U.S. 3G Adoption Rivals Europe

Those of you who like to keep score might find this item interesting. It would be interesting to take comparative look at pricing for these services as well. In any case, I guess it pretty much renders moot the discussions about the different airtime charging schemes (caller pays vs. mobile pays) and multiple standards!

Payphones again

In reading the EU Household Usage report I blogged about earlier, I came across their study of payphone usage in the EU. So, to follow up on this item, consider what the EU found. The percentage of people reporting that the "sometimes" use payphones ranges from a high of 34% (Austria) to a low of 3% (Cyprus) with an EU mean of 22%. 44% of payphone users report doing so because their mobile phone is out of range or its battery has run out, while 19% report not having a mobile phone and needing to place a call while travelling and 16% report not using their mobile phone due to high international tariffs.

Very interesting. I will have to search out similar data in the US. Anecdotal evidence is that payphones are disappearing in the US, which would make it difficult to use them! Do you have any data about payphone use elsewhere in the world?

EU Household communications survey

This report was released today. It is a wide ranging report (released annually) that examines the use of communications services by households in the EU. Because the report is lengthy, I haven't had a chance to review it fully yet.

In my cursory review, there was one datum -- households with mobile only access, that I wanted to compare with the US. The result? According the the EU report, the number of wireless only households grew to 24% from 22% the year before (figure from p. 10 of the report).



In this item, I had reported a similar study of US households by the CDC. It shows that 14.5% of US households are in a similar position, up from 12.6% of households in the previous year. So, the trends are in the same direction on both sides of the Atlantic, though the percentages are different. Here is how it breaks out by country:

Broadband technologies in the US

The FCC released its latest report on broadband penetration (incidentally right on the heels of the EU's Review). While these broadband reports have been criticized, and the FCC will be adopting new reporting technologies (see this summary over at CNET), the data on technology use are still interesting and useful.

I have culled this graphic from Table 3 of this report. Plotting it in on a semi-log scale highlights the fastest growing technologies in addition to the ones in greatest use. You can see that, while cable modems are the dominant technology, followed closely by ADSL, the most rapid growth is in fiber and wireless. This should surprise no one, but it is interesting to see it graphically.

AT&T network upgrades

Stories like this one in Forbes don't get a lot of press attention, but I think that they are worth tracking anyway. Since Forbes doesn't do permalinks, here are some key excerpts from the article:

AT&T Inc. said on Monday it has switched on its high-speed backbone network, which is designed to ferry data traffic across the U.S. four times faster.

AT&T has begun placing traffic on its so-called "ultra-long haul" network, which boasts a capacity of 40 gigabits per second, meaning consumers will be able to download large files quicker and more easily stream online videos to their computers. Carriers have been upgrading the backbone network - the underlying pipes needed to move data across extremely long distances - to meet the increasing demand in bandwidth-intensive programs and videos.

[...snip...]

The company, which is deploying routing equipment supplied by Cisco Systems Inc., has upgraded 50,000 miles of its network and plans to connect 25 major metropolitan areas in the next several months. ... In addition to a faster connection for consumers, the upgrades will help ease the capacity requirements for the company's U-Verse Internet-based TV system.

[...snip...]

While the network is the first in the U.S., Verizon Communications Inc. said that this month it would begin building a 2,000-mile backbone network connecting major cities in Europe.

Both companies plan to push the 40-gigabit standard in the U.S. and eventually upgrade to 100 Gbps.

The article doesn't mention it, but I think it is safe to assume that the "40 Gigabit" standard is, in fact, OC-768 (this article in Network World confirms this). NW also reports that this is AT&T's MPLS network. I'm not sure what the "100 Gbps" is ... OC-1536 comes in at approximately 80Gbps. Wikipedia reports that the OC-3072 standard is a "work in progress".

Could the 100Gbps bit rate be referring to 100 Gbps Ethernet (as this article in Wikipedia suggests)? That would be quite a departure ... and would suggest an explicit strategy to integrate local and long distance network standards. Ethernet has truly come a long way (pun intended)!

In light of the Comcast "network management" discussion, this is an interesting development. Do you think AT&T would be credible if they employed similar techniques on this new network?

EU Declines to Set Mobile TV Standard

This article in Forbes, which reports that the EU Telecommunications ministers, who are meeting in Brussels this week, declined to endorse the adoption of a standard for mobile television (I haven't yet found the original announcements). According to the article:

But EU telecommunications ministers said this time that it was important to let the market decide which type of mobile TV it prefers - and the European Commission should stick to "technology neutrality." They said DVB-H should be a "non-mandatory standard" among other options.

Not surprisingly, the EU Commissioner Viviane Reding was concerned with this laissez-faire attitude, warning that "Europe risks losing its competitive edge unless it moves fast".

This is a truly surprising announcement, coming from the region that mandated the GSM air interface. Many European cognescenti have expressed concerns about the US's refusal to set such a standard. This makes this development so much more remarkable!

iPhone in Germany

You might find this item interesting. This is very similar to the situation in France, except it is ex post instead of ex ante, which is less favorable for Apple. The comments on the Gizmodo post are worth reading. Is this a precursor of what we will find throughout Europe?

EU announces new (proposed) telecom regulation framework

In case you missed it, you might find this of interest. If you follow the links, you can get to the (draft) legislative documents. Note that these documents do not represent final policy, though it seems likely that the final policy will be close to what is published today.

• As expected, functional separation is one of the options available to regulators. Do you think that this will be widely used?
• The framework proposes a "European Telecom Market Authority". How do you think this will play out, especially with regard to NRAs?
• What about the spectrum reform proposals? Will they help?

Anyway ... enjoy your reading!

Update (2007-11-14): Here is Forbes' take on this announcement and here is CNET's. Interestingly, few of the major news outlets reported on this.

Update (2007-11-15): This item reports that French and German regulators question the need for the Telecom Market Authority. Will this reform proposal face a long road to adoption?

Vivian Reding on Telecoms regulation

You might find this speech by EU Commsioner for Information Society and Media interesting. Here are some points from her speech:

I have come to the conclusion that the instrument of functional separation should be added to the remedies tool box of national telecom regulators ...

... a symbol for the single market for telecoms is the creation of the new European Telecom Market Authority which will be an integral part of the reform package.

As you would expect, there are many caveats to those points in the speech. It clearly is a preview to the new regulatory frameork that will be forthcoming in the next month.

MVNOs

Speaking of the differences between the US and Europe in mobile communications ... I found this article an interesting contrast to this one. It seems the MVNO business is more attractive in Europe than in the US. According to the first article:

But while MVNOs are booming in Europe, some U.S. upstarts already have failed and others soon could follow suit. Despite investments ranging from $20 million to $300 million per company, many of the U.S. MVNOs have fewer customers than their counterparts in tiny European countries launched at a fraction of the cost. Analysts say that's because too many U.S. startups are trying to act like full-service operators instead of mimicking the business plan of a discount airline.

[snip]

Such problems might be avoided if U.S. MVNOs took the same approach as their European counterparts, says Telmore founder Rasmussen. "You don't need to have shops and consultants," he says. "If you want to be competitive on customer service let people do things by themselves." With full-service operators, for instance, customers who want a copy of their bill typically call a service representative, who sends one out in the mail. But at MVNOs like BiBoB, subscribers fetch their own records over the Web and print them out themselves.

Using the Net to cut costs isn't the only thing that sets apart European MVNOs. Many use clever marketing tactics, such as distributing SIM cards (the chips that link a phone to a specific user account) through supermarkets and convenience stores. Telmore did something even wilder: It blew 60% of one year's marketing budget on a giant party for all of its customers, offering live music, draft beer, and free hot dogs. Rasmussen figures the 6,500 people who showed up became roving ambassadors for Telmore, helping it nab 250,000 new customers that year.

Are there other things (eg. different air interface standards in the US) that might be a factor?

iPhone in Europe

It has been announced that the iPhone will make its (official) European debut in the UK on the O2 network ... with Germany to follow (see this) on T-Mobile's networks. But questions remain about whether it will be as successful there as it was in the US. According to this article:

But analysts say Apple may have a tougher time in Europe. They expressed disappointment that the iPhone to be sold in Europe was identical to the one in the United States, meaning that it would be unable to take advantage of faster European wireless networks for Web browsing and media downloads.

[snip]

Mr. Jobs said the iPhone would overcome this hurdle by relying heavily on Wi-Fi technology, which provides broadband Internet access for laptop computers and other devices, though only when they are stationary. When iPhones are on the move, they will shift to a mobile technology called Edge, which is also use by AT&T, Apple’s exclusive network partner in the United States.

[snip]

Also, 20 percent of British mobile users already have 3G-enabled phones, according to M:Metrics, a research firm. “There’s no doubt it’s going to be an obstacle for Apple,” said Paul Goode of M:Metrics. “You’re going to be asking people to downgrade in terms of capability.”

Apple is also going against the grain of the European mobile business by charging £269 ($538) for the phone in Britain, and locking customers in to 18-month contracts at monthly rates of £35 to £55 ($70 to $110). Typically, carriers discount even high-end cellphones in Europe.

Furthermore the carrier O2 has spotty EDGE coverage; the compensation will be free access to a network of WiFi hotspots, according to this article. Interestingly, this article has also raised the specter of competition between wifi and 3G, a topic that has been the subject of several academic studies (see this, for example).

To me, this highlights the potential difficulties firms face when transferring a technology that is successful in one commercial/social environment to another. Can you find other examples of telecom-related technologies that did not translate well? How are these different from technologies that did transfer well?

Microsoft and the EU

As has been widely reported (see this), Microsoft's appeal of the European Commission's decision failed. This story in BusinessWeek and this one in the NY Times begin to contemplate some of the longer term consequences of this decsion beyond Microsoft.

Some of the other cases mentioned involve Qualcomm and other firms that have technologies that are either de facto or de jure standards. If the markets that these firms compete in benefit from standards, should the firms whose technology has been adopted by the marketplace be subject to government scrutiny or intervention? Should a de jure process exempt firms from this?

More broadly, how much should the government manage competition? Do consumers benefit from this kind of intervention? What should be the standard for determining "successful" government intervention?

Update (2007-09-18): Here is an analysis from TLF.

Update (2007-09-21): I found this item to be a worthwhile read. Do you agree or disagree?

Update (2007-09-25): This article suggests that smaller companies may begin "venue shopping" in the EU in order to gain favorable rulings. Is this a good development?

Update (2007-09-26): This item is critical of the EU ruling, and frames the Antitrust fine as a tariff that bypasses the WTO. Do you think this has merit?

Mobile WiMAX in Europe

This article frames mobile WiMAX as a disruptive technology in the European telecommunications market. The essence of the article is this:

For the past 15 years, American tech giants such as Intel and Microsoft have been largely shut out of the European-dominated mobile phone industry. Not that they haven't tried—Intel (INTC) made processors and memory for handsets and Microsoft (MSFT) is still pushing a pint-sized version of Windows for handheld devices. But the business was still largely controlled by telecom companies such as Nokia, Ericsson, and Vodafone.

Now, with the pending arrival of a disruptive new wireless technology called Mobile WiMAX, the U.S. crowd stands its best chance in years at knocking down Fortress Europe. A kind of Wi-Fi on steroids, Mobile WiMAX delivers data at speeds comparable to conventional third-generation (3G) mobiles but promises to be cheaper to implement because it uses newer, more efficient technology.

Do you think this article is correct? Does WiMAX match the criteria for a disruptive technology laid out by Christiansen in his book?