Posts

Showing posts from January, 2015

Dish Network is Surprise Winner in AWS-3 Spectrum Auction

AT&T spent $18.2 billion to acquire AWS-3 spectrum; Dish Network won $13.3 billion; Verizon bought $10.4 billion worth of rights and T-Mobile US committed $1.7 billion in recently-completed auctions of 700-MHz spectrum.

AT&T seems to have won most of the 10 MHz by 10 MHz allocations nationwide, while the other bidders mostly won the 5 MHz by 5 MHz allocations.

Dish Network perhaps was the surprise, committing the second-largest amount of money in the auction. The issue now becomes whether Dish Network will commit to building a new mobile network, or will sell the spectrum rights to another company.
By some estimates, Dish Network’s mobile spectrum is worth perhaps $20 billion.

The huge unanswered question is "what happens next," where it comes to Dish Network and its mobile strategy. Some skeptics have been willing to believe, all along, that Dish Network ultimately would simply try to monetize its spectrum assets by selling them or leasing them to another existing m…

Would Verizon and AT&T Consider a "Use Best Network" Approach on Steroids?

It looks as though we might relatively soon get new tests of the value of network agnostic access.
If Google launches its own mobile service, relying on Wi-Fi, Sprint and T-Mobile US networks we might start to get a sense of how 5G mobile networks will operate, aggregating the best access “available right now.”
Whether that devalues or enhances the value of any specific retail operator’s offering remains to be seen, though 5G supporters obviously believe such “any network” access will enhance value for any retail mobile services provider.
Comcast is expected to do something along those lines, using a “Wi-Fi first” approach. Cablevision Systems Corp., in one sense, is using the “legacy” approach, relying on an owned network solely. Granted, it might be odd to classify a “Wi-Fi only” mobile network as a “legacy” approach, but that is what a sole reliance on an owned Wi-Fi network represents.
The long-term business issue is whether leading mobile networks would agree to allow a “use the …

BT to Lean on G.fast to Boost High Speed Access to 500 Mbps

BT plans to boost high speed access to as much as 500 Mbps, to most U.K. homes, within a decade, with fiber to home gigabit service also being made available.
By about 2020, BT expects to have boosted speeds to “a few hundred megabits per second to millions of homes and businesses by 2020,” BT says.
Speeds will then increase to around 500 Mbps as the new “G.fast” implementation of digital subscriber line technology improves.
G.fast deployment will start in late 2016 or early 2017, BT now believes.
Since 1998, DSL speeds have grown by two orders of magnitude (100 times), so long as copper drops are short enough. In essence, that is the same principle used by cable TV hybrid fiber coax networks, which also combine fiber backbones with copper drop media.
If drop lengths are short enough (less than about 300 feet), speeds to 1 Gbps are theoretically possible. That implies a deployment of fiber almost to the premises. In urban areas, that might mean fiber to a cluster of two detached houses, …

What Does Market Signal About Need for Heavier AT&T Regulation?

Are tier-one telcos behemoths with power to stifle other competitors, or business-challenged entities barely able to cope with the magnitude of changes in their core businesses?

It is a question that goes to the heart of assessments about “what is to be done” about supplying and enhancing high speed access, mobile and other essential services.
The reason is simple: if tier-one telcos are dangerous potential monopolists, regulators have to be on guard against abuse of market power. But if tier-one telcos are fundamentally challenged, different policies are called for.
European regulators arguably have held both positions over the past couple of decades. Two decades ago, the emphasis was on restraining tier one service providers to enhance competition.
Today, the concern essentially is that there is too much competition in European markets, and that service providers are not able to justify investing enough to upgrade networks as regulators and others believe is necessary.
Perhaps ironical…

Apple Catches Samsung in Smartphone Market Share

Apple has pulled nearly even with Samsung in smartphone shipments, International Data Corp. now reports.

Having spent 11 quarters prior to the fourth quarter of 2014 as the number two smartphone vendor in terms of shipments, Apple just 600,000 units fewer than Samsung in the fourth quarter.
In the same quarter of 2013, Apple trailed Samsung by more than 33 million units.
IDC also reported that smartphone vendors shipped a total of 375.2 million units during the fourth quarter of 2014, representing 28.2 percent growth year over year.
Sequential growth was about 12 percent.
Samsung had 20 percent share while Apple had nearly 20 percent share in the fourth quarter. The next three suppliers in the top five are Chinese: Lenovo with 6.6 percent share; Huawei with 6.3 percent share and Xiaomi with 4.4 percent share.
For the full year, the worldwide smartphone market saw a total of 1,301.1 million units shipped, up 27.6 percent from the 1,019.4 million units shipped in 2013.
Top Smartphone Vendor…

AWS-3 Auction Ends: Prices Arguably are at "Bubble" Levels

It isn’t yet clear precisely how much the price of one MHz-pop of mobile spectrum in the U.S. market has changed, now that the AWS-3 spectrum auction has concluded.

But it is fair to say the amounts bid likely will represent prices that are as much as 250 percent higher than the last auction of AWS-2 mobile spectrum.
Few, if any, expected the spectrum prices to be bid at such levels. Even in the early bidding rounds, prices grew exponentially.
It is hard to say how the sharp rise in prices might affect future auctions, such as the 600-MHz TV spectrum auctions scheduled for 2016.
Some might argue the AWS-3 prices were so high because many bidders think the 600-MHz auctions now are too uncertain, both in terms of spectrum that might be released, and the uniformity of released spectrum in the major markets where the need for spectrum is greatest.
AT&T and Verizon, the expected big winners of AWS-3 spectrum, reasonably would be working under the assumption they cannot gain big chunks o…

FCC Adopts New 25-Mbps Definition for High Speed Access

The Federal Communications Commission has upped the definition of “broadband Internet access” to a minimum of 25 Mbps downstream and 3 Mbps upstream. In one sense, the revision makes sense: high speed access speeds are climbing about as fast as Moore’s Law would suggest.

The definitional change will be reflected in FCC and other policies to spur faster broadband deployment in rural areas. The last revision was made in 2010, when the FCC redefined broadband as 4 Mbps downstream and 1 Mbps upstream.
In other words, in five years, the FCC has boosted the definition of broadband by an order of magnitude. That, the agency says, reflects “advances in technology, market offerings by broadband providers and consumer demand.”
And yet the FCC also maintains that broadband deployment in the United States is failing to keep pace with today’s advanced, high-quality voice, data, graphics and video offerings.”
Using the updated service benchmark, the FCC argues that 55 million Americans, representing 1…

How Big are M2M Connection Revenues, Today?

Machine-to-machine communications are the plumbing for the Internet of Things, and therefore underpins communication service provider interest and revenue potential from the IoT, one might argue.

For that reason, IoT is the larger of the two markets. The analogy is the current relationship between Internet access and Internet application revenue streams, where application companies earn multiples of access revenue.
If global mobile revenue is about $1.2 trillion, as estimated by the GSMA, total mobile ecosystem revenues are about $2 trillion, roughly 15 percent of global mobile revenues are generated by Internet access and M2M represents an incremental one percent of present revenues, then M2M revenue might represent something like $1.8 billion, annually, for the mobile industry.
Some estimate mobile M2M connection revenue at perhaps $1.5 billion to $2.4 billion, depending on the assumptions about recurring monthly revenue for an M2M connection.

Why AT&T 4Q 2014 Results Really Don't Matter

One might argue fourth quarter 2014 AT&T results almost do not matter, if U.S. regulators approve AT&T’s acquisitions of DirecTV, Iusacell and Nextel Mexico. The reason is that the revenue and customer profile will change, overnight.
AT&T now faces shrinking legacy services revenue, in both consumer and business segments. In the consumer segment, new services continue to grow, but AT&T is reaching saturation in the consumer segment.
In the business segment, new services likewise are growing, but not enough to offset losses in legacy services. The point is that, no matter how much effort or capital AT&T throws at those problems, the firm is unlikely to make gains commensurate with the investments and efforts.
So AT&T is making rational choices about where to invest for revenue growth. In fact, the collective impact of the three acquisitions will be to boost business segment revenue and also boost growth in the service that arguably drives most AT&T consumer r…

Service Providers Could Lose Up to 1/2 of Their Customers in 12 Months

Telecommunications service providers might lose as much as half their current customers in one year, a new global survey by Ovum suggests.
The survey of 15,000 consumers and 2,700 enterprises in 15 major global markets found that only about half of surveyed customers definitely had no plans to leave their current suppliers.
About 25 percent of all users globally say they will definitely change providers within 12 months, while 25 percent reported they might do so.
Those findings are not necessarily unusual, even if, in markets where the triple play offer is standard, customer churn rates are far lower, on the order of 12 percent to perhaps 15 percent annually. That tends to be true, in the U.S. market, for example, for the largest service providers, including AT&T, Verizon and Comcast.
Churn rates for smaller service providers still are in the 24 percent to perhaps 36 percent range.
Two decades ago, churn rates for constituent triple play services--even at the biggest companies--coul…