Telefonica Looks for Other O2 Options in United Kingdom

source: Informa

It is starting to appear that regulators will not allow the proposed merger of Three and O2 in the United Kingdom, a prospect that now has Telefonica looking at other options  for its U.K. business.

Among the other options conceivable in the event of a merger denial are selling to another buyer or spinning O2 off as an independent company.

And some speculate that Liberty Global, owner of the Virgin Media cable TV assets in the United Kingdom, will be interested.

Any successful acquisition by Liberty Global would be a further move by major cable TV operators into the core mobile services business.

In the Netherlands, Liberty Global already is working with Vodafone to sell mobile services to its cable TV customer base. In the United States,

Comcast now says it will bid on 600 MHz mobile spectrum, while Comcast and other cable TV companies already have the right to resell Verizon Wireless services, with the eventual option to create a mobile virtual network operator business that uses wholesale Verizon assets to create a branded retail operation.

The switch in plans by Telefonica shows the big role regulators now are playing in global communication and Internet ecosystem markets.

In recent days, regulators have been active shaping communications markets, creating network neutrality rules that boost or limit business models, changing spectrum licensing rules in ways that permit more intensive use of existing licensed spectrum and freeing up more spectrum for use both licensed and license exempt.

But antitrust regulators also appear to be taking a more prominent role, essentially killing mergers that would have directly affected mobile market structures in the United States and European Union, while preparing to stop a big merger in the U.K. mobile market.

And antitrust investigations directly affecting software suppliers are underway in the European Community.

Actions by private actors matter, but so do ground rules set by regulators that directly affect market structures and potential costs and opportunities within various portions of the broader Internet ecosysetm.

T-Mobile US Gains Most Subscribers in 4Q 2015, But Market Becomign a Zero Sum Game

In a saturated but competitive market, nearly all account gains necessarily must come in the form of taking market share from another supplier, and the U.S. mobile market illustrates the trend. In other words, the U.S. market is becoming nearly a zero sum game.

By 2014, use of mobile phones had reached 110 percent in the U.S. market. And though half of the leading four carriers gained net accounts, while the other half lost net accounts, the big change might be that the majors are gaining subs at the expense of smaller providers.

source: Strategy Analytics

In the fourth quarter of 2015, AT&T had a net loss of six percent, Verizon had a net loss of three percent, Sprint had a net gain of three percent and T-Mobile US had a net gain of about 24 percent.

Other carriers had a net loss of 15 percent.

The analysis by Consumer Intelligence Research Partners shows that among customers that activated a phone in the quarter (approximately 12 percent of the U.S. market), T-Mobile US grew its customer base 42 percent (net 24 percent) at the expense of other carriers, as did Sprint, which gained a net three percent.

source: Consumer Intelligence Research Partners

20% of U.S. Households Rely Exclusively on Mobile for Internet Access

As "wireless substitution" gutted the fixed network voice business, there now are growing signs that mobile has become an effective substitute for fixed network Internet access.

“Mobile Internet service appears to be competing more directly with wired Internet connections,” says Giulia McHenry, National Telecommunications and Information Administration chief economist.

Between 2013 and 2015, “the proportion of online households that relied exclusively on mobile service at home doubled between 2013 and 2015, from 10 percent to 20 percent,” she says.

About 75 percent of U.S  households using the Internet at home in 2015 still used wired technologies for high-speed Internet service, including cable TV high speed access, digital subscriber line and optical fiber connections, she notes.

But that represents a sizable drop in fixed network  home Internet access use, from 82 percent of online households in July 2013 to 75 percent two years later.

                    Percent of Households Using the Internet at Home, 2013-2015

As is the case in many other regions globally, low-income households are significantly more likely to depend on a mobile data plan than those with higher incomes.

For example,  29 percent of online households with family incomes below $25,000 only used mobile Internet service at home, compared with 15 percent of those households with incomes of $100,000 or more.

                 Exclusive Use of Mobile Internet Service

Also, NTIA’s latest data shows that some of the demographic groups that have historically lagged behind in using the Internet—senior citizens, minorities, and Americans with lower levels of educational attainment—are erasing the gaps.

Internet use increased significantly among children and older Americans between 2013 and 205, for example.

Children between the ages of three and 14 became substantially more likely to go online, as Internet use among this group increased from 56 percent in 2013 to 66 percent in 2015.

While Internet use among those Americans with at least some post-secondary education remained steady between 2013 and 2015, it increased significantly among those with education up to a high school diploma.

Although those with lower levels of educational attainment are gradually increasing their online presence, the gap in Internet use based on education remains quite large, with 88 percent of college graduates going online in 2015, compared with 58 percent of those with no high school diploma.  

Internet use among those aged 65 or older increased from 51 percent to 56 percent during the same period.

Usage remained largely unchanged among those who were previously most likely to go online, with 83 percent of Americans between the ages of 25 and 44 reporting Internet use in both 2013 and 2015.

Intel Annouinces Shift Away from PC, to Cloud and IoT

Intel Corporation has announced a restructuring initiative to “accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices,” Intel says.

“The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines,” Intel now says.

“These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment,” Intel also says.

source: IDC

Why Comcast is Installing Direct Fiber for Gigabirt Pro Services

There is a good reason Comcast is making symmetrical 2 Gbps fiber-based Internet access available across much of its footprint, described as reaching 18 million homes, or about 85 percent of its current network footprint.

For consumer customers, the Gigabit Pro service allows higher bandwidth than the 1 Gbps standard Comcast now is preparing to offer all consumers.

But 2 Gbps symmetrical, provided over a direct fiber to home connection, will be more important for business customers.  

Chris McReynolds, Level 3 VP, says Level 3 does not consider Ethernet-over-HFC service to be competitive with the business Ethernet services that Level 3 sells to business customers.

Jitter is the problem. Jitter levels associated with Ethernet-over-HFC are too high, compared to telco fiber or copper access, he says.

But maximum transmission unit (MTU) performance of cable hybrid fiber coax access networks also is an issue.  

MTU is a key performance standard for Ethernet because it has a significant effect on the rate and efficiency of throughput.

The higher the MTU, the higher the rate of throughput. Ethernet-over-HFC delivers an MTU of 1518 bytes (1522 bytes with a single virtual LAN tag), he says. “This is significantly below the MTU that can be supported by Ethernet-over-fiber and Ethernet-over-legacy loop networks, which are increasingly supporting MTUs far above 2,000 bytes,” says McReynolds.

Also, he says, cable Ethernet access often is restricted to 10 Mbps.

Of course, all those issues will undoubtedly be resolved when Comcast adds Gigabit Pro access over dedicated fiber lines.

Has Hosted PBX Business Finally Hit an Inflection Point?

The global voice over IP (VoIP) service market totaled $73 billion in 2015, a five percent increase over 2014 levels.

That figure includes the value of consumer services--about 62 percent of total revenues at $45.3 billion--and business buying of managed phone services, hosted equivalents, SIP trunking services and unified communications services and software, according to IHS Technology estimates.

“The competitive landscape has become highly fragmented for VoIP business services, with an increasing number of PBX and unified communications (UC) vendors, enterprise agents and resellers expanding into the market along with traditional service providers,” said Diane Myers, senior research director, VoIP, UC and IMS, IHS Technology.

Of the roughly $27.7 billion in business IP telephony spending, about $9 billion is generated by purchases of SIP trunking services (access).

Managed IP PBX services amounted to about $10 billion globally, while another $9 billion worth of hosted PBX services are sold as well.

Roughly 10 to 20 percent of new IP PBX lines sold are part of a managed service or outsourced contract depending on region, Myers said. Annual sales of business phone systems might have amounted to $6.4 billion in 2015, extrapolating from second quarter 2015 sales estimates.

As a result, managed IP PBX services, including private cloud services, are expected to comprise the largest segment of business VoIP services over the next several years.

There were 230 million residential VoIP subscribers worldwide in 2015, an increase of 3 percent from 2014

In 2015, unified communications-as-a-service (UCaaS) revenue grew six percent over the prior year and seats sold grew 25 percent.

XO Integrates Skype, Salesforce into Hosted PBX Offer

XO Communications (XO) has integrated Skype for Business (formerly called Lync) as well as Salesforce into its hosted PBX (HPBX) solution, allowing phone calls to be placed directly from CRM systems and automatically accessing customer records upon call connection.

The Skype for Business integration allows users to leverage seamlessly all Skype collaboration tools while connecting phone calls through the HPBX platform.

The XO service now also supports multipoint video conferencing and allows customers to invite users not on the HPBX platform to participate in conferencing and collaboration sessions.

Those moves illustrate the difficulties of tracking the “business phone system” market separately from the unified communications and conferencing markets. In fact, most analysts include all those segments within a single unified communications market.

source: IDC

source: Synergy Research