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Showing posts from August, 2017

5G Fixed Wireless Could Add $1.8 Billion in Consumer Segment Revenues

Even if service providers in most parts of the world will not see the opportunity in such terms, AT&T, Verizon and possibly other service providers see significant upside in fixed 5G deployments, for obvious reasons.

In the U.S. market, fiber to the home has remained a tough business case, given generally lower population densities across much of the United States, as well as the certainty that at least half the investment will be stranded, immediately. So 5G fixed wireless could allow AT&T and Verizon, for the first time, to supply gigabit per second internet access connections in many areas where the fiber-to-home business case has not worked.
Quantifying the potential upside is the issue. One way is to calculate the amount of account loss 5G fixed wireless could address.
In the second quarter of 2017,  U.S. telcos lost at least a net 233,260 internet access accounts, according to Leichtman Research Group. But most of those losses were from a few telcos other than AT&T an…

AT&T Expands 5G Fixed Wireless Trials

AT&T expects standards-based deployment of fixed 5G as early as late 2018.
AT&T is expanding its fixed wireless 5G trials to business and residential customers in Waco, Texas; Kalamazoo, Michigan; and South Bend, Indiana by the end of 2017, after tests launched in Austin in June 2017.
In tests so far, AT&T has seen speeds up to 1 Gigabit per second and latency rates well under 10 milliseconds for the radio link at customer trial locations in Austin.
AT&T expects commercial equipment to be available within six months of the completion of the 5G Release 15 standard. In contrast, LTE equipment wasn’t available for a year to 18 months after the LTE standard was complete, says AT&T.
In 5G Evolution metros AT&T has upgraded cell towers with network upgrades that include LTE Advanced technologies like 256 QAM, 4x4 MIMO, and three-way carrier aggregation.
By the end of 2017, AT&T expects to deploy LTE-License Assisted Access and four-way carrier aggregation in certain…

U.S. Mobile IoT Connections Up 11% Year over Year

AT&T is the leader among U.S. carriers when it comes to internet of things connections, according to Compass Intelligence. The carrier ended the second quarter with 33.7 million IoT/machine-to-machine connections, a four percent increase from the first quarter, and more than twice the number of connections reported by Verizon and Sprint combined.
Verizon ended the second quarter with 18.2 million connections and Sprint has 13.2 million. T-Mobile US had an estimated 4.6 million IoT connections, down 22 percent from the first quarter, according to Compass Intelligence.
As a group, the four nationwide U.S. mobile service providers have added an estimated 7.5 million IoT connections within the last year, an increase of almost 11 percent.
AT&T’s IoT  connections are up 16 percent, Verizon’s connections higher by eight percent and Sprint’s IoT accounts up 20 percent. T-Mobile’s number of IoT connections appears to be down 11 percent over the last year, based on the Compass Intelligen…

Unlimited Offers Simply Push Competition Elsewhere

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Mobile service providers generally detest competing on the value of their internet access packages, the reason being that offering bigger--and unlimited usage allowances--typically means consumers will use more, creating more demands for capital investment to support the higher usage.

At the same time, revenue per unit sold drops. That tends to hit profit margins, if not revenue.
Also, major competitors simply match any popular new offers, so no particular retail package offers sustainable advantage. For example, in any markets where all the leading providers offer “unlimited usage,” that feature recedes as a source of advantage, since all the suppliers offer the feature.  
Ironically, when all the key suppliers move to any single lead offer--unlimited usage, for example--competition necessarily shifts to other aspects of the offers.
Not only does the adoption of any key feature nullify chances for business advantage, it also shifts combat to other realms.
In the U.S. mobile market, tha…

Video Content Ecosystem is Being Rearranged

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Winners and losers are inevitable in the internet era, and the content business has for some time been a prime example. Consumption patterns have been transformed, and with it, the economic fortunes of contending channels.

source: ZenithOptimedia
source: eMarketer
source: ZenithOptimedia
The linear video business now is approaching its own transformation, as have other media and retailing businesses in the internet era. How the business changes is the issue, beyond the simple observation that on-demand streaming is going to displace large portions of the linear delivery business.
For distributors, the big new trend is that content bundlers (networks) can become their own distributors (think Netflix). For content producers, the big change is that bundlers/distributors become content creators (again, think Netflix). The big theme is “going direct to consumers.”
That has potential positive implications for networks, negative implications for facilities-based distributors and already positiv…

Movie Ticket Purchases Peaked in 2000; So Did Voice

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It might only be a coincidence, but it looks like purchases of movie tickets peaked right around the time voice minutes of use did, in the U.S. market, and the same year voice accounts globally seemed to reverse trend, as well.
According to Federal Communications Commission data, U.S. long distance usage peaked in 2000. U.S. voice subscriptions (landline) seem to peaked in 2000 as well.  
In other markets, use of fixed lines seem to have peaked between 2003 and 2012. Even U.S. fixed network internet access seems to have peaked, measured in terms of number of subscriptions. The sales softness continued in 2016 and revenue appears to be lower, at least in the U.S. market, again in 2017.  
Culprits could include viewing alternatives such as streaming, bad choices by content producers, a perception of lower value compared to other alternatives. Whatever the cause, it might ultimately be the case that the communications and video entertainment  businesses reached a historic point around the t…

U.S. Internet Access Prices are Not as High as Some Believe

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Though it remains common to hear complaints about “how slow” internet access is in the U.S. market, or how “far behind” U.S. internet access is, compared to other nations, what always seems missed is how inexpensive internet access is, on a “cost per gigabyte consumed” basis.

But some new studies also suggest that absolute retail cost in the United States is not as high as originally was said to be the case.

Also, on a “purchasing power parity” basis, U.S. internet access cost is among the lowest in the world.

Prices not adjusted for purchasing power parity suggest one set of cost rankings, globally.  On that score, U.S. prices per megabit of speed are high, compared to many other nations.

Source: Boston Consulting Group

Adjusting for purchasing power parity or general levels of income are key. For example, measured as a percent of gross national income per person, the monthly cost of owning a mobile phone in the U.S. market is less than one percent. In developing countries the cost ca…

5G Really Will Be Different From All Prior Mobile Networks, Says Telenor CEO

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There is more evidence that mobile executives believe 5G really will be different from prior mobile generations. Most significantly, the business case is more speculative. “No customers will need 5G for current services,” said Telenor CEO Sigve Brekke. “Deployment likely will be more gradual and more driven by the business case.”
Also significantly, Brekke believes 5G will be quite different from prior generations in another sense: where mobile-only deployments were possible in the past, 5G will require ownership of fixed network assets.
Brekke’s comments also illustrate another novel element of 5G: it is the first mobile network where the business case will rest on new services driven by enterprise customers deploying internet of things networks, not “human users.”
Alternative access technologies also complicate the business case, as it is not yet clear how extensive the mobile network access role will be.
“We foresee 6.4 billion internet of things connections using fixed, mobile and …

5G Really Will Be Different From All Prior Mobile Networks, Says Telenor CEO

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There is more evidence that mobile executives believe 5G really will be different from prior mobile generations. Most significantly, the business case is more speculative. “No customers will need 5G for current services,” said Telenor CEO Sigve Brekke. “Deployment likely will be more gradual and more driven by the business case.”
Also significantly, Brekke believes 5G will be quite different from prior generations in another sense: where mobile-only deployments were possible in the past, 5G will require ownership of fixed network assets.
Brekke’s comments also illustrate another novel element of 5G: it is the first mobile network where the business case will rest on new services driven by enterprise customers deploying internet of things networks, not “human users.”
Alternative access technologies also complicate the business case, as it is not yet clear how extensive the mobile network access role will be.
“We foresee 6.4 billion internet of things connections using fixed, mobile and …

You Wouldn't Buy a Car Because it Has Tires

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Very few of us would buy an automobile without tires, or a mobile phone that could not make calls. On the other hand, we do not buy cars because they have tires or mobile phones because they make calls or mobile phone service because it supports voice, text and internet access.
In large part, that is the business model problem faced by mobile and fixed access service providers in mature markets. The former key revenue drivers now arguably are valuable features--but just that, valuable features--and not dominant revenue drivers, not the reason people decide to buy a communications service.
That conversion of “revenue-generating services” to “useful features” can be seen clearly in OTT voice and messaging. Despite much hope in some quarters that service providers could create their own VoIP services that generated revenue comparable to legacy voice, that has been hard to achieve.
In the U.S. market, only cable operators generally were able to do so, and then only because their legacy re…