Tag Archives: telecommunications

Mobile communications and government: be careful what you ask for, because you might get it

by Steve Blum • , , , , , , , ,

Some gems sparkled this afternoon in what otherwise was an unfocused chat. The topic was supposed to be mobile technology adoption by government agencies but instead skidded toward canned talking points from lobbyists.

Some panelists got it right, though. Eric Engleman, senior policy advisor for energy and innovation in the San Diego mayor’s office, zeroed in on two key policy areas that will determine the path government agencies will take regarding mobile applications and devices: open data policies and the development and integration of open source, interoperable software.

Open (or otherwise) data policies determine what, if any, restrictions are placed on data generated and collected by government agencies. In theory, open data policies assume that if information is held by a government agency then it’s in the public domain and should be easily accessible by anyone who might be curious. And easily accessible means online, searchable and organized in a way that quickly presents complete answers, even if the component parts of those answers lie in different departments or agencies.

Local governments are developing open source applications to solve specific problems, such as business permit processing, pot hole patching and data base management. Sometimes, as in Santa Cruz, it’s in cooperation with a foundation like Code for America that was specifically designed to address these opportunities.

One approach San Diego is taking is holding a App Challenge. Organized by the mayor’s office and sponsored by AT&T, the contest offered a prize purse of $50,000 and attracted 78 mobile application entries, ranging from a dog park locator to an end to end earthquake preparedness app to a public transit platform.

AT&T’s Stacey Black, a market development and external affairs executive, talked about the same issue, but saw it as an opportunity for companies that can develop vertical solutions for specific problems. Like Engleman, he thinks the future means fewer fat, proprietary applications that any organization might use (think: Microsoft Word) and thinner, focused apps that solve specific problems.

His example was a wireless bar code scanner that AT&T implemented for Amtrak, adapting it to the railroad’s peculiar operating practices. The result, he said, was that Amtrak was finally able to replace the venerable ticket punches that had been in use for a century and a half or more.

The rest of the panel was less on point, albeit no less entertaining in some regards. A Sprint lobbyist wants government subsidies for devices students can take home because, he says, most learning happens after 7 p.m. I’d like to see the research behind that statement – the logical conclusion would be that we should give every child an iPad and a mobile data account and close down the schools. Let me know that works out for you.

The T-Mobile lobbyist reminded everyone that they need more cell tower sites. Another T-Mobile lobbyist in the audience helpfully repeated the point.

A gentleman from USC, who was appearing on behalf of the U.S. State Department, had some fascinating things to say about the use of social media in revolutionary times and the efforts – successful, largely – of government like Iran that aggressively censor mobile, Internet and other communication media. It wasn’t what the MobileCon moderators had in mind, I’d bet, when they organized the panel. But it was a graphic illustration of, as the panel title promised, successfully “leveraging mobile communications to help agencies meet their missions.”

User-financed FTTP fails in a competitive market

Palo Alto user financed FTTP study

A user-financed, municipal fiber-to-the-premises broadband system would be a financial nightmare if launched into a market with mainstream competition, even if it’s subsidized and supported by a profitable city-owned utility.

That’s the finding of a study presented to the City of Palo Alto’s Utility Advisory Commission last night by Tellus Venture Associates. The report assessed the financial potential of user-financed municipal FTTP options, including upfront payments ranging from $1,000 to $5,000, substantial capital contributions by the City and ongoing subsidies of up to $2,000,000 per year.

In a user-financed model, property owners may opt to pay a share of the cost of hooking up to a municipal fiber network, or refuse and remain unconnected.

Very little construction cost savings can be realized by avoiding building lines to uninterested households. A telecommunications network has to be contiguous and a municipal-scale network costs about the same to build whether it serves many homes or just a few.

Upfront fees in the thousands of dollars range proved to be an insurmountable obstacle in a market like Palo Alto that already has two major service providers – AT&T and Comcast – that do an adequate job of meeting the needs and expectations of the majority of residents.

The City’s market research (conducted by RKS Research and Consulting) indicated that less than 10% of residents would be interested in paying $3,000 to connect to a fiber optic broadband network, even if ongoing Internet service was free. When a monthly service fee was included, interest dropped to less than 5%.

Tellus Venture Associates’ modeling showed that even under theoretically perfect conditions, a 24% take rate would be needed to fully pay the cost of construction, and two to three times that many subscribers would be required in any plausible real-world scenario. Even when operating surpluses and tens of millions of dollars in City subsidies were added in, full payback was not possible except in a handful of scenarios where optimistic assumptions were made about initial subscription rates, continuos growth over twenty years and virtually no competitive response from incumbents.

The study concluded that “a fully user-financed citywide fiber-to-the-premise system is not possible to achieve” in a competitive market such as Palo Alto. It could “be built using a combination of upfront user fees and City financing, but there is very little probability of the debt incurred being repaid through operations. Ongoing subsidies would be required”.

The full report is available here, and the accompanying presentation is available here.

Palo Alto user-financed FTTP study

Palo Alto user-financed FTTP study, 6 June 2012

Palo Alto user-financed FTTP presentation, 6 June 2012

User-financed FTTP presentation to City of Palo Alto UAC, 6 June 2012


3G networks reach deep into Australia and New Zealand

Travelling through New Zealand and Australia with a smart phone or iPad is painless and relatively inexpensive for a traveller. Three national mobile networks – Telstra, Optus and Vodafone – cover Australia. Optus also markets service under the Virgin Mobile brand. In New Zealand, it’s Telecom NZ and Vodafone, with newcomer 2degrees building out its network.

My assessment of actual coverage is subjective. I used Vodafone in both countries, and Telstra in Australia. Vodafone NZ and Telstra do a very good job of covering the areas I visited: long swathes of both North and South Islands in New Zealand, and Melbourne, Adelaide and the countryside in between in Australia. Vodafone Australia’s coverage is less comprehensive. I occasionally checked on Optus’ and Telecom NZ’s availability, and could not see any significant difference between their coverage and that of Telstra and Vodafone NZ, respectively.

All four companies market their services through their own stores and resellers, and do a good job of reaching out to travellers with iPads and unlocked GSM/3G phones. I have a long standing pre-paid account with Vodafone NZ that lets me use its Australian sister network on the same terms. Just topping up once a year keeps my phone number active.

Getting a microsim for my iPad from Telstra took longer than it should have – I spent about 45 minutes in a Melbourne store going through the bureaucratic steps necessary for setting up an account, and the other three carriers appear to have similar procedures. It’s a far cry from Vodafone’s UK operation. Travellers there can pop a credit card into an airport vending machine and, for £10, get a microsim and 250 MB of data.

Costs are very reasonable. In Australia, Telstra, Vodafone and Optus all offered a microsim with 3 GB of data for A$30. Published prices are different but, judging from discussions with store staff, all three aggressively meet or beat each other’s special deals on the street. There are a few Virgin Mobile brand stores as well, and they’re aiming at more even more cost conscious buyers: a A$5 microsim comes with 300 MB of data. Avoid a couple of hotel or WiFi hotspot day use charges and it’s paid for itself. In New Zealand, microsim costs range between NZ$20 to NZ$50 for up to 3 GB of data.

New Zealand and Australia have always bee very pleasant places to do business. Ubiquitous, fast and cheap mobile broadband coverage makes it very easy, too.

Mobile telecoms companies lead consumer electronics innovation

Consumers expect the devices they buy to be connected to their content collections, personal data, interpersonal communications and the Internet and other external data sources. That’s why innovation at CES is coming from companies that wouldn’t even have been considered part of the industry a few years ago.

Since Apple launched the iPhone and followed it up with the iPad, mobile telecommunications manufacturers and core technology providers have been driving profound changes in the consumer electronics business.

It’s the consequence of what Ericsson CEO Hans Vestberg called “the networked society” during his keynote address at CES today. Citing commonly accepted industry statistics, Vestberg point out that the mobile telecoms industry boasts 6 billion subscriptions (not subscribers – many people have more than one subscription). About a billion of those accounts include broadband, a figure expected to grow to 5 billion by 2015.

“Anything that benefits from being connected will be connected in the future,” said Vestberg, predicting 50 billion devices will be on mobile networks by 2020, the vast majority using machine to machine (M2M) connections.

Many of those machines will be automobiles, which explains the growing presence of car makers at CES. Mobile phones may be distracting drivers today, but tomorrow M2M links between cars will dramatically improve safety.

4G networks will make automated control possible, according to Vestberg. Latency will drop from half a second on 3G networks to a tenth of a second on 4G technology, making mobile network responses comparable to the reaction time of an alert and skilled human driver.

Legacy consumer electronics manufacturers will make bigger and sharper video displays and richer, cleaner speakers and earphones. At least to the point human eyes, ears and brains can’t tell the difference.

Anything truly new will begin with telecommunications capability, and for most it will be based on wireless technology.