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Networks of the world, 2019. A first draft.

4G will be almost everywhere with peak speeds often over 100 megabits. 100 megabits will be slow for wired connections in the developed world. Most developing countries - except China - have very few landlines and it's not clear wireless will have enough capacity for much video over the net. Prices in strongly competitive markets will be flat to down because the costs of modems, Internet transit, and nearly everything else are going down. In the more common weakly competitive market, like the U.S., prices will creep up unless the regulator is strong.

Two billion more people will be connected to the net as LTE phones drop under $50. Africa will have more Internet connections than the United States by 2017, more than the 315M population of the U.S. India is growing almost as fast, and China already has twice as many connected as either the U.S. or Europe. The rich countries are today 40-45% of connections; by 2019, that will be down to 35-40%. 5% to 25% of homes will be screwed as rural areas have limited coverage and competition.

10% Speed DOCSIS 3.1 to Australia in 2016

Vombatus ursinus -Maria Island National Park wikipedia Australia's NBN damaged
by wombats and politicians As gigabits deploy, why throttle down to 100 megabits? Since 2005, DOCSIS 3.1 was designed to go to a gigabit and more, shared. But NBN will only offer 100 megabits when it rolls out in a year or two, NBN CTO Dennis Steiger tells Alan Breznick at Light Reading. The equipment cost for a gigabit will be similar to the 100 meg cost. Next year, most cablecos will begin using gigabit-capable modems for new customers whether or not they have gigabit service. The cost to the carrier of the extra bandwidth would normally be less than $2/month/customer, often far less.

Alcatel's Weldon: Governments are splitting the broadband market. We get 11% in China

Confirms cartel. Weldon notes "China allows foreign vendors to claim a maximum 11% of the wireless market; Alcatel-Lucent and Nokia each have an 11% share." (Jessica Lipsky, EE Times http://bit.ly/china11share) Whether China will allow the merged company 22% or only 11% is a major factor in the future success of the company, but nothing is decided. Lipsky quotes Weldon, "I think what is definitely true is we will both be stronger in wireless in either company. We’re hopeful that means we can maintain the aggregate market share and not have that renormalized.”

Fearing bankruptcy of Alcatel and Nokia, the EU threatened high "dumping" tariffs on China's Huawei and ZTE. The Chinese were taking market share and driving down prices. The threat was highly credible. The U.S. had blocked Huawei, citing "security" but without any proof. EU Trade Commissioner Karel DE Gucht went public with the statement below.

In 2014, the tariff investigation was put on hold. The industry rumor was the governments reached a behind the scenes agreement on market share. China allowed Alcatel and Nokia a share of the Chinese market and Huawei/ZTE accepted a limit on their market share in Europe. Equipment prices went up.

Adtran hurt badly by loss at AT&T, slowdown at DT

NFV, SDN starting to inspire white box fears. (Update 4/31 Adtran's stock climbed and Calix plummeted, leaving them both about the same % lost.) Adtran's stock fell 10% Wednesday, about $100M, to the lowest level in five years. Tom Stanton's company was hit hard by disappointing sales to two major customers. Quarterly sales were slightly down, partly explained by the euro falling against the dollar. Interim CFO Interim CFO Mike Foliano didn't warn the street of the sales decline. The analysts expect a wink and nod in advance with inside information.

Adtran remains a capable and profitable company but the market has been treating it as a growth stock. Telecom is not a growing business. Nearly no company except Huawei has seen sales increase.

AT&T canceled a project to upgrade some of the old BellSouth territory. That's not much of a surprise; AT&T's $4B capex cut this year is the largest of any telco over the last decade, anywhere in the world. Craig Moffett for several years has been pointing to how hard Randall has to work to cover the dividend. Over the last four years, dividends have actually exceeded earnings per share.

Deutsche Telekom is trying to weasel out of their repeated commitment to meet the EU 100 megabit speed with vectoring to 24 million homes in 2016.

Gig for $25/month in Bakersfield, CA

Attractive real estate come-on. Rent any of 224 apartments in a new real estate development and automatically get connected at a gigabit. Natural prices for a gigabit are $40-$100, Google's $70 +- $30. Gigabit Internet is a very attractive amenity. One proponent believes "fiber to the home increases the value of a $300,000 home by $5,300 to $6,500," (below)

A $40/month discount is a modest marketing concession on apartments that rent for $1100-$1400. Bakersfield is 120 miles and 3 hours by train north of Los Angeles. It's a desert town dependent on imported water and probably a hard place to sell apartments in a drought.

Randall Stephenson literally 10 years ago told the street that AT&T was already installing fiber in all new developments. After all, glass is cheaper than metal. It was the right thing to do even back then but in practice AT&T was doing nothing of the sort. Carriers without high speeds are just leaving themselves open for folks like this to jump in.

George Soros has put £50m behind Hyperoptic, an English company doing the same.

$40/port VDSL Baby DSLAMs with new Lantiq system

Cheap 8 50-100 megabits so cheap it can go everywhere. Lantiq's new VINAX dp8 is designed to lower the price of an 8 port DSLAM to $20/connection. Include the hookup cost and it's only about what the customer pays in a single month. Lantiq says similar units today cost more than twice that. The nominal speeds in the lab are 200 down, 100 up; 50+ megabits down, 25+ up will often be practical for 500 meters. In small buildings, performance will be much better, often 100/50. While larger buildings can be served with multiple cheap units, the interference in the binder becomes a crucial factor. With vectoring, the rate reach would often double, but that's a more expensive and complicated system.

The unit is based on their existing 8/16 port VDSL chips, controlled by an inexpensive network processor Lantiq originally designed for their GPON system on chip. Eliminating the high-performance network processor simplifies design, further reducing cost.

Death of Gigaom: This one really hurts

NY Times, WSJ, WP: You need to make offers to Stacey at staceyhigginbotham dot com, Kevin Fitchard at gigaom.com (or via me if that email is shut down.) In the day, Om Malik and Saul Hansall (NYT) were the only reporters who consistently beat me to major broadband stories. Soon after Gigaom began, Saul was disappointed. We expected Gigaom would do well and now Saul would never have the chance to hire Om for the Times. To a large extent, Best Bits in the Times was based on what Gigaom was doing.

"Just watch. Stacey is going to be incredible," Om said to me when he hired her. He was right. Kevin Fitchard was in a tough spot just before Stacey & Om hired him, virtually singlehandedly trying to report every story in the business as Telephony dropped almost all the reporters. He remained productive at Gigaom while dramatically upping his game.

10 Gig - repeat, 10 gig - to 800K apartments in Hong Kong

Bruce Lee's Hong Kong statue Soon, the cost to the telco for 10 gigabits will be little different than the cost of ten megabits. 1 gig service over fiber costs the carrier very little more than 10 or 100 megabits. Equipment going in today is almost all ready for a gig. There's rarely any savings using obsolete gear that tops out at lower speeds. PCCW's Hong Kong telco has now upped the ante, bringing a ten gig - presumably XGPON - to all 800,000 fiber customers. Trials have begun and they expect to cover nearly all 800K by the end of 2015.

Hong Kong consumers are among the luckiest in the world. Despite wages often as high as the U.S., prices both for wired and wireless service are typically half what they are in the states. Pricing for the gig service isn't announced and will be determined by what the market requires. Even with the low revenue base, HKT is going fiber or vectored VDSL to nearly all the city while investing less than 10% of revenue. Their LTE is going to 300 megabits.

Hong Kong HKT's cost should be somewhere between $400 & $1,000 per home - probably closer to $400.

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