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Showing posts from August, 2016

Over 15 Years, Average Internet Speed Ceilings Have Become Floors

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Progress is very swift in the Internet access business. In 2009, the average Internet access speed in Australia was about 12 Mbps. So at the time, a boost to 25 Mbps, the minimum national speed promised by the National Broadband Network,  sounded pretty good.
In 2009, the average Internet access customer In the United Kingdom was getting 4 Mbps. So a boost to “superfast” (24 Mbps to 30 Mbps) likewise sounded pretty good.
That same year, typical U.S. speeds were in the 5 Mbps range. By 2015, though, average U.S. downstream speeds had climbed to nearly 36 Mbps.
So we don’t hear much about 24 Mbps or 30 Mbps being “superfast.” The U.S. Federal Communications Commission, in fact defines broadband as being a minimum of 25 Mbps downstream.
In 2016, the biggest cable TV ISPs offer downstream speeds ranging between 49.6 Mbps and 39 Mbps. Verizon matches the top average speed of 49.6 Mbps.

Among other ISPs, Google Fiber is the absolute fastest, offering average downstream speeds of 354 Mbps.
In…

Flexibility or Debilitating Uncertainty From New Proposed EU Net Neutrality Rules?

Sometimes, it is sensible not to create hard and fast rules to cover circumstances that are expected to be novel. In other cases, the same stance can create such uncertainty that innovators will be dissuaded from trying to create new things.
New proposed rules on network neutrality are likely to cause just that problem.
As a practical matter, network neutrality is based on a principle that “providers of internet access services shall treat all traffic equally,” a concept initially seen as primarily relating to the notion of “best effort access only,” with no prioritization of packets by sender, receiver, terminal or access network.
Even if some think ISPs--or consumers, app providers and ISPs--should be free to create access services with quality of service measures, the default “best effort access only” principle is at least clear.
Other newer proposed principles are not so clear.
The net neutrality concept has been broadened, in some quarters, to rules about zero rating of apps or d…

Bandwidth Inequality is Going to Increase, at Least Momentarily

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There are times when the amount of communications capacity, as available to consumers across the globe, becomes more equal, and times when there is more inequality. We seem to be heading for a time when gaps grow again.
Since 2006, gaps have tended to shrink, globally. In 2012, by one analysis, gaps began to grow again. The reason is that the introduction of new platforms tends to happen unequally, first in developed markets, later in developing markets.
With 5G coming, platform-based inequality will grow, for a time. But there are some other developments likely to widen gaps. In the U.S. market, unprecedented amounts of new spectrum are going to be released, while spectrum sharing and massive amounts of unlicensed spectrum also are coming.
At the same time, North America is witnessing huge leaps in bandwidth supply from cable TV companies about to innovate at their own pace, separate from what all other suppliers using traditional telecom technology can do.
At the same time, significan…

AWS, Other Cloud Computing Leaders Best Telcos in U.S. Market

With NTT as the exception that proves the rule, tier-one telcos have not been able to outcompete the application and commerce providers that, oh by the way, have decided to monetize their cloud computing assets.
The “bundled services” strategy Verizon and AT&T attempted, melding cloud services with private internet networks, security, data storage and service guarantees, has failed to gain traction, compared to Amazon Web Services, Microsoft, IBM and Alphabet (Google).
Some would argue that the market changed. Though colocation remains a distinct segment within the broader “data center services” market, the cloud computing market arguably has changed because the original concerns about security have faded.
In substantial part, those buyer perceptions changed because the leading app cloud computing services were able to create security mechanisms strong enough to allay the original fears.
In other words, a buyer would often have closen AWS for cloud computing, unless convinced secu…

Why "One Talk" Now?

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One obvious question about the new Verizon “One Talk” service, a unified communications offer that, among other things, forwards landline calls to mobiles, is whether Verizon can take significant share from other existing providers such as 8x8, RingCentral, Vonage or West, for example.  

One other obvious question is why the new offer, and why now. And a high level, the issue is that Verizon now is mostly a mobile services company, with a declining business customer base.

A new business phone service heavily based on the mobile network suits Verizon more than a number of other providers.

At the same time, if hosted PBX is a business Verizon really wants to be in, it has to make moves to gain market share. While Verizon is not an “also ran,” neither is it in the top ranks of the business, based on seat licenses.
To some extent, the offer also aims to provide a solution small businesses say they want. Some 29 percent of small businesses surveyed by Software Advice want a phone system tha…

T-Mobile US "Unlimited" Offers (Not)

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T-Mobile US, touting the end of all usage plans (data buckets) with its new  T-Mobile One plan, has emphasized that the new plan offers unlimited data, text, and calls starting at $70 per month for the first line, $50 for the second line, and $20 for the third up to eight lines.
What that plan does not support is high-definition video streaming or tethering at any speed faster than 2G. Customers seem to have objected to both those limitation, so T-Mobile US has now introduced a One Plus plan that, for an incremental $25 per line, per month, supports unlimited video streaming in high-definition format,  along with tethering at 3G speeds of 512 kbps.
The move shows that execs now are willing to alter new mobile offers as soon as consumer irritation emerges, a possibility most would agree is due to social media, which allows dissatisfaction to be expressed fast.
The new offer also shows how subtle the crafting of new offers has become, as well. Though some might see the new “unlimited” off…

Why Markets Consolidate

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Over time, markets tend to consolidate, and they tend to consolidate because market share is related fairly directly to profitability. One rule of thumb some of us use is that the profits earned by a contestant with 40-percent market share is at least double that of a provider with 20-percent share.
And profits earned by a contestant with 20--percent share are at least double the profits of a contestant with 10-percent market share.
That is why one of the main determinants of business profitability is market share. Generally, entities that have high share are much more profitable than their smaller-share rivals.
And that is likely to be especially true for business products that are not purchased frequently, or are hard to understand, such as business communication products and services.
For infrequently purchased products, the return on investment of the average market leader is about 28 percentage points greater than the ROI of the average small-share business.
For frequently purchase…