Fleet Logistics IoT Shows Impact of Stay-at-Home Orders on Traffic, Truck Speed

Fleet logistics analytics provider Geotab says the stay-at-home orders issued as part of Covid-19 mitigation rules have decreased the time trucks spend at intersections and increased average speed when driving. The data was gathered from fleet internet of things sensors. 

The U.S. city with the largest increase in average road speeds was found to be New York City, moving from an average speed of 17.5 mph to an average of 21.0 mph - a 20 percent increase. San Francisco and Washington had the second largest increase in average road speeds.

source: Geotab 

The city with the largest reduction in time spent at intersections was Atlanta at 17 percent, with an average of 35 seconds spent at an intersection compared to 42 seconds before March 15. The city that has shown the smallest reduction in time spent at intersections is Seattle, with a three percent difference since before March 15.

“As soon as the lockdowns began across North America, we saw a drastic reduction in (carbon dioxide) emissions, down to 40 percent or less of normal for some cities,” said Mike Branch, Geotab VP. 

New York City, in particular, has seen the largest reduction, sitting at 38 percent of pre-pandemic CO2 emissions.” 

No Surprise, Net Profit Margins are Generally Lower than in Monopoly Era

Globally, a  typical retail connectivity service provider selling to consumers and businesses, likely with universal service obligations, tends to have net profit margins in the five percent range, according to Deloitte, perhaps six percent in the first quarter of 2020, making the business more profitable than low-margin grocery retailing but far less profitable than finance or technology services. 

source: Factset

Ironically, those sorts of net profit margins are close to monopoly-era margins as well. In the monopoly days, profit margins were set at guaranteed rates of return not much different, often in the six percent to eight percent range. The difference is attributable in large part to competition, which tends to lead to lower prices and therefore lower profit margins for suppliers. 

But product substitution also plays a part, as consumer and business demand shifts from legacy to new products, not all of which require purchase of a service provider product. Better technology also plays a role in enabling supply of better or more product at equivalent or lower prices. 

That illustrates a near zero pricing trend for basic connectivity products, especially on a per-bit, per-incremental-unit or per-use basis. Over time, connectivity prices have tended to mirror computation prices: better performance and declining prices over time. 

In fact, some major business models are premised on near-zero pricing for computing and communications goods. Microsoft’s software business, Netflix, Amazon, Google and 
Facebook provide examples of major business models built on the assumption of cheap communications and cheap computing. 

That can be seen in declining average revenue per user or commoditization.

Brief Dip, Quick Rebound Likely for Telecom Revenue, Capex

Though many parts of many economies might not see a “V-shaped” recovery post-Covid-19, Analysys Mason believes 5G capital investment will do so. If that happens, and looked at from a longer time frame, it will be almost hard to see the impact of Covid-19 on capex. That would be in keeping with past experience in the aftermath of the 2008 Great Recession, for example. 

And though Analysys Mason also predicts a revenue decline in developed markets of as much as 3.4 percent in 2020, growth will return in 2021. That also would be in keeping with the connectivity provider revenue recovery from the Great Recession. 

source: Analysys Mason

"Your Connection is Unstable"

“Your connection is unstable” is a message I almost always see at least once per Zoom session these days. So I did some checking, assuming there had to be a performance issue on my access circuit. Apparently, not so. Jitter measures at 2 milliseconds, well under the threshold of perhaps 39 ms on that measure. Bandwidth downstream is always between 200 Mbps to 300 Mbps per user, upstream between 11 Mbps and 12 Mbps, so bandwidth is not the issue, and latency is about 29 ms. 

All of that, essentially, means the connection, including both access connection plus Wi-Fi link, should not have instability issues. And yet it wobbles. Perhaps to be expected on a “best effort” internet connection, even with a new router. 

Most of the solutions I could think of involve removing the Wi-Fi link and direct connecting to the router using Cat 5 or Cat 6 cable, which is not an option since my PC no longer has an Ethernet port and uses Wi-Fi exclusively. 

I briefly looked at buying any available over the top QoS solution, but at least so far nothing seems suitable. And, in any case, it does not appear that jitter could be an issue. The apparently momentary unstable connection issues are annoying, but not mission critical for video conference calls. 

That is going to be a bigger issue when I am the one conducting webinars. About all I think of right now is rebooting the router before each Zoom session.

Australian ACCC Says Many Households Only Need 50 Mbps

A new report by the Australian Competition and Consumer Commission says 50 Mbps is sufficient to support household consumption of two concurrent high-definition video streams. For that reason,  “higher priced NBN100 services are not generally required to support many households’ consumption of streaming services, and that in most cases an NBN50 service is sufficient.” In other words, 50 Mbps works fine for household HDTV video streaming. 

“For most RSPs (retail service providers), nearly all NBN50 services would be able to stream from Netflix in High Definition, even if two people were watching different programs at the same time. This remained true even during busy hours,” the ACCC says. 

source: ACCC

6G as Industrial Policy

It has been quite some time since the idea of national “industrial policy” has had much currency in the United States, but 6G mobile network platforms seem to be shaping up as one area where attitudes could change, especially in the areas of indigenous supply chain. To be sure, 3G and 4G have been viewed as arenas for industrial policy in other parts of the world, and 6G is viewed as an area of policy for China. 

Despite the growing interest in 6G standards, it might not be so clear how leadership leads to advantage that can be reaped by countries, suppliers, service providers or consumers. The Alliance for Telecommunications Industry Solutions speaks of  “core technologies and recommended government actions,”  “rapid innovation and development” and  “common national purpose.”

Referring to 5G, ATIS notes the advantages of “development and early deployments” that, in a 6G context, might also confer leadership of “ideas, development, adoption and rapid commercialization of 6G.”

The idea is to focus on ways to “complement–not abandon or usurp–global standards in the ICT sector.” Key is “leadership of ideas.”

ATIS says “leadership begins with identifying a vision for the next decade,” although some related competencies include AI-Enabled Advanced Networks and Services, advanced antenna and radio systems, multi-access networks and likely a few key use cases. 

As a practical matter, that means “defining the technological breakthroughs that can lead the U.S. to sustainable technology leadership, with incentives for research and development and early investment.

Those steps, in turn, are viewed as vital to promoting time to market and “wide scale commercial adoption.”

More tactically, ATIs suggests tax credits for development in areas where U.S. firms might lead, continued spectrum policy support and support for efforts to commercialize 6G use cases. 

None of that would sound unusual, in the context of government policy in the 3G, 4G and now 5G eras. It is a mix of policies to spur supply and demand. Similar approaches arguably were common when many other nations--China, Singapore, South Korea, Japan, Israel--likewise chose to target economic growth in leadership, and as many others now also intend (Malaysia, Thailand, India and others). 

The methods will vary, but the idea is to focus effort, perhaps always easier on the supply than the demand side, but both have roles. 

It also is not too soon to argue what ultimately will matter most is not standards, which, by definition, will be global, but the ability to usefully deploy technology. By definition, every firm and nation will have access to the standards. 

But some firms, nations and regions might hope to create competencies in supply, or advantageous demand profiles. Scale, experience curves and intellectual property will matter. But so will skill at the application of new technology and leverage of existing assets.

Were that not the case, we should never see significant differences between productivity gains, for example, among any countries. As we used to say, tele-density and economic development should be directly related. And yet benefits are differential, even when tele-density, or internet usage, or network speeds, are identical or similar. 

The point is that what matters is the ability to leverage technology for economic advantage. High rates of deployed technology are only proxies for what benefit those deployments are expected to bring. 

That is not to say standards are unimportant. 

Technology standards in computing and communications are said to provide benefits for enterprises by reducing cost, minimizing risk, increasing the range of suppliers and making possible standardized training for employees. Such standards historically have been crucial in the hardware realm, much more than in the applications arenas. 

For consumers, standards are expected to produce the best goods and services, more value, lower cost and therefore wide availability. 

Benefits might also accrue to particular suppliers when proprietary standards become consumer or enterprise commercial “standards,” as was true for IBM and become true for Microsoft and Apple, Cisco and others. 

“Open” standards have also grown more important in the hardware and firmware spaces, as Linux, Android and Transmission Control Protocol/Internet Protocol suggest. 

The world of applications is much less dependent on international standards. In the internet era, Google, Facebook, WeChat, Amazon, Alibaba, Netflix and other solutions have not established themselves so much through standards as because consumers simply prefer to use them. 

Broadly speaking, broad global standards reduce risk for infrastructure suppliers, as they create larger markets and create more niches for original equipment manufacturers. 

What matters is productivity; the ability to wring value from investments. Industrial policy might help. Still, success will ultimately be determined by demand, not supply.

Short, Shallow Dip in Service Provider Revenue Because of Covid-19?

Though it might seem counter-intuitive, connectivity service provider revenue might not change all that much because of the Covid-19 pandemic, and a revenue rebound might be quite swift, in some markets.Some product lines and some geographies might not fare that well, but there are historical reasons to believe any dip will be shallow and short lived.

By way of comparison, that is what happened to telecom service provider revenue in the wake of the global Great Recession of 2008.

To be sure, some believe global telecom revenue will fall by 3.4 percent in 2020 compared to 2019, before returning to growth (0.8 percent) in 2021, according to Analysys Mason. Analysys Mason had previously forecast growth of 0.7 percent in 2020 and 0.8 percent in 2021. 

International Data Corp., on the other hand, predicts that global telecommunications and subscription TV services revenue will dip less than one percent in 2020. Most observers might agree that a dip of some size will happen. What is likely more contentious is the size of such a dip, or its duration. 

With all the talk about a new normal caused by the Covid-19 pandemic, where life in many ways will be permanently altered, it is worth keeping in mind that past traumatic events such as the Great Recession of 2008 can be very hard to detect in time series data where it is possible to track trends over time. 

So even if it seems too optimistic, the IDC prediction is well within historical expectations. The Great Recession of 2008 caused a momentary flattening of revenue growth, with the prior pattern asserting itself quickly afterwards. A modest dip would not be without precedent, even if we fear greater damage. 

And though it is reasonable to expect a dip in business customer spending (with economies shut down and significant bankruptcies expected), consumer spending on telecom services might well increase, as it did in the United States in the aftermath of the 2008 Great Recession. 

source: Statista

IDC estimates global service provider revenue at nearly $1.6 trillion in 2020, a decrease of 0.8 percent compared to 2019. IDC expects the decline to continue in 2021, but at a somewhat lower degree. 

The mobile segment, the largest segment of the market, will post a slight decline in 2020 due to lower revenues from roaming charges, less mobile data overages due to the stay-at-home situation, and slower net additions, especially in the consumer segment, IDC argues.

Fixed data services spending will increase by 2.9 percent in 2020. Spending on fixed voice services will continue to decline.

Subscription video services will be boosted by the lockdown, but also affected by the economic downturn, so the spending in this category is expected to decline slightly, says IDC.

The Americas market will see a tiny decline of 0.04 percent. Europe, the Middle East, and Africa (EMEA) and Asia/Pacific (including Japan) will dip more. Growth is not expected in EMEA or Asia/Pacific before 2022 as the users in emerging markets are expected to remain cautious about spending for some time, IDC estimates. 

source: IDC