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Showing posts from August, 2014

What's More Important: Bigger Buckets or Lead App Plans?

It isn’t yet clear whether various U.S. mobile service provider promotions that provide more mobile Internet access for the same, or lower prices, or new “lead app” packages will have greater long-term impact.

On one hand, bigger usage buckets for the same, or lower price, might make mobile Internet access a more-potent competitor to fixed access, over time.
On the other hand, “lead app” packages might lead to creation of new customer segments in the same way that the ability to buy single TV programs or channels could reshape customer segments in the video entertainment business.
Whether “more for less” or “buy only what you want” will have bigger impact long term.
T-Mobile US or Sprint adding more gigabytes to Internet usage buckets are an example of the former. Virgin Mobile Custom is an example of the latter.
It might be tempting to argue that “more for less” is the more-important trend.
But in the content consumption realm, the “buy only what you want” feature might be equally impor…

Rural Areas Might Gain 36 Times More Bandwidth While Urban Areas Get 1,000 Times More

Making new spectrum available for Internet access arguably is more important in rural and hard-to-reach areas than it is in high-demand urban areas. The reason is that key methods for increasing the use of bandwidth (smaller cells) are often unavailable.
Some might argue that, as a generic, 10 times improvement might be gotten by adding new spectrum; 10 times a contribution from redesigning denser networks; and then 10 times from other sources of advantage, such as better modulation or coding, better radios and use of hybrid networks.
Others might argue that as much as half the advantage could come from denser, small cell networks, and far less a contribution from adding new spectrum.
One way of putting matters is that a 1,000-fold improvement in available bandwidth would come from access to three times more spectrum, six times more efficiency and 56 times denser networks.
And if that is true, you glimpse the problem. Adding more spectrum provides three times the advantage. Use of sma…

Sometimes Disruption Requires Big Firms

We have a notion that big changes in techology and capabilities are fostered primarily by small firms and teams of innovators. Often, that is correct. 

Sometimes, though, innovation requires action by big, wealthy firms. Only a big firm such as Apple likely could have changed the way mobile devices are brought to market by cellular communications firms. 

Likewise, sometimes firms have to be able to invest quite a lot in regulatory changes. That appears to be the case for delivery drones. The Federal Aviation Administration will have to be convinced that use of drones for all sorts of purposes is safe. 

No small firm will be able to supply the evidence or push through big changes in policy. 

"This Time it's Personal," T-Mobile US Says

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T-Mobile US is going to fire more shots in the U.S. mobile marketing war on Sept. 10, 2014. You can bet there will be a Sprint reaction. 

At this point, while T-Mobile US could announce yet another tweak to its value-price propositions, even that might not be so noteworthy. 

More data usage for less money is a good thing, from a consumer perspective. 

But with Sprint seemingly now willing to respond in kind for every T-Mobile attack on the packaging front, the upside seems to be less valuable. 

So what new attack might T-Mobile US be unleashing? 

And will the new promotion focus on end user experience, single-line accounts, prepaid or family accounts? 

And at what point will the attacks start to move the needle on multi-line accounts?

Value and price are important, to be sure. But it is easier to switch a single-user account than a multi-line account. It is one thing to swap out a single device, and to make a decision for a single user.

It's harder to switch multi-line accounts when four …

Will Tablets Cannibalize Smartphones, or Will Smartphones Displace Tablets?

The extent to which larger-screen smartphone devices are cannibalizing sales of tablets is unclear, but possibly quite important, in at least some markets.
But the reverse might also be happening in some markets, namely tablets cannibalizing smartphone sales. That might be an odd or unexpected development.
But the developing trend of larger-screen smartphones and smaller-screen tablets likely fuels the divergent trends.
In some cases, where consumers cannot afford both a smartphone and a PC, they might be choosing a tablet.
In other cases, the choice might be more an instance of “which device do I carry with me?” Sometimes, the choice is “which two devices do I carry?”
Once tablets get mobile network capability, including voice, and smartphones get bigger screens, the choices might be harder.
Consider that sales of voice-enabled tablets that are able to use the mobile network reached 25 percent of total in the Asia/Pacific (excluding Japan) region in the latest quarter, according to In…

How Fast Will Internet Usage Grow in Asia?

It often is the case in the communications business that “where we are” matters less than “where are we going?” In other words, observers have in the past noted that U.S. consumers used mobile phones less than consumers in Europe, by a sizable margin.
Likewise, U.S. consumers once used text messaging far less than European or Japanese consumers.
And it is a recurrent theme that U.S. high speed access prices are high, and speeds slow.
Some studies of U.S. high speed access suggest that actually is incorrect.
Of course, European policymakers no longer agree with that characterization, arguing that U.S. fixed and mobile speeds and prices actually are better than typically is the case in Europe.
In fostering competition, European telecom policies have created an investment problem, many argue.
The point is that where usage or adoption now stands can be a completely unreliable indicator of where adoption or usage is going, even over relatively short periods of time.
It would be correct, fo…

Coould AT&T Become the Largest U.S. Video Entertainment Supplier? Possibly

Will AT&T become the biggest U.S. linear video services provider sometime in 2015? Possibly.
The scenario would have to involve two key developments: AT&T gets Federal Communications Commission and Department of Justice approval to buy DirecTV, and does not have to divest significant numbers of its customers (fixed or satellite).
The second requirement for this scenario is that Comcast is denied permission to buy Time Warner Cable.
In that instance, it is conceivable that AT&T might have 25.8 million video customers, while Comcast might have 21.7 million video customers.
Of course, the Department of Justice will have gotten AT&T agreement to take some measures to  “maintain competition” in the video market. Frequently, that takes the form of agreements to maintain prices and terms of service for a time, programs to support services for low-income customers and so forth.
Whether the DoJ will require divesting customers is the issue.
Nor is it clear whether Comcast’s purc…

T-Mobile US Promotion Attacks Tablet Segment of the Market

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Not content to battle for phone accounts, T-Mobile US now has launched a promotion aimed at snaring more tablet accounts. 

T-Mobile, starting September 3, 2014, will allow any Simple Choice customer to add a tablet to a postpaid Simple Choice phone plan for $10 per month. 

T-Mobile US also will match the customer's 4G Long Term Evolution data plan, up to 5 GB a month.

For example, a customer with a Simple Choice smartphone plan with 5 GB of LTE data can add a tablet with another 5 GB of data set aside for use on that tablet, for just $10 per month.

That particular promotion is significant because, in recent quarters, all four leading U.S. mobile carriers have added net new accounts on the strength of tablet activations.

T-Mobile US, meanwhile, arguably has had the lowest amount of activity in that regard. 

So the tablet promotion serves two purposes, bringing T-Mobile US up to parity with tablet adds by the other three leading carriers, and also helping T-Mobile US maintain its net new …

How Widespread will Gigabit Competition Be?

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Gigabit networks now have become the value-price umbrella under which Internet service providers in a growing number of communities must operate. 

To be sure, not every neighborhood will have access to one or more providers, nor is it clear that demand is present in every neighborhood of every city. 

In all likelihood, supply will tend to be deployed where there is expected demand. 

Some might worry that there will not be competition in many, or most markets. 

Some of us would bet there will ultimately be two or more ISPs offering such service in most markets where major cable and telco ISPs compete head to head.

Where cable and telco ISPs face each other as direct competitors, it seems logical that, over time, contestants will try and maintain parity, at least, with the key competitor. 

That doesn't always mean gigabit access. In many neighborhoods, 100 Mbps or 300 Mbps might match demand characteristics better. But in such neighborhoods, many of us still would bet there will be a mini…

TV Drives Deutsche Telekom Fixed Network Results

Fiber to cabinet investments in the German market remain difficult to justify on tradtional return on investment grounds, but appear to be strategic, nonetheless.
Deutsche Telekom argues it is “investing more in our home market than any other European incumbent,” according to Timotheus Höttges, Deutsche Telekom Chairman of management board chairman and CEO.

As part of that investment, Deutsche Telekom has bumped Long Term Evolution coverage to 77 percent of potential customers and fiber to the home coverage to 39 percent of households.

Deutsche Telekom expects it will cover 45 percent of homes with fiber facilities by the end of 2014, as well.

But financial results in the second quarter illustrate how difficult it is to justify the return on investment from fiber to home facilities, even when they are deemed necessary.

In the second quarter of 2014, overall Deutsche Telekom revenues fell 0.3 percent year-over-year.

Deutsche Telekom did report organic revenue growth of about 0.6 percent,…