Monday, November 26, 2018

Rural Internet Access is Tough

Any reasonable observer would say that a 1 Mbps internet access speed costing $80 a month is less than adequate, as it costs in Fort Yukon, Alaska.

The problem is that current solutions to boost access speed are not commercially viable, owing to geographic isolation and the small number of potential users.

Fort Yukon has a total population of 547, and is served by three internet service providers (one using satellite, one using fixed wireless, one using digital subscriber line).

There are an average of 2.6 persons per home, implying a total of 210 homes, of which 38 percent are occupied seasonally. Some estimates suggest full-year occupancy is 40 percent.

So assume full-year occupancy is about 62 homes to 84 homes are the universe of home broadband services.

Assume 62 percent of homes buy internet access. That implies a universe of 38 to 52 potential customers. Recall that Fort Yukon is isolated. Fort Yukon, located northeast of Fairbanks, is not served by the GCI TERRA network.



Terrestrial for Every Rural Region in Alaska (TERRA) project, a 3,300-mile rural high-speed broadband network delivering high-speed broadband access to 45,000 Alaskans in 84 communities that are spread across an area the size of Texas.

That means the only backhaul is by satellite, with all that implies for cost and capacity, in a region with very low population density. The estimated cost of building a mile of optical fiber middle mile facilities is $120,000. Microwave middle mile might cost $26,000 per mile. While fiber middle mile might support 10 Gbps, microwave might support less than 1 Gbps.

It is at least 138 miles from Fairbanks to Fort Yukon. Low earth orbit satellite constellations eventually will be a viable solution for middle mile, but not using terrestrial facilities. A microwave connection could cost $3.6 million. A fiber line might cost $16.6 million.

There is no payback model, using terrestrial facilities.

Some Industry Professionals Believe Connectivity Will be Less Important in 5 Years

One always should be on the lookout for anomalous data. So it is with a survey of 550 industry executives from 11 countries, conducted by Osborne Clarke for The Economist Intelligence Unit. Note that executives in the digital business, energy and utility and financial services verticals say they believe “connectivity” will be less important in five years.

Conversely, professionals in real estate/infrastructure and transport/automotive industries believe connectivity will be more important in five years. So what to make of those results? Some argue that real estate and transport traditionally have been slower adopters of information technology.

Also, financial services and digital businesses have been early adopters.


The results might also indicate that, in some industries, connectivity itself is less an issue, while other elements of business success are viewed as more significant.

NASA Spacecraft Lands on Mars

Never get bored with a Mars landing!



Is 5G as Big as the Internet?

Is 5G going to be as big an innovation as was the internet? It is too early to tell. But here’s an exercise, taking a range of claimed Internet benefits and simply substituting the word “5G.”


“Unlike its predecessors though, Internet is a technological paradigm shift, akin to the shift from typewriter to computer. And it isn’t just a network. Internet will become the underlying fabric of an entire ecosystem of fully connected intelligent sensors and devices, capable of overhauling economic and business policies, and further blurring geographical and cultural borders. It will be capable of delivering at every rung of the ecosystem’s ladder, and will provide seamless, continuous connectivity for business applications.”

Image result for internet economic impact


  • “5G will be a fundamental shift in the way communications networks are managed and operate; a marked distinction from previous mobile generations
  • 5G is no longer just about communications, but connectivity solutions. Data rate and capacity have traditionally been key metrics, but Internet significantly improves other metrics such as latency and coverage. This allows enhanced connectivity for a much wider range of applications across all sectors and industries.
  • Major mobile operators will have to focus on an expanded value chain to sustain high growth, while key players from other sectors will find themselves integrated into the wider telco industry.
  • 5G will become a universal connectivity platform, and will have a profound impact on the way devices and people communicate and interact.”


  1. “5G will turn connectivity into a platform. With Internet, wireless access networks will go beyond pipe, providing seamless, ubiquitous, and limitless connectivity for all people and all things.
  2. Everything will go 5G. Right now, most things are offline by default, and most electronic devices are not connected. With 5G, being online and connected will become the default for everything.
  3. The world will go all cloud. Supercharged with 5G, the cloud will provide massive computing power with instant transfer speeds and near-zero lag. This will make intelligence on demand available for everyone, everywhere. New business models like Cloud X – where devices are boosted by inexhaustible cloud-based resources – will begin to emerge.
  4. Devices will be redefined. With AI support across devices, network, and the cloud, devices will go from plug and play to plug and think. They will understand users better – able to actively predict our needs, not just passively respond to commands – and interact with us in more natural ways.
  5. Experience will flow seamlessly. With existing networks, our online experience is fragmented from one scenario to another. When all things are 5G and cloud-based, experience and content will flow seamlessly through time, space, and devices for a truly holistic experience across all scenarios.”


The point is that many potentially huge innovations, such as internet of things, artificial intelligence, virtual reality and autonomous vehicles are enabled by a complex of technologies and platforms. Internet is part of that complex, but ultimately just a part.


That is not to say 5G will fail to play a role in creation of a big new platform for apps, services, use cases and revenue models and sources. But separating the impact of 5G specifically, from all the other important changes, is a perilous exercise.


The internet itself, AI, VR, semiconductor advances, use of millimeter wave spectrum, device advances or other technologies might play key roles. Or not.


The big point is that all the incoming innovations likely are not solely driven by 5G. If successful innovations happen, they might not even require 5G. It just is impossible to say, right now.

Sunday, November 25, 2018

Are Telecom Prices Too High?

One argument we always hear about any communications service is that it is “too expensive.” That clearly is true in developing or lesser-developed nations, where mobile internet access can cost 14 percent of gross national income per person. In developing markets, mobile internet access can cost about six percent of GNI, per person.

Consider mobile internet access. In developing countries, mobile internet access costs about 0.7 percent of gross national income, per person, according to International Telecommunications Union data.

Much the same story holds for fixed network internet access as well. Fixed network internet access in developed nations costs less than one percent of GNI per person, perhaps 11 percent of GNI per person in developing nations and as much as 30 percent of GNI per person in lesser-developed nations.

One rather impressionistic bit of evidence that prices are not excessive might be gleaned from industry profits. On a global basis, revenues dropped by about four percent between 2014 and 2015, for example.

Developed market revenues have been dropping since about 2012, according to ITU statistics.
 


Half of Global Fixed Lines Support Internet Access

In 2017, about half of all fixed network lines globally supported voice. The other half (the growing half) consisted of internet access lines, according to International Telecommunications Union data.

Fixed Network Lines, Voice and Broadband, Lines in Millions

2014
2015
2016
2017*
Fixed-telephone subscriptions
Developed
503
490
479
471
Developing
592
556
524
500
World
1,095
1,046
1,004
972
LDCs
9
8
9
9
Fixed broadband subscriptions





Developed
354
370
382
392
Developing
377
472
535
588
World
731
842
917
979
LDCs
5
7
8
10





Total Lines




Developed
857
860
861
863
Developing
969
1028
1059
1088
World
1,826
1,888
1,921
1951
LDCs
14
15
17
19





Percentage Broadband Lines
Developed
41%
43%
44%
45%
Developing
39%
46%
51%
54%
World
40%
45%
48%
50%
LDCs
36%
47%
47%
53%


That illustrates one key facet of fixed network business models: increasingly, the fixed network is a platform for internet access, less so voice. The other trend is that more of the value of the fixed network is being generated by a range of data services including wholesale and retail lines, as well as services for enterprises.



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