Cisco: 33% Wireless Traffic Growth in 2021 Predicted but "Unlimited" May Be a Gamechanger

Why bother to offload when your LTE is fast and unlimited? Growth rates seven years ago approached 100% as people first got iPhones. They are much lower now. Verizon last year saw about a 45% growth in data per customer, confirming a trend to lower growth in traffic. Cisco (and I) have been predicting this fall for the last three years because smartphones are now nearly ubiquitous. AT&T and others have been telling Wall Street that customers with smartphones were only increasing usage by about 40%. (Trends worldwide are similar but details deserve another article. Some charts below and at Cisco)

Technology in wireless is moving so rapidly that telcos could increase capacity 8-10X in the next few years without raising capex. They may not because they won't be able to sell so much data. Cisco projects a 7X increase in demand in five years, less than the potential capacity increase. 

Read more ...

Broadband growth tops at Egypt, Vietnam, China, Lebanon & Algeria

Strongman rulers delivering better results. We like to think democracy and openness are the keys to expanding broadband, and some very prominent ideologues have been making that claim. The data show otherwise. Egypt, the current growth leader, is a vicious military dictatorship.  Vietnam remains a single-party socialist republic. The Chinese government has lifted hundreds of millions out of poverty, one of history's greatest achievements. The horrors of 1958-1975 are now in the past, but it remains an authoritarian state. 

Thailand, #4 among nations with 1M or more connections, remains under a military government. #5 Belarus makes the Soviet Union look like a model Democracy. Among smaller countries, the leaders are Sri Lanka, Kosovo, and Syria.  The growth rates for Q3 2016 of these countries ranged from 3% to 8%.

Much as we'd like to believe it, the evidence is clear broadband growth does not require openness, freedom of speech, public private partnerships, light touch regulation, or the other recommendations of the Washington Consensus. Nor is "multi-stakeholder" control required. These may be good things - I support most of them - but making stupid claims in public is not the way to achieve them.  

Read more ...

Bharti reaches 2M VDSL but India will always be a wireless network

200M wireless, 2M wired. Reliance just signed up 100M 4G subscribers in six months; India is likely to pass the U.S. in broadband connections by the end of the year. About 15M of those have DSL, mostly from government owned BSNL & MTNL. Bharti, which is the fourth largest telco in the world, has just connected DSL customer two million. The current offering is VDSL, which they sell as the misleading, "up to 100 megabits." I haven't found any evidence of vectoring nor a breakdown of actual speeds or distances. Based on the British experience, that means most customers will get 10 megabits to 50 megabits. They call it V-Fiber, a marketer's fantasy.

Reliance Jio is currently running fiber home, designed for a gig but apparently mostly sold at 100 megabits.

Read more ...

New York's Massive Time Warner Fraud Case Proves I was Wrong About Cable Performance (Correction)

Time Warner gamed the FCC AskSam testing. The multibillion dollar New York State suit against Charter/Time Warner revealed details about how they delivered false results to the FCC tests, in a manner reminiscent of the $20B Mercedes-Benz emissions fraud. Hundreds of thousands of customers were overcharged $20, $30, and $40/per month, often for several years. Because TWC blocked interconnections with companies like Netflix, millions of customers did not get the Internet connection TWC promised and advertised.A 20% refund to those customers adds up to $billions. 

That I got this wrong is not nearly as interesting as the story itself, but I'm putting my correction first. My frequent comments about U.S. cable systems generally delivering promised speeds or close. I hope the other cablecos, especially Comcast, were more honorable.

Time Warner sold 50, 200, and 300 megabit service to hundreds of thousands of customers they knew had D2 modems that couldn't deliver the speeds. That's just simple fraud and they collected $hundreds of millions. A team of lawyers worked through an massive pile of subpoenaed documents and discovered smoking gun after smoking gun.

The Attorney-General's suit used Time Warner's own data to show customers often got 30%, 75% and even 90% less than the speeds they were charged for. They also found definitive proof that TWC actively refused to accept data like Netflix streams in order to force Netflix, Cogent, and others to pay Time Warner or be effectively cut off from millions of customers.

 

Read more ...

For $6/month, 31M Russians get excellent Internet service

Similar to Germany, faster than France. A few years ago, I was amazed to discover that Russia had some of the fastest Internet in Europe. Akamai's State of the Internet Report is based on a massive data set and showed excellent speeds in Russia. Most are served from fiber to the basement, inherently faster than most DSL, the main European connection. Russians generally live in apartment buildings and FTTB was the natural way to build the networks.

According to Akamai's report, the Q3 average connection speed in Russia was 11.6 Mbps, about midway between England's 9.7 Mbps and Germany's 13.7 Mbps. Russia is ahead of Germany in peak speed measures. (Unfortunately, the Akamai report has important methodological problems. The relative speeds do correspond to other data I've seen so I think they are in the right proportions.)

The market is intensely competitive despite only having three players in many areas. Prices were always low and fell further in dollar terms as the oil price dragged down the rural.

Read more ...

Profit almost disappears at China Unicom MTW

Shows the danger of underinvesting when competitors are upgrading. Unicom is the small carrier in China, with only 264M mobile and 75M broadband subscribers. In 2016, they added 11M mobile customers but only about 2M broadband. China Mobile's 1.3M LTE cell sites and massive fiber home build is pulling ahead. In 2016, they added 27 million mobile subs (to 849M) as well as 22M broadband (to 77M.) China Telecom has been adding LTE towers at a rapid pace. In 2016, China Telecom added 17M mobile (to 215M) and 10M broadband (to 123M.) 

China Unicom did not match the investments of the others. They had no choice but to cut prices & raise marketing expenses. Apparently, the Chinese market knew this profit warning was coming. The stock was not forced down. (This week, BT was down $8B and Verizon down $10B.) I wasn't particularly surprised either. I have been watching the nearly incredible build by China Mobile. China Telekom responded but CU held back. It looked like they were burying their heads in the sand.

I do not pick stocks, especially from 12,000 miles away and without a good knowledge of the market.

Read more ...

$50/customer upgrade to DOCSIS 3.1 includes gig upstream at Vodafone

So cheap, all of cable will go DOCSIS 3.1. DOCSIS 3.1 is designed to do a gig up and down, but only the downstream is widely deployed. Gig downstream cable is deploying rapidly, with Comcast and Cox expecting to cover 50% of the U.S. in the next 24 months. Until now, cable upstream doesn't match fiber or G.fast, running 20-35 meg at best. Upstream DOCSIS 3.1 is not yet deployed anywhere, although Comcast has announced they will begin in 2017. Others will wait for full duplex. Vodafone in Spain now has promised a gig across their entire network by the end of 2018, including upstream.

Until now, cable upstream doesn't match fiber or G.fast, running 20-35 meg at best. Upstream DOCSIS 3.1 is not yet deployed anywhere, although Comcast has announced they will begin in 2017. Others will wait for full duplex. Vodafone in Spain now has promised a gig across their entire network by the end of 2018, including upstream. I wouldn't be surprised if the pr is running ahead of the likely deployment and that the upstream is a little later.

Vodafone Spain is built around the former ONO, purchased by Voda in 2014 for €7.2 billion. It has 2.1M cable customers while passing 9.5M.

Read more ...

Altice/Cablevision replacing entire DOCSIS network with fiber home

First major cableco to make the switch. The cost will be high but investors seem happy. The stock went up in a down market. I found the move particularly surprising because Altice is very heavily leveraged after paying well above market for Cablevision and others. Patrick Drahi is of the John Malone school: high leverage and risk, GAAP losses, prayer. That is working well in today's low interest environment.

Other cablecos trust DOCSIS 3.1 to remain competitive with fiber. Comcast is offering a gigabit downstream of DOCSIS 3.1 to millions of subscribers, with hundreds of megabits of DOCSIS upstream beginning in 2017. Cablevision faces Verizon FiOS, still America's best network although getting a little long in the tooth. I suspect Altice expects savings from a new, all IP network and ultimately lower operating costs. Fiber will enhance their strong share of the many businesses in Long Island. Once the decision was made to go all fiber, offering 10 gig was logical. The difference in equipment cost is small. 

Liberty Global is using fiber home for as much as 2/3rds of the new homes they are passing and many other cablecos are installing more fiber. As far as I know, Altice is the first large cableco to rip out a DOCSIS network and bring in fiber home. (Calix is providing gear for some small cablecos.) 

Altice wants to IPO the U.S. division, cash out a portion, and use stock to acquire more companies.

Read more ...