The sorry saga of WiMAX in India continues.  We think India is vitally important to the health of the mobile WiMAX industry as it is potentially the largest emerging market for that technology.   China has shown no interest in WiMAX  and is pursuing their homegrown 3G technology instead.   So that leaves India as the kingpin for WiMAX deployment in developing markets.

For background info, please refer to:   http://viodi.com/2008/08/11/wimax-in-india/

It seems we’ve been duped again.  Having been told by the Indian government that the much anticipated auctions for 3G and Broadband Wireless Access (e.g. WiMAX) licences were imminent, we now hear that they have been delayed further.  In fact, they may now not take place until early 2009 (but don’t bet on it).

India’s IT and Telecom minister, A Raja has already announced the delay in the 3G auction process due to some strange reasons such as December being too full of holidays.  We met Mr Raja in March 2008 (Tamil Manram arranged dinner meeting with the "Honorable Minister for Communication and Information Technology" at the India Community Center in Mipitas, CA). At the time, Mr Raja (who spoke mostly in Tamil) was not very enthusiastic about WiMAX and did not even mention it in his prepared remarks.  It was only as a result of my question that he forecast the number of WiMAX subscribers expected by 2010, which was reported on it in Viodi View:   

http://www.viodi.com/2008/03/23/wimax-in-india-whom-do-you-believe-press-or-indian-government-official/

The hold up now appears to be a result of the Indian government failing to clear the relevant radio spectrum in nine circles, or operating regions, out of India’s total of 22 such regions.  Apparently, there are issues of getting the spectrum cleared from defense services using the 1920-1980MHz band, which was to be auctioned off.  The Indian defence forces have yet to vacate their spectrum for commercial use in nine circles:  Delhi, Rajasthan, Jammu and Kashmir, Gujarat, East Uttar Pradesh and West Uttar Pradesh, Himachal Pradesh, North East and West Bengal.  Will they do this by year’s end to clear the path for an early 2009 auction?  Don’t hold your breath.

For more on this topic, please refer to the following articles:

http://www.itexaminer.com/3g-spectrum-held-up-by-defence-force-delays.aspx

http://economictimes.indiatimes.com/News_by_Industry/3G_auction_by_January_2009_Raja/articleshow/3624498.cms

http://www.telecoms.com/itmgcontent/tcoms/news/articles/20017583633.html

For WiMAX in India, we are now are compelled to ask:  Can you believe what the Indian government says about the timing of the auctions?   What do you think?  Please comment below.

Popularity: 8% [?]

Parks Associates Web Cast, Broadband Video to the TV and Beyond, is an excellent primer for anyone wanting to get the most out of the upcoming Digital Hollywood and TelcoTV conferences. It is not too late to listen, as Parks Associates has the recording online. Kurt Scherf, Vice President, Principal Analyst, combines extensive primary and secondary research together with excellent analysis to provide a clear picture of the current broadband video market.

Scherf’s presentation provides an update on the broadband video space and the various players that are distributing online video content, how online video is being monetized and the rise of networked consumer electronics as a way of viewing broadband video. He splits the broadband video space into multiple categories, including:

• DVD+electronic delivery (e.g. NetFlix)
• Broadcaster initiatives (e.g. ABC, CBS, etc.)
• Internet Video Providers (e.g. Apple TV)
• Portals (e.g. Google)
• TV on the Web (e.g. Veoh)
• Broadband Service Providers (e.g. Verizon)
• Hardware and Content (e.g. TiVo)

He makes the point that the combined revenue for theatrical box office, DVD sales and DVD rentals has been flat since 2004. As a result, all of the major content owners seen online video as a new revenue channel. Examples of the seriousness of the major content providers include:

• NBC, where 92% of viewers who start a program watch the entire program
• CBS estimates its average online video viewer is 38 years old
• ABC.com has served up 400 million episodes and 1 billion advertisements.

The major content owners are finding advertising as one way to monetize existing content, with ad rates up to $70 CPM on sites such as Hulu. The value of online advertising is more than just impressions, as ad executives surveyed by Parks Associates highly value the interactivity, reporting, immediate feedback and direct customer relationships that broadband video provides.

Broadband video allows for innovative advertising and new formats, such as overlay ads, which are much less intrusive to viewers. One of the early innovators in overlay and alternative format advertising is Blip.TV, which, according to Scherf, will be integrating onto Verizon’s FiOS service. Scherf points out broadband video may provide service providers, such as Verizon and Comcast with new advertising opportunities as well.

People are also spending money on transactional online video. Scherf suggests that the game console has become and will continue to be an important way for viewing video from the Internet (e.g. see this link on how the Play Station 2 works with video). For instance, over 5.1 million homes are using game consoles to view video. In the case of the X-Box 360, the average monthly spend is over $20 per month. Other methods for moving online video to the living room include DVD players and TVs with integrated Internet connections. To this last point, Scherf sees a general trend for a tighter linkage between content and devices.

This article captured just a few of the many jewels from this excellent webcast. Scherf ended the session with a number of provocative questions that remain to be answered. I look forward to future Parks Associates’ webcasts to help answer his questions regarding this rapidly evolving market.
 

Popularity: 12% [?]

Viodi is hooked on WordPress. WordPress has been an amazing tool for managing hundreds of posts on ViodiTV and Viodi View over the past 20+ months. As an open source system, it has given us an amazing amount of flexibility and saved a ton of money. Still, we are just touching upon the surface of what it can do and we have never invested the time and resources necessary to take our sites to the next level. Plug-ins are a big part of the power of WordPress and, thanks to Doug Broomfield of Veeple, we recently discovered a plug-in that simplifies the process of adding embed code to a WordPress sites.

With one file to add to the WordPress installation, Embed-It is a simple plug-in to install and to use. No longer does one have to go to the HTML code editor to add a video. Simply add a key by giving it a name in the format of HTML#, where # is from 1 to 9. Then, paste the embed code into the “value” field and click “add key”. With version 2.6.x of WordPress, it is necessary to repeat this previous step (i.e. paste the embed code into the value section) and press update. This glitch will hopefully be fixed in future versions of WordPress.

Then simply add the embed code by entering the value (e.g. [HTML1] into the editor. This can be repeated up to 9 times in one post.

I am looking forward to trying this technique with embed code where I previously had issues. Thanks Doug for sending us this cool plug-in.

Popularity: 8% [?]

Update from US Telecom’s Executive Briefing in San Jose

At the US Telecom Association’s 2nd Annual Executive Business Forum this week in San Jose, CA, Link Hoewing, Verizon’s VP of Internet and Technology Policy, stated that Verizon Wireless plans to roll out LTE in early 2010 (that’s about 18 months from now!) with, "possibily 75M bit/sec downstream rate." 

At the same conference, Robert Brown, Wayport’s Director of Business Development for Strategic Roaming and Managed Services stated that WiFi hot spots are growing very rapidly and that more and more people on the move are using WiFi devices (e.g.cameras, MP3 players, mobile phones) for Internet connectivity. Wayport is largest operator of WiFi hotspots in the U.S. and the largest managed WiFi hot spot service provider (they manage AT &Ts WiFi network).

Note: The agenda and some of the presentations for this excellent conference are at:

http://ustelecom.org/Events/EventSubPages/Second-Annual-USTelecom-Executive-Business-Forum-Agenda.html

Please let me know if you have questions or request for my take on any of the presentations I heard.

So with LTE moving faster than expected at the high end and WiFi hot spots increasing dramatically at the low end, where does that leave mobile WiMAX? We review important take aways from WiMAX World in Chicago and results from SPRINTs XOHM WiMAX launch in Baltimore this week.  Then we offer an opinion and conclusions.   Good reading!

WiMAX World and More….

The 2008 WiMAX World show wrapped up this week in Chicago and offered a nice perspective on the industry and the possibilities of full-mobility, wireless broadband connectivity. This article lists 10 key points from the show.

http://www.wimax.com/commentary/blog/blog-2008/october/Top-10-Key-Take-Aways-from-WiMAX-World-2008

Reaching into WiMAX’s Pocket  By Rhonda Wickham WirelessWeek - October 03, 2008

This week’s WiMAX World wasn’t exactly the all-out enthusiastic trade event you might expect from a technology that launched its first commercial U.S. mobile network the day before the show doors opened. The mood was decidedly tempered as most folks were pondering the economic situation that was playing out on the world stage around them.
What should have been an exuberant time for this new sector was instead tarnished as many conversations were punctuated with financial feasibility questions.

http://www.wirelessweek.com/Reaching-into-WiMAX-Pocket.aspx

Sprint’s 4G Xohm WiMax: How fast is it?

The following link provides an excellent summary of the real world speeds and the real world devices (the Nokia tablet device is especially interesting) available in Sprint’s WiMax deployment in Baltimore. 

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9116844&intsrc=hm_ts_head 

XOHM WiMAX Broadband Service Debuts in Baltimore

Earlier this week, Sprint officially launched XOHM TM (its mobile WiMAX commercial offering) in Baltimore, MD. “This is truly an historic day with the birth of a completely new Internet-based business model that alters the dynamics of the traditional telecom industry,” explained Barry West, president of Sprint’s XOHM business unit. “Wireless consumers will experience WiMAX device and XOHM service innovation on multiple levels as the computer, Internet, telecom and consumer electronics industries converge to redefine wireless mobility.”

http://www.wimax.com/commentary/blog/blog-2008/september/XOHM-WiMAX-Broadband-Service-Debuts-in-Baltimore-0929

Xohm Could Restrict Usage By Brad Smith, WirelessWeek - October 03, 2008

When Sprint’s Xohm launched in Baltimore earlier in the week, the launch raised some questions about the future. Are there usage restrictions? Are there more devices coming? What about long-term pricing? Where and when will other markets launch?
Atish Gude, senior vice president for mobile broadband operations for Xohm, answered some of those questions Thursday in his keynote to WiMAX World 2008. Others didn’t get answers.

http://www.wirelessweek.com/Xohm-Restrict-Usage.aspx

Alvarion Notches WiMAX Win in the US Heartland with Wisper

Midwest based Wisper chooses Alvarion to supply a dual spectrum WiMAX deployment in both 2.5 GHz and 3.65 GHz. In what is the first dual-frequency deployment of WiMAX radios in the US, Minnesota-based Wisper chooses Alvarion to supply both a 2.5 GHz licensed spectrum solution and a 3.65 GHz lightly regulated spectrum solution.

http://www.wimax.com/commentary/blog/blog-2008/october/alvarion-notches-wimax-win-in-the-us-heartland-with-wisper

DCT/Weissberger Opinion:

For a long time, mobile WiMAX was said to be the first 4G like mobile broadband service with a 3 or 4 year lead time over LTE. However, that window of opportunity for WiMAX is shrinking fast, as the WiMAX commercial rollouts have been delayed while carrier LTE plans and progress have accelerated. There seems to be much more telco focus and endorsement of that technology then WiMAX is enjoying, especially among Tier 1 mobile carriers.

Conclusion:

So it appears mobile WiMAX is being squeezed into a small niche market in developed countries like the U.S. and Europe. In the U.S. we observe expanding WiFi hotspots and WiFi based fixed broadband access putting severe cost pressure on WiMAX. With the financial crisis, how will WiMAX providers justify the high build out and deployment costs when they will have to charge very low rates to compete with free (or almost free) WiFi? What about the cost of mobile WiMAX CPE, especially on PDAs, smart phones, gadgets, etc when WiFi is already built into those for almost no cost?

At the same time, the lead time mobile WiMAX has over LTE deployments is shrinking fast. So where does that leave the market for mobile WiMAX? We have long stated mobile WiMAX would be predominantly used for fixed wireless broadband access in developing countries (without wireline infrastructure) and for DSL substitution in rural areas that can not be cost effectively serviced by DSL. Our opinion has not changed based on this week’s breaking news and conference reports. We also do not see any progress on the "Internet in your pocket" type of Mobile Internet Devices (MIDs) that Intel talked about at our ComSoc SCV January 2008 meeting.

Do you agree with this analysis or do you have a different opinion?

Popularity: 14% [?]

Jeff Gardner, President and CEO of Windstream Communications, opened his keynote speech at U.S. Telecom’s Executive Business Forum with a note of appreciation to US Telecom for getting behind what he termed, “credit stabilization legislation.” These opening comments set the theme for his talk, which was primarily about the financial condition of his company. In doing so, he provided insight into Windstream’s thoughts on the basic business, but also on topics such as wireless and IPTV.

Gardner spoke of the transformation of Windstream Communications from a telephony-based to a broadband-centric company. As proof points, he cited metrics that showed growth in broadband customers from 81k to 934k from 2002 to present. Revenues have increased from $3.1 to $3.21 billion in that same period, which is remarkable given the ongoing voice line loss of approximately 5% per year.

Windstream was born out of a merger of Alltel’s wireline properties together with those of VALOR Communications and instantly became a top-ten telco. It is primarily a rural and suburban carrier with about 20 access lines per mile. Still, they are facing strong competition, particularly in their suburban areas, as evidenced by the fact that 50 to 55% of their markets have voice competitors and 80% of their markets have broadband competitors.

Despite this, OIBDA (Operating Income Before Depreciation and Amortization) is at 53% and Gardner indicated that the dividend was safe and, at the time of his speech, was yielding 9%. He indicated that only 15% of Windstream’s revenue results from regulation (e.g. High Cost Fund, Switched Access, etc.).

Gardner said that there are multiple secrets to Windstream’s success, including aggressive marketing at the local level. Windstream staffs at the local level and targets its marketing efforts to particular markets, as opposed to one-size-fits-all, national programs.

They are expanding distribution channels as well and are finding success in marketing to MDUs – some of Windstream’s college towns have 30 to 40% of their residences located in MDUs. Approximately 10% of their sales are coming from retail channels. Gardner suggested that they are making big investments in their save desk; they have saved some 50% of customers who were about to defect to a competitor.

He spoke of the importance of offering products that customers want. As an example, they created an offering called Greenstreak; which is targeted at those people who are wireless-only customers. Greenstreak is a broadband product which provides a metered voice line (primarily for emergencies). They have not seen cannibalization of revenue from higher priced tiers as they have carefully targeted this offering.

One of the offerings Windstream won’t be providing anytime soon is wireless, especially as an MVNO. Gardner, who has 20+ years of wireless experience, said that Windstream could not see a path to profitability for a wireless offering. He said it was very difficult, if not impossible, for a rural telco to be competitive in the wireless space.

He had similar thoughts about building out a traditional IPTV infrastructure and IPTV does not appear to be in their video plans in the near-term. With that in mind, he is very pleased with the performance of their digital video offering via their partnership with Echostar/DishTV and called it a long-term strategy. He said that they are paid in the millions of dollars per quarter in upfront commissions, plus ongoing fee for billing and collections for their 231k video subscribers.

When asked who owns the customer, he admitted that, at this point, the customer is pretty much DishTV’s. He hinted that this could change as the rollout of a hybrid satellite/on-demand via broadband offering (expected in Q1 2009) will allow much more customization of the product for Windstream.

This is consistent with their focus on enhancing the broadband experience of their customers. Approximately 85% of their customers can receive their 3 Mbs tier, 40% can receive 6 Mbs and 22 to 25% can receive 12 Mbs. To increase the value of this bandwidth, Windstream has is either offering or planning to offer services such as tech help, home network VOD and security services.

He suggested that one way to monetize its broadband infrastructure is through, “Consumer preference advertising.” This is the type of targeted advertising that has been at the center of controversy in Washington. Gardner pointed out that the industry has to figure out how to add this revenue stream to their portfolio. He believes that targeted advertising ultimately provides a better experience for the consumer, as they will receive advertisements they want to see and implied that the new advertising revenue streams will effectively subsidize consumers’ broadband subscriptions.

Finally, Gardner suggested that Windstream is well positioned for further merger and acquisitions with other telcos. He warned that the ability to enter into such transactions will be slowed somewhat by the credit markets and to not expect anything for 12 to 24 months.
 

Popularity: 17% [?]