TRAI Looks at Free Basics, Other Forms of "Free Mobile Internet Access"

About 25 percent of one billion Indian mobile service  subscribers use mobile data plans, representing about 300 million accounts. It goes without saying that app and service providers would like to boost that to 100 percent. “How” to do so is contentious, though.

Telecom Regulatory Authority of India (TRAI) has pressured Reliance Communications to halt its offering of Free Basics access, for example, and now TRAI is seeking comments from stakeholders on data plan pricing that offers either free or discounted access for some apps.

Some might argue that regulation of Internet services using a voice common carrier model is itself an issue. “The regulatory guidelines till now on discrimination and transparency in tariff offers were more focused to address the regulatory concerns in voice telephony,” says TRAI.

As TRAI rightly says, in stating common carriage principles,  the “service provider shall not, in the matter of application of tariffs, discriminate between subscribers of the same class and such classification of subscriber shall not be arbitrary.”

Pricing of access to Internet apps sometimes varies. “Under one form, the service provider selects the content, which is offered free or bundled together at reduced rates,” TRAI notes. “In another form, one content provider creates a platform where other content providers can apply, and be selected.”

The platform creator then partners with service providers to provide free Internet access to those content providers, for the subscribers of those service providers. That seems clearly the issue TRAI is most concerned about as it is the principle underlying Free Basics, for example.

TRAI does not yet seem to be looking at other forms of sponsored data access, such as ad-supported access.

Two key principles of tariff regulation are non-discrimination and transparency. Some might not agree that either discrimination or opacity are dangers with Free Basics, but that is among the issues TRAI wants to consider.

source: Bloomberg

"Mobile" Now is the Internet

In some ways, the mobile Internet remains distinct from uses of the Internet from personal computers. In other important ways, there now is not such a compelling reason to differentiate “mobile” from “fixed” access to the Internet, or use of its enabled applications.

“For as long as the idea of the 'mobile internet' has been around, we've thought of it as a cut-down subset of the 'real' Internet,” says Benedict Evans, Andreessen Horowitz

venture capitalist. “I'd suggest it's time to invert that - to think about mobile as the real internet and the desktop as the limited, cut-down version.”

That has implications for all markets--developed and developing--in every global region. There is a behavioral reality: people use their mobile devices to interact with Internet apps all the time, not only when “out and about.”

By some estimates “out and about” might represent the exclusive use mode for only about 10 percent of users. About 24 percent of users, according to a recent Ofcom survey, use their mobiles “only” or “mostly” at home.

Most use them everywhere.

Beyond behavior, there is the growing reality that, in developing markets, the mobile is the dominant platform for using the Internet.

In 2014, mobile Internet connections were more used than fixed connections by a three to one margin, according to the International Telecommunications Union.

In developing nations, mobile Internet connections were in 2015 5.5 times more prevalent than fixed connections, the ITU reports. In some reasons, the gap is even wider. In Africa, mobile Internet subscriptions outnumber fixed subscriptions by a 41:1 margin.

In many of the “emerging” Internet markets in Asia, mobile access is virtually the “only” access. Fixed network Internet access is used by a tenth of a percent of households in Cambodia, one percent in Indonesia and Lao Republic.

Fixed network access is purchased by just two percent of households in the Philippines, six percent of households in Thailand and eight percent of Malaysian households.

Reliance Communications to Buy Aircel?

Speculation about consolidation  in India’s ferociously-competitive mobile services market has been a staple of thinking for some years. Including a number of regional providers, India in 2013 had 11 mobile operators, where most markets have three to four national leaders.

Reliance Jio’s entry into the market has been expected to be the catalyst for mergers, and that appears to be happening. Reliance Communications, with about 11 percent market share, is said to be planning a bid to acquire Aircel, with has 8.4 percent market share, for example.

A merged entity would have 19.5 percent share, a substantial improvement, making Reliance Communications the third-largest provider in India.

Vodafone India has nearly 19 percent market share, while Bharti Airtel leads with 24-percent share.

source: sourcedigit

Challengers Win 900-MHz Thai Spectrum Auction

Necessity sometimes is the mother of virtue. Since without adequate spectrum, no facilities-based mobile service provider can expect to succeed, it is surprising, but not totally unusual, that challengers bested the incumbent market leaders in the Thai 4G spectrum auction.

Advanced Info Service (AIS) and Total Access Communication were widely expected to be winners of an auction of 900-MHz spectrum for 4G mobile networks.

Instead, Jasmine International and True Corp won Thailand’s auction of two fourth-generation telecom licenses on the 900MHz spectrum, spending $4.2 billion.

Granted, True is the third-largest Thai mobile service provider, measured by subscribers, so it is no “outside” challenger. But Jasmine barely registers, in terms of market share.

The issue is whether overpaying for spectrum ultimately will prove to be a problem, as has been the case in other spectrum auctions, especially 3G in many European countries a decade ago.  

“Making a good return from the investment will be a struggle, so this could be the classic case of a winner’s curse,” said Maria Lapiz, an analyst at Maybank Kim Eng Securities.

It would not be unusual for price wars to result, with lower earnings for the leading providers, as the winning bidders scramble to monetize the spectrum assets.

The Thai spectrum auction, as often is the case, featured market leaders potentially investing to maintain leadership and deprive rivals of capacity. But Jasmine needed much more spectrum to make a serious run at the leadership ranks.

True already had amassed spectrum in an earlier auction of 4G spectrum, and clearly hopes to build its market share with all the new 4G spectrum.

AIS, 23 percent owned by Singapore Telecommunications, has lagged its rivals on 4G services due to limited bandwidth capacity, and so had ample reasons to bid heavily to add more spectrum. But AIS apparently concluded it simply could not earn a return on the latest potential spectrum, based on the high prices.

TAC, controlled by Norway's Telenor, also seems to have concluded that prices were too high.

source: Yozzo  

Mobile Internet Access Grows 25% Annually Through 2020, Internet Access Globally Just 2% a Year

About 63 percent of all people using the Internet in 2016 will do so from a mobile phone, researchers at International Data Corporation (IDC ) estimate.

Some 3.2 billion people, or 44 percent of the world's population, will have access to the Internet in 2016, IDC says. More than two billion will be using mobile devices to do so. And 44 percent of all global users will live in Asia.

China, India, and Indonesia will account for almost half of new subscribers globally over the next five years. Globally, subscriptions are forecast to grow at two percent annually through 2020.

Mobile subscriptions will grow an order of magnitude faster.

"Over the next five years global growth in the number of people accessing the Internet exclusively through mobile devices will grow by more than 25 percent per year," said Scott Strawn, IDC program director.

How the World Uses the Internet

Shaw Communications Buys Wind Mobile

Shaw Communications is buying Mid-Bowline Group Corp., the owner of Wind Mobile Corp.

Wind is Canada's largest non-incumbent wireless services provider, serving approximately 940,000 subscribers across Ontario, British Columbia and Alberta with 50MHz of spectrum in each of these regions.

Wind has a bit over three percent market share in the Canadian mobile market.

Wind has yet to begin building a fourth generation Long Term Evolution (LTE) network, so that undoubtedly will be on the agenda, as Shaw prepares to step up competition with the leading mobile providers in Canada.

Thailand's 2 Biggest Mobile Service Providers Seen as Winners of 4G Spectrum Auction

Advanced Info Service (AIS) and Total Access Communication are the expected winners of an auction of 900-MHz spectrum for 4G mobile networks. The Thai spectrum auction, as often is the case, has market leaders investing to maintain leadership and deprive rivals of capacity.

AIS, 23 percent owned by Singapore Telecommunications, has lagged its rivals on 4G services due to limited bandwidth capacity, and so has ample reasons to bid heavily to add more spectrum.

TAC, controlled by Norway's Telenor, arguably is more interested in using the low-frequency spectrum to provide better coverage.

True, 18 percent owned by China Mobile, was among the winners in an earlier auction of 4G spectrum.

source: Yozzo  

Google Hopes Project Loon Will Serve 300,000 Indian Villages in 2016

Google hopes its Project Loon initiative will  cover 300,000 Indian villages in 2016. It will need some help from the government--at least not getting in the way--to do so.

Though some government agencies have issues with Google’s Project Loon, Ravi Shankar Prasad, India’s minister for telecom and IT said that the government was in principle agreeable to pilots of Google's Project Loon.

Prasad also said he had also proposed a partnership with state run BSNL for Project Loon, which proposes a fleet of steerable balloons as a backhaul mechanism for mobile networks using the Long Term Evolution 4G protocol.

A few ministries--defense, home and civil aviation and the Department of Telecommunications have raised technical and security concerns over the project.

One of the primary concerns with the proposal is that the spectrum band required for the transmission a band between 700 to 900 MHz is occupied by telecom service providers and is currently unavailable. But security is another concern.

Prasad said the government would help Google in obtaining clearances from civil aviation and the defense ministries.

4th Myanmar Mobile Operator Will Face a Tough Battle

Since authorizing two new mobile operators in Myanmar--Telenor and Ooredoo--the two operators, plus existing provider Myanmar Post and Telecommunications, have rapidly signed up millions of new subscribers, boosting mobile penetration from 10 percent in 2013 to over 60 percent in September 2015, according to government figures.

Mobile accounts doubled in the last year, for example, and most of the gains have been made by the two new entrants. MPT was the sole telecoms service provider until August 2014.

As of the end of March, MPT had 18.4 million SIMs in the market, while Ooredoo had 3.3 million SIMs and Telenor 6.4 million SIMs.

At that point, there were 28.1 million total accounts in service, meaning MPT had 65 percent market share, Telenor had 22 percent while Ooredoo had 11 percent.

Telenor--near the end of 2015--now has perhaps 11.8 million subscribers, Ooredoo 4.8 million and MPT has 16 million customer accounts.

But the gains have come at incumbent operator MPT’s expense. MPT experienced a decline in subscribers.

MPT lost 2.6 million customers in three months at the beginning of 2015, for example.

Between 60 percent and 70 percent use smartphones, as well.

But Myanmar now wants to issue a fourth mobile license, to “offer a cheap service,” said Daw Htike Htike Aung, project director at the Myanmar ICT for Development Organization. Its priority should be to bring internet services to rural areas.”

Myanmar expects to issue the fourth license in 2016.

Companies will apply to join a local consortium of 11 local firms and investors, with a state partner, according to The Myanmar Times.

The newest tender winner will join an 11-company consortium including Myanmar Technologies and Investment Corporation, Myanmar ICT Development Corporation, Myanmar Agribusiness Public Corporation, Shwe Pyi Tagon Telecommunication Public Company, Golden Land East Asia Development, Myanmar Edible Oil Industrial Public Corporation, Myanmar Industries Alliance Public, Myanmar Agriculture and General Development Public, International Power Generation Public Company, Royal Yatanarpon Telecom Public Company and Mahar Yoma Public Company.

If mobile adoption reaches 70-percent by 2018, the fourth provider will have to work very hard to gain enough market share to sustain itself. Mobile adoption in Myanmar was nine percent in 2012, but 54.6 percent by mid-2015.

There will not be much new share to get, by the time the new operator is up and running. A low-cost focus might help, but that also will limit revenues and profit margins, especially if the new company has to target the rural areas, where costs are higher and average revenue per user is lower.

A rule of thumb is that the total number of viable mobile service providers in any country ranges between three and four. Many would argue three is the more sustainable number of providers.

So the fourth operator in Myanmar is likely going to have a tough time.

75% LTE Coverage of SE Asia by 2021

More than 75 percent of people in the Southeast Asia and Oceania region will have access to LTE networks by 2021, according to the  latest edition of the Southeast Asia and Oceania regional Ericsson Mobility Report.

Between 2015 and 2021, mobile subscriptions are also forecast to grow at a compound annual growth rate (CAGR) of four percent, reaching around 1.3 billion subscriptions by the end of the period.

With the continued rise of smartphones and an accelerated growth in data usage, the total mobile traffic in the region is also seen to increase 14-fold by 2021.

In 2015, 40 percent of consumers in the region are subscribing to 2.1 GB to 5 GB mobile broadband plans, compared to 30 percent in 2014.

For all countries included in the analysis, the number of subscribers with packages below 1 GB has declined within the same period, while the number of subscribers with higher data volume packages has increased significantly.

source: Ericsson

source: Ericsson

Smartphones, Apps Boost Financial Inclusion

One should not underestimate the impact of widespread smartphone usage as a boost for economic development. In fact, private investment, remittances and other market-based investment in developing regions vastly outstrips the amount of official development assistance provided by governments and other aid agencies.

In fact, such private market investment and financial flows outstrip official development aid by at least an order of magnitude.

Increasingly, smartphones and Internet apps (especially social media and other communications patterns), plus banking and money transfer using mobile phones, are playing a key role in many investment and remittance operations.

Early on, perhaps 10 percent of the gross domestic product of Kenya moved through M-Pesa, the mobile payments service. By 2014, more than 20 percent of Kenya’s GDP moved through M-Pesa. That can be estimated at 42 percent if one counts both sender and recipient activity.  

The latest developments are happening in services and systems to allow lenders to better assess credit risk, when traditional measures are unavailable.

Connecting small business owners and entrepreneurs with trade finance is the mission Rwandan company Kountable accomplishes using mobile phones and a method of assessing creditworthiness using social networks. The whole point is fast and accurate due diligence on ability to repay a loan.

Launched in May 2015, deals ranging from as low as US$2500 and as high as $500,000 have been facilitated, says Chris Hale, Kountable CEO.

Kountable is not a loan originator, however. It provides assistance to lenders and borrowers. Basically, Kountable reduces risk when a supplier and financing entity agree to enable delivery of  goods to a merchant.

“We help you purchase raw materials, stock or inventory and get paid by your end client so you don’t have to worry about funding these purchases as part of your transaction,” says Hale.

“We are focused on business finance needs that require short term support which does not exceed one year and though there are no limits on how much, we want to benefit as many businesses as possible so we want to keep the bulk given to each business within the range that we have handled in the past ($2500-500,000),” Hale says.

Kountable measures creditworthiness by evaluating an entrepreneur’s social capital—their network of contacts and relationships. In cases where an applicant does not actively use social networks, a score can be constructed from email data.

The scoring alogorithm, as with any other method, assumes that one’s past business relations, activities and behavior tend to predict future behavior.

Ideally, though, an applicant’s kScore is generated by measuring the activity and size of social networks (social networking sites) as well as phone and text messaging contacts and email profiles.

Based on an algorithm that looks at several dimensions of all that data, applicants are scored with a numerical value between 500 and 1000 that is a proxy for creditworthiness based on social capital.

The company says it can make a credit score in five to 10 working days.

Kountable works to raise funds in the United States for such entrepreneurs using the kScore, offering lower rates than otherwise would be available.

The Kountable business model is a two-percent-per-month financing fee on the value of loans made by third parties.

The significance is that, since about 1995, private activities have vastly surpassed the value of official development assistance as sources of capital inputs in developing countries. Kountable is part of that trend.

source: World Bank

source: Economist

Swisscom Plans to Deploy Underground Cell Sites

Most consumers eventually discover that “where” a Wi-Fi router is placed has a direct impact on signal reach.

Though that obviously will be an issue for underground small cell radios as well, there are times when an underground small cell has value, despite some limitations on signal propagation.  

So Swisscom is testing, and plans to deploy, an in-ground antenna system to support urban pedestrian apps. In that scenario, the primary requirement is data connectivity for mobile users and their devices on the street and sidewalks, not inside buildings. So the more-limited signal reach is less an issue.

Following a trial period in Bern, Switzerland, the antenna will be deployed in selected Swiss cities in early 2016.

As always is the case, placement of new cells on street furniture such as street poles and building walls is problematic at times. Those poles or walls might not be precisely where a service provider needs them, or the cost to rent the site might be too high.

There are zoning ordinances to deal with as well.

To address these issues, Swisscom developed the concept of a micro cell in which the base station is incorporated into existing cable manholes of the landline infrastructure.

The antenna is embedded into the ground in the immediate vicinity by way of a core drilling and is not visible.

Ericsson supplies the base station and Kathrein the antenna solution.

Microsoft India Wants to Sponsor Lumia Data Use on Bharti Airtel Network

Microsoft India plans to sponsor 4G mobile data access for Bharti Airtel customers who buy Lumia 4G smartphones, though the deal is not finalized. As presently envisioned, buyers of Lumia devices will get use of twice as much data.

Airtel 4G customers purchasing the Lumia 950 or 950 XL will get free data bundled with the devices, as well as the  Lumia 550.

EU Mobile Operator Roaming Revenues to Fall 27% in 2017

European Union mobile roaming costs for consumers, and therefore revenue for mobile service providers, will fall seven percent in 2017, but 28 percent within the EU, when mobile operators will be unable to charge any premiums currently for international calls, text and data while roaming within the EU.

Because of EU rules to ban roaming charges, retail price reductions for calls, texting and mobile data have fallen 80 percent since 2007.

Data roaming is now up to 91 percent cheaper than in 2007, but mobile data usage has grown by 630 percent.

Global mobile roaming revenues will generate about $52 billion in 2017.

Everybody Wants Better Cell Service; Nobody Ever Wants Cell Towers

Mobile service providers globally face one problem never seems to go away: local opposition to new mobile towers. This “not in my backyard” problem applies in India, where mobile operators say they are hampered by local rules about getting up new cell sites and running quickly, as well as in the United States, where Sprint raises the same issue to the U.S. Federal Communications Commission.

To be sure, Sprint is equally concerned about maintaining reasonably-priced “special access” circuits used for backhaul of traffic to its towers, something that is an issue as the service providers supplying capacity move to IP-based optical facilities. e

Indian Govt. Ministries Express Concerns about Project Loon Signal Interference

Though Google's Project Loon likely had anticpated the objections, government ministries in India are questioning Project Loon on grounds of signal interference. One suspects the objections are not insurmountable obstacles, though an issue at the moment.

It is, however, an issue that will have to be addressed, and it is almost certain that Project Loon already anticipated, and knew solutions are possible.

Skeptics, including service providers or transport providers whose business interests might face new competition, have asked general questions about the feasibility of Google's Project Loon almost from the start.

Some of the issues are similar to questions raised about use of unmanned aerial drones that Facebook and Google both are working on as well. The issue is the use of specific downlink (and uplink) frequencies.

"Where will Project Loon get rights to use such frequencies?" some have asked. There is no universal long-term answer, yet, as Project Loon remains in testing phase, though Sri Lanka might move to commercialize sooner than most other countries. Sri Lanka officials already have committed to commercial service at some point in the future.

Project Loon proposes the use of the 700 MHz to 900 MHz spectrum for its downlinks and uplinks, but those frequencies are allocated for mobile phone service in India.

A concern about potential surveillance is a concern of the Indian Defense ministry.

But the chief obstacle is the objection by the Indian Department of Telecommunications, which notes signal interference could be an issue.

This is not the sort of issue Project Loon would have missed anticipating, especially since Project Loon presently views itself as a backhaul technology working with retail mobile service providers.

In Indonesia, for example, the big mobile companies are partnering with Project Loon for a test of the service, and that is not something they would have done if it was believed there is no way to avoid interference.

In 2016, the top three mobile network operators in Indonesia--Indosat, Telkomsel, and XL Axiata--will test Project Loon, a constellation of balloons to deliver Long Term Evolution 4G signals across the country.

Sri Lanka might be going further, and reportedly is planning on relying on Project Loon to cover the island for Internet access, starting as early as March 2016. There would seem to be some significant issues to be settled, if that timetable is to be kept.

Unless something new has been developed, Project Loon would beam signals to stationary antennas, much as a fixed wireless network would do. There would be no way to deliver signals directly to a mobile phone using LTE, for example.

So though mobile operators would be logical partners, they are not the only logical partners. Fixed network telcos might arguably be better positioned to serve as on-the-ground sales, installation and support partners.

There also has been confusion about whether the service was to be supplied “for free, or for fee.” Both could be correct conclusions, though it seems likely any “free” services would be limited, both in terms of usage or speed. Think of a program similar to Wi-Fi at public institutions.

It is possible, perhaps likely, that some amount of basic service could be made available “for free.” But it seems highly unlikely that most of the service can be provided that way. Nor would most offers of that sort provide unlimited access or large buckets of usage.

But it seems most likely that most of the service will be supplied at some commercial rate.