Verizon "Very Confident" in Spectrum Position

Most informed observers outside of Verizon believe it will have to boost its spectrum assets. But Verizon continues to insist it is “very confident” with its present and potential spectrum assets, according to Matt Ellis, Verizon CFO. “We have significant opportunities to continue to grow within the spectrum holdings that we currently have; we’re refarming spectrum as we've talked about for a while; we still have the AWS-3 spectrum; and then unlicensed,” said Ellis.
It is not an unrealistic position. Even if, historically, gaining new spectrum has been the main way mobile operators have added new capacity, using smaller cells is the other typical way additional gains have been achieved. With the fiber deep architectures Verizon is pioneering in Boston, it is creating the backhaul infrastructure to do just that: add small cells to reuse existing capacity.
So, in terms of the physical options, Verizon does not absolutely need more spectrum to add more capacity. On the other hand, ther…

AT&T Adds Gigabit Service in Eight More Metro Areas

AT&T plans to add eight more metro areas to its AT&T Fiber service, reaching at least 75 major metros with the fiber-to-home, gigabit per second service.
AT&T now markets gigabit connections to 4.6 million locations across 52 major metros. AT&T expects to add two million locations in 2017, and plans to reach at least 12.5 million locations by mid-2019.
Some critics will point out that the deployment is neighborhood by neighborhood, and not a “ubiquitous” deployment. That is a simple case of selling gigabit connections where there is enough demand to warrant the investment. Even Google Fiber, which did build in the same way, found insufficient demand to continue. AT&T expects its deployments to be sustainable.
Some observers characterize AT&T fixed network investment plans as “running away” from that business. Some of us would disagree. AT&T, it is undoubtedly true, will not drive most of its future revenue growth from its U.S. fixed network. That will tend t…

In U.S. Market, Internet Access is Broadband; Phones are Smartphones

In many markets these days, there is very little functional difference between “internet access” and “broadbamd internet access,” as there is very little distinction between a “mobile phone” and a “smartphone.”
In the case of internet access, though, there is one important observation to be made, namely that buying of fixed internet access seems to have passed its peak, as mobile broadband continues to grow, suggesting there is product substitution going on.
For those of you who live in a developed market, when was the last time you met anybody who uses a dial-up connection to the internet? For most of us, the answer is that we cannot remember the last time we saw anybody using a dial-up connection, or actually know somebody who buys such a connection. source: Pew Research Center,  source: Pew Research Center data source: Pew Research Center
source: Pew Research Center
Smartphone Sales (Percent of Total, 4Q 2016) China 96 India

"What if Computing and Communications were Free?" Still Are Key Questions to Ask

Though it is not something anybody really thinks about on a daily and routine basis, virtually every business, in every industry now operates in a context where “computing and communications are nearly free.”
Even if it is not yet true everywhere on the planet, for everyone, computing and communications are shaped by Moore’s Law, which means those products and capabilities ultimately will be so affordable people do not have to worry about using the tools.
That is a good thing, in a broad sense, if often challenging for suppliers of computers and other computing devices; as well as suppliers of communications services. Bill Gates and Reed Hastings, though, are among the executives who correctly figured out how to leverage those trends.
For Gates, the insight that free computing would be a reality meant he should build his business on software used by computers.
source: Deloitte University Press
Reed Hastings came to the same conclusion as he looked at bandwidth trends in …

Nothing is Going to Prevent Internet Access Prices From Falling

It is helpful to remember some historical facts whenever a regulatory policy is changed in a way that critics argue “will lead to higher prices.”

And that lesson is that internet access prices decline over time. That seems to be the case for fixed or mobile internet access, and certainly has been true for transport prices. Sometimes observers focus only on retail prices, not consumption. That is important, as users tend to consume more data over time, buying tiers of service that are faster, and often have higher retail prices.  

In other words, in addition to retail price declines, quality of service keeps improving (looking only at speed) while volumes consumed keep climbing as well. So cost per megabyte or cost per gigabyte matter. Now is it crazy to argue that prices are going to fall further, as much more supply, and more-efficient platforms are introduced.

Such price changes are clear in both consumer and business realms, as well. Consider T1 prices, DS3 prices or Ethernet prices.…

Wi-Fi Offload Now Mostly is a Matter of How Mobile Usage Plans are Built

With the caveat that “being connected to Wi-Fi” is a different matter from “using Wi-Fi,” the incentive to use Wi-Fi offload obviously is directly related to consumer perception of the value of doing so. An analysis by OpenSignal finds that T-Mobile US customers (presumably the customers most likely to have unlimited-usage plans) shift to Wi-Fi access the least of customers of the top-four U.S. mobile service providers.
source: OpenSignal
In the coming 5G era, and assuming data tariffs remain affordable (no particular consequences for relying on mobile networks instead of offloading to Wi-Fi), customers might not find it useful to offload to Wi-Fi.
Assuming mobile data usage policies do not penalize video consumption, while usage charges remain affordable, the economic incentive to offload will be lessened. Also, given the speed fo 5G networks, offloading to Wi-Fi will not often result in better user experience. source: Cisco

Why Revenue Sources Beyond Mobile, Mobile Data, Must be Found

Some trends now are so well established they are a background issue, no matter how important. Revenue earned by mobile service providers, in developed markets, from mobile data, from human customers, has past its peak. In markets such as Japan and the United Kingdom, mobile data, no matter how important, is no longer driving growth.
That is why hopes for internet of things are so important. Growth prospects for all human uses of mobile services--with one possible exception--are largely negative, in developed markets, even if growing in developing regions.
That possible exception is entertainment video. If some mobile operators can shift enough market share from traditional fixed network linear video services to “owned” mobile video services, that access revenue segment still could grow.
The other important shift is indirect. Or, one might say, what happens with telco diversification efforts. Put simply, the access business is declining, in mature markets. To keep growing, service prov…