What’s the real status of Internet access in Cuba?

by Matteo Ceurvels of  eMarketer (edited with Notes by Alan J Weissberger)

Few people in Cuba have regular access to the Internet, and those who do encounter slow download speeds, according to an eMarketer study. Although Cuba’s state-run service provider (see details below) has built WiFi hotspots throughout the country, the relatively high rate of $1.50 an hour is too much for most Cubans to pay.  [Please see references below for additional information on the WiFi hotspots in Cuba- mostly in Havana]

eMarketer estimates that there will be 360.4 million internet users in Latin America in 2017. While the market research firm does not break out specific metrics for Cuba, the latest figures from the government’s National Office of Statistics and Information (ONEI) show that over 4.5 million people, or roughly 40.3% of the total population, accessed the Internet at least once during 2016.

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Editor’s Note:  The actual ONEI ICT report (via Google Translate) states that for 2016 there were 403 people that accessed the Internet out of every 1,000 people living on the island. That compares with 348, 271, 261, 257 and 232 for the years 2015, 2014, 2013, 2012, 2011 respectively.

The same report (which I don’t trust) says the mobile population coverage (not usage) has been 85.3% of the population from 2012-2016, up from 83.7% in 2011.

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The number of people with internet access in their homes was significantly lower: The BBC reported in March of last year that the at-home internet penetration rate was roughly 5%.

Web access in the country remains relegated to a few options. State-run telecom Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), which first began offering public Wi-Fi spots in 2015, claims to provide 391 such spots across the country. But at a cost of about $1.50 per hour, access remains too expensive for most Cubans, and internet speeds are reportedly excruciatingly slow.

ETECSA also began a pilot program in December of last year to provide some 2,000 users in Havana, Cuba’s capital, with fixed broadband internet access for a free two-month trial period. In March, ETECSA said 358 participants in the program signed up to pay for the service, which offered data speeds of between 128 kilobits per second (Kbps) and 2 megabits per second (Mbps).

And when residents of the country do manage to get online, they are subject to strict internet censorship overseen by the government. Some websites and services are blocked, and communications can easily be monitored by government figures.

During parliamentary sessions held in July, Vice President Miguel Díaz-Canel acknowledged that Cuba has one of the lowest internet access rates, but rejected the notion that its society was “fully disconnected.”

He added that tech companies that had entered into agreements with the country’s government to provide them with the infrastructure necessary to expand internet access had been met with “fierce financial prosecution.”

Despite these claims, the government has sought out partnerships with some of the world’s leading tech companies. In April, Google brought servers in the country online for the first time, making it the first foreign tech firm to host its own content in Cuba.

At the parliamentary sessions, Díaz-Canel also claimed that the penetration of social media platforms had grown by 346% in 2016. (The government did not respond to eMarketer’s request to verify this figure.)

However, Martín Utreras, vice president of forecasting at eMarketer, noted that the majority of social media users in the country were most likely foreign tourists looking to stay connected while on vacation.

According to data from StatCounter, there are signs that Facebook is a leading social media platform in the country. Facebook was responsible for 83.3% of page views resulting from social network referrals in Cuba in July, more than either Pinterest (8.4%) or Twitter (4.3%). (StatCounter’s figures take into consideration website referral traffic from both locals and visitors in Cuba.)

Social Network Referral Share in Cuba, July 2017 (% of total page views referred by social networks)

Despite signs that internet access is increasing in the country, Cuba still has a long way to go before getting online is something residents consider normal. In fact, many in the country rely on “el paquete semanal,” or the weekly package—a hard drive that is loaded with contraband content such as news, music, TV shows and other videos and passed from person to person.

“Cuba’s journey resembles that of similar trends we’ve seen in the case of China or Vietnam,” Utreras said. “Although Cuba is still many years behind in terms of private telecom investment, infrastructure development and overall internet adoption, by comparison, the immediate future will most likely be driven by government interests rather than the market itself.”

Wifi hot spot in Old Town Havana

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References:

https://www.emarketer.com/Article/Cuba-on-Slow-Crawl-Toward-Increased-Internet-Access/1016352

http://www.one.cu/aec2016/17%20Tecnologias%20de%20la%20Informacion.pdf

http://www.businessinsider.com/is-there-internet-in-cuba-2017-1

https://insightcuba.com/blog/2017/03/05/havanas-wifi-hotspots-and-getting-online-cuba

Cuba to expand Internet access and lower price of WiFi connections

 

 

Altice-USA FTTH network to reach 1M homes by 2018

Altice USA (majority owned by Altice NV) is the successor of Cablevision Systems, headquartered in Bethpage, NY.  It is one of the largest broadband communications and video service operators in the United States and the provider of Optimum and Suddenlink-branded internet, TV and phone services.

On August 14th, the company said in a press release that design and construction of its fiber to the home (FTTH) network will reach hundred thousand homes in parts of New York, New Jersey, and Connecticut. According to the company, its network is on track to reach one million homes in 2018.

Altice USA says it is the first U.S. cable provider to plan for a large-scale FTTH network deployment. According to the company, the FTTH network will enable a connected home, business, and community that provides an improved customer experience.

“We are incredibly pleased with the progress we are making on our fiber investment and look forward to lighting up this new, advanced network to enable innovative products and services to support our customers’ connectivity needs well into the future,” said Dexter Goei, Altice USA chairman and CEO.

In 2016, Altice revealed plans for its fiber-to-the home (FTTH) network rollout with the ability to deliver speeds of up to 10 Gbps, skipping the DOCSIS 3.1 upgrade protocol.

The company this week indicates it is continuing to deploy enhanced services to customers over its existing hybrid fiber-coaxial (HFC) network.

Altice recently launched gigabit service in seven cities across states including Missouri, Arkansas, and Oklahoma, bringing 1 Gbps broadband service to more than 60 percent of its Suddenlink footprint.

The company’s Optimum footprint now offers speeds of up to 400 Mbps for residential customers and 450 Mbps for business customers.

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In addition to its fiber investment, Altice USA combined its Lightpath, Optimum Business, and Suddenlink Business brands last month to form the Altice Business unit (see “Altice USA forms Altice Business unit“), becoming a provider of data, voice, video, and managed services for business customers.

Altice USA recently launched gigabit service in seven cities across Missouri, Arkansas, Oklahoma, and other states as part of its efforts to extend 1-Gbps broadband service to more than 60 percent of its Suddenlink footprint, says the company. Altice USA also provides broadband speeds of up to 450 Mbps for business customers and 400 Mbps for residential customers, which is more than triple its Optimum footprint internet speeds.

Altice-USA says it will continue rolling out enhanced services to customers via its existing HFC network, and plans to provide speeds that meet consumers’ future demands.

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Altice France and Altice Portugal have both also announced plans to bring fiber to all of their countries.

References:

http://www.alticeusa.com/sites/default/files/pdf/Altice-USA-FTTH-Network-On-Track-to-Reach-1M-Homes-Constructed-2018.pdf

http://www.lightwaveonline.com/articles/2017/08/altice-to-light-up-one-million-homes-in-ftth-network.html

https://www.cedmagazine.com/news/2017/08/altices-ftth-build-out-reach-1m-new-homes-end-2018

KT opens 100,000 free Wi-Fi Access Points in South Korea; WiBro & LTE

KT, the second largest telco in South Korea,  has opened up 100,000 Wi-Fi access points (APs) as part of its participation in a government-led program which will improve the public’s access to free Wi-Fi-based connectivity.  According to the Korea Times the operator has also pledged to enhance Wi-Fi network equipment in subway trains across the country.

“Aiming at reducing people’s telecom (i.e. broadband Internet access) expenses, we have worked on opening 100,000 Wi-Fi APs and improving the quality of Wi-Fi networks inside subway trains,” said Park Hyun-jin, vice president of KT Mobile’s business department. “We will come up with more measures to further cut household telecom expenses and expand benefits for our subscribers.”

With the government’s ‘Public Wi-Fi 2.0’ policy seeking to improve Wi-Fi APs nationwide, KT has said that the bulk of its newly opened hotspots are at busy locations, such as shopping malls, bus stations, subway stations and tourist sites. The hotspots can be accessed by both KT mobile subscribers and those that are not signed up to the cellco’s services, though the latter users are required to provide personal information (such as an email address, phone number, gender and age) in order to take advantage of free Wi-Fi for one hour.

Alongside its expansion of free Wi-Fi APs, KT has begun work on improving network equipment to provide faster and more stable wireless broadband connectivity. To that end, it is reportedly replacing old Wi-Fi network devices, which are based only on WiBro technology (the Korean variant of WiMAX), on subway trains with new hybrid devices that support both WiBro and LTE technologies. KT has said it expects to first complete the replacement for subway trains on lines 1 to 8 in Seoul, before expanding upgrade works nationwide by the end of this month.

KT models show promotion materials for the Giga-LTE WiFi network on June 15.

KT models show promotion materials for the Giga-WiFi and LTE networks ………………………………………………………………………………………………..

Over one year ago, KT introduced its GiGA WiFi 2.0 that will provide network speeds twice as fast as the previous version. With the world’s first Wi-Fi 2.0 technology, the nation’s second-largest telecom company said it will soon be able to upgrade maximum Wi-Fi speed to 3.4 gigabits per second (Gbps).

The Wi-Fi 2.0 network adopted “multi-user, multiple input and multiple output” technology to provide faster speeds to all users simultaneously connected to a network, KT said. It has also applied the “wireless intrusion prevention system” to block unauthorized access points and devices.
KT also said it has provided more than 200,000 public Wi-Fi access points nationwide of which 100,000 were announced this past Friday.

References:

http://www.koreatimes.co.kr/www/common/vpage-pt.asp?categorycode=133&newsidx=234602

https://www.telegeography.com/products/commsupdate/articles/2017/08/14/kt-opens-up-access-to-100000-wi-fi-hotspots/

http://www.koreatimes.co.kr/www/tech/2017/07/693_210108.html

IEEE 802.11 considering LiFi as complement to WiFi

Executive Summary:

The Light Fidelity (LiFi) wireless protocol, which works from transmitters in light-emitting diode lamp bulbs, could function as a complement to Wi-Fi connectivity by offering faster internet access for mobile devices. The IEEE 802.11 standards committee is collecting industry feedback on a potential Li-Fi standard as noted in the section below.

Li Fi is an emerging wireless protocol that uses visible light spectrum to provide wireless networking access. A Li-Fi transmitter uses LED lights to modulate light intensity – mostly beyond what our eyes can perceive – and that is read as data by a photosensitive receiver. Because LEDs already use a chip to control their output they can modulate up to millions of times per second, theoretically allowing them to transmit data up to 100 times faster than Wi-Fi.

fig(i)..Sending of data [2]

IEEE 802.11 Standards Status of LiFi:

IEEE 802.11 notes on the Topic Interest Group (TIG) page, “The introduction of light emitting diodes (LED) for general purpose lighting has created a growing interest in using the visible light spectrum for wireless communications……It is felt that the IEEE 802.11 is the best forum to drive forward the global standardization efforts for light communications with manufacturers, operators and end customers all present during the standardization process. If the TIG should progress to a Study Group and eventually into a Task Group, then this will not only help users within home, enterprise and industrial environments, but also assist manufacturers and operators to provide common components and services for IEEE 802.11 customers.”

At their July 2017 meeting, the IEEE 802.11 LC TIC unanimously recommended the continuation of the LiFi work via formation of a 802.11 LC Study Group.  Hence, the 802.11 standards body is still seeking contributions before LiFi  can become an official IEEE 802 standards project.

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Light Communications (LC) use cases:

  1. Enterprise

    1. Data access: where network connections are based on LC for daily work, conference streaming remote desktops along with potential video, etc. Enhanced data security can be achieved for organizations that require high level of confidentiality. The directionality of light propagation can effectively reduce interferences in heavily populated offices. Wireless off-loading to light releases spectrum for connecting other devices.

    2. Use cases for RF sensitive facilities: for RF sensitive facilities such as hospital and mining, LC can provide safe data access where RF may not be allowed.

  2. Home

    1. Data access: where mobile devices use LC for high data rate network access. Especially for heavily populated apartments so that reduced interference and enhanced privacy can be achieved.

    2. Home theater: Indoor use cases where high definition video and audio equipment connect to a LC AP

    3. Virtual reality (VR): use cases where VR goggles are connected to a LC AP

  1. Retail

    1. Currently, delivery of high-bandwidth data at particular points in store requires cabled connection, making these spots immobile. Alteration of retail space to enable new customer experiences is a key part of retailer strategy. High-bandwidth flexible retail space through LC enables cost reductions for retailers when modifying or refitting the space.

    2. LC can offer high data density that can enable very-high bandwidth content streaming without fear of interference with other wireless resources.

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Sidebar:  The Problem with WiFi & How LiFi Complements it

WiFi signals don’t travel far, especially through walls.  WiFi routers, operating on the traditional 2.4 GHz band, reach up to 150 feet (46 m) indoors and 300 feet (92 m) outdoors.  At 5 GHz, WiFi signals only reach 40 or 50 feet.  The higher the frequency, the shorter the wavelength.  Hence, there’s less range at the same sensitivity and transmit power for 5 GHz vs 2.4 GHz WiFi.

Also, WiFi is notoriously insecure and easy to spoof by hackers. And even with the bandwidth increases over the years, an access point can be overwhelmed rather easily when too many people try to access it at the same time.

Li-Fi is meant to complement, not replace, Wi-Fi. It will co-exist in devices like smartphones, tablets and laptops, which would require a special receiver and transmitter to send and receive Li-Fi signals. That would also require a special encoder/decoder chip to convert the light signal to data.

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Analyst Opinion:

Will Stofega, program manager for mobile device technology and trends at IDC, says good luck with that.

“Getting any standard approved is tough,” he told Network World. “There is always an ecosystem and political interests to play out. I think overall it needs a lot of work, but it’s the most promising of the alternative connection technologies.”

Analysis of Windstream’s 2nd quarter results; enhanced SD-WAN solution

2Q-2017 Operating Results:

Windstream Holdings Inc. on August 3rd reported a $68 million 2nd quarter loss and said it would end its quarterly dividend to shareholders as part of a new capital allocation strategy.

The Little Rock, AR telecommunications and cloud service provider reported 2nd quarter revenue of $1.49 billion, which was up 10% from the same quarter last year. Operating income was $107 million, down 31% from $155 million in the same period a year ago.  Its $68 million net loss, or a loss of 37 cents per share, compared with net income of $1.5 million, or 1 cent per share, a year ago.

“Windstream delivered solid second quarter results, highlighted by sequential growth in Adjusted OIBDAR,” CEO Tony Thomas said in the previously referenced press release.

“Our unique network assets and cloud-based applications have us well positioned to grow market share. Additionally, we continue to improve our cost structure and have significant opportunities to further drive down costs through reductions in network interconnection costs, upcoming synergies from the EarthLink and Broadview transactions (i.e. acquisitions) and initiatives to advance our organizational effectiveness,” Thomas added.

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Recent Acquisitions:

1.  Windstream completed its purchase of EarthLink Holdings Corp. of Atlanta, GA in February. The company has said the $1.1 billion all-stock deal will expand Windstream’s U.S. nationwide fiber footprint and lead to enhanced products and services.

2. Windstream closed on its $225 million purchase of Broadview Networks Holdings Inc. of Rye Brook, New York last month. The private, cloud-based unified communications services provider to small and medium-sized businesses offers a suite of services under the OfficeSuite UC brand which will now be sold by Windstream’s sales force.

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Comment & Analysis:

Windstream is a leading rural local exchange carrier in the U.S. The company offers broadband Internet, private line, telephony and digital TV services to consumers primarily in rural areas. Windstream also provides advanced network communications such as cloud computing and managed services to enterprise (medium & large business) customers. The company also has business units for: ILEC consumer & small business, CLEC consumer & small business, and wholesale.  They have recently entered the SD-WAN market via VeloCloud’s solution (see below).

From Windstream’s most recent SEC 10-K report filing:

Our vision is to provide a best-in-class customer experience through a world-class network. Our “network first” strategy entails leveraging our existing infrastructure and investing in the latest technologies to create significant value for both our customers and our shareholders.

Following the completion of the Merger with EarthLink, our business unit organizational structure will be focused on the following four core customer groups: ILEC Consumer and Small Business, Wholesale, Enterprise, and CLEC Consumer and Small Business, as further defined below. During the third quarter of 2016, we changed the name of our Carrier segment to Wholesale to better reflect our customer base and the products and services we are selling in the marketplace. Historically, we were solely focused on serving telecom companies based in the United States, but over the past year, we have expanded our focus to sell our products and services to nontraditional telecom companies, including content providers, data center operators and international carriers requiring voice and data transport services in the United States. This organizational structure aligns all aspects of the customer relationship (sales, service delivery, and customer service) to improve accountability to the customer and sharpen our operational focus.

Windstream’s local exchange business competitors include: wireless communications providers, cable television companies/MSOs, resellers of local exchange services, inter-exchange carriers, satellite transmission service providers, electric utilities, competitive access service providers.

Windstream has been losing access lines due to pricing pressure and fierce competition. The company is also under pressure with losses in the wholesale business. Being a local exchange carrier (both an ILEC and CLEC), Windstream remains exposed to stringent regulatory measures by the Federal Communications Commission (FCC) as well as state regulatory bodies and local public utility commissions.

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SD-WAN Offering:

In an earlier press release this month, Windstream touted its previously promoted SD WAN solution which now includes additional broadband flexibility, improved self-service monitoring and control options, and a new SD-WAN Concierge™ managed service that automatically optimizes application performance, lowers costs and simplifies network management. Windstream customers can also combine SD-WAN with Diverse Connect to achieve a 100 percent availability service level agreement (SLA).

“We introduced our SD-WAN service in January, and we have seen tremendous adoption in the first six months as customers find they benefit from a more tailored, flexible and controllable WAN experience,” said Joseph Harding, executive vice president and enterprise chief marketing officer at Windstream. “Following our merger with EarthLink, we are enhancing our SD-WAN solution as we work to integrate our offerings. The result is a powerful new solution that gives customers even greater network agility, scalability and performance, all while also reducing costs and virtually eliminating downtime.”

Windstream’s SD-WAN solution was said to utilize “cutting edge technology” (see Editor’s Note below) coupled with the customer’s application prioritization to dynamically route traffic over a combination of private and public networks to reach multiple locations. Customers maintain control over their network from a convenient centralized location rather than manage various individual routers and firewalls.

Windstream’s enhanced SD-WAN solution is available immediately to businesses in Windstream’s nationwide service area. Over the past six months, Windstream has partnered with customers in the retail, banking, professional services, healthcare, manufacturing and financial services industries, and the company expects demand to remain high for its industry leading solution.

In addition to SD-WAN, Windstream offers a full suite of advanced network communications and technology solutions like UCaaS and Diverse Connect along with voice and data services such as VoIP access, SIP trunking, MPLSWavelengthEthernet and dedicated high-speed Internet. Windstream also offers managed servicescloud services and network security services designed to help businesses increase productivity and improve operational costs. For more information, visit windstreambusiness.com.

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Editor’s Note:

As we’ve repeatedly stated in these techblog posts (and elsewhere), there are no standards for SD-WANs which implies each network provider goes with a single vendor solution which won’t inter-operate with any other SD-WANs from other network providers.  Earlier this year, Windstream selected VeloCloud’s SD WAN as the product powering their SD-WAN service.

Earlier this summer, Windstream joined the ONAP open source project (under Linux Foundation). The ONAP Project is focused on creating a harmonized and comprehensive framework for real-time, policy-driven software automation of virtual network functions. ONAP’s primary objective is to enable software, network, IT, and cloud providers and developers to rapidly create new services which can be monetized.

References:

http://www.arkansasbusiness.com/article/118175/windstream-reports-68m-2q-loss-ends-quarterly-dividend

http://abea-43pvyw.client.shareholder.com/investors/releasedetail.cfm?ReleaseID=1035855

http://investor.windstream.com/investors/releasedetail.cfm?ReleaseID=1035354

https://www.windstreambusiness.com/solutions/networking-solutions/sd-wan

https://www.windstreambusiness.com/resources/brochures/sd-wan-solutions

http://files.shareholder.com/downloads/ABEA-43PVYW/4941624088x0xS1282266-17-13/1585644/filing.pdf

http://techblog.comsoc.org/2017/07/01/windstream-joins-onap-open-source-telco-movement/

 

AT&T, Verizon, Spectrum Enterprise lead in fiber lit business connections; M&A in 2017

Vertical Systems Group (VSG) ranked the leading providers of on-net fiber business connections as of the end of 2016. The research group said that retail and wholesale fiber providers with 10,000 or more on-net fiber-lit commercial buildings in the U.S. qualify for this new benchmark.

VSG’s 2016 U.S. Fiber Lit Buildings LEADERBOARD list includes a mixture of traditional telcos, cable providers and a competitive carrier: AT&T, Verizon, Spectrum Enterprise were the top three followed by CenturyLink, Comcast, Level 3, Cox, Lightower Fiber NetworksZayo, Altice USA and Frontier.

The Challenge Tier of fiber providers includes companies with lit fiber connections to between 2,000 and 9,999 U.S. commercial buildings. Seventeen companies qualified for the 2016 Fiber Lit Buildings Challenge Tier as follows (in alphabetical order): Cincinnati Bell, Cleareon, Cogent, Consolidated Communications, Electric Lightwave, Fairpoint, FiberLight, FiberNet Direct, FirstLight, IFN, Lumos, Southern Light, Sunesys, Unite Private Networks, Uniti Fiber, Windstream and XO.

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Rosemary Cochran, principal at Vertical Systems Group, said the criteria for the leader board list was for network service providers to have fiber installed and fiber transport equipment ready to serve business customers.

“This is commercial buildings and data centers that have fiber in place and there is active service equipment that enables provisioning of commercial services,” Cochran said. “We’re not counting residential fiber or standalone cell towers.”

Cochran added that VSG is not counting near-net buildings where service providers may be passing buildings with fiber but have not connected them yet.  “It is either lit or not lit,” she said.

“On-net fiber lit buildings are valued strategic assets that give retail and wholesale providers a competitive edge in profitably delivering services to business customers. A major benefit of a fiber lit building is ready connectivity with provisioning through service orchestration, without the construction cost and extensive lead time required to light a building,” Cochran added.

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Acquisitions of Fiber Providers happening this year:

“These dynamics are driving this year’s acquisitions among fiber providers that will significantly impact the U.S. fiber landscape. Eighteen of the twenty-eight Fiber LEADERBOARD and Challenge Tier companies have fiber-related transactions just completed or pending.”

One of the largest out of this group is CenturyLink’s pending deal for Level 3, one that will enhance the telco’s on-net fiber footprint.

CenturyLink’s Level 3 acquisition will increase its reach by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA and Latin America, giving the telco a larger footprint to deliver Ethernet and software-defined services.

Some of the other acquisitions that will alter the on-net fiber profile will be Verizon’s recently completed purchase of XO Communications and Crown Castle’s pending acquisition of Lightower.

By purchasing XO, Verizon gained metro fiber networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles.

Cochran said that since a number of these deals have not been completed it remains unclear as to what effect they will have.

Crown Castle, which will gain an additional 22,000 buildings, stands out from the crowd since the service provider has been operating the fiber providers it has bought as separate companies.

However, other pending acquisitions being made by Consolidated Communications, Cincinnati Bell and newer players like Uniti Fiber will have an effect.

Consolidated Communications, which will announce its second-quarter earnings tomorrow, recently completed its acquisition of FairPoint. By acquiring FairPoint, Consolidated immediately established itself as the ninth largest fiber player with a presence in 24 states and 8,000 on-net buildings.  This greater density will enable Consolidated to pursue more dark fiber and lit Ethernet service opportunities with a larger mix of business and wholesale customers.

“Out of the companies on the leader board, 18 of them either already completed acquisitions or some are pending,” Cochran said. “Because a lot of deals happened in July with some that are pending such CenturyLink/Level 3, they are not reflected here.”

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Strategic importance of Fiber Assets to deliver business services:

Regardless of when these deals are completed, Cochran added that they show how having a large arsenal of fiber is important to compete for business services.

“There’s a lot that happened in the first half of this year and that’s going to shake things up,” Cochran said. “Just the fact that you have more than half of these companies involved in some kind of transaction shows the value of fiber.”

On the fiber leaderboard, 7 service providers have an ongoing spot on VSG’s Carrier Ethernet Leaderboard report. These providers include: AT&T, Verizon,Spectrum Enterprise, CenturyLink, Comcast, Level 3, and Cox.

Cochran noted that the presence of fiber has coincided with the growth of Ethernet in the domestic U.S. market.

“Fiber-based Ethernet is the most widely deployed technology,” Cochran said. “As those upgrades take place, one of the drivers is trying to get more bandwidth so there’s a correlation between higher bandwidth services and having that fiber in the building.”

“Wholesale services are also a big driver, which becomes a question of service provisioning.  The work that’s being done at the MEF on inter-carrier provisioning and service orchestration across carriers to automate it with standard APIs would help to accelerate new services,” she added.

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Other Fiber Providers:

All other fiber providers with fewer than 2,000 U.S. commercial fiber lit buildings are in the Market Players tier. The 2016 Market Players tier includes more than two hundred metro, regional and other fiber providers, including the following companies (in alphabetical order): Alpheus, Axia, Birch, C Spire, Centracom, Conterra, DQE Communications, EarthLink Business, Fatbeam, Global Capacity, GTT, Hawaiian Telecom, Hibernia, Hunter Communications, Independents Fiber Network, Infostructure, Logix Communications, LS Networks, Mediacom, Monmouth Telecom, Orca Communications, Pilot Fiber, PS Lightwave, Shentel, Silver Star Telecom, Sovernet, Spirit/Palmettonet, Syringa, TDS Telecom, TPX Communications, U.S. Signal, Veracity, Wilcon, WOW and others.

References:

https://www.verticalsystems.com/vsglb/u-s-fiber-lit-buildings-leaderboard/

http://www.fiercetelecom.com/telecom/vsg-at-t-verizon-spectrum-enterprise-take-dominant-spots-net-fiber-business-connections

Sprint Reports 1st Net Income in 3 years; CEO Says Merger Decision Coming Soon

As we’ve previously reported, Sprint is exploring various M &A options, including a merger with rival wireless carrier T-Mobile US Inc as well as a tie-up with cableco/ MSO Charter Communications Inc.  Japan’s SoftBank Group Corp owns approximately 80% of the company.

“We’ve had sufficient conversations with several parties and soon we’re going to start making decisions,” Sprint CEO Marcelo Claure said on a conference call Tuesday (see Reference 1. below for the replay) after the company reported results for the three months ending June 30.  The company achieved net income of $206 million, compared to a loss of $302 million one year earlier.  This was the first time in three years Sprint did not have a loss for any quarter.  However, the positive net income was achieved via cost cutting.  Sprint reported almost $370 million of combined year-over-year reductions in cost of services and selling, general and administrative expenses.

Sprint is in the middle of a turnaround plan and has sought to strengthen its balance sheet to compete in a saturated market for wireless service.  Although Sprint has cut costs, analysts have said the company is highly leveraged.  While its customer base has expanded under Mr. Claure, growth has been driven by heavy discounting.  It recently offered free wireless service (including unlimited data) for one year to new subscribers.  Sprint’s CEO had previously hinted that the  #4 U.S. wireless carrier doesn’t have the necessary funds to invest in 5G infrastructure, which gives more impetus to some type of M&A deal if Sprint is to survive.

A person familiar with the matter told Reuters that SoftBank CEO Masayoshi Son is considering making an acquisition offer for the cable company to combine it with Sprint as early as the end of August. The deal would entail SoftBank buying the Sprint shares it does not already own, the Reuters source said.

“The talks with T-Mobile have been encouraging, the talks with other partners have been encouraging,” Mr. Claure said. “Everybody has shown a high level of interest in evaluating Sprint as a potential merger partner,” he added.

The Wall Street Journal reported  (on line subscription required) that the offer being considered by Sprint’s chairman and SoftBank founder, Masayoshi Son, would be to form a new publicly traded entity that would use SoftBank money to buyout shareholders of both Sprint and Charter at a premium. The transaction would be funded with roughly half cash and half stock. The deal would result in SoftBank controlling the combined company.

SoftBank has already lined up financing from at least three banks to fund the deal, according to people familiar with the matter. One of them cautioned that it could still take several weeks or more to reach an agreement with either company.

Mr. Claure said a deal with T-Mobile might be the preferred option, but it would be tougher to get past antitrust regulators in Washington. Sprint and T-Mobile held merger talks in 2014 but backed down in the face of regulator opposition.

“If you were to merge with another wireless carrier, the synergies are enormous. I mean, this is a scale business, and today you need to operate two competing networks to offer the same service, having half the amount of customers that AT&T and Verizon have,” Mr. Claure said.

A Charter deal poses its own hurdles, particularly since the company said Sunday that it isn’t interested in buying Sprint. Mr. Claure said Tuesday that Sprint didn’t offer to sell itself, so he was “surprised to see Charter’s announcement.”

Were Sprint to go it alone, the results it reported on August 1st show it has a rough road ahead. The carrier drew praise from analysts for posting its first quarterly profit in three years—$206 million compared with a loss of $302 million a year ago—but revenue fell 4.5% to $8.2 billion and it added fewer customers than rivals. While Sprint started investing more money in network improvements, its quarterly profit came primarily from cost-cutting.

The company said it had 88,000 postpaid phone additions during the quarter, the eighth consecutive period of expansion. However, the pace of growth has slowed from a year ago when the company reported 173,000 postpaid additions. Overall, it still suffered a net loss of 39,000 postpaid subscribers (a figure that includes things like tablets and smartwatches.)

Mr. Claure said Sprint will be fine without a deal, but “doing a strategic transaction will always be significantly better than having a stand-alone entity.”

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“The obvious risk in so openly courting one potential suitor after another is that Sprint will increasingly be viewed as damaged goods,” said analyst Craig Moffet in a research note to clients.  “Like an unsold house that has sat too long on the market, an asset that has been shopped too often without success takes on an air of taint.”

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References:

1.  Sprint’s earning call webcast- available on demand requires registration at:

https://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&referrer=http%3A%2F%2Finvestors.sprint.com%2FHome%2Fdefault.aspx&eventid=1398551&sessionid=1&key=4DF9602D9C5D5AB1FAC1435DC0A533EA&regTag=&sourcepage=register

2.  Sprint Reports Net Income for the First Time in Three Years with 1st Quarter of Fiscal 2017:

http://investors.sprint.com/news-and-events/press-releases/press-release-details/2017/Sprint-Reports-Net-Income-for-the-First-Time-in-Three-Years-with-First-Quarter-of-Fiscal-2017-Results/default.aspx

3. Earnings Results Presentation:

http://s21.q4cdn.com/487940486/files/doc_financials/quarterly/2017/q1/02_Q1FY17-Slides_Final.pdf

 

 

 

BT offers to spend up to £600M on rural broadband in the UK

BT has offered to spend up to £600M to connect the final 1M homes and businesses in rural areas of Britain to a broadband connection suitable for most needs. The telecom company said every home and business in the UK would have a broadband speed of at least 10 megabits per second (Mbits/s), fast enough to stream movies, video conference and browse the web.

Broadband endpoints will either be connected via the Openreach network through fiber-optic cables, a network of copper lines via xDSL, or through the fixed broadband wireless system, where connections use radio and, in some cases, satellite signals.

BT’s plan is for 99% of the UK population to be able to obtain a broadband service of at least 10 Mbit/s by 2020.  That speed meets the needs of a typical household, according to UK regulatory authority Ofcom, but is less than the 2015 FCC broadband speed minimum of 25M bit/s (downstream).

About 93% of the UK population can already access a service of at least 24 Mbit/s, according to the UK government, but there has been concern about a growing “digital divide” as rural communities miss out on the broadband revolution.

The government said it was weighing BT’s proposal against a regulatory approach. “We warmly welcome BT’s offer and now will look at whether this or a regulatory approach works better for homes and businesses,” said Culture Secretary Karen Bradley in a weekend statement. “Whichever of the two approaches we go with in the end, the driving force behind our decision making will be making sure we get the best deal for consumers.”

Actual network construction is not due to finish until late 2021 or 2022, because of work on the rollout of fixed network technologies.

The UK government said rollout would take longer under a regulatory approach but highlighted the pricing implications of BT’s plan for rivals and broadband consumers.

“It is also proposed that BT would fund this investment and recover its costs through the charges for products providing access to its local access networks,” it said. “The approach to recovering these costs will be considered in Ofcom’s current wholesale local access review.”

Gavin Patterson, CEO of BT, said:“  We are pleased to make a voluntary offer to deliver the Government’s goal for universal broadband access at minimum speeds of 10Mbps. This would involve an estimated investment of £450m — £600m depending on the final technology solution.”

At the top end of this range, the investment would equal about 2.5% of BT’s revenues in its last fiscal year (to end-March 2017) and about 17% of overall capital expenditure across the Group.

BT said it would look to recover the cost of its investment by leasing the rural networks to its rivals. The offer will also be reflected in Ofcom’s current review of how to regulate the market for super fast, fiber-based networks of the future.

Capex soared by about £3.5 billion ($4.6 billion) at BT last year, largely because of spending on broadband roll outs.  BT is planning several major investments in the coming years: it plans to extend all-fiber networks to around 2 million UK premises by 2020, and connect another 10 million homes and businesses to a xDSL technology called G.fast, which boosts connectivity speeds over last-mile copper loops. (See BT to Cover 2M Homes With FTTP in $8.7B Plan.)

Earlier this month, BT CEO Patterson said he was considering the viability of a much more ambitious fiber roll out that would benefit around 10 million premises by 2025. (See BT Rejigs Consumer Biz as Profits Hit by £225M Italy Payout.)

He has also indicated that BT will participate in an upcoming auction of airwaves that could be used to support new 5G services. Operators made crippling payments for spectrum licenses during previous auctions, although experts do not expect a 5G auction to generate a similar windfall.

References:

https://www.ft.com/content/a4ba67a4-73b0-11e7-aca6-c6bd07df1a3c

http://www.lightreading.com/regulation/bt-offers-to-spend–gb-pound-600m-on-rural-broadband/d/d-id/735011?

https://www.bloomberg.com/news/articles/2017-07-30/bt-pitches-788-million-plan-for-faster-u-k-rural-broadband

https://www.techrepublic.com/article/british-telecoms-778m-broadband-investment-could-improve-remote-work-for-rural-uk-workers/

http://www.businessinsider.com/r-bt-floats-600-million-pound-plan-to-push-broadband-into-remote-corners-of-uk-2017-7

http://www.itproportal.com/news/bt-unveils-600m-scheme-to-bring-broadband-to-every-rural-uk-home/

J.D. Power: SMB a Growth Opportunity; Telecom ARPU Falling in Every Region

J.D. Power Report Highlights:

Enterprises with 500 or more employees are more likely to be satisfied with their telecom service, according to a report from J.D. Power, which sees the small- to medium-size business market as a growth opportunity for telcos.  Medium-size businesses had an average satisfaction score of 787, J.D. Power said in a press release.

The J.D. Power report, which grades larger telecoms and cable companies, gives Verizon and AT&T the highest marks.

Verizon exceeded the average satisfaction level and topped the rankings for all three categories of businesses – small, mid-size and large. The company’s overall scores were 762, 816 and 821, respectively, for small, mid-size and large companies.

AT&T came in second place and exceeded the average score in the mid-size and large categories, with scores of 792 and 820, respectively. But Cox came in second among the smallest businesses, with a score of 744. AT&T followed at 730.

Cox was the only cableco to have a score above the average in any of the three categories. Among the telcos, CenturyLink also failed to have a score above the average in any category – a situation that company will want to address whenever its merger with Level 3 closes and the company becomes the most enterprise-focused of all the major service providers.

J.D. Power attributes the higher satisfaction level of the larger businesses to several factors, including higher satisfaction levels with communication, cost of service and customer service. Those companies with an account representative assigned to their business have notably higher overall satisfaction, researchers noted – and larger companies are more likely to have account representatives assigned to them.

Service providers in general have been emphasizing the business market in recent years and that emphasis seems to be yielding positive results. Scores for all the categories of companies were higher than for a similar study that J.D. Power conducted in 2015. Scores for 2015 were 783 for large companies, 747 for mid-size companies and 715 for small companies.

The business market has been a particularly strong focus for cable companies, which do not have wireless businesses but do have modern fiber network infrastructure. The J.D. Power results suggest cable companies still have a way to go in gaining business customers’ loyalty and trust, however.

The J.D. Power results suggest opportunities for service providers that can excel at serving SMBs – and tier two service providers such as Windstream  and Frontier have been focusing on that market for a long time.  So was TW Telecom (which was acquired by Level 3, which is in turn being acquired by Century Link) and XO Communications which was acquired by Verizon.

Tier two telcos were not included in the J.D. Power report.

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Telecom ARPU Falling in Every Region

Average revenue per user in the telecom industry is falling in virtually every region

Closing Comment:

Perhaps, the negative growth in telecom is causing telcos to merge to acquire scale and to go into other businesses (like Orange investing in on-line banking instead of its core telecom business).

Fierce Telecom reported on July 24th:

CenturyLink, Frontier, Windstream suffer worst 3 quarters in history

CenturyLink, Frontier and Windstream have continued to see pressure over the past three quarters as shares at each of these companies dropped dramatically due to issues at each company.

“Shares in the wireline ILEC/RLEC space (CenturyLink, Frontier, Windstream) have endured the worst three consecutive quarters in industry history, with shares plummeting an average of -20% in 4Q16, -21% in 1Q17, and -24% in 2Q17 (we note another -5% in 3Q17 thus far), mostly from Frontier and Windstream as CenturyLink shares are being supported by the Level 3 acquisition,” Cowen said in a research note.

Overall, the three companies face the industry-wide challenge of balancing strategic service growth with ongoing legacy service declines and losing market share to cable operators.

Additionally, each of these companies has been dealing with specific headwinds in their businesses. Frontier has been challenged by integrating the properties it purchased from Verizon in California, Texas and Florida, while CenturyLink is dealing with a raft of lawsuits over alleged consumer fraud issues and Windstream is seeing declines in its legacy TDM-based wholesale business sector.

References:

J.D. Power: Business Telecom Satisfaction Highest for Largest Companies, Highlighting SMB Opportunity

http://www.jdpower.com/sites/default/files/2017108.pdf

http://www.prnewswire.com/news-releases/big-satisfaction-gap-exists-between-large-and-small-business-internet-and-phone-line-customers-jd-power-finds-300491000.html

 

 

Microsoft White Spaces Plan would bring 2 million Americans online by 2022

Microsoft today announced a project to bring broadband internet access to rural parts of the U.S. using TV white spaces, unlicensed and unused spectrum.   Microsoft President Brad Smith unveiled details about the initiative at a Tuesday event in Washington, D.C. as a way to bridge the digital divide between urban and rural areas.

Microsoft’s ambitious plan, dubbed the Rural Air-band Initiative, will begin in 12 states, where the company said it will invest in broadband connectivity alongside local telecom services. The company said that it does not intend to enter the telecom business itself or profit directly from the initiative. Instead, Microsoft said it will supply the upfront capital required to expand broadband coverage, then recoup that cost by sharing in the revenue with local operating partners.

The company is calling for a combination of private and public investments to get about 2 million rural Americans online in the next five years.  Microsoft plans to partner with telecommunications companies that serve rural counties in 12 states: Wisconsin, Michigan, North Dakota, South Dakota, Kansas, Washington, Texas, Arizona, Georgia, Virginia, New York and Maine. It’s also asking for regulatory support from the Federal Communications Commission.

Mr. Smith will also urge President Donald Trump and his administration to ensure that unlicensed white space is available in all U.S. markets.  “As a country, we should not settle for an outcome that leaves behind more than 23 million of our rural neighbors,” Smith wrote in a blog post.

“To the contrary, we can and should bring the benefits of broadband coverage to every corner of the nation,” he added.  Smith said the TV white spaces provides powerful bandwidth to allow wireless signals to travel over hills and through buildings and trees.

“Today, 34 million Americans still lack broadband internet access, which is defined by the Federal Communications Commission as a 25 Mbps connection,” Smith posted. “Of these, 23.4 million live in rural parts of our country. People who live in these rural communities increasingly are unable to take advantage of the economic and educational opportunities enjoyed by their urban neighbors.”  Smith said Microsoft wants to eliminate the rural broadband gap by July 4, 2022.

“Our goal is to serve as a catalyst for market investments by others in order to reach additional rural communities,” he stated in his blog post.

Microsoft company faces many hurdles with the technology. For one, few manufacturers are making devices compatible with white-spaces technology, and some devices that can be used with the technology cost more than $1,000 each. The National Association of Broadcasters, a trade group, said that only 800 devices that worked with white-spaces technology had been registered with regulators.

“White spaces has tremendous opportunity to help with broadband coverage in rural areas, but it’s hard to justify the cost to device makers who don’t see economies of scale in rural areas,” said Doug Brake, a senior analyst at the Information Technology & Innovation Foundation, a research organization that is sponsored by tech companies including Microsoft.

Mr. Smith said that he would demonstrate four devices that work with white-space technology at Tuesday’s event, adding that prices for such gadgets would fall below $200 by next year.

Another challenge is a battle with television broadcasters who have long argued that devices on the unused airwaves can interfere with the broadcasts run on neighboring channels. This week, the National Association of Broadcasters filed comments with the Federal Communications Commission arguing against Microsoft’s request for one nationwide channel to be set aside for white-spaces use.

“Microsoft has been making promises about white-spaces technology for well over a decade,” Patrick McFadden, an associate general counsel for the association, wrote in comments to the commission. “At what point do we finally conclude that the white spaces project is a bust?”

Author’s Closing Comment:
It seems Microsoft and Google have been talking about White Spaces forever.  I first heard Larry Page of Google talk about it at a broadband wireless conference in 2005- when WiMAX was all the rage.  Here’s a Microsoft co-authored article published in 2008 on Networking over White Spaces.  One has to question whether the public-private partnership Microsoft seeks will be economically viable after over a decade extolling the potential and promises of broadband Internet over White Spaces.

References:

https://blogs.microsoft.com/on-the-issues/2017/07/10/rural-broadband-strategy-connecting-rural-america-new-opportunities/

https://www.microsoft.com/en-us/research/project/dynamic-spectrum-and-tv-white-spaces/

http://whitespaces.microsoftspectrum.com/

https://www.nytimes.com/2017/07/11/technology/to-close-digital-divide-microsoft-to-harness-unused-television-channels.html

https://www.theverge.com/2017/7/11/15953310/microsoft-rural-airband-broadband-strategy

https://www.bostonglobe.com/news/nation/2017/07/11/microsoft-wants-bring-million-americans-online/tTxhm9fXVbuSYUfPJvsd3L/story.html

http://www.detroitnews.com/story/tech/2017/07/11/rural-broadband-microsoft/103618818/

https://arstechnica.com/information-technology/2017/07/microsoft-will-help-isps-bring-wireless-internet-to-12-us-states/

https://www.microsoft.com/en-us/research/project/networking-over-white-spaces-knows/

 

 

 

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