Daunting Digital Divide Dilemma

Digital divide daunting dilemma

Discussions on the digital divide and associated challenges have been around as long as internet. The actual definition comes in a variety of forms, the most common being lack of access to the internet. So the question becomes whether the problem is unsolvable or whether the landscape will change with mobile and cloud.

Broadband access was recently redefined in the US to be 25Mbps downstream and 3Mbps upstream. With this definition 17 percent of American households are on the wrong side of the digital divide. The number increases to 53 percent if we look at rural households alone. This definition is shaped around the insight that video will play a larger role going forward but assumes traffic patterns will remain asymmetric in nature.

With the introduction of Gigabit fiber access, segments of the market get a symmetric and even more powerful access, which creates a broader divide when looked at from an access speed perspective. The evolution to Gigabit fiber is the service proposition fixed network operators need to offer to meet mobile broadband competition.

Mobile and cloud have the potential to close the digital divide. Smartphones have potential to be the device that bridges the digital divide from a device perspective. If you don’t have broadband or a PC today, you are unlikely to get it anytime soon. According to a recent study by Pew Research, 10 percent of Americans rely on their smartphone as their only Internet access. The second challenge is what to use the smartphone for if you are not already connected. A common response for the non-connected when asked is that there is a lack of relevant applications and content.

The cloud has been instrumental for introducing apps that target a broader audience. Apps on a smartphone are easier to use than a browser on a PC as an entry point for the unconnected. With the low barriers of entry for cloud-based applications and access to crowd funding capital, we can expect to see applications targeting the niches yet to be connected. The combination of mobile and cloud is an even more powerful proposition to close the digital divide in the part of the world with poor fixed networks.

My predictions for the evolution of the digital divide are:

  • The introduction of Gigabit Fiber will create a three-tiered society divide – Gigabit Fiber, powerful copper/coax and inferior fixed access.
  • In addition to the digital consumer divide, we will see the emergence of a business digital divide – where businesses without adequate access will find it harder to thrive in an increasingly digital society.
  • Mobile and cloud will start to close the digital device gap – with a focus on applications rather than raw access speed.

Originally published on the Ericsson Networked Society blog on April 10, 2015

Advanced access, an awesome aspiration

© Peter Linder 2015 – All rights reserved
© Peter Linder 2015 – All rights reserved

The majority of fixed access networks today are upgraded copper and coax networks optimized for uni-directional data, broadcast TV and phone services. The triple-play momentum has peaked, and two-way media distribution access symmetric access is emerging. This is the first in a series of posts outlining the main drivers and access network options for different geographical locations.

The next access wave must be optimized for a world where video- and cloud-centric services shape demand for two-way media distribution access, which will be the target for fixed “broaderband” access going forward. This movement is currently restricted to parts of society and is not a universal trend.

Regulators will shift focus from universal service obligation (USO) for past services, such as plain old telephone service (POTS), TV and one-way-surfing, to universal enablement of future services. Video and cloud services will drive demand for increased upstream, as well as downstream, capabilities. Fiber and radio combinations will be the technologies of choice while business model innovation will play a central part of the access evolution. Operators face a strategic choice in either sticking to legacy access and a valuation as a utility or investing in an awesome access network and becoming valued for the growth potential.

As outlined in a previous series of posts about the future of IP video traffic, the new access networks will be driven by camera/screen equipped devices. And services will be media consumption, production and collaboration intensive.

The two-way media-centric access will emerge in different ways depending on location and network starting point. Fiber-to-the-Home is a given for access coverage build-out in new real estate areas. The reach of the VDSL2 and Fiber overbuild of the legacy copper networks can be extended to new neighborhoods. Fiber has also become the norm for connecting business buildings for Ethernet services, as well as to buildings with small cells.

The installed base of Fiber in The Loop (FITL) systems from the early 1990’s are candidates for upgrades, and the last coax drop in Hybrid Fiber Coax networks is about to be replaced with fiber. Rural/urban copper access in unprofitable areas can be replaced with Fixed Wireless LTE access. The copper networks in villages and small cities can be extended with improved video capabilities. All these access upgrades will be made with the objective of providing the best feasible two-way media distribution access in any given area.

My predictions for the fixed broaderband access network evolution across these areas will be exploited in detail in future posts. My top-level predictions are:

  • The operators that invest in an aggressive access transformation strategy can, should and will be valued for growth potential rather than cash-flow and dividends.
  • In addition to market forces, national broadband plans and regulations play a key role in defining the cornersstones of these new capabilities for the benefit of the whole society.
  • Seven to nine deployment scenarios are required to support the needs of a given country, in order to secure that no digital divide emerges as a societal divider

Major messaging milestone

Blog 100 - lit candles 16x9This post is my 100th contribution to Ericsson’s Networked Society blog. It has been an exciting journey worth a few reflections.

In the three years since my first post, we have seen a strong acceleration in the development of the Networked Society. Out of the seven areas I initially decided to focus on – society, industries, devices, users, video, networks and business models – I have been most surprised by the society, industry and business model areas. Particularly, the momentum for societal change in urban areas and the role and reach of the ICT industry in creating new city concepts is fascinating.

In fact, the evolution of almost all industries is being driven by a paradigm shift to “smart” concepts, with innovation and a determination to leverage technology developing at a pace we have never seen before. All industries are becoming tech dependent, and only the scarcity of science, technology, engineering and math talent is going to slow the pace of evolution in many industries.

But for all the tech innovation going on, I think the largest and most important innovations are taking place in the business model arena – including the radical change in how we purchase physical and digital products/services. Who expected Uber market capitalization in 2014 to pass that of most of the other rental car companies combined?

This has also been a personal journey. When I started as a Networked Society evangelist, my knowledge of social media for professional use was very limited. I used LinkedIn as an address book, did not have a Twitter account, had never written a professional blog post and had no idea what Klout was all about. Since then, I’ve really enjoyed experimenting with content in different formats in order how to reach and then influence an audience. Blogs are a great way to lay out a short story, but it is hard work to attract readers on a recurring basis. The visual component of a blog is also just as important as the text. On Twitter, tweets with links to great content also work best with a good visual attached. And tweeting in a fun and positive tone is the only way stay out of trouble.

Video is also quickly becoming our new slides, i.e., a universal information bearer. And it is the short video format that captures the most attention in the hyper information society. So consider turning more and more of your stories into short videos. All will not go viral, but they will take your message further than text and pictures will do

To sum up my first three years on the blog, here are my personal favorites from my first 100 Networked Society posts:

10. Seventy seven society sketches & statistics – an experiment with holistic format for describing a broad range of market trends
9. When will wireless WOW world’s workers – guestimates of where the future of the mobile enterprise future is headed
8. Creative capillary connectivity – the new type of connectivity the world is about to explore
7. Mchn-Maaachiiine-Mchn, middle man matters – a reflection about how little society in general knows about the “2” in M2M
6. Fantastic FourK future – a reflection on the future of video provided in a video format
5. Waikiki welcome workation world – changing both work and vacation life, and making them hard to separate
4. Significant society shaping started – the very first post, and still very relevant.
3. Little ladies love laptops & LTE – how the youngest generation is affected by tech development
2. Time to turn to third trajectory – new exciting business models for network connectivity beyond voice and data
1. Nascar nights, not normal network needs – an early one on the networked arena experience. The story was later turned into an extreme project video.

I look forward to continuing to engage with you both here on the Networked Society blog, as well as on the recently started Ericsson Cloud & IP blog.

Lifelogs Log Long Lovely Life

© Peter Linder 2014 – All rights reserved
© Peter Linder 2014 – All rights reserved

Lessons from life logging – my first months with photographic memory – The Networked Society Blog

According to design consultancy Fjord, there are 27 different types of wearables you can be wearing right now. One type of these wearables – a life-log – equips you with a photographic memory – one separate from your smartphone and that works without pushing a button.

Life-logs are used for a new phenomenon called life-logging. A small wearable camera captures your activities during the whole day. Pictures are taken automatically; the one I use takes one every 30 seconds, or around 2000 in a day. Geo-tagging of all the pictures gives you memory about what you saw where. Cloud-based storage of all the pictures helps to merge them into different “contexts” to reflect the activities you were doing. Access to the pictures from a mobile app allows you to post the desired ones to your social media channels. 2014 is the year when Autographer, Lifelogger, Narrative, Parashoot and Sony are introducing their first variants of life-logging cameras, and we can expect variations on the concept outlined above.

Here are some experiences from my first few months with a life-log in my daily life. The overall concept of life logging also includes a variety of parameters captured by fitness trackers and smart watches. This post was deliberately focused on the photography aspect of life logging.

We are still in the early stage of exploring how life-logging will be used for private and professional purposes. I have not yet figured out all the applications for a life log, and I am not even close. But wearing a life log triggers questions from people around you. What is that device? Which privacy rule applies? Will you use it mostly for vacation or in daily life situations? What type of pictures will be easier to take with a life log device than a smartphone or a dedicated digital camera? One clear application area is to capture memories when you’re traveling and exploring either a city or nature, as the collection in this blog picture (all taken with a life log)

During the first week and months, you will learn a few lessons. Life-logs work best outside, since the camera does not come with a flash or adjustments of the ISO levels. It provides the best picture angles when attached to a dress shirt or polo. When using T-shirts, it tends to shoot too much downward. Substantial volumes of pictures are generated daily. Turn it off when when doing the same thing for a long time. Enjoy the movie scroll features that allow you to scan through material quickly, as a library of interesting moments to share or remember.

My predictions for the future of picture life-logging are:
· Life logging has broad private and professional application potential, most of them still to develop as we put the devices in use.
· The cloud synchronization could be simplified greatly when done via Bluetooth through a smartphone on the go. This will be a natural evolution for next generation devices.
· The picture volumes are substantial, and life logs could easily become a substantial driver of traffic from you towards the network/cloud.

Creative Capillary Connectivity

© Peter Linder 2014 – All rights reserved

Short-range radios today play an essential role in connecting smaller devices to our mobile phones. We can expect a lot of new applications leveraging the Bluetooth Low Energy and Low-Rate Wireless Personal Area Network standard (IEEE 802.15.4) with connectivity through a smartphone or wireless access point – also known as a capillary network. This concept is emerging to address the unique network needs that many new applications will have.

The obvious driver for introducing short-range radio is battery life and the need to avoid cabling. Many emerging devices, such as sensors, cannot be charged as frequently as smart smartphones and need to be run using a zero-maintenance model (e.g. deploy and forget). The ability to introduce a wireless device with no or low-charging needs enables a whole range of new industrial and consumer applications, like sensors (temperature, humidity and pollution), alarm generators (windows, fire) and smart control and consumption (gas, water, electricity).

This new application paradigm will be cloud based, with devices running close to the customer while the back end will run in the cloud. Capillary network connectivity provides an end-to-end connection between the device and the cloud. This connectivity bridges the short-haul private area network with fixed or wireless access, metro transport, and the cloud. As the primary target is commercial applications, the value of capillary connectivity will be application dependent with little correlation to the amount of bits used.

As part of the zero-provision paradigm, the applicable devices will rely on automatic discovery, directory and provision mechanisms provided by the network and the cloud. A key part of the capillary network concept is automated provisioning end-to-end. These connections also need to provide the right security levels for the application at hand. This can be achieved by leveraging existing security mechanisms in mobile networks.

My predictions for the future of capillary networks are:
• Devices connected through smartphones or access points with low-power radio is a rapidly growing network application area
• The ability to provide end-to-end support, to devices with mobile-like capabilities through capillary networks, is crucial for broad industry acceptance.
• Zero maintenance is a vital requirement for both the powering and provisioning operations of these new devices.
• Operators can introduce new revenue generating capillary connectivity services tailored to application needs.

Powerful performance play provide profits

Powerful performance play 16x9

Making real performance improvements in the network is an ever-more-important issue on operators’ agendas. This is being driven by three strong trends in the market: word-of-mouth marketing, the growing importance of Net Promoter Score and user selection criteria for mobile services. As a result, we are entering an era with clearer correlations between real performance and profit margins, one in which you don’t want to be left behind.

Wharton@Work recently presented a study that showed that 84 percent of consumers trust advice they get from friends and family. This is just one example of how word of mouth in marketing has never been more important – a reality that any network provider must consider. This trend is driving the current focus on Net Promoter Score as the most important KPI for network operators, with network performance also the most important user criteria for staying with or leaving a given network provider.

With this in mind, it is time to consider alternative views on the value of real performance in the network – one in which profits can be derived from how you and I talk about the performance of our operators’ networks.

A new study, “The value of performance”, conducted in collaboration with Columbia University has analyzed the correlation between increased investments in network performance and enhanced profits. One of the key observations in the study is the correlation between increased capacity and market share gains. A one kbps increase in downlink speed resulted in 0.012 higher market share the following quarter. Another way of looking at this opportunity is to see what a 10 percent yearly increase in capex would generate in terms of increased profit margins. In both the US and Brazil, a 10 percent increase in capex has been found to deliver 5 percent higher revenues and a greater than six percent increase in EBIDTA.

With a future around the corner in which video barrels are going to replace data buckets as the user reference for how well networks meet their needs, we have a new scenario in the market. 50 percent of mobile traffic will be video in 2019, and 40 percent of YouTube views are mobile already today. Therefore, investments over the next three years in network performance are central to growing market share and profits. There were doubts about the mobile broadband business case in 2006, and the market adoption of smartphones then took us with storm. There might be doubts about the business case for investing in network performance in 2014, but it will be a risky decision to bet against it.

My predictions for the future of a performance- and profit-correlated future are:
• Network performance will continue to be the number one selection criteria for users, and will only grow in importance.
• Network performance will only grow in importance, driven by video-, VoLTE-, mobile enterprise and M2M-driven applications.
• The most valuable conversations about network performance will take between you, your friends and your family. Performance is and will be an easy topic to discuss as a personal experience.
• Network investments focused on performance will pay off and will be central to operator strategies.

2X @20% @20% 2020

© Peter Linder 2014 – All Rights Reserved
© Peter Linder 2014 – All Rights Reserved

The first 20 years of mobile and internet evolution was characterized by innovating for users, but this ‘smartphonification’ is rapidly approaching saturation in developed markets. However, the current growth wave is different. It is being driven by a mobile and cloud-centric evolution in which the pace of innovation is accelerating with businesses in focus. The question now is: how large can this transformation be?

The first five billion mobile users and their primary devices have been driving a significant market. The emerging mobile-cloud revolution has the potential to unlock even greater business values as enterprises transform to smart enterprises on top of the smartphone wave. So how much value might the next 45 billion devices be expected to generate? My hypothesis is that the new devices on average can generate 1/10th of the monthly revenues generated by a smartphone. Such a scenario mean network revenues could double in a mobile and cloud-centric business world by taking advantage of extended network capabilities to support the new devices?

With the adoption of new network architectures we will see a significant reduction of elements in the networks as we move towards optimized, virtualized and software-defined networks. Considering the fast pace of evolution in computing and storage technologies, it is possible to envision a scenario where a future network can be run with 20 percent of the network elements deployed today. The net result of this is that powerful programmable platforms are coming in, and legacy network elements are being retired.

The massive growth in connected devices, connectivity types and new business models call for a very high degree of automation of network operation procedures. This affects all steps including configuration, provisioning, monitoring and charging and billing. In addition, businesses expect the network to be agile, with the ability to serve their changing needs with on-demand service delivery capabilities. Imagine if it was possible to run the network with a significantly lower staff, say 20 percent of current levels – and require a much different skill set from employees.

A vital industry question is how fast this transformation will go? The smartphone wave and the very fast ramp up that came with it was a surprise to many network operators. Given the very strong momentum among industries in adopting mobile-first strategies for transforming their operations, fast and large-scale adoption for the mobile and cloud-centric wave is also likely to be very strong.

Imagine if already by 2020, the new network and new operational models can be fully deployed by operators. In addition, legacy networks would need to be phased-out gradually and a reality by 2020. Businesses could be fully mobilized and leveraging the mobile and cloud-centric advancements with the network playing a key role in the middle.

Here are my predictions regarding the size of these transformative forces:

* Potential revenue growth is tied to both customization of network services and business model innovation, in order to secure that value is both created and captured.
* The possible reductions in network elements and staff are tightly coupled to the ability to phase out the old in addition to building new. Expect the sunset of legacy networks to be harder than the sunrise of the new.