Fast Net.news

Profit almost disappears at China Unicom MTW

Shows the danger of underinvesting when competitors are upgrading. Unicom is the small carrier in China, with only 264M mobile and 75M broadband subscribers. In 2016, they added 11M mobile customers but only about 2M broadband. China Mobile's 1.3M LTE cell sites and massive fiber home build is pulling ahead. In 2016, they added 27 million mobile subs (to 849M) as well as 22M broadband (to 77M.) China Telecom has been adding LTE towers at a rapid pace. In 2016, China Telecom added 17M mobile (to 215M) and 10M broadband (to 123M.)

China Unicom did not match the investments of the others. They had no choice but to cut prices & raise marketing expenses. Apparently, the Chinese market knew this profit warning was coming. The stock was not forced down. (This week, BT was down $8B and Verizon down $10B.) I wasn't particularly surprised either. I have been watching the nearly incredible build by China Mobile. China Telekom responded but CU held back. It looked like they were burying their heads in the sand.

I do not pick stocks, especially from 12,000 miles away and without a good knowledge of the market.

$50/customer upgrade to DOCSIS 3.1 includes gig upstream at Vodafone

Altamira-bison-180 So cheap, all of cable will go DOCSIS 3.1. DOCSIS 3.1 is designed to do a gig up and down, but only the downstream is widely deployed. Gig downstream cable is deploying rapidly, with Comcast and Cox expecting to cover 50% of the U.S. in the next 24 months. Until now, cable upstream doesn't match fiber or G.fast, running 20-35 meg at best. Upstream DOCSIS 3.1 is not yet deployed anywhere, although Comcast has announced they will begin in 2017. Others will wait for full duplex. Vodafone in Spain now has promised a gig across their entire network by the end of 2018, including upstream.

Until now, cable upstream doesn't match fiber or G.fast, running 20-35 meg at best. Upstream DOCSIS 3.1 is not yet deployed anywhere, although Comcast has announced they will begin in 2017. Others will wait for full duplex. Vodafone in Spain now has promised a gig across their entire network by the end of 2018, including upstream. I wouldn't be surprised if the pr is running ahead of the likely deployment and that the upstream is a little later.

Vodafone Spain is built around the former ONO, purchased by Voda in 2014 for €7.2 billion. It has 2.1M cable customers while passing 9.5M.

Altice/Cablevision replacing entire DOCSIS network with fiber home

First major cableco to make the switch. The cost will be high but investors seem happy. The stock went up in a down market. I found the move particularly surprising because Altice is very heavily leveraged after paying well above market for Cablevision and others. Patrick Drahi is of the John Malone school: high leverage and risk, GAAP losses, prayer. That is working well in today's low interest environment.

Other cablecos trust DOCSIS 3.1 to remain competitive with fiber. Comcast is offering a gigabit downstream of DOCSIS 3.1 to millions of subscribers, with hundreds of megabits of DOCSIS upstream beginning in 2017. Cablevision faces Verizon FiOS, still America's best network although getting a little long in the tooth. I suspect Altice expects savings from a new, all IP network and ultimately lower operating costs. Fiber will enhance their strong share of the many businesses in Long Island. Once the decision was made to go all fiber, offering 10 gig was logical. The difference in equipment cost is small.

Liberty Global is using fiber home for as much as 2/3rds of the new homes they are passing and many other cablecos are installing more fiber. As far as I know, Altice is the first large cableco to rip out a DOCSIS network and bring in fiber home. (Calix is providing gear for some small cablecos.)

Altice wants to IPO the U.S. division, cash out a portion, and use stock to acquire more companies.

KT Giga to 9M Korea homes, Spain, Turkey

Moving from G.hn to G.hn Wave 2 at "up to 1 gig." G.hn has grown beyond home powerline into a legitimate contender for in-building broadband. KT, using Marvell chips has been offering hundreds of megabits since late 2014. KT reaches several million apartments now and intends to cover 95% of Koreans who can't get fiberhome by the end of 2017. That puts G.hn a year or more ahead of G.fast.

KT, working with Ubiquoss and Lightworks, has begun exporting the system. They have a deal with Turk Telecom and a demonstration building in Barcelona near Mobile World Congress. As you can see from their pr below, they plan a strong export campaign; the picture is the cover of their slick brochure.

G.hn is not as complex as G.fast with vectoring and many other features. That means it's simpler and cheaper. Chano Gomez of Marvell believes Wave 2 can match today's G.fast chips. I haven't seen test data from an independent source.

Upstream 300 meg+ in 2017 at Comcast

Jackie-Joyner-Kersee-Comcasts-fastest Jackie Joyner-Kersee, Comcast's fastestJorge Salinger is ready as soon as the vendors can deliver. Casa Systems has already demonstrated 400 megabits upstream and will soon show 600 megabits. They will only offer gigabits downstream in 2016, Daniel Frankel reports, “because 3.1 was not available in upstream. ... I think it’ll be in 2017.” Comcast's $70 gigabit downstream is available today in parts of Chicago, Nashville, and Nashville with a promise to cover over 40M homes by 2018. The upstream is limited to 35 megabits, but that's about to change.

I had heard from cable people that they would wait for Full Duplex before upgrading speeds, so this is good news. Full Duplex - sending both upstream and down in the same spectrum - is an active project at CableLabs but likely 3-7 years from volume deployment. Comcast instead will use dedicated spectrum for upstream, possibly eight 6 MHz channels. AT&T is serious about adding 12M "gigabit" homes, using GPON and G.fast, and Comcast wants to be able to match the gigabits soon available to about 30% of the U.S.

Cable systems are about to get a massive capacity improvement with software defined CCAPs running on easily upgradable hardware. Harmonic has just entered the market with a software-defined unit running on a common, off-the-shelf Intel PC.

$0.002/gigabyte Backbone/transit cost - and up

In large volume, 2/10ths to 5/10ths a cent. That suggests large ISPs pay something less than a penny per gigabyte. If you use 139 gigabytes/month, that costs your provider something like $1/month. (Doubling transit costs gives you a rough estimate of the cost to the carrier, which also has to carry the bits to your local exchange.)

Akamai recently bid "$0.002 per GB delivered," according to Dan Rayburn, a streaming media expert I trust. Dan notes that's the lowest price he's ever seen for a content delivery deal, and other recent bids have been as high as half a cent. Prices have been driven down by large customers, including Apple, doing their own content carriage. Amazon is in the game today as well.

Hurricane Electric is advertising Internet transit at dozens of locations for $0.20/Mbps, which works out to a similar price.

Australia confirms: Traffic growth is slowing down

300px Riemann Zeta Func 40% last two years, 30% expected next two years. NBN Chief Bill Morrow sees the Netflix surge passing and future growth slowing. The average NBN user draws 131 gigabytes/month, reports Geoff Long at CommsDay. (Not linkable. CommsDay is an excellent news source, available only via a professionally priced subscription.)

Until two or three years ago, landline data traffic for the average user had been growing at 40% +-5% for a dozen years. Fortunately, Moore's Law has brought down the costs of the necessary components at a similar rate of about 40%. The marginal cost per subscriber per month has stayed flat at all the large carriers: About $1/subscriber/month across the developed world. Wireless growth has been similarly slowing.

Comcast promises "100% of advertised speeds, even during peak"

Tony Werner 320 Shared networks can work remarkably well. Across the U.S., AT&T, Comcast, and Verizon are in a fierce marketing battle to offer fiber to new developments. Table stakes now are a reliable gigabit network and premium TV offerings. 400,000 new apartments go up every year. They add less than 1/2 of 1% to the housing stock but are a prime growth market.

I suspect there's a slight exaggeration here, but 97-99% would make most of us very happy. U.S. & U.K. government testing (SamKnows) have long demonstrated that most cable networks are darn close to 100% delivery. In 2014, FCC tests showed 95% of Comcast customers received between 109% and 119% of advertised upload speeds.

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