regulators and service providers must have made clear plans to decommission the olde network, and move all customers to the replacement network.

It will not make economic sense to support both legacy and replacement networks simultaneously.

Google-Backed Sidewalk Labs Will Use Ad-Supported Revenue Model

Ad-supported communications is not a new idea in telecommunications. But it is getting much more attention these days as service providers experiment with new business models.

Decommissioned payphone booths will become public Wi-Fi hotspots in New York, as part of an initiative by Sidewalk Labs, a Google-backed urban innovation startup that will rely on advertising to support its menu of free Internet access to anyone in a 150-foot radius, free phone charging, phone calling, Internet browsing and access to local services and information.

Sidewalk Labs leads a group of investors acquiring Control Group and Titan, among the companies working on the LinkNYC network to blanket New York City with free Wi-Fi.

The intent is to extend the concept to other cities.

I Pay, You Pay, Somebody Else Pays are the Only 3 Fundamental Business Models

In terms of business models, there really are only three of top interest for communications service providers: “I pay, you pay or somebody else pays.”

The traditional model is “you pay,” reflecting the salience of subscription-based revenue models.

Advertising and promotion represent the potential new “someone else pays” models.

Sponsored data and zero rating represent perhaps the newest models, where the service provider itself underwrites consumption of services by end users.

In fact, among the chief objections some might have about applying “network neutrality” principles to sponsored data or zero rating of app use is precisely that doing so forecloses one new innovation in terms of business models.

By barring zero rating or sponsored apps, regulatory bodies prevent exploration of new business models that provide direct end user and citizen benefit while p

O3b Revenue Accelerating Faster than Expected?

The fact that SES, an investor in O3b, might become majority owner of MEO constellation provider O3b in 2016, reflects a couple developments, both of which are positive for O3b, and might be indicative of the potential future opportunity for emerging LEO constellations.

Satellite fleet operator SES has noted that demand for capacity from the O3b Networks constellation of medium Earth orbit Ka-band broadband satellites is accelerating “faster than expected.

source: SES

That, in turn, would lead SES to become a majority shareholder before the end of 2016.

SES CEO Karim Michel Sabbagh said ownership of more than 50 percent of O3b always has been contingent on O3b’s early success. In that regard, O3b apparently is booking customer orders at a faster clip than expected.

O3b has more than 40 customers, mostly telecom companies that use O3b for trunking or backhaul.

SES earlier in 2015 indicated that O3b’s backlog stands at $530 million, including  the maritime segment, which represents perhaps 30 percent of backlog, energy customers represent about five percent of backlog while government customers represent perhaps one percent of backlog.

Trunking accounts for 60 percent of backlog and backhaul comprises four percent of backlog.

At present revenue growth rates, O3b should reach breakeven no later than the first quarter of 2016.

Perhaps the biggest unknown is the long-term relationship between mobile operators and O3b, though it is clear O3b primarily sees itself, and is seen by many mobile operators, as a supplier of long haul trunking, functionally equivalent to use of subsea fibers for backhaul or trunking.

O3b emphasizes that its earth terminals support 4G, 3G, 2G and Wi-Fi end user devices and networks, for example. That indicates the role O3b transport now plays, backhauling traffic to and from mobile data centers and switching offices and cell towers.

Far better latency performance is among the reasons for that potential, in enterprise solutions such as support for the energy exploration industry.

source: OneWeb