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D.C. squabbles won't affect broadband investment
Tuesday, 06 April 2010 15:40
AT&T and Verizon are telling everyone in D.C. they will cut broadband spending heavily if they lose on NN and the Title I/Title II technicalities. There's one wall street guy who has this wrong, and they will make sure everyone in D.C. knows his comments. Carriers can't radically downsize because they have already cut broadband spending to the bone.
    10 companies are over 85% of the market, with four - AT&T, Verizon, Comcast and Time Warner - about 70%. By looking at the plans of each, you can determine any large moves possible in U.S. broadband.
Last Updated on Tuesday, 06 April 2010 16:37
2009: China up 22M to 104M and domination
Monday, 29 March 2010 16:26
Point_Topic_2009China added three times as many broadband subscriptions in 2009 than the U.S. and the 18M subscriber gap is almost as many as the total broadband customers in France or Britain. The ever-invaluable Point-Topic figures show  Mexico and India surprise third and fourth. Argentina, Russia and especially Brazil are doing better than many realize, and Vietnam added almost as many subscribers as Italy or Britain. 
     China, India, and Russia all grew by over 20%.  The U.S., Germany, France, Spain, Sweden, Belgium, and Italy all grew 7-10%; Britain and Canada were a little lower.
     Japan, with 80% fiber availability, has the best built Internet in the world but only grew 3%. The 65% household penetration is comparable to Germany or Spain. Effective prices have gone up substantially in the last few years as the government has allowed NTT fiber to dominate after some of the most vigorous DSL competition in the world early in the decade. Japan has long had the most advanced mobile data devices; I suspect what's going on is that many Japanese are content with mobile.
Last Updated on Wednesday, 31 March 2010 23:28
Finally: AT&T femtos
Sunday, 28 March 2010 08:00

femtooysterRandall Stephenson will put 10M AT&T femtocells across the U.S., I reported in 2008. He told Wall Street that a half-billion dollar investment in femtos would save him the equivalent of $3B in spectrum. They've now officially launched, but at a high price ($100-150) to limit early demand. Cisco is selling femtos to AT&T for about $50 (very large quantities). They save bandwidth (think reducing iPhone problems) and make customers happy, so T's logical strategy is to include a femto in most  bundles. 2Wire, part owned by AT&T, discussed a gateway with a femto included three years ago.

    Checking with parts suppliers I'm finding that including a femto will only add $20-30 to the cost in the near future, and be a natural to include with every U-Verse order. T has invested in their chip supplier, picoChip, rapidly introducing integrated chips that bring down the cost. Randall has a powerful incentive to move quickly after they resolve the last few bugs; wall street is downgrading for reputation issues due to iPhone problems,

     4-10 devices can connect via each femto. Think several phones, the meter for the smartgrid service, electric appliances to switch on or off for automatic energy savings, and others not yet dreamed of. No one is doing it yet,

Last Updated on Wednesday, 31 March 2010 23:22
DSL the Great Gamekiller
Saturday, 27 March 2010 10:50

DSL_killed_meJeff Green's DSL line dropped and he tweeted "Booted twice -- and progress lost -- on my single-player C&C4 game because my DSL connection blinked. DRM fail. ...Well. I've tried to be open-minded. But my 'net connection is finicky -- and the constant disruption of my C&C4 SP game makes this unplayable. The story is fun, the gameplay is interesting and different at least -- but if you suffer from shaky/unreliable DSL -- you've been warned."

     Jeff, editor-in-chief of Electronic Arts, added "We need new solutions." DSL reliability, please. (via Neoseeker and slashdot)

Last Updated on Saturday, 27 March 2010 11:05
Free.fr: Great profits aided by depreciation change
Thursday, 25 March 2010 03:22
Freebox_offerThe 30 Euro triple play remains highly profitable with 2009 earnings at Iliad/Free raising from 100M euro to 176M despite losses on the Alice takeover of the better part of 100M. Free cash flow of € 376 allowed Xavier to reduce leverage despite investing € 112 if fiber running under 70% of Paris. Free.fr added 389K subscribers despite Numericable offering 100 mega DOCSIS and mobile carrier Bouygues offering quadplay for € 45,

Iliad increased the depreciation period on the Freebox from three years to four, reducing depreciation from € 316 to € 295. In many companies, that would be an accounting trick to increase profits, but with churn running under 12% per year a four year life is reasonable. The latest generation Freebox is a full DVR set top with 802.11n and home powerline, which they design and assemble for € 180.
Chip capacity tight; No DSL shortages
Wednesday, 17 March 2010 16:00

"Right now our capacity is all taken up, and we don't have enough," Jiang Shangzhou of SMIC tells Reuters. Ulrich Schumacher at Grace Semi  has been operating at 100 percent capacityLantiq_logo since September. Mark Lapedus  in EE Times writes "Not long ago, chip makers could not buy an order amid the terrible downturn. Now, amid the upturn, there are widespread reports of component shortages in the supply chain." Memory chip prices are actually going up, with Samsung doing particularly well.

      My checks across the industry suggest things are not nearly that intense. Don't panic. Everyone has to carefully plan, but it's rare that an order that ordinarily would be filled in 30 days is delayed. Demand for DSL chips is good but not enough to seriously strain supply. Chip demand is ultimately driven by sales of the product that include chips; the world economy simply hasn't expanded that much. It's far more likely the industry situation was caused by companies in previous quarters conserving cash by keeping inventories low and now catching up. John Pitzer of Credit Suisse is strongly optimistic about semiconductor stocks, but also notes "there is double ordering in the current environment." Digitimes reports wafer prices are up, but we're talking perhaps a dime a chip, not huge price increases that need to be hedged. broadcom_logo

      Several times I've watched forecasts of chip shortages become self-fulfilling prophecies. Companies double and triple order "just to be safe." The splash of orders creates a real bottleneck and then chaos when things catch up. I call it the "Johnny Carson" problem. The TV host made a joke about toilet paper shortages on the east coast of the U.S. The next day, everybody bought all they could and there (temporarily) was a real shortage.

Last Updated on Tuesday, 23 March 2010 07:50
Australia: 0% growth in 2009
Saturday, 03 April 2010 05:39
KangarooAustralia began 2009 with 4,176,000 DSL subscribers and ended with 4,193,000. The net gain of 17,000 is 0.4%, which rounds to 0%. Cable and fibre did little better, going from 913,000 to 935,000, up 2%. This is abysmal, especially because 369,000 canceled dial-up. 
     Mobile wireless data more than doubled, from 1,368,000 to 2,838,000 with the growth increasing in the second half of the year. The Australian Bureau of Statistics defines "mobile wireless" as connected via a datacard, dongle or USB modem. http://bit.ly/bwkG8V. Petroc Wilton of Commsday suggests "the available market for DSL customers is flattening out quickly."
     Wilson quotes Frost and Sullivan’s Phil Harpur belief that the trend would soon level off, with very limited cannibalisation from the fixed market. “I think the period of that very high growth has peaked and the growth rates are going to plateau out.... although you get some people who’ll totally do away with the fixed line, the problem you’ve got with wireless is that network can only take so much... and it can get overloaded.” Nathan Burley of Ovum calculates that from June to December the average monthly download went from 4.7GB to 5.8GB. per user.

Last Updated on Saturday, 03 April 2010 06:15
Ivan Seidenberg: Many $millions to finish the Verizon-Vodafone deal
Monday, 29 March 2010 04:51

ivanUpdate 4/7 Ivan at CFR says no merger likely. He usually tells truth. Prev: Ivan Seidenberg has tens of millions of reasons to sell Verizon to Vodafone before he retires in a year or two. Vittorio Calao also wants to strike a deal in the next few months. Needing to keep short term numbers high to raise the deal price explains Verizon recent moves: firing 8,000 more people than originally intended, canceling 5M planned lines of FiOS and reaching an entente with cable to both raise prices.

    Calao is an ex-Morgan banker who will drive a tough bargain. Craig Moffett notes that Verizon has a problem the current dividend, which in 2009 was substantially higher than earnings. He thinks Voda has a trump card in Verizon's need to pull cash out of the 45% Vodafone owned Verizon Wireless if they don't want to cut the dividend, although cutting capex could put that off several years. 

     Mike McCormack of JP Morgan sees it differently. "

Last Updated on Thursday, 08 April 2010 08:03
Great Firewall eats Facebook in Chile
Saturday, 27 March 2010 11:18
Robert McMillan reports Facebook, Twitter, and YouTube were all inaccessible at a Chilean ISP great_firewallwho used a root DNS server in China. A censorship tool spread internationally, although it's since been corrected.

     Earl Zmijewski at the very valuable Renesys blog tracked down the details which he calls "Accidentally Importing Censorship" It appears the Chilean and possibly an American ISP peers with China Telecom and followed a route through that peer.  bit.ly/cpZF64

Here's the code
$ dig @i.root-servers.net www.facebook.com A
Last Updated on Tuesday, 30 March 2010 18:34
South Africa: Some people got very rich
Thursday, 25 March 2010 03:29
AndilePetrus Potgieter sends great news from Pretoria “the market has apparently been blow wide open this week by one of the big players announcing affordable uncapped service package.” The new cables landing across Africa have allowed MWEB to cut bandwidth prices almost in half. But Telkom's monopoly on the local loop keeps prices above $100/month. Politicians including Andile Ngcaba, former director general of the Department of Communications and presidential spokesman Smuts Ngonyama are getting rich off deals with Telkom. Telkom's monopoly has been protected, allowing them to charge almost $100 (U.S.) for a 4 megabit line - without bandwidth. So while bandwidth costs are now dropping in half - with more to come - South Africa continues to be one of the most expensive countries in the world for fast connections.

In the early 1990's the African National Congress had a remarkable website for the day, hundreds of pages of material about policy and politics. I was working at WBAI/Pacifica radio back then, and the reporters would ask me to download material from the ANC for them. Bringing down the broadband price to stimulate the economy and help those less fortunate would honor the ANC pioneers.
$500M IPO for CALX
Thursday, 25 March 2010 02:29

Goldman Sachs and Morgan Stanley sucessfully brought Calix public on Wednesday for $13/share and ended the day at $15. After the offering they will have over $100M in cash, far more than their total debt. Their primary product is a multi-service access box supporting both DSL and fiber, along with associated software and customer equipment. CenturyLink is their primary customer (38% in 2009) and 90% of total sales are in North America. They have a very strong position in the U.S. Tier 2 market with 2009 sales of $233M

Last Updated on Thursday, 25 March 2010 03:00
"Q: What does the plan mean for me today? A: Not much."
Tuesday, 16 March 2010 22:16
"FCC's plan for broadband Internet access falls short" is Julius Genachowski's nightmare headline from the Washington Post. Rob Pegoraro adds "this set of blueprints doesn't represent much of a change from the existing market for high-speed Internet access.
      Doing little for affordability was widely reported as a great weakness of the plan. Matt Richtel in NYT quoted "They talk, talk, talk about affordability, but when you look at the plan, most peoples’ prices are going to go up,” and noted one opinion that the high speed prices of about $100 in the U.S. are twice similar in France and England.FCC's plan for broadband Internet access falls short

   The Washington Post's Cecilia Kang, rarely critical of the FCC, questioned affordability in "How the FCC's new national broadband plan is expected to affect consumers" in response to the plan. She began with "Q: What does the plan mean for me today? A: Short answer, not much. And maybe not even for years." 

Last Updated on Saturday, 20 March 2010 18:36
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