Perhaps 10% to 25% of Fixed Network High Speed Access Customers Could Go Mobile

Over the relatively near term, perhaps nine million to 23 million potential subscribers are candidates for wireless substitution where it comes to high speed Internet access, though that solution will not make sense for all consumers.

At an incremental $55 a month additional revenue, wireless substitution for Internet access could boost mobile operator service revenues between $6 billion and $15 billion, BTIG suggests.

The key variables at the moment are total monthly data usage per account, as well as current prices for fixed network Internet access, plus the usage of streaming video apps and services.

Median fixed network data usage of 23 GB means a sizable number of the 90 million broadband customers in the United States could have their usage needs addressed by wireless.

source: Sandvine

The “sweet spot” therefore includes fixed network Internet access accounts presently using between 20Gb and 30Gb per month.

In other words, the potential wireless substitution could range between 10 percent and 25 percent of the fixed high speed access market.

The wild card is that the market is not static. With additional spectrum, shared spectrum, 5G mobile networks and even higher use of Wi-Fi offload, offers are going to evolve, both fixed and mobile.

Even if cost-per-megabyte remains better for fixed access offers, the issue is how big a difference exists between offers (mobile versus fixed) and how well each offer matches a particular user’s requirements. That is a moving target, and prices vary with volume, especially in the mobile market.

With reasonable volume, mobile price per gigabyte hovers between $6 and $10. Fixed network prices are harder to characterize, since access is not sold “per gigabyte” and there often are not formal usage limits, making “cost per gigabyte” a statistical matter.

However, virtually all observers would likely agree that fixed network price per gigabyte is lower than mobile price per gigabyte.

source: Kim Kyllesbech Larsen  

source: Gigaom

FixFi

Retail Mobile Spending to Grow 3% Annually Through 2019

According to IDC, enterprises and consumers in the Asia region (excluding Japan) will increase spending on mobile devices and services by three percent annually between 2015 and 2019.

Though China will represent a large chunk of that spending, amounts will increase from $514 billion in 2015 to $578 billion by 2019. Analysts at Analysys Mason estimate China alone could drive about 40 percent of revenue growth revenue growth in the region.

Around two-thirds of global revenue growth will come from Emerging Asia–Pacific, and around 20 percent from Latin America, Analysys Mason predicts. Three countries will account for about 60 percent of global revenue growth, including China with 40 percent, India with 12 percent and Brazil with eight percent, between 2012 and 2017.

But both Analysys Mason and IDC predict Asia will be the largest region in the world in terms of mobility-related spending.

IDC expects the services component in Asia will reach US$332 billion by 2019, growing even more than spending on hardware US$243 billion by 2019.

Key: North America (NA), Western Europe (WE), Central and Eastern Europe (CEE) and Developed Asia–Pacific (DVAP) – and around one-third from emerging markets – Emerging Asia–Pacific (EMAP), Latin America (LATAM), Middle East and North Africa (MENA), and Sub-Saharan Africa (SSA). Period covered is 2012 to 2017.

source: Analysys Mason

All Posturing Aside, 5G is Coming

One always hears quite a lot of posturing when one generation of networks is about to be superseded by the next generation.

Some will tout their leadership in deploying early. One sees this now in public statements by Korean and Japanese mobile carriers, as well as Verizon.

But one also hears lots of warnings, or cautions, from many other service providers. The typical refrain is that “there is lots of life left for X,” or “there is too much hype about the coming Y.”

Those are reasonable statements, if posturing nonetheless. Eventually, even those who warn about hype wind up getting ready for the next generation, for that next generation is coming, inevitably. So it is that T-Mobile US, which recently has touted both its progress in 4G, and has warned of hype around 5G, now will be testing 5G.

There always are business drivers for all the statements. Leaders tend to be those carriers who believe they can afford early deployment, have ample spectrum assets, financial strength and whose positioning involves “leadership” in the market.

Fast followers tend to be those firms that have made recent and expensive investments in the latest versions of the present lead network, that are more capital constrained, or have other business reasons for balancing capital investment with acquisitions and other actions.

But 5G is coming, and perhaps faster than many would normally expect.

Content Consumption Shifting to Mobiles, Away from Tablets

Not all device, app or connectivity trends develop as originally expected. Tablet sales and usage, for example, seem to be going in reverse.

In 2015, tablet sales dropped about eight percent, according to IDC.  

It might also seem obvious that tablet data consumption could fall if tablet sales declining sharply, or if consumers substitute larger-screen mobile access for content consumption on tablets.

Mobile content consumption is growing, while tablet content consumption is declining, according to Adobe Digital Index.  

“There was a time when tablet browsing surpassed smartphone browsing, and that trajectory was expected to continue,” said Tamara Gaffney, principal at ADI. “Since then, however, browsing growth by these devices has decreased significantly, and we think this is mainly because smartphone screens are getting bigger. Now, instead of buying both a smartphone and a tablet, people are opting for ‘phablets’ and relying on just this one device—with a larger screen—for all of their browsing.”

The top seven countries in EMEA all saw at least 11 percent  growth year-over-year in mobile visits.

But tablet traffic is decreasing, according to ADI. The U.K., for example, has seen a 1.9 percent decline in tablet traffic, while Saudi Arabia experienced a 25 percent decline.

source: Adobe

source: Dazeinfo

Dish Network Highly Unlikely to Enter U.S. Mobile Market as "Fifth" National Provider

Dish Network arguably has for decades always approached spectrum assets in terms of options. Owning spectrum provides options, in other words. The big question about Dish Network’s mobile spectrum is how the options will be exercised.

Dish Network is in a “use it or lose it” position with respect to its spectrum. Unless the spectrum is used to support an active retail network, Dish loses the licenses. Nobody expects that to happen.

So the important subsidiary question is whether Dish Network somehow will reach agreements to deploy its spectrum actively, with a partner, or will sell the spectrum to a firm that can immediately put it to work.

Recent statements by Ergen suggest the only path Dish Network would not take is to build its own mobile network. “I don't personally see a fifth operator in the United States unless it was something like a neutral hosting where the existing carriers could use it,” Ergen said recently.

That arguably takes one possible option--Dish becoming a retail mobile provider--off the table.

There is one exception to that scenario, and that is if Dish Network decided it could partner to build its own network, but then act solely as a wholesale provider, leasing capacity to other retail providers. It isn’t clear there are sufficient customers to support that option, many would argue.

At least so far, none of the big four mobile carriers, or new providers such as Comcast, have in the past been willing to build their businesses primarily on leased facilities. The possible wild card is some new contestant that is willing to take a gamble on major entry into the U.S. mobile business using leased facilities.

That is possible, if it has not happened in the U.S. market before.

So even with a partner, it seems unlikely Dish Network would build and operate its own network.

That almost prohibitively suggests an eventual sale of spectrum. That does not preclude an equity interest being obtained by Dish Network, in at least some potential acquirers. Some might consider that an unlikely outcome as well.

Some have suggested Dish Network would entertain a sale of the whole company. Few buyers are likely to want to do that.

“In terms of spectrum, obviously we've talked in the past about a lot of optionality,” said Charles Charlie Ergen, Dish Network chairman and CEO. But the exercise increasingly is looking like a sale of spectrum to a retail provider of some sort.

“We're starting to spend a lot more time looking at 5G because you're probably, realistically when you look at our spectrum being used, it's most likely to be used in a 5G format,” said Ergen.

The problem for Dish Network is the limited pool of potential buyers. So one possible outcome is a Dish Network agreement to activate its spectrum by means of a virtually-perpetual lease agreement with a firm such as Verizon, which would then fulfill the “activated network” requirement.

What is unclear is Verizon’s desire to lease all the capacity. If not, then Dish Network might have to find one or more additional anchor tenants. Most people can think of at least a few logical names.

The point is that Dish Network seems increasingly unlikely to emerge as a “fifth national competitor” in the U.S. mobile market. One way or the other, “four” is likely to remain the number characterizing the number of U.S. national mobile providers.

SK Telecom Demos 20.5 Gbps for 5G

Korean operator SK Telecom, using a Nokia platform, demonstrated 20.5 Gbps speed over the air, using pre-5G protocols, for the first time, the firms said.

In October 2015, SK Telecom and Nokia showed speeds of 19.1Gbps, using 56 quadrature amplitude modulation (QAM), 8x8 Multiple-Input Multiple-Output (MIMO) transmission and 400 MHz of bandwidth.

SK Telecom also has demonstrated 25 Gbps speeds, using an Ericsson platform.

The tests show that, given enough bandwidth, and trading propagation distance for capacity, while using sophisticated radio technologies and modulation, extraordinary levels of mobile device bandwidth are feasible.

Physics explains the higher capacity of higher-frequency radio waves. Simply, no matter what the modulation method, higher frequencies mean more oscillations in any unit of time. And since each oscillation represents the ability to transmit a symbol state, the more oscillations, the more symbol states can be transmitted, in any unit of time. 

source: Professor Theodore (Ted) Rappaport

Higher-order modulation matters as well, of course. But the foundation is the sheer increase in possible symbol states made possible by higher oscillation rates.

Carriers Form 5G Air Interface Testing Alliance

KT, NTT DOCOMO, SK Telecom and Verizon have formed a new global initiative to encourage 5G air interface trials applicable across mobile networks, at various frequencies above and below 6 GHz.

The 5G Open Trial Specification Alliance says it will focus on 5G radio interface trials, and provide the industry with the ability to test and validate key technical components in real-world settings.

The trial specification will be neutral and is not intended to limit on-going standardization discussions and decisions that will be happening in 3GPP.

Those moves are part of a quickening tempo in the standards area, with service providers pushing for relatively rapid setting of standards. At least one supplier, Nokia, pre-standard networks actually could be operating by about 2017.

In substantial part, "pre-5G" is a matter of definition. Many expect pre-5G to appear first as part of the evolution of 4G networks.


source: Analysys Mason

Some observers think the line will blur so much it is hard to determine precisely where 4G ends and 5G starts. For that reason, "second phase 5G" might be commercially deployed in 2022 or so. 

The first phase of 5G might well be a series of changes based in large part on what is done to support 4G and core networks.


source: Frank Rayal

Casa Systems Debuts Access System for Wi-Fi and Mobile

Casa Systems has introduced a new mobile and Wi-Fi edge access small cell solution (Apex) and edge platform (Axyom). 

It is reasonable to expect the solution pitched as an access system for cable TV operators moving into the mobile business, especially using a Wi-Fi first access method.

Casa Systems’ Axyom is a virtualized multi-access solution for 3G, 4G and trusted or untrusted Wi-Fi access. Both will be available in the first quarter of 2016.

source: 3G4G Small Cells blog

Google, Orange Partner for Middle East/Africa Bundle

Orange and Google have partnered to deliver service packages bundled with mobile access and an Orange-branded smartphone running Android. 

While "featuring" some content sources, probably by preloading apps, the bundle does not appear to involve any controversial elements that raise network neutrality issues.

The package is aimed at youth who have high data usage and want the latest generation smartphone.

Customers will receive one of the most competitively priced tariff plans in the region starting at $40, which will consist of a high-specification smartphone and a communication bundle with voice, SMS and data, Orange says.

Customers across the Orange MEA footprint will now have access to a range of best-in-class online services including, but not limited to, popular content covering fashion, sport and music, as well as everyday tools such as Google Search, YouTube and Google Maps, Orange says.

The service  will launch using the Orange Rise 31 Special Edition, a new and exclusive Orange branded 3G device.

As the flagship model of Orange’s 2016 smart family line-up for Orange MEA, it will be running on Google’s latest OS Android 6.0 Marshmallow, has a 4-inch screen and comes with the latest version of Orange Experience 8.

The smartphone is a powerful quad-core product, boasts a high memory package (1GB RAM/8GB ROM) and will provide access to the full suite of Google Apps.

Coming with a 3 mega pixel camera with LED flash and a 1500mAH battery, it will be the first Orange customized smartphone to run Android 6.0 Marshmallow at a low price point.

India Mobile Adoption Slows, Cost a Barrier

In 2013, mobile connections in India reached 900 million, making India the second-biggest mboile market, by subscribers.

But one can infer that something in the business model must change to accelerate adoption beyond present levels. Since about 2012, net additions have stalled. Cost is among the key barriers, one might argue.

According to BCG consultants, whatever they pay for their phones and services, they "value" them at far higher amounts.

Indians value what they spend on mobile technologies at 45 percent of their incomes, whereas Americans value what they buy at 11 percent of income. Consumers actually spend much less than that. 

But that high sense of value, plus the sort of plateau of net new additions, suggests people value mobility highly, but cannot afford to buy it. That, in turn, suggests the value of new platforms or pricing plans to reignite adoption rates.



source: BCG

Source: World Bank Indicators, Brookings

Indian Mobile Data Revenue-Per-Megabyte Will Drop 30% to 40% This Year

Reliance Jio's launch of 4G services could disrupt data pricing in the Indian mobile service provider market, causing revenue-per-megabyte to tumble 30 percent to 40 percent this year, according to the India Ratings and Research (Ind-Ra).

To be sure, lower revenue-per-megabyte is a fundamental trend in the transport and access business, so a decline is not unexpected. Only the magnitude is unusual, for a one-year period.

At the same time, given expected lower prices, data services average revenue per user also will decline, although the number of accounts should increase, while data consumption also climbs, over time.

Revenue per megabyte declined by 4.5 percent to 5.5 percent, sequentially, in the third quarter, for Bharti Airtel and Idea Cellular.

Ind-Ra believes expects a further softening of data tariffs in the current year of perhaps negative eight percent to 10 percent.

Those are among the least controversial observations that could be made about Reliance Jio’s entry into the Indian mobile services market.

India Ratings and Research (Ind-Ra) “expects the launch of Reliance Jio Infocomm Limited (RJio) to intensify competition which will squeeze the market share, EBITDA margins and credit metrics of incumbents.”

At the same time, debt burdens will increase, as competitors and Reliance Jio itself invest heavily in their networks and spectrum.

Ind-Ra also expects voice revenue to decline. Airtel and Idea reduced voice tariffs by eight percent to 10 percent last year.

Can Three Force Google, Facebook to Share Ad Revenue?

Business models in the mobile business and ecosystem continue to evolve, and access providers continue to look for ways to increase their share of ecosystem revenue.\

The latest effort--with uncertain outcomes--comes from mobile operator Three, which operates in a number of countries including Indonesia and Hong Kong.

The ambitious gambit is an effort to gain leverage over the major ad-supported apps (Google and Facebook, particularly), and force them to share ad revenue with Three. That, one might argue, is unlikely to happen.

Three does not control enough of the whole mobile user base to prompt immediate reaction from Google, Facebook or other leading ad-supported apps. Advertisers do not pay for ads that are not delivered, so there is a nearly-immediate revenue issue for any big ad-supported app provider.

But the damage is not so extensive that any immediate Google or Facebook reaction will happen. Still, the decision does add weight to a growing issue that advertisers and app providers will have to face, namely the relevance of advertising, as ad blocking continues to grow.

Perhaps almost nothing will happen right away. But it is almost certain something will happen, longer term.

Still, the Three decision is momentous.

Three, after having instituted ad blocking at the network level, plans to add the capability on all of its networks, everywhere, in a way that notably will institute sponsored data for virtually all advertising content, across all Three networks, in a first for any tier one mobile operator anywhere in the world.

The universal ad blocking feature essentially means that all advertising will require that the advertiser pays for bandwidth consumed to deliver the messages, or that ads are blocked.

So Three customers will not pay data charges to receive ads. The policy also means that all advertising instantly becomes “sponsored data.” That is likely to affect developing thinking about sponsored content or sponsored Internet access more generally.

How advertisers react also is a key issue. The Internet Advertising Bureau warns that Three’s move could result in publishers being forced to charge users for content they currently enjoy for free.

The other issue is whether regulatory intervention might occur. Digicel, the Caribbean mobile operator, already has blocked almost all mobile advertising and demanded that publishers and web giants such as Google and Facebook share their revenue with it.

But that has gotten the attention of regulators, who might be looking at whether the practice is a network neutrality infraction. Digicel is not blocking the content, however, only ads, demanding a revenue share with the leading app providers.

Consumers might be affected in any number of ways. The unintended consequence might be that Three users find they have to pay for content that presently is provided at no additional charge, as advertisers pay on behalf of their end users.

In a policy that also should help shape the nature of advertising in direction it had already been moving, Three’s policy aims to promote advertising content that is “relevant and interesting” to each user.

At the same time, the new Three policy will seek to block “excessive, intrusive, unwanted or irrelevant ads.

This is a huge shift, with implications for all apps that are ad supported, which is to say nearly all the important and widely-used apps. The policy also will force advertisers to recraft their ads, and significantly, pay for the bandwidth used when consumers view those ads.

The ultimate implications are not clear, as it remains to be seen whether the leading mobile providers in any market will follow the example. If the other contestants do not adopt similar policies, Three might simply find it gains consumer subscription market share, at the cost of losing some attractiveness for ad-supported apps and advertisers.

Three might well consider that a reasonable trade off.

Three UK and Three Italy have implemented the Shine Technologies ad blocking system, with intent to enable the feature on all Three networks in all countries.

“Our objective in working with Shine is not to eliminate mobile advertising, which is often interesting and beneficial to our customers, but to give customers more control, choice and greater transparency over what they receive,” Three says.

Precisely how Three will work with the advertising community to achieve those goals is not yet clear.

“Over the coming months Three will announce full details of how it will achieve these objectives and will work with Shine Technologies and the advertising community to deliver a better, more targeted and more transparent mobile ad experience to customers,” Three says.

"Irrelevant and excessive mobile ads annoy customers and affect their overall network experience,” said Tom Malleschitz, Three UK CMO. “We don't believe customers should have to pay for data usage driven by mobile ads.”

The question now is how successful Three will be. Though few leading app providers are likely to block access to Three customers, they are going to have to figure out how to mollify advertisers, or simply forego some ad revenue earned from views on Three networks.

It will be complicated. Three is gambling, likely reasonably, that no leading app provider will block use of its apps by Three customers. But the new policy immediately raises revenue issues for all ad-supported app providers, with new cost issues for those app providers and their advertisers.

Ericsson Demonstrates 25 Gbps over Pre-Standard 5G

If you have enough spectrum, you can deliver quite a lot of bandwidth or capacity over a mobile or Wi-Fi network.

Ericsson 5G radio prototypes have demonstrated ability to deliver more than 25 Gbps throughput in outdoor field trials with NTT DOCOMO and Korea Telecom, Ericsson says.

The tests use multi-user, multiple input multiple output radios, expected to be a feature of both mobile 5G and Wi-Fi networks.

The 802.11ac, or gigabit Wi-Fi standard, uses 80-MHz channels, and eventually 160-MHz wide channels.