Enterprises buy a variety of computing services from public to private along with VPS, hosting and everything in between. "It's easier for enterprises to develop, test, operate and migrate workloads across hybrid architectures when the CSP's public and private cloud code base is the same, or at least virtualized and functioning identically." However, they cannot procure this variety from Amazon or Google. They would to go to the likes of IBM, Microsoft and Oracle.
"Consumer tablet demand continues to shrink. Apple is the only manufacturer seeing an improvement in buying." Not good news for the cellcos.
"Future data centers will include technologies such as advanced data center management software, distributed resiliency, prefabricated modular (PFM) components and dexterous robots." Meanwhile Telcos are exiting the data center business (WIND, C-Link, VZ).
PE firms own many of the data center companies, including Peak 10 which acquired Via West from Shaw today for $1.7 Billion. In addition, Dupont Fabros merged with Digital Realty. That is along of transactions and consolidation in the space.
Upgrade those pipes!
Cisco's report on Internet traffic growth is out with many pretty graphs. "Globally, Internet traffic will grow 3.2-fold from 2016 to 2021, a compound annual growth rate of 26%. Globally, Internet traffic will reach 235.7 Exabytes per month in 2021, up from 73.1 Exabytes per month in 2016. Global Internet traffic will be 7.7 Exabytes per day in 2021, up from 2.4 Exabytes per day in 2016."
What is an Exabyte? "Global Internet traffic in 2021 will be equivalent to 707 billion DVDs per year, 59 billion DVDs per month, or 81 million DVDs per hour. In 2021, the gigabyte equivalent of all movies ever made will cross the Internet every 1 minutes."
According to Akamai, "Slow IPv6 adoption is a conundrum in light of IPv4 address exhaustion." Global Average Internet Connection Speed = 7.2 Mbps. Yet "U.S. speeds averaged 18.7 megabits per second compared with 28.6 Mbps for global leader South Korea." Most of that is cable modem download speeds since MSOs have the lion's share of broadband customers in the US. DSL is dragging us down.
The Duopoly is looking to strip Net Neutrality rules, claiming they stifled growth. OOPS! "Broadband speeds have soared under net neutrality rules, cable lobby says."
"Fiber is basically the nervous system of the networks of the future," Malady said and Verizon is making big investments in it." Good insight.
]]>If I was starting my telecom agency today, what would I do?
When I started in 1999, I was selling basically one product (Wholesale DSL to ISPs). That was my entry drug of choice. It led to frame relay, ATM, IP Transit, DS1/DS3 and PRIs. But it was a single offering to a very targeted market. Most of those clients from 1999-2001 are still with me!
Certainly an agent starting out is going to be offering bandwidth in all its colors. However, I would build a multi-vendor bundle to sell to a specific audience. I am a big fan of vertical sales. Anyone can be a Generalist, but being a Specialist pays better. How many GPs (general practitioners) are left in medicine or law?
And being a Specialist doesn't mean that you have to turn away other business that comes to you, it just means that you have Focus. You have a target to aim at. You have an audience that you can get to know and develop a message for.
It is far easier to market a specific bundle aimed at a target vertical than it is to create a marketing message aimed at the generic masses.
Targeted marketing is cheaper. Easier to send email or postcards to every ISP in the BellSouth region than to target every SMB in a state.
One bundle I have been working on is the Verizon Wireless One Talk service with 4G backup, a Cradlepoint router, FiOS and a Square POS (point of sale) system. It is a targeted package - Retail. It allows for add-on sales: smartphones, video surveillance, email or Office365 and web hosting. You could also offer credit card processing and PCI DSS Compliance via EarthLink. You could go bigger with managed wi-fi. There are many add-ons, but the original 4 component bundle is where to start.
The bundle contains the essential ingredients of a small retail shop: broadband, backup (because retail can't make money without 100% uptime on the Internet for credit card processing and digital phone service), wireless network, phone system and cash register. Signing up with SYNNEX and any of the Alliance Partners would get you all the access you need to bundle that - and make commissions.
Anyway that is how I would start today. Chasing Verticals with a multi-vendor solution that I designed for them.
]]>"The U.S. (and the world) is in the midst of a sea change in how we spend our leisure time. Young people are less inclined to indulge in America's favorite pastime: zoning out in front of the TV. On average, people ages 18 to 24 spend half as much time watching live and recorded television as 35-to-49-year-old Americans, according to Nielsen...... Young people are definitely watching video, but it's more likely something from YouTube or a friend's Snapchat story on their phone than the episode of "Grey's Anatomy" their parents are watching on the living room TV."
"All told, traditional cable, satellite and telco pay-TV services (not counting OTT offerings) lost a net of about 1.64 million video subscribers last year as compared to a loss of some 980,000 in 2015." [telecomp]
Telco TV was too late to the party. It cost the telcos billions of CAPEX dollars to find out that cord cutting was real and OTT video - Netflix, Hulu, YouTube, Amazon Prime, Sling TV -was going to be the winner.
The economics look upside down. Bear with me here. Right now the cable operators are winning the war for both broadband and voice. In many areas, cable is now the incumbent voice provider.
With triple-play the operator sees ARPU of about $161. If the customer only buys broadband - which is happening more and more - the ARPU drops to $65. Never mind the tax implications for federal, state ad local government (they are screwed either way), just consider what this does for revenue numbers.
The ripple effects are already being seen. ESPN, the Disney owned sports channel, is in a tail spin with a loss of about $500M in revenue per year from cord cutters. Cable channels are either being closed by the content owners or re-named and re-tooled. There aren't 500 useless channels; there are 1M with all of the streams and social media. This will be a real problem for content creators, actors, writers and advertisers.
Windstream, CenturyLink and other RLECs (Frontier, Fairpoint, TDS, et al) have been working hard to get the percentage of revenue from residential/consumers from the average of 75% to a 50/50 mix with business services. Windstream bought EarthLink; CenturyLink bought Level3. TDS bought managed IT firms and data centers. Fairpoint sold itself to Consolidated Comms. Frontier keeps buying states from Verizon and AT&T; consequently, their mix is still heavily consumer.
Everyone has a revenue problem. Pricing pressure has squeezed every operator. It will get worse. Millennials don't want to pay a cable company. They have a huge cellular bill and student loans totaling $1 Trillion. Couple that with stagnant wages and a bleak jobs future that is getting darker with all the investment in robotics and AI, the economic outlook doesn't look bright. As I have asked before: if wages are stagnant, how does someone continue to keep the economy spinning with buying?
I hope, unlike cord cutting, that operators don't have their head in the sand on this issue.
With 5G trials rolling out, will the next generation - who aren't buying homes and aren't buying cars - buy wireline broadband? A few analysts say Unlikely. I already know several twenty-somethings and thirty-somethings that do NOT have terrestrial / wireline broadband. It is all smartphone and hotspot at home.
What does that do to the economics of the network? Business revenue will become even more important. And as revenues decrease, price increases will result, which will mean less subscribers.
Planet Networks believes that rural and under-served areas will still be on wireline because 4G and 5G will not get there any time soon. That may be true - so RLECs will be happy - but the majority (80%) of the population lives in urban areas.
In other nations, cellular (including fixed cellular) are sometimes the only available network. It is cheaper to put up towers and radios than to dig up streets and sidewalks to lay fiber.
]]>I sat down with an old colleague from ISPCON days, Tristan Barnum, and her co-founder at Tellient, Shawn Conahan. We talked about IoT, the Internet of Things, and its similarity to WebRTC. WebRTC was tech; VoIP is tech. Both needed a business plan wrapped around it to make sense. (The technology alone is not a business.) The technology has to be monetized. Tellient is in the business of monetizing IoT.
Conahan describes a marketplace as the place where data inputs into other data. All that data by itself means little. It takes analytics as well as understanding to give that data meaning. Then you can take that data and deliver it to a user in a fashion (or graphical form) that he/she can understand and utilize, in place of a terabyte of ones and zeroes.
"For companies wanting to embrace the Internet of Things to extract the greatest value from their products and customer relationships, the new value chain must include device analytics." [from the Tellient website]One example Conahan gave was over a NOAA buoy, which can be used to improve shipping routes from the same data that the NOAA collects (but doesn't use.) Another example came from GoGo (the satellite Internet provider to airlines) who will use data to help airlines avoid turbulence, which wears on both the passengers and the planes.
In a way Tellient is helping to build a mesh network to connect data from a number of connected sources, add analytics to it and provide a functional output (like graphs).
For me, Big Data, AI (artificial intelligence and bots), math (algorithms + analytics) are all coming together at the same time as sensors, computing and connectivity are all hitting mass market penetration. Look at the Raspberry Pi, a $5 computer! Sensors are under a dollar each. Smartphones can be had under $100. Connectivity is all you can eat. Data storage on AWS or S3 is pennies. All of this hardware is commodity. The smarts - the math - is where the business plan is. It is where the money is.
]]>The Age of the CLEC - the competitive carrier - is at end. They fill gaps now, like Birch, Bullseye and Granite for POTS and other legacy services. XO is part of Verizon. EarthLink absorbed by Windstream to become like AllWorx, USLEC and Paetec, a memory. Level3 will be a division of CenturyLink, where it will cease to be a rival to the RBOC in the Enterprise.
Net Neutrality is going away. That zero rating investigation to determine if giving some content a free rideover all other content was fair has been closed.
It is simply cable or ILEC. And both groups have to be wondering how much longer they can continue to carry their massive debt. The big dilemma is that ARPU is stagnant but subscriber counts have peaked. Cord cutting is a real issue for cable, telco, satellite and content owners. NBCU closed two channels recently and re-branded another. Apparently, twenty five cents per subscriber per channel per month isn't enough any longer. And advertising rates are a little off too. The economics of many legacy businesses are being blown up!
The cost of services increases as more small cells are deployed to blanket coverage for 4G LTE, LTE-Advanced and how much will 5G cost? If ARPU is stagnant for cellcos in this price war, yet the cost to build and maintain the network remains constant and you don't lose any subscribers, all is good.
Sprint and T-Mobile have waged a brand battle against Verizon and AT&T. It has worked to a degree. But all 4 carriers are losers. The foreign owned T-Mobile and Sprint can afford to lose money for a while, but how long?
With the subsidized phones are gone so are contracts and large ETFs. More churn. Higher cost of customer acquisition. Ma and Pa Bell already saw this small business broadband and voice. Then they lost the consumer broadband and voice market. Now the cellular market is up for grabs.
Verizon is looking at buying Charter now. Rumor has Comcast looking at buying its 4G backup partner, T-Mobile. The cablecos denied cord cutting until it was too late. Telcos denied cable competition until it was too late. There really aren't any visionary CEOs in our space.
The problem remains the same: at some point you have to be make money, not just on paper.
Debt payments, network CAPEX, stock dividends, payroll and pension liabilities are a burden to ILECs - all of them: Frontier, AT&T, Verizon, CenturyLink, even Windstream and Fairpoint (who sold out to Consolidated).
Revenue is getting crushed as the cost of bandwidth, transport and transit collapse. Voice revenue has declined. Text revenue is flat. OTT apps have taken video calls (Skype, Facetime), some voice calling (Messenger, WhatsApp), SMS/MMS. What's left? The Enterprise market and the Government market.
What happens when there are just 4 carriers? Is the channel necessary to sell monopoly services? Well, see.
Some other points:
With subsidized phones gone, how will that affect phone makers long term? Will we see the leaps in tech that we have so far? Unlikely. Google Pixel at $649. The iPhone 7 is $700. Not that many folks are going to drop that cash every 18 months to two years. (Note to self: Get in the smartphone/device insurance business!)
When will the next highly desired device come along to prompt an exclusive carrier deal (a la AT&T and the original iPhone) to drive signups?
Even Sprint is Buying into the business of streaming media with a $200M investment into Tidal, another money losing music streaming service.
As someone at lunch pointed out, many foreign LECs like Vodafone, BT, Telstra, even NTT, are sitting on tens of billions in cash. They could buy into the US market.
We sit at the nexus point of some interesting times.
Did you notice that UCaaS consolidation halted? Yeah, me too.
]]>"Put it all together and you can see a day when you're watching content that Google produced disseminated via infrastructure that Google owns on a phone that Google made using wireless service Google brokered." Amazon tried it and failed. Google's phones are nice, but the Fi service has done about as well as Google Fiber.
The opposition - the cellcos, the RBOCs, the ILECs - don't want to be just dumb pipes. That's why Comcast owns NBCU; AT&T is buying TimeWarner; and Verizon owns AOL and is buying Yahoo. They want to own the whole OSI stack - Layer 1 to 7 - the walled garden that was AOL.
Facebook wants the same thing. Amazon, Microsoft and Google, too. Live in their ecosystem, where they collect as much data as possible to target you better to sell you more.
Amazon is selling ISP service, as a retail channel for Comcast and Frontier, not as a virtual network operator.
Meanwhile, a bunch of articles over the last two weeks talked about the ILECs lack of investment in broadband. Cable Will Keep Ruling US Broadband.
LightReading states, "All seven of the top MSOs registered broadband subs gains in the summer quarter. Over the past year, the cable companies have added more than 3.5 million data customers. Once again in contrast, five of the seven leading telcos lost broadband subscribers overall in the third quarter as they focused mainly on upgrading their DSL customers to fiber lines, not bringing on new customers." Once again telcos are late to the game - in TV and in competing against DOCSIS. Telcos were even late to get in the DSL game, afraid of losing T1 business. They have always had short term thinking.
"More than 80 service providers have opted out of participation in the Lifeline broadband program for at least part of their territories," writes Telecompetitor. Verizon, AT&T, Cox, Windstream, Charter, CenturyLink, FairPoint and Frontier have all opted out to the FCC. Part of it is "rural carrier stand-alone broadband pricing"; and part is the 10MB x 1MB requirement which DSL can't meet.
Meanwhile, telcos have to re-think their TV strategy in the wake of OTT video. A consortium of them should buy DISH Network and its Sling TV.
After Google Fiber's debacle in 2016, all providers will re-evaluate fixed wireless instead of a wired strategy.
Maybe g.fast makes its way past some trials in 2017.
Will Comcast, Charter or Google become the number 4 cellular provider in 2017 after AT&T, VZW and a combo of T-Mobile+Sprint.
FiberLight, LUMOS, Sprint wireline, Fatbeam, Wilcon, Towerstream, and some others will likely be part of some M&A this year. No one saw Fairpoint getting picked off by Consolidated - or the pending Level3+CenturyLink disaster.
Another year of turmoil coming at you! With a new FCC.
One thing all this says: we don't know what will disrupt in 2017.
]]>Content and ad money is the only area of growth for the Duopoly.
An analyst is projected that Cable companies will be the Incumbent Phone company in 2017 due to the number of cable phone lines sold compared to telco. The RBOCs have been trying to get out of the incumbent label for years, much to the chagrin of their ILEC brethren like Frontier, Windstream, CenturyLink and Fairpoint, who wish that the RBOCs would shut up.
The RBOCs have cellular, voice, data, broadband, big pipe, managed services, data centers and cloud in the catalog but the cash cow was the consumer triple play. Much like EarthLink and AOL floated on dial-up revenues for years, ILECs float on wireline revenues. Unfortunately, cable is eating their lunch in the broadband market.
Easier to dump a billion or four into a company that will provide some top line revenue than spend $24 billion on fiber to the home, where Verizon lost money.
Telco has pension and union liabilities that cable does not. These liabilities are now mainly under the RLEC umbrella in the form of CenturyLink, Fairpoint and Frontier, who purchased assets from many other ILECs and RBOCs, including the pension liabilities. It is quite the financial burden.
Content is the next revenue stream for the telco, following in the footsteps of cable, who have owned TV stations and content for years.
No idea how the telcos arrived at advertising as a viable revenue stream (maybe they are following Google's model). Yet "AT&T reports $1.5 billion and growing in annual revenue for its AT&T AdWorks division. That unit aggregates 14 million households and 35 million set-top-boxes nationwide, managing ad inventory across national ad-supported cable networks. AT&T claims it's the largest addressable advertising network in the industry, thanks in large part to its acquisition of DIRECTV." [telecomp]
It looks like we will soon be back in the days of AOL and Prodigy, where your ecosystem will be defined by your cell phone operating system (Android or Apple) and cell provider and broadband provider. The cellcos are providing free bandwidth for staying inside the ecosystem, making it tough for companies like DISH/Sling, Netflix and Layer3. Captured users, eyeballs, viewer habits, buying habits, ads, etc. will result in big money per user. It is a similar model that Amazon uses with Prime and Kindle. Users of a Kindle device buy Prime and spend more than 3x what a non-Prime member spends. And we keep it in the ecosystem. Google, Apple, Amazon, AT&T, Verizon and Comcast all competing for you.
]]>CS&L, the telecom real estate investment trust (REIT) spun out of Windstream last year, owns the copper and fiber assets that Windstream exclusively leases for its network. CS&L bought Tower Cloud and PEG Bandwidth to add to its fiber portfolio. CS&L lost $4.1 million during its 2016 third quarter on $200M in revenue of which 82% comes from WIND. CS&L will "acquire Network Management Holdings LTD, a private company that owns and operates 359 wireless communications towers in Mexico, Nicaragua and Colombia" for $65 million. Towers are like real estate for a REIT. Fiber is still an asset to rent in a REIT. Surprisedly, Level3 nor others have spun out fiber, data centers or other assets into a REIT as a tax savings entity.
As I wrote my column for Internet Telephony magazine last night, Tony Thomas must have read my mind. WIND CEO says that SD-WAN and UCaaS are the driving forces for the WIND-EarthLink merger -- and where success will come from for similar telecom providers.
Cellular companies have started counting all Internet connected devices as number of handsets slows down. In the latest quarter results (see here), it is all about the notes:
"Subscribers include retail and wholesale connections of both traditional and new connected device categories (e.g. M2M). Verizon Wireless subscribers include Strategy Analytics' estimates for wholesale and connected device volumes. Sprint subscribers and net adds exclude affiliate subscribers, but include wholesale."
The blended ARPU is diminished by M2M and IOT device revenue. And this will continue. Family plans, hotspot add-on, tablets at $10 per month - these are the tricks that will need to improve going forward for ARPU to not slide off. Or they will have to break out M2M and IOT which they can't do.
]]>Yet, this headline: "75% of internet use will be mobile in 2017 according to forecast" is kind of misleading. "Zenith Media has released a forecast which says that mobile devices will account for 75% of global internet traffic in 2017." Globally that would appear to be on point since much of the world is mobile only. Laptop and desktops aren't booming. I wonder if tablets are considered mobile or only if they are on a 4G plan.
Mobile internet use passes desktop for the first time, study finds. "The combined traffic from mobile and tablet devices tipped the balance at 51.2 percent, vs. 48.7 percent for desktop access, marking the first time this has happened since StatCounter began tracking stats for [global] Internet usage."
Keep in mind that Mobile vs Desktop has unique User Behaviors. Maybe 55/45 is as far as we go.
"For someone in telecom, the surface-level answer seems obvious. Millennials grew up in the age of cell phones and the Internet. They expect constant connection, mobility, and innovation. This explains why millennials are shaking up personal mobility and communications. But how is it that they're having such an impact on business communications and collaboration too?" from this report.
To continue, "Millennials are becoming the majority in the workforce. They're already the largest generation in the U.S. workforce and should be more than half of the global workforce by 2020. Millennials are becoming managers and leaders. Their preferences and early-adopter tendencies are shifting the conversation about tech in the workplace."
This might be why so much emphasis is on 5G and mobility, but let's not forget that the 2 RBOCs get about half their revenue from mobile, so they will hype up the biggest half of their business.
I don't know how 5G will trump fiber to the home, especially for Boomers and older. Reading tablets and phones with old eyes is a challenge, believe me.
As we have recently witnessed with IOT and hacked phones, security will be an issue. A big issue. No idea how we handle that going forward since people still use password for password (and 1234 for PINs).
If 5G is sold in buckets of data, how does that compete against cable wi-fi or an almost unlimited fiber pipe? "Wi-Fi Expected to Carry up to 60% of Mobile Data by 2019". Is that still mobile only?
Fiber has had set-backs, especially with Google Fiber, but it is also on the rise. More than 600 independent telcos have FTTH projects in the works. Getting pole access via telco, power and government entities is a maze of red tape. Yet cell towers are facing bigger hurdles as no one wants one in their neighborhood. Companies like Crown Castle and Zayo are building out small cells along their dark fiber routes to help 4G fill-in. No idea how dense it will need to be for 5G -- or the lasting effects of that many radios and wi-fi routers per block.
What about the economic effects of fiber? "The evidence is mounting: investment in fiber improves the economic performance of a community as well as its quality of life," said FTTH Council President and CEO Heather Burnett Gold. Would fixed 5G present the same economics?
We will see a certain amount of the market go wireless only. "The latest data from the Centers for Disease Control paints the picture of a growing mobile first society in the U.S., with nearly half (45.4%) of U.S. households wireless only," from the CDC's National Health Interview Survey (NHIS).
5G will change things for a few companies. Point to Point licensed wireless has made a few CLECs happy (and profitable). But it isn't for everyone or for every where.
]]>I wonder back to when AT&T tried to buy T-Mobile in 2011. That Obama Admin said NO. Despite the fact that AT&T was actively helping the NSA and other 3-letter agencies since before 2006, when Klein exposed Room 641A.
Then there is the other program that AT&T runs for the feds: "Hemisphere was used far beyond the war on drugs to include everything from investigations of homicide to Medicaid fraud." The Daily Beast explains how AT&T is spying on Americans for profit. (It would be weirder if they were just doing it for fun.)
Barry Eisler spells out how all this works via his "fictional" book God's Eye View.
AT&T has hedged its bets since the T-Monile No. It won approval for DirecTV. It plans to get a Yes from the DOJ - and has told the FCC that they don't have a say in this acquisition.
From NEXTDRAFT by Dave Pell: "Will the AT&T acquisition of TimeWarner get federal approval? Before you place your bet, consider this data provided by the NYT: "AT&T is the biggest donor to federal lawmakers and their causes among cable and cellular telecommunications companies, with its employees and political action committee sending money to 374 of the House's 435 members and 85 of the Senate's 100 members this election cycle."
Why are they buying TW? Well, to catch up to VZ and Comcast. And because all the pies are flat. AT&T had a bad quarter. VZ has a had a couple. They are laden with debt. Cellular which is half the revenue or more is being picked apart by T-Mobile and to a much smaller extent Sprint. Cable is eating the wireline broadband lunch*. Since all of the bets were on cellular, it is now a run to use fixed wireless (LTE or licensed) for broadband deployment which will increase ARPU for them -- and the bills to consumers.
Ma and Pa Bell have spent tens of billions on spectrum. They will use it to get out of terrestrial broadband and have everything be wireless. They will still have to figure out the T-Mobile problem as well as the cable wi-fi problem.
They want content to build a walled garden - like Facebook or AOL before them. When you own the content you can be king, just ask Comcast/NBCU or Disney.
The one thing that will kill off the telco is an economic depression. When the US experiences another economic slowdown - like say 3Q2017 - consumers will have a lot less money to spend. That means ARPU will not go - and subscriber counts will go down. When you have to eat, you skip HBO and cable TV.
The auto industry is already feeling this crunch. More leasing, less sales, more discounts, interest free loans. The cars last longer. And driverless cars are coming.
One reason for immigration is to actually increase the population of the US. Millennials aren't having kids - in many cases because student loan debt and poor salaries make a child too expensive, except by accident.
In the midst of this noise 2 things to note: (1) ABRY is selling Masergy to Berkshire Partners for about $1 Billion dollars. The reports say $900M; I was told it is more than that.
(2) Google Fiber is laying off. The CEO of Google Access, Craig Barratt, is also stepping down. Too few subscribers, too many hassles means they will try fixed wireless then probably call it a day. The Duopoly of cable and telco have successfully squashed competition. And for all the little guys cheering, it could be you next!
Please note that in the middle of all this, despite the skyrocketing analyst forecasts, cloud computing is not mentioned in this scenario. Why? It amounts to peanuts in revenue for the Duopoly. "Total SaaS/PaaS revenues of top 50 software companies globally are $22.4B. Microsoft, Oracle, IBM, SAP, Symantec, EMC, VMWare, HP, Salesforce and Intuit are the top ten software companies worldwide," according to Fortune and PWC. Unless they were to buy Salesforce to gain $5.5Billion in revenue, they have to go content. Microsoft bought LinkedIN for $26B!! And LI revenue isn't even $4B dollars.
IOT isn't even a billion dollars in revenue for VZW yet. So how do you move the revenue needle at the former Bells?
* Per telecompetitor, "The number of U.S. fixed broadband subscribers dropped by nearly 200,000 on a net basis in 2Q 2016, a decline of 0.2 percent, according to the latest market data from Point Topic."
]]>Both VZW and AT&T are experiencing a saturated cell phone market. AT&T lost a record 268,000 postpaid wireless subscribers last quarter. The DirecTV arm is replacing the U-Verse TV service but "While DirecTV added 323,000 video subscribers on the quarter, AT&T reports that the company lost 326,000 TV subscribers during that same period," according to DSLR. "AT&T's fixed-line broadband growth was unimpressive as well. While AT&T added 156,000 U-Verse broadband subscribers, it lost 161,000 DSL customers, for a net loss of 5,000 broadband subscribers on the quarter."
When you look at ARPU for video, in December 2014 it was $102.66 rising to $118.09 in 3Q16. IP Broadband ARPU (DSL) in the same period went from $44 to almost $50. You can only raise prices so far to increase revenue. You need more subscribers, but that is clearly NOT happening. So you go wider and buy another vertical. It is funny to watch Ma Bell follow cable's lead. A long time ago, AT&T owned cable under the AT&T Broadband brand. Now, it is playing catch up to VZ and Comcast.
TW owns movie studios, DC Comics, The CW TV Channel, HBO, TBS, CNN, a publishing house and 10% stake in Hulu. It will make AT&T on par with Comcast which owns NBCU.
This administration just doesn't know how to say NO to mergers (one notable exception was TWC-Comcast). There have been too many, leaving consumers with less choice -- and corporations with too much power and size (and debt). [If this deal goes through, AT&T will have about $175 billion in debt -- more than many banks!
A quieter but big merger: Phone maker VTECH is buying SNOM! In a move similar to Mitel buying Polycom (which a PE firm saved from happening), VTECH decided to scoop up German IP Phone maker, snom. All about Scale, right? Bigger is better. Just ask Mitel after buying Aastra.
And the third acquisition was assets only. "Endstream has completed the acquisition of the assets of Mainstream Communications, a provider of wholesale voice termination," reports Channel Vision magazine.
]]>Velis4 has been acquired by a company called Globalgig. Ernest Cunningham will be the CEO of the combined company, while Anthony Jett, Velis4's current CEO, becomes the COO. Globalgig brings a global vision to Velis4, who will be expanding into Europe and Australia soon.
"The one global product of interest to Globalgig is the multi-IMSI SIM, a revolutionary technology enabling Globalgig subscribers to use their own local SIM card anywhere for low rates. Traveling employees just need to turn their device on and the Globalgig system will automatically select the available IMSI having the most optimal rate and service. Customers enjoy seamless worldwide coverage."
Speaking of mergers, CB Insights has the list of the 27 worst mergers (or failed M&A).
Andy Abramson hints that Vonage is selling off its consumer business.
T-Mobile has an MVNO named Walmart Family Mobile that it sold to TracFone.
Reports say that Verizon is close to selling off its data centers for $3.5B, which is a good return on the Terremark acquisition in 2011 for $1.4B. There are 18 facilities and it looks like Equinix is the likely buyer.
Rumors at Dreamforce are swirling about Salesforce buying twitter -- for its customer service functionality.
The big news this week is Yahoo! Verizon is buying them for $4B but they just let folks know that 500M accounts were hacked 2 years ago!!! - and now it seems that they were scanning emails for the feds (3 letter agencies). Rich Tehrani does make a good point that in an Age of Cloud, US providers are now at a disadvantage globally because the feds are so ingrained in cloud providers.
A little something from Salesforce: a customer service survey infographic.
]]>As I watch Hurricane Matthew, I wonder how many elderly and infirm still have POTS lines.
Verizon workers can now be fired if they fix copper phone lines for DSL, according to reports (and HERE). Verizon wants people to buy fixed wireless and 4G LTE-A in place of anything copper.
Certainly, VZ needed the money when it sold off VZT in Cali, Texas and Florida to Frontier. It had to pay the FCC $10B for spectrum - and that is what the sale price was to Frontier. But it wants out of the union labor based telco business. Buying Yahoo and AOL is a way to be a mobile and entertainment business. So copper has to go.
Windstream is using copper for G.Fast and VDSL2 in Project Excel as it beefs up broadband in its ILEC regions. Their ARPU is up, which is what they need - to pay for the upgrades AND to keep Wall Street happy AND to pay down debt.
AT&T uses copper for VDSL2 for the now retired brand U-Verse. "AT&T notes that "AT&T Fiber" may not actually mean fiber -- the telco noting that "under the AT&T Fiber umbrella brand we will use a variety of network technologies." That's likely to include wireless broadband, and should it ever come to market, AT&T's AirGig initiative which utilizes power lines." [DSLR]
After Google Fiber finished up its acquisition of WISP, WebPass, it started thinking about fixed wireless in places, instead of always actual fiber. Why? It got exhausted trying to jump through hoops with local governments for rights of way, pole attachments and more. Then there was the matter of the electric companies who also own poles. And finally dealing with the ILEC, who also owns poles, and who along with cable was suing to slow it down. Louisville being a good example.
Google Fiber reminds me a lot of Covad and the DLECs (and Earthlink's Muni wi-fi project): Good idea, poor execution, no telco experience, learning the lessons all CLECs know the hard way: ILECs will screw you to hamper competition. So will cable. Monopoly mentality just can't be changed.
It would be nice if the copper plant could be rolled up into a nationwide REIT (similar to CS&L), so that EoC, DSL and T1s could still be utilized by alternative carriers. It is the one thing that other CLECs find a use for XO: EoC. We'll see how it plays out.
]]>Sendhub,a business SMS provider that raised $10M, was acquired by Cameo Global, a global managed IT shop that does some contact center work.
Salesforce's leadership position in CRM now gets e-commerce with Demandware $2.8B acquisition
Broadsoft acquired Intellinote. [see here]
QTS buys DuPont Fabros Tech's New Jersey data center. This transaction comes after QTS transformed the Sun Times building in Chicago into a Tier 3 data center with 317K SF of capacity and 24MW of power.
Nest has unlimited budget, large workforce, and nothing. Oops!
The strike is over for Verizon and the lesson for the C-Suite: we can't get rid of wireline and unions fast enough.
ADTRAN launched hardware-as-a-service, a subscription service for MSPs to offer hardware to clients without leasing -- or another way to say that the leasing is built into a subscription service.
The Allied Fiber assets in the Southeast are up for auction under bankruptcy court approval. [source]
Rest assured, another prediction says the same thing that the other predictions said: VoIP Market Set for Steady Growth.
Want an example of Innovation? Zappos re-designs the shoe box!
CNBC list of Top 50 Disruptors
Mid-year channel trends HERE (site is hard to read with banners, pops, etc., but aren't they all getting that way?!)
Dean Bubley asks, "So uncomfortable Q for 5G designers & stds bodies: can critical-comms 5G really yield enough rev/profit to justify much expenditure/effort?" Follow up with this piece on 5G Vision. In short, is there enough revenue to build out yet another network (voice, 2G, 2.5G, 3G, 4G)?
Now softswitch vendors are service providers, competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services [see here and here]
RETAIL: Sears, J C Penney - 30 Companies That Might Disappear In 2017 Based On Altman Z ]]>
If you can't see the flash based player above you have two options: listen on Soundcloud or download the mp3.
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