FTTH Deployment to Increase Sharply; Google Fiber Project in KC; & Feb 2013 ComSocSCV meeting
Market research firm RVA LLC forecasts that direct investment in North American fiber to the home (FTTH) deployment will reach $4.7 billion annually by 2017. Altogether, the market will be worth $18 billion across the next five years, RVA asserts. Meanwhile, operators will see FTTH services revenues grow to $4 billion by 2017, almost half of the cumulative $9 billion North American service providers will see over the same fiber-year period.
North American Fiber to the Home and Advanced Broadband Review and Forecast to 2017, tracks both FTTH deployments and consumer demand for high-bandwidth services. The report states that deployment growth will continue over the next five years despite the wrap-up of the ARRA broadband stimulus program, the evolution of the FCC’s Universal Service program to the Connect America Fund, and potential continuation of past economic uncertainties. Market expansion will come via what an RVA press release described as “a diverse group of small to large providers” who will supplant Verizon as the primary market catalysts. Meanwhile, the deployment focus will shift from overbuilds to greenfield applications over the five-year forecast period, RVA says.
RVA also expects the number of subscribers for high-bandwidth services ranging to the 1-Gbps will increase rapidly. These high-bandwidth users will create an important market for for application, software, and programming developers.
http://www.rvallc.com/ftth_subpage4.aspx
A great example of this trend is the Google FTTH project in Kansas City, KS and MO. A new study from media and technology marketing consultancy Ideas & Solutions! Inc. suggests that while Google’s brand recognition played a large role in the initial success of Google Fiber, the company’s marketing campaign also helped get its Kansas City fiber-to-the-home (FTTH) project off to a good start.
The Ideas & Solutions! “Google Fiber Matters: Consumer Demand Study” is based on 1,303 interviews about the Google Fiber project. The company conducted 532 online interviews among Kansas City “fiberhoods” with adults 18-74 years of age from October 19 to November 4, 2012, a few weeks just prior to Google Fiber’s initial customer installations. The remaining interviews were conducted during roughly the same timeframe from among 18- to 74-year old adults nationwide for benchmarking purposes. The study measured respondents’ perceptions of Google, its competition, and the Google Fiber project itself.
In addition to those Google successfully pre-registered for the Google Fiber – about 30% of the target market – another 30% of survey respondents expressed interest in the FTTH services.
http://googleblog.blogspot.com/2012/07/super-fast-fiber-for-kansas-city.html
http://www.dslreports.com/shownews/Google-Fiber-the-Free-Market-Success-Story-That-Wasnt-121078
IEEE ComSocSCV Feb 13, 2013 meeting: Fiber Deployments for Broadband Wired and Wireless Access
This decade will see unprecedented growth in broadband networks, both mobile as well as fixed (to the home). On the home access side, new fiber optic deployments are enabling a quantum leap in the access rates that are available to consumers. On the mobile side, one of the key bottlenecks has been in backhaul to the cellular base stations, and the growth of small cells providing high-speed 4G and WiFi access has exacerbated this issue. This session will deal with these two market drivers and the resulting growth in fiber-based deployments.
Milo Medin will discuss the Gigabit access networks that Google is currently building out in Kansas City and elsewhere, and John Georges will talk about the rapid growth of small cells and the capacity needs which are driving the fiber build-out to provide the necessary backhaul.
Our two speakers have been instrumental in creating access networks over the past couple of decades. Milo Medin was founder and CTO of @Home, which enabled millions of homes gain access to high-speed cable Internet service through the television cable infrastructure. In his current role running access services at Google he is responsible for deploying Gigabit access networks for residential use. John Georges is a pioneer of RF-over-fiber technology. Prior to his current position at Vodafone USA, John founded and ran NextG Networks (acquired by Crown Castle International) which built out a fiber network to connect cellular base stations.
Talk Titles
· Milo Medin, Moving the Web forward: Moving the access network to Gigabit
· John Georges, Wireless Access and Fiber Backhaul for Small Cells
The Feb 2013 meeting description, along with logistics, will be published at: http://comsocscv.org
Double and triple play broadband provider comparison: AT&T U-Verse vs Comcast Xfinity
Introduction:
Via the IEEE ComSocSCV discussion group, I’ve surveyed several hundred IEEE members on their double and triple play experiences with Comcast and U-Verse over the past several months for high speed Internet, pay TV service, and digital voice (mostly VoIP). Verizon FiOS is not available in the SF Bay Area, so it was not included in the survey.
Almost all the responses were related to U-Verse customer experiences- probably because it’s only been available in the SF Bay Area for a couple of years now (less than one year in the city of Santa Clara where I live).
I have also received a comparison chart from Comcast comparing their Xfinity service to AT&T’s U-Verse (see Table 1. and 2. below). AT&T was invited to provide an equivalent chart or feedback from their customers, but chose not to do so. Hence, there is no input from AT&T in this report.
We report the conclusions below along with selected anonymous comments related to our findings.
AT&T U-Verse
a] The Good
User experience is overwhelmingly positive with respect to the qualtiy and reliability of U Verse TV and high speed Internet services. Here are a few selected anonymous comments that support that finding:
“We’ve had ATT Uverse since it was offered in our neighborhood (West San Jose area) about 1 year ago. I’ve been very pleased with the service. The install was straightforward, the service just worked out of the box. We’ve had virtually no interruption of TV or internet (we have both delivered over UVerse). Upload and download speeds work as advertised.”
“U-Verse has been completely satisfactory! I have had it for about two years and have only had to reset the modem (power off) once in that time. The internet speed is superb at MAX (12 Mbit). The TV service has also been great – four receivers including a DVR and a wireless receiver on my home network. I do not have AT&T VOIP. Instead I use Vonage which was subscribed to prior to U-Verse and has also been completely satisfactory including the features. I have only called AT&T tech support once which led to resetting the modem which, in turn, corrected the problem. There have been no other outages, TV or internet, that I am aware of. The on screen TV guide has been useful using the Favorites feature which has eliminated much of the guide scanning and going to the “station” produces a useful listing of programs for that station only.”
“I have had a great experience with UVerse (voice, internet and TV bundle) so far. Some specifics:
Installation:
– Installation was completed successfully in one day. I was aware that my drop-wire was rather old and was likely contributing to increased noise on the line. I explained that to the installer, and they sent a second technician late on the same afternoon to replace it (with zero cost to me, and even though there was no observable issue at the time). All DSL statistics and metrics have been solid ever since. The installation was very “clean”, because they ran an entirely new line from the NID (the box outside the house) to the location inside the house where I wanted the gateway.
– I discovered a small voice problem a few days after installation. After talking on the phone for a few minutes, an AM signal could be heard. A technician came to check within a couple of days. He immediately knew what was happening: The internal wiring for the phones included a number of bridged taps. Given that I was not really using those bridged taps, he recommended that I connect my (only) phone directly to the gateway, and eliminate the bridged taps. (My explanation for this is that there is a hardware design issue with the impedance matching of the SLIC of the gateway, and that the unterminated bridged taps were just acting as receiver antennas.) Everything has worked perfectly ever since.
Quality:
– TV signal quality has been outstanding the whole time.
– Voice quality is exceptional – better than “old” POTS, and of course miles better than cellular.
– Internet speed is very good. AT&T currently “reserves” a portion of the available bandwidth for the TV signal. I wish that portion could be made available to the internet connection, when the TV set-top-box is not in use (no TV viewing and no recording).
– The DVR is fantastic. I think I barely watch any live TV any more.
Pricing/billing:
– AT&T eliminates some discounts after the first 12 months, and I had to call to ask for a better deal. I think that this is just too common with all communications service providers. I wish there was a way to avoid that.
– On the other hand, the AT&T customer service staff have been very willing to give me various upgrade offers, and I am now enjoying an internet speed two tiers higher than the one that I originally ordered (but for the same price).
Based on my experience, I would recommend UVerse to SF Bay Area residents.”
“Regarding uVerse, after some early startup issues related to getting the pair bonding to work, the service has been solid and I am a happy customer. I was comped for the service during the “start up” issues time. My only current complaint is that as of today uVerse had not cut a deal with the Pac12 sports network.”
b] The Bad
However, there were several complaints that were mainly related to tech support, pricing after promotion period ends, and lack of customer retention effort:
-When there is a technical issue with service, e.g. outage, frozen image/channel, Internet problems, etc, AT&Ts tech support is very bad/deficient and needs to be improved. The customer is transferred to either India or the Philippines where personnel can not effectively trouble shoot the problem.
“The only issue I’ve had was with very poor customer service from the U-Verse phone reps I spoke with. They don’t seem to understand the services- especially U-Verse TV. Also, the very long time it takes to reach a live person to answer your specific question is quite frustrating.”
-Prices rise sharply after the promo price period ends. Subscribers must threaten to cancel and go to a competitor to get reduced prices which they say is a major hassle.
-AT&T makes little or no effort to retain customers that threaten to switch to another double or triple play service provider. (A friend of this author recently switched back to Comcast from U-Verse due to lower entry prices. AT&T made no effort to retain her as a U-Verse customer, despite several calls and emails).
-Navigation and search need to be greatly improved using existing remote/Set Top Box (not via a third party mobile app running on a second screen).
-Start up time after power on takes too long. [That might be due to IPTV processing and synchronization vs Comcast’s RF broadcasting of TV channels].
There was one complaint about U-Verse high speed Internet speed being too slow (compared to Xfinity and other broadband Internet providers):
“In Netflix’s monthly speed rankings, AT&T was called out for poor performance on both U-verse home broadband. AT&T U-Verse was in 11th place for Netflix average speed per video stream as per the table in this post (URL below):”
http://www.theverge.com/2012/12/11/3755486/netflix-monthly-speed-rankings
That same individual switched from AT&T U-Verse to Comcast Xfinity:
“After re-evaluating AT&T U-Verse, I decided to switch back to Comcast (Xfinity). Originally, I came to U-Verse from Comcast and I immediately noticed the difference, some pixelation in video and the longer zapping time. Within two years perhaps pixelation improved but the zapping time was annoyingly long, especially with the bad lineup. The deal breaker is that the basic package I needed was mostly kiddie programming with U-Verse, whilst with Comcast I even get ESPN (with MNF and I can watch Sports Center as often as I feel like). Also, I was surprised that when I lost like 5 days of service when the battery died. AT&T had to ship me one from Arizona. How can that happen?”
“Comcast has gone through a lot of challenges in transforming itself from an old style cable company to a credible telco & satellite competitor, while AT&T is still in the business of milking copper (Ok, maybe a wireless provider too, with the lowest ranked customer service there as well).”
One final anonymous comment on AT&T making false promises regarding the availability of U-Verse (San Jose, CA):
“We still can’t get U-Verse! Our home is 12kft from the C.O., but we’re only a block away from a U-verse node (confirmed this the other day, that this is still the case). A few years ago, I got so tired of receiving advertisements from AT&T suggesting that I could upgrade my 1.5 Mb/s service (actually only 300kbs) to U-Verse, which still isn’t available in my neighborhood. I switched to Comcast and vowed never to go back to AT&T. I even opted out of their phone calls and direct mail (which would tease me with impossible upgrades).”
Personal Observation: This author had AT&T “DSL Pro” from 2008-mid 2012, which provided 2.5Mb/sec downstream (before that I had DSL at 1.5Mb/sec downstream). To get a higher Internet access speed I had to switch to U-Verse, which only became available in my neighborhood this summer.
I am very satisfied with the U-Verse quality and reliability of both high speed Internet and TV service. There has not been a single outage of either one since July 28th when U-Verse was installed! The TV picture quality is terrific, which was quite a surprise as I expected IPTV quality to be inferior to RF broadcast.
In contrasts to the results of our survey, the on line postings of U-Verse customer service experiences seems to be quite negative. Here’s an example:
“Thomas estimates he’s spent five fruitless hours on the phone with AT&T trying to simply keep the service he’s had for the last four years.”
And another:
“After 8 months, WHY can’t Uverse get my bill correct? After 8 months and HOURS AND HOURS on the phone and online chat, we STILL cannot get a correct bill. I have been assured each time it will get handled and STILL NOT RIGHT! HELP!!!!! Does anyone have a direct corporate or executive email I can contact? Or other suggestions?”
Comcast Xfinity:
a] The Good
Xfinity offers much faster downstream and upstream Internet speeds then AT&T U-Verse. For example, 105Mb/sec downstream vs a maximum of 24 Mb/sec with U-Verse (see Table 1. below). This is a powerful reason for heavy duty Internet users to chose Comcast over AT&T.
b] The Bad
Price for a given bundle is generally higher and their are often extra charges, such as for a DVR or multiple TVs/STBs.
“We have Comcast Xfinity triple play. Comcast is charging us an extra $18/month to get an HD DVR and converter box.”
Meanwhile, a San Jose Mercury reporter wrote that he was switching from Comcast Xfinity to AT&T U-Verse. You can read why here:
It’s somewhat amazing that Comcast apparently made no effort to retain the SJ Mercury journalist, considering he might and did write a negative article about Comcast that could conceivably damage their reputation. I had the same experience and switched from Xfinity to U-Verse- Comcast made no effort to keep me as a customer, despite me reaching out to them in several emails.
In the June 2012 issue of Consumer Reports gave Verizon FiOS a score of 77, AT&T U-verse a rating of 72 and Comcast Xfinity a grade of 65 (near the bottom of the list of triple-play providers)
Tables 1. and 2. Comparison Charts (provided by Comcast):
AW Comment: The above charts seem to be a fair comparison of service offerings and promotions. However, they don’t address the critical issues of customer service and support. From my personal experience, both AT&T and Comcast are severely lacking in these areas and need to improve. We’ve heard that Verizon provides much better support for FiOS (one reason for their higher consumer reports ranking), while other MSO’s offering triple play services provide reasonable good customer support, especially for problem isolation and resolution.
References:
WSJ: Cable Operators falling behind in race to offer higher broadband access speed + ViodiTV & Editorial
Steady growth in broadband revenue has helped cable operators offset a stagnant pay-TV market in recent years. But now, the industry is resisting pressure from local governments, businesses and universities to offer ultrafast Internet service, opening the door to new competitors.
Google Inc. and a host of smaller companies working in partnership with cities like Seattle and Urbana, Ill., are building fiber-optic networks that offer speeds of a gigabit per second. That’s more than three times as fast as the maximum speeds available to residential subscribers of major cable or phone companies. Cable operators are resisting pressure from governments, businesses and universities to offer ultrafast Internet, opening the door to competitors.
Other Broadband Internet services, such as Verizon Communications Inc.’s FiOS, which already bring fiber lines all the way to customers’ premises, could be boosted to gigabit speeds relatively easily by upgrading the equipment in central offices and consumers’ homes, experts say.
Cable companies, meanwhile, are holding back. To offer the faster speeds across their service areas alongside other services like television, cable operators would have to spend billions more on their networks. Unlike fully fiber Internet service providers, cable companies typically run fiber to neighborhood “nodes.” Less-efficient coaxial cables connect those nodes to what can be hundreds of subscribers, who effectively share bandwidth.
About half the nation’s cable systems would need more fiber before they could deliver gigabit speeds to all customers and continue offering television, says John Dahlquist, vice president of marketing for Aurora Networks Inc., a company that sells network infrastructure to both fiber and cable operators.
Pat Esser, chief executive of Cox Communications Inc., the nation’s third-biggest cable company by subscribers, said it would cost him “multiple billions” to upgrade Cox’s network to offer gigabit speeds to all its customers. Cable executives acknowledge that demand for fast speeds is growing. Time Warner Cable Inc., the second-largest cable operator, said in November that more than 22% of broadband subscribers are opting for faster, costlier Internet speeds, up from 10% in 2009. While many cities view affordable gigabit broadband as an economic-development tool, cable executives say consumer demand is lacking, and there are too few applications requiring such speeds to justify more investment in fiber. Time Warner Cable CEO Glenn Britt told investors at a recent conference that fiber “ends up being more about publicity and bragging.”
For years cable companies were criticized by investors for their heavy capital spending as they improved their networks to offer additional services. A new round of upgrades could jeopardize big stock buybacks and dividends now in place in the industry. “The pressure is on” for cable operators to exploit their current infrastructure first, says Jeff Heynen, a cable analyst at Infonetics.
CableLabs, the industry’s research consortium, says cable “has a lot of tools to increase [its] bandwidth” to deliver gigabit speeds if the demand materializes. These include shifting to more efficient ways to deliver TV channels, something many operators are already working toward.
Comcast Corp. said it is “confident” it can “continue to return the majority of cable free cash flow to shareholders in the form of dividends and buybacks” even with future investment in its network.
Deciding not to upgrade carries risks. Wall Street views broadband as cable’s hedge against the threat of consumers dropping their costly pay-TV packages for online alternatives.
“We’re at a very early stage, but I do think the incumbents have some long-term risk” if they let other companies develop a reputation for leading innovation, said Blair Levin, a former chief of staff at the Federal Communications Commission who now leads Gig.U, an alliance of universities that are helping build gigabit fiber networks in university towns across the country.
The gigabit market remains tiny. Fewer than 30 companies offer such speeds today, reaching about 400,000 customers, according to RVA Market Research. Aside from Google, which has started offering service on its gigabit network in the Kansas City area, they are mostly smaller companies, such as Minnesota-based Hiawatha Broadband Communications Inc. and California-based Paxio Inc.; municipal operators like LUS Fiber, Lafayette, La.; and public utilities like Chattanooga, Tenn.’s EPB fiber network.
But the number of companies whose fiber-only networks are capable of relatively easy upgrades is much larger and growing. In addition to Verizon FiOS, which is available to 17 million people, primarily in the Northeast, more than 700 rural telephone companies that used to provide slow-speed Internet over copper wires have reinvested in building fiber-to-the-home networks, according to the Fiber to the Home Council, a trade group, and Calix Inc., which sells broadband equipment to both cable and fiber operators.
Cities including Chicago, Seattle and San Francisco, as well as the state of Hawaii, have set goals of more access to gigabit broadband. John Tolva, Chicago’s chief technology officer, said he would bring a gigabit fiber network to Chicago whether the incumbent operators want to build it or not, though he would prefer their cooperation.
Several cities and Hawaii have said they would sweeten the deal to offset the cost of laying fiber, such as by expediting permits and, in some cases, even helping with marketing—as Kansas City is doing for Google. In Seattle, the city is opening up unused fiber lines it laid over the years to Gigabit Squared, a startup that plans to bring fiber to 50,000 homes and businesses.
City officials and Gig.U’s Mr. Levin say that these public-private partnerships are more attractive and “replicable” than the municipal fiber networks that several cities funded more than a decade ago. Many of those networks ran into financial troubles as they battled lawsuits and aggressive marketing from big incumbents.
Some cable operators are extending fiber lines selectively to office parks and businesses that will pay for the bigger, pricier bandwidth. St. Louis-based Charter Communications Inc. CHTR +2.44%says requests for gigabit and multigigabit speeds from businesses have doubled in the past six months. But Charter and other operators say they aren’t seeing enough demand to warrant extending fiber to small and medium-size businesses—and certainly not to every household. Cox says only 15% of its business customers are larger clients whose demands would require fiber.
Mr. Tolva in Chicago says business services offered by cable operators are far too expensive for “the kind of growing companies that we’re trying to foster.” He estimates it would cost businesses about $3,500 a month for a dedicated fiber line with gigabit-speed Internet from a cable operator.
By contrast, gigabit speeds in Chattanooga, where the public utility started offering fiber Internet in 2009, cost $300 a month. Some residential gigabit services are even cheaper: Google charges $70 a month for its Kansas City service, as does Sonic.net in California.
Some cable operators have ramped up their marketing and discounting aggressively to combat such newcomers. Vermont-based VTel, which plans to offer gigabit service to about 18,000 subscribers at $30 a month by the end of 2013, says that since it started laying fiber in Vermont more than a year ago, it has faced fierce competition from Comcast. Michel Guite, VTel’s president, says Comcast has sent salesmen door to door to sign people up ahead of VTel’s new service.
“Why bang on doors? Why not improve service and speeds?” he says.
About the author:
Shalini Ramachandran is a reporter at The Wall Street Journal covering the pay TV industry.
Contact her at: shalini.ramachandran@wsj.com; 212-416-3764
Many of the cutting-edge companies referenced in the WSJ article have been interviewed by ViodiTV over the past few years. Despite the premise of the article, it would be premature to count the cable industry out of the bandwidth game. As alluded to in the article, they can continue to improve bandwidth efficiency by implementing DOCSIS 3.0 and bringing fiber deeper in the network by adding fiber nodes. As the article states it would cost multiple billions to instantly upgrade cable networks to offer each of their subscribers dedicated gigabit speeds, but the reality is that, in most places, forklift upgrades are not necessary to remain competitive. Thus, depending upon a given market, their network investment can continue to be incremental.
Read More at: http://www.viodi.tv/2013/01/03/will-speedier-rivals-impact-cable-operators/
Comment from IEEE Member:
DOCSIS 3.0 isn’t the only tool the cable operators have. There is a project in 802.3 that involves most of the big players to generate a spec for a coax PHY to allow the EPON protocol to be used with a hybrid cable plant where the final run to the subscriber is over coax.
http://www.ieee802.org/3/bn/index.html
Question from this Author:
We wonder how AT&T U-Verse will respond to the “need for speed?” Not only for faster Internet access, but for multiple HD TV channels in the home. Currently, U-Verse topology is Fiber to the Node (FTTN) and VDSL2 to the customer premises. Only in greenfield markets, where there is no copper to the home/building, will AT&T install fiber all the way and NOT in all cases. An AT&T splicing technician told me that there was a greenfield buildout in Sonora, CA where AT&T did NOT install fiber, even though the local government was willing to pay for it!
We’ve just published a survey of IEEE Discussion list members on their experience with U-Verse, and Comcast Xfintiy related to their double & triple play services. Here’s the url: https://techblog.comsoc.org/2013/01/04/double-and-triple-play-broadband-provider-comparison-att-u-verse-vs-comcast-xfinity
The End of the Public Switched Telephone Network (PSTN)
More and more businesses and households are trading their traditional switched telephone service for voice over Internet Protocol, or VoIP, services. That’s led to a paradoxical situation, where a huge number of phone calls start out as Internet packets and end up as Internet packets, but have to be switched to, and then from, a voice circuit on the old-school public switched telephone network. Universal Internet Protocol would allow telecom companies to meet the same demand with much less equipment. Seeing the possible financial benefits—including turning suddenly redundant real estate into cash—AT&T, the largest phone service provider in the world, called on the U.S. government to set a final date for the last plain old telephone call.
“Techwise Conversations” host Steven Cherry talks with Daniel Berninger, founder of the Voice Communication Exchange Committee. This Washington, D.C.–based telecom advisory group has chosen the date for the completion of the transition to the Internet Protocol.
To read the transcript of the podcast, visit: http://spectrum.ieee.org/podcast/telecom/internet/the-end-of-the-public-phone-network/?utm_source=techalert&utm_medium=email&utm_campaign=122712
Another source states, “At some point, there will be so few customers left on the older networks that they cannot be supported any longer, especially when all legacy services can be delivered using the new IP networks. Fixed voice still represents 25 percent of total service provider revenue in the 17 countries, Ofcom reports. But only a quarter of total revenues. And those revenues steadily are declining.”
Read more at:
Infonetics & Insight Research Corp paint different pictures & forecasts for Global Telecom CAPEX
Overview:
Market research firms Infonetics Research and the Insight Research Corp have huge differences in their global telecom capex forecasts. Infonetics is quite postive stating 2012 global capex increased almost 4% year over year in 2012. Meanwhile, Insight Research Corp says that capex spending among fixed-line operators continues to decline, with the only capex growth coming from the mobile operators in developing countries
1. Infonetics Research: Fundamental Telecom and Datacom Market Drivers
Infonetics released excerpts from its December 2012 Fundamental Telecom and Datacom Market Drivers report, which analyzes global and regional market trends and conditions affecting service providers, enterprises, subscribers, and the global economy. The firm estimates that global CAPEX was up approximately 4% (Year-over-Year) in 2012, outpacing global GDP growth of about 3.4%.
FUNDAMENTAL TELECOM AND DATACOM MARKET DRIVERS:
. Globally, mobile service revenue is the main growth engine in the overall telecom/datacom market, up 4.3% year-over-year in the first half of 2012.
. User mobility, specifically BYOD anywhere, is putting pressure on carriers to move to a single network for fixed and mobile access, internet traffic, and private/premium services.
. Data traffic growth is outstripping transport equipment costs: traffic is climbing 29% annually while equipment costs are falling 10%.
. Software-defined networks (SDNs) are here to stay, but not today: SDNs are on service providers’ minds, but it is a longer-term challenge to find implementations of hybrid SDN and non-SDN in live networks.
. The phase out of stimulus monies and pressure on government budgets is decreasing public sector spending and taking a bite out of overall enterprise growth.
. With security top of mind due to unprecedented threats and the growing BYOD trend, businesses everywhere are looking to integrate security into everything from smartphones to routers and switches, and are evaluating data center security appliances, cloud security services, and security for virtualized environments and public and private clouds.
ANALYST NOTE:
“As we’re ending 2012, Europe’s crisis remains uncontained and is now spreading to Germany. The potential of shaking business confidence everywhere in the world has risen to new heights, and the IMF lowered its growth forecast and is warning of recession risks due to downward revision of global GDP, which now stands at 3.3%. Economic readings are worrisome everywhere but the U.S., but so far the impact on global telecom and enterprise remains tame, and we’re forecasting capex to grow nearly 4% in 2012 over 2011,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
Téral adds: “With the announcement of AT&T’s and Deutsche Telekom’s multi-billion dollar investment plans, next year’s capex outlay looks brighter.”
REPORT SYNOPSIS:
Infonetics’ market drivers report is published twice annually to provide analysis of global and regional market trends and conditions affecting service providers, enterprises, subscribers, and the global economy. The report assess the state of the telecom industry, telling the story of what’s going on now and what is expected in the near and long term, including spending trends; subscriber forecasts; macroeconomic drivers; and key economic statistics (e.g., unemployment, OECD indicators, GDP growth). The 40-page report is illustrated with charts, graphs, tables, and written analysis.
To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
2. The Insight Corp: Global Telecom CAPEX Hampered by Funding Problems
Capital expenditures (Capex) by telecommunications service providers globally will be very uneven, with North America, Europe and the Latin American-Caribbean regions showing little or no growth and only Asia-Pacific and Africa continuing to make investments in telecommunications hardware and software to keep up with burgeoning customer demand for new services, says a new market analysis report from The Insight Research Corporation.
“Customers in every region are pinching pennies and the demand for advanced applications is uncertain. The confluence of these trends means a further erosion of operator margins, which in turn will affect investments into infrastructures and new technologies since funding is now more difficult to obtain,” says Insight Research President Robert Rosenberg.
“The difficulty in finding funding now faced by many operators will certainly slow down, if not derail, the rolling out of investments in NGNs, WiMAX, LTE, or converged services,” Rosenberg concluded.
Insight’s report, “Telecommunications and Capital Investments: Impacts of the Financial Crisis on Worldwide Telecommunications, 2012-2017,” states that Capex is expected to increase at a compounded rate of 1.5 percent, from $207 billion in 2012 to $223.3 billion in 2017. The report notes that capex spending among fixed-line operators continues to decline, and the only growth in capex spending comes from the mobile operators in developing countries that continue increase their capital outlays to meet the pent up demand for service.
“Although demand for telecommunications services may be income inelastic and may actually grow, services will nonetheless come under pricing pressure as operators fight for more cost-focused customers and new device purchases are delayed. On the other hand, demand for advanced applications is more uncertain. This will result in further erosions of operator margins, which in turn will affect investments into infrastructures and new technologies since funding will be more difficult to obtain. It will prompt operators to search for further improvements in internal efficiencies, including infrastructure sharing and workforce reductions. Will the credit crunch derail investments in NGNs and converged services? How will OEMs fare during the economic maelstrom, where are the opportunities for operators, what are the risks, and which operators are best equipped to weather the crisis? “
AW Comment: Doesn’t sound too upbeat to me :–((
For more information on this report, please see:
http://www.insight-corp.com/reports/invest12.asp
http://www.insight-corp.com/ExecSummaries/invest12ExecSum.pdf
http://bbpmag.com/wordpress2/2012/12/global-telecom-capex-hampered-by-funding-problems/
Comment from Infonetics on the apparent differences in the 2 forecasts (apples & oranges?):
noticed that the excerpts from Insight’s forecast are about the future, whereas the excerpts from ours focus on our expectations for 2012 (final figures are not in yet so 2012 figures are still forecasts at this point).
So comparing the numbers is a little like comparing apples to oranges.
Our 5-year CAGR for capex for 2011–2016 is 2.7%. Insight’s is 1.5% for 2012–2017 (different set of years). Also, they could be counting slightly different things in their definition of capex. That’s why we can’t comment on their forecast.
If you want to use the specific growth figure we expect for 2012 over 2011, it’s 3.6% (we rounded it to “nearly 4%” in the press release). That is still slightly ahead of 2012 GDP forecasts (also just a forecast at this point until final figures are in).
When Stéphane says 2013 looks brighter, he means capex spending should be slightly better next year than this year on a worldwide basis, though he stresses in his report that things still look bleak in a lot of places, especially Europe , on a macroeconomic level. That’s why it was such big news that Deutsche Telekom committed to spending so much over the next 3 years – they’re spending despite the (difficult) economic environment.
Kimberly Peinado
Director of Marketing, Infonetics Research
Editor’s Note: This author is very appreciative of Kim’s efforts to share breaking news about Infonetics very high quality market research reports. She also sends me graphs, like the one that appears in this article Thanks a lot Kim!
References:
http://viodi.com/2012/12/25/global-telco-capex-may-surprise-on-the-upside-in-2013/
TW Telecom launches nationwide availability of 10GE "One to Many" Ethernet access
TW Telecom has announced the commercial availability of its new business 10G Ethernet service, which is being rolled out nationally through a partnership with Columbus Networks. The company says E-Access (one to many) — based on the Metro Ethernet Forum (MEF) 33 standard — will reach thousands of enterprise customers from a single hub in Miami. tw telecom says it is the first to offer national E-Access Ethernet connectivity based on new MEF 33 standards.
Through a single network connection in one location, tw telecom says its Business Ethernet service is delivered to virtually any building or data center in the United States across its 75 market national footprint. The E-Access solution provides ready-made infrastructure for carriers to quickly and easily reach their end user locations across a secure, scalable and trusted network, the company added.
“Our initial experience with tw telecom has enabled us to successfully connect to many U.S. customer locations from one network access point,” said Peter Collins, executive vice president and chief technical officer, Columbus Networks. “The uniqueness of E-Access provides us with additional seamless and scalable connectivity to extend our regional managed business solutions to customers with offices here in the USA.”
“E-Access with an external network to network interface (ENNI) provides carrier, application, and data center service providers with a single point of access into tw telecom’s vast national Ethernet footprint,” said Tom Marx, president of tw telecom’s wholesale services. “These providers are recognizing the need for a secure and scalable network as they roll out business critical applications to their customers. Many of these carriers typically do not have their own network to connect everywhere they need to go. They look to tw telecom to deliver secure, scalable and predictable network connections and solutions that help them deliver applications to their customers.”
References:
Contact:
For more information on TW Telecom’s portfolio of Ethernet services, please contact: TW Telecom Account Executive
Michael Weiss at [email protected] or call him at 408 603-2316
Spectrum Crunch or not? Do Wireless Network Operators really need More Spectrum?
AT&T Chief Randall Stephenson has been warning about a spectrum crunch for some time and used that argument as the main reason AT&T needed to acquire T- Mobile.
- http://forwardthinking.pcmag.com/none/300447-at-t-ahead-of-the-capacity-crunch-but-spectrum-problems-loom
But then just last month, the new Ma Bell (which is really SBC + the old AT&T) said they’d build out LTE to 99% of the US, including rural areas it previously said could only be built out if the company acquired T-Mobile’s spectrum and cell towers. A complete reversal!
http://viodi.com/2012/11/08/at-bring-fiber-to-commercial-buildings-cover-99-of-us-with-lte/
Stephane Teral of Infonetics clearly says no more spectrum is needed- operators should use what they have more efficiently to meet the surge in mobile data traffic. See his comments both within this article and in the comment box below it: http://viodi.com/2012/12/05/infonetics-mobile-infrastructure-market-down-in-quarter-small-cells-not-so-hot/
In particular, ” It’s interesting to see that so many people believe there is a spectrum crunch! And therefore, mobile infrastructure spending should increase! Who’s paying for the new infrastructure at a time ARPUs are falling everywhere except in Australia , Canada , the US , and Japan? I’m currently crunching mobile services revenue numbers and there are not pretty: consumers don’t want to pay for mobile communications. At this point of the 21st century, mobile infrastructure on this planet is essentially built out and the bulk of the market consists of migrating/upgrading 2G network to 3G with LTE-ready gears.”
In a SJ Merc editorial today, Joint Venture SV’s Chris DiGiorgio and Leon Beauchman say yes, more spectrum is needed to encourage more mobile apps & mobile computing.
Greater wireless spectrum can power Silicon Valley and U.S. economy, by Chris DiGiorgio and Leon Beauchman
http://www.mercurynews.com/opinion/ci_22148409/chris-digiorgio-and-leon-beauchman-greater-wireless-spectrum
Leon refers to the recent JVSV Wireless Symposium and Congresswomen Anna Eschoo said “we (U.S. Congress) must make freeing up more spectrum a top priority” Summary of her remarks & the entire symposium is at:
https://techblog.comsoc.org/2012/11/14/summary-of-nov-2nd-wireless-symposium-sponsored-by-joint-venture-silicon-valley
Here’s more to whet your appetite:
-WirelessOperators can’t afford to raise mobile data plan prices as a means to constrain mobile data traffic, as that would discourage users.
-And they apparently don’t want to spend much money to rebuild their cellular networks to make them more efficient, e.g. small cells, self organizing networks, mobile data traffic management, improved backhaul, etc.
-Operators seem to be using a combination of femtocells and WiFi hot spots to offload mobile data traffic to broadband wireline networks. Is that the ultimate solution, or would they really make use of more spectrum if they got it?
Yankee Group Assessment of 2012 Mobile Market & 2013 Predictions
From today’s Yankee Group webinar, which I attended.
2012 in Review: It’s Been a Busy Year!
- The mobile economy went mainstream
- 4G/LTE deployments gained momentum
- Innovations achieved in mobile data pricing
- Emerging markets jumped on the smartphone bandwagon
- Power shifted in the mobile OS war
- HTML5’s fortunes fluctuated wildly
- Cloud‐based mobile wallets emerged
- Mobile POS initiatives spread in U.S. and launched in EU
- Professionals became primary drivers of enterprise mobility
- Companies’apps initiatives shifted from experimental to strategic
Mobility in 2013 – A Make or Break Year:
The volatility marking the mobile industry is finally beginning to ease, and as the dust begins to settle, mobility’s true winners—and losers—will slowly emerge across the entire ecosystem, from devices, to applications, networks and more. This will be the year when smart players place their bets and position themselves for long‐term success in: Mobile money, Mobile apps & cloud, Mobile broadband, Mobile devices.
Highlights:
- With voice and messaging revenue on the decline, the only bright spot for operators is demand for mobile data services.
- Globally, data revenue will increase from U.S.$319 billion in 2011 to U.S.$550 billion by 2016, and total mobile service revenue will increase from U.S.$1 trillion in 2011 to U.S.$1.15 trillion by 2016.
- Consumers want—and demand—anytime, anywhere connectivity. Sixty-three percent of respondents to Yankee Group’s 2012 US Consumer Survey, September state that mobile data speeds are important to them and the same number (63 percent) want to be connected all the time.
- Mobile payments are due for a security setback. A perfect storm of ubiquitous smartphone usage, 24/7 connected devices and consumer naiveté are destined to culminate in at least one of the major cloud-based mobile payment schemes falling prey to a successful hack.
- Enterprises are experiencing their own mobile app gold rush. • The proportion of companies increasing their budgets for mobile applications has almost doubled in the past year, from 28 percent to 51 percent of all companies spending more, with many looking at different use cases, both internal and customer-facing.
- The iPhone continues to thrive. Today, iPhones are owned by almost 30 percent of U.S. consumers surveyed, and 42 percent of U.S. consumers who intend to buy a smartphone intend to buy an iPhone.
- M2M’s potential is starting to be realized. Yankee Group forecasts the number of M2M cellular connections to grow by over 22 percent between 2012 and 2013, spurred by falling M2M device costs, ubiquitous and affordable wireless connectivity, increasing enterprise awareness and business case viability and government mandates driving areas such as smart metering and e-Call services.
Top 10 Mobile Predictions for 2013 (those in bold font are most interesting to this author):
1. Operators Will Lose US$1 Billion per Month in Voice/Messaging Revenue in 2013
The Upshot: Changes in customer behavior and the mobile industry in general will culminate in a precipitous drop in voice/messaging revenue; fortunately, the loss will be offset by a boost in data.
2. By Year End, All Mobile Operators Will Be Either Digital Lifestyle Providers or Value Bit Providers
The Upshot: Both strategies are valid but ruled by different dynamics; thus both will feature winners and losers.
3. Small Cells Will Stumble
The Upshot: Tariffs influencing end‐users to avoid mobile broadband for video will strip much of the economic rationale for extensive small cell deployment in the near term, calling into question expectations for rapid market uptake.
4. At Least One Operator Will Launch Turbo‐ Boosting Service in 2013
The Upshot: As more operators look to real‐time analytics tied to network data to speed the creation, delivery and monetization of unique product and service bundles, they will begin to learn from customer expectations and be able to track, monitor and respond to any change. As a result, they will embark on new services—such as turbo‐boosting— enabled by this new insight.
5. By Year End, Google Will Start Subsidizing Mobile Payments Credit/Debit Transaction Fees
The Upshot: Google needs to entice merchants to accept its mobile wallet solution. Paying merchant transaction fees could prove very persuasive.
6. A Cloud‐Based Mobile Payment System Will See a Significant Data Breach in 2013
The Upshot: Fraudsters are not naive to the opportunities presented via mobile and thus far attacks have been muted only due to the lack of scale. But in 2013, we will see the perfect storm of ubiquitous smartphone usage, 24/7 connected devices and consumer naiveté culminate in at least one of the major mobile payment schemes falling prey to a successful hack. All things equal, we expect the victim will be a cloud player, since it presents criminals with the most lucrative risk/reward ratio.
7. More Than 50 Percent of Companies Look to the Cloud for Their Mobile App Deployments
The Upshot: Demand‐side pressures and supply‐side innovations are accelerating enterprise deployments of mobile applications in the cloud. Next year, the majority of enterprises will be deploying their applications using software‐as‐a‐service (SaaS), as opposed to on‐premises software.
8. Microsoft’s Windows Store Will Abandon 70‐30 Split and Registration Fees in 2013
The Upshot: In 2013, competition between app storefronts will turn red hot. Microsoft will entice developers to its store by breaking with standard app store‐to‐developer business terms.
9. 2013 Will Mark the First Year That Android Smartphone Market Share Will Decline in the US
The Upshot: Stronger competition from Apple, Microsoft and even RIM will put further pressure on already inexpensive Android smartphones and their makers, forcing them to differentiate and add more value.
10. In 2013, M2M MVNOs Will Feel the Squeeze as Operators Get Serious About M2M
The Upshot: As Tier 1 operators ratchet up their attention on machine‐to‐machine (M2M) networks to help drive new revenue, specialist MVNOs will feel the heat as they evolve from friend into foe.
http://web.yankeegroup.com/Report2013PredictionsRegistration.html
Infonetics: Global femtocell market experiencing double digit growth with sales of 3G Femtocells up 50% in 3Q 2012
One of the key factors contributing to this market growth is the increasing need for better network coverage, especially indoors and in areas with no 3G/4G service. The global femtocell equipment market has also benefited from the long promised emergence of fixed – mobile convergence services. However, interference with 3G/4G cellular macrocell networks could pose a challenge to the growth of this market.
Market research firm Infonetics Research just released excerpts from its 3rd quarter (3Q12) Femtocell Equipment market share and forecast report, which tracks femtocells by market segment, technology, and form factor.
FEMTOCELL EQUIPMENT MARKET HIGHLIGHTS:
. The global femtocell market, including 2G, 3G, and 4G femtocells, grew 13.5% sequentially in 3Q12, to $132.7 million
. Sales of 3G femtocells were up 50% in 3Q12
. Samsung grew revenue 45% in 3Q12 from 2Q12, seizing the femtocell market share lead for the 1st time since 4Q11; Samsung also led in units shipped
. Meanwhile, following a double-digit sequential decline in revenue, Airvana slid into the #2 spot in the 3rd quarter
. Integrated femtocells made up just 2% of units shipped in 3Q12, but Infonetics expects they will account for around 1/3 of total units by 2016
“After a minor dip earlier in the year, healthy revenue growth has returned to the femtocell market, where we saw a second consecutive quarter of increases,” notes Richard Webb, directing analyst for microwave, mobile offload, and mobile broadband devices at Infonetics Research. “All segments-consumer, enterprise, and public access-saw both units and revenue go up, and we remain optimistic that femtocells have sufficient market drivers and support among operators to sustain continuous annual growth through 2016.”
Webb adds: “Many new product types have launched recently, including the data-only femto from Ubiquisys, in-flight femtos from ip.access, the dual-mode 3G/LTE consumer femto from Fujitsu, and the 3G/4G/WiFi enterprise femto from SpiderCloud, and this innovation is driving new models and market opportunities.”
Femtocell Report Synopsys:
Infonetics’ quarterly femtocell equipment report provides worldwide and regional market size, vendor market share, forecasts, analysis, and trends for 2G femtocells (CDMA and GSM/GPRS), 3G femtocells (W-CDMA/HSPA, CDMA2000/EV-DO, and TD SCDMA), and 4G femtocells (WiMAX and LTE). Femtocells are tracked by form factor (standalone and integrated) and market segment (consumer, enterprise, and public access). Companies tracked
include Airvana, Alcatel-Lucent, Argela, Cisco/ip.access (3G femtocells), Contela, Huawei, ip.access, NEC/ Ubiquisys, Ubee Interactive, and others.
To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
RELATED RESEARCH from Infonetics:
. Latest Infonetics Small Cells and Mobile Backhaul research brief: http://bit.ly/1232L4t
. Outdoor small cell backhaul a 5-year $5-billion opportunity, says new Infonetics report
. Small cell is the buzz but DAS is the biz, say operators in latest Infonetics survey
. Femtocells offer opportunity to put the mobile network at the heart of the home network
. Small cell market not big enough for all who want to play in it
. Femtocell market ignited by tight vendor battles, price erosion, shift to the enterprise
Another Opinion:
TechNavio’s analysts forecast the Global Femtocell Equipment market to grow at a CAGR of 74.76 % over the period 2011-2015. TechNavio’s report, the Global Femtocell Equipment Market 2011-2015, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the Americas, and the EMEA and APAC regions; it also covers the Global Femtocell Equipment market landscape and its growth prospects in the coming years. The report also includes a discussion of the key vendors operating in this market.
The key vendors dominating this market space are Samsung Electronics Co. Ltd., Airvana Corp., Alcatel-Lucent, and Cisco Systems. Other vendors mentioned in the report are NEC Corp., Ubiquisys Ltd., Huawei Technologies Co. Ltd., Argela Technologies, Contela Inc., ip.access Ltd., and UbeeAirWalk Inc.
http://www.researchandmarkets.com/research/2ch5wh/global_femtocell
AT&T Talks Up U-Verse TV at 1st Consumer Analyst Conference; SJ Mercury picks U-Verse over Comcast for triple play bundle
2012 Consumer Analyst Conference:
AT&T has succesfully disrupted an existing service model – pay TV – with its U-Verse TV (and high speed Internet)service bundle. SBC Communications, which acquired AT&T, began building U-Verse as part of its Project Lightspeed broadband access network in 2004 and initiated commercial U-Verse service in a controlled release in San Antonio, TX in December 2005. That network consists of fiber to the node with VDSL based copper drops to homes. Compression is used to enable up to 4 separate TV streams over VDSL, including HD as well as SD.
With 4.34 million video subscribers and still growing rapidly, AT&T is now the seventh largest pay TV provider in the United States. U-Verse reached that position in less than seven years (Verizon has reached #6, with 4.59 million; in about the same length of time). Before U-Verse and in areas its not available now, AT&T resells Dish satellite TV service as part of a double or triple or quad play service bundle.
Many new and planned AT&T U-Verse TV features and second screen apps were described during the company’s 2012 Consumer Industry Analyst Conference in Atlanta,GA- the first such event for AT&T. AT&T representatives said that the interactive apps for U-Verse have significantly reduced churn – or subscriber loss rate. The AT&T U-Verse App enables users to view the program guide, select programming, control the DVR remotely, and view AT&T’s VOD library. The U-Verse App also allows users to know or select what’s being watched on each TV in the home. According to AT&T, about 80% of the available programming consists of full episodes, while the remaining video content are trailers and other short-form content. It’s that 80% of video content that’s accessible via the U-Verse App.
An excellent report on AT&Ts Consumer Industry Analyst conference is at:
http://www.telecompetitor.com/atts-2012-consumer-industry-analyst-conference-a-uverse-tv-update/
For a summary of second screen app presentations at the 2012 TVNext Conference, including AT&T U-Verse initiatives, please see: http://viodi.com/2012/10/16/second-screen-apps-enhance-viewing-experience-offer-additional-capabilities-tvnext-2012-conference-highlights/
U-Verse over Comcast for triple play bundle:
San Jose Mercury reporter Troy Wolverton wrote a stunning article explaining why he thinks AT&T U-Verse provides a much better value than Comcast Xfinity for a double or triple play service bundle. He compares prices and features side by side with AT&T clearly the winner. I agree completely, especially with the authors comment that Comcast makes no effort to retain customers, even journalists like myself and the author of this article:
Personally, I have been very satisfied with switching from Comcast Xfinity to U-Verse in July 2012.
Here are a few of the reasons why I like U-Verse better than Xfinity:
- Much better price for what you pay for both TV and high speed Internet (I don’t need 30M b/sec or higher speed than that and most consumers don’t either)
- Higher resolution picture quality/ reception- both SD and HD
- Many more TV channels (especially like CNN International) available at reasonable package price
- ZERO outages or hiccups in service in 5 months I”ve had U-Verse Internet and TV service
- No extra charge for DVR or wireless receiver (I use the DVR don’t have the receiver)
- AT&T Executives that truly make an effort to improve U Verse customer service and overall customer experience (rather than be ignored/ neglected)
- Many new advances coming, like anywhere remotes, on screen trouble diagnosis, 2nd screen apps, etc. The Telecompetitor article referenced above is a great example of this trend.
AT&T U-Verse vs Comcast Xfinity double/triple play user survey:
I have been surveying IEEE members on the ComSocSCV discussion list (any IEEE Member can join free by following instructions at www.comsocscv.org) about their experiences with U-Verse and/or Comcast Xfinity. All readers of this post are invited to email me their inputs which will be published anonymously in the survey results.
U-Verse Related articles by this author:
http://viodi.com/2012/11/08/at-bring-fiber-to-commercial-buildings-cover-99-of-us-with-lte/
http://viodi.com/2012/10/25/wireless-u-verse-managed-services-drive-att-revenues-earnings-in-3q2012/
http://viodi.com/2011/03/13/increased-video-traffic-necessitates-att-to-cap-dsl-internet-u-verse/