Disruptive Analysis has recently published an update of its June 2014 report on "Non-Neutral Mobile Broadband: New Models for Monetisation"
It updates and extends the model for mobile data revenues worldwide, for both traditional and new forms of charging. It also analyses the impact of the Apple SIM, mobile data encryption (including SPDY), zero-rating, paid-peering, new vendors and other recent developments in regulation.
The baseline forecast for global mobile Internet access is $354bn by 2019. New business models such as "sponsored data" or "paid priority QoS" might add another $19bn incremental revenue - but may well cost more than that to enable, deploy and market. The report analyses more than 15 different policy use-cases, such as sponsored advertising, single-app dataplans, enhanced MVNOs, and IoT-related QoS.
Despite developing markets having more lax rules on neutrality, the bulk of the "enhanced monetisation" opportunity (2/3rd) is in North America and Europe.
In other words, for mobile, all the arguments about Net Neutrality (or Non-Neutrality) are largely a waste of time and effort in terms of new revenues, justification of 4G/5G investments and so on. The telco industry's voluminous research papers and theoretical models, from assorted academics, economists and consultants, fail to understand the practicalities involved - technical, commercial alike. It's a set of straw-man arguments.
The concept of two-sided markets applied to mobile data traffic - whether "sponsored" by content companies, or "prioritised" using QoS, simply doesn't fly in the real world. The academics ignore the realities of mobile application development, behaviour & perception of users, role of WiFi, encryption (see below), recalcitrance by smartphone platform providers, lack of willingness-to-pay and ability-to-bill, and about a dozen other issues.
In a nutshell: If mobile operators can't justify investing in 4G and 5G on their current trajectories, then changing the law (or preventing Internet regulation) isn't going to help. There is very limited money in "application-based" business models - except (ironically) zero-rating of certain apps' traffic, which seems to encourage new sign-ups or switching, albeit without any extra revenue from the Internet companies. Some very low-end users are adopting restricted plans for single applications or a curated selection, but as a general rule "anybody who can afford the whole Internet will not be satisfied with just half of it".
Mobile operators would be better off switching money away from lawyers and lobbyists, and towards genuine service innovation - or (as is actually happening) either consolidation, or just getting on with building networks and selling access with decent pricing and tiering, differentiating on coverage, speed, customer service, devices, bundled content and maybe time-of-day or location-specific plans.
The obsession with application-based charging models is mostly driven by DPI and policy vendors - there is very little (if any) demand from application and content players for prioritised QoS or sponsored data. This is critically important, as attempts to "non-consensually" filter or modify Internet traffic by application (blocking or "negative discrimination") are leading to a huge rise in encryption, also catalysed by surveillance fears.
Some mobile networks now have >50% encrypted data traffic, and that is inexorably rising as websites switch to HTTPS or (in future) SPDY or similar variants in default-encrypted HTTP2. The industry's attempts to halt the spread of crypto are likely to fail - the "Open Web Alliance" seems to be too little, too late, and over-focused on proxies which are intended to optimise telco intervention opportunities, rather than fix specific problems. The new report update gives a full analysis of where the encryption debate is likely to end up.
Report purchasers will get both the original full 150+ page 2014 report [details here] and also the new 35-page update document. Those buying the Corporate licence will also get a free one-hour conference call with Dean Bubley, the report's author, to discuss the findings in detail.
Payment is either with the links below (Paypal / Credit Card) or via bank transfer & invoice (contact information AT disruptive-analysis dot com)
For online purchasers, the PDF document will be sent by email, typically within 24hrs of receipt of payment, although sometimes travel schedules may mean a small delay. Please include company name for licence purposes, and VAT number for EU purchasers.
NOTE: PAYPAL's CARD PAYMENT SYSTEM CAN BE TEMPERAMENTAL, IF USED IN A BROWSER ALREADY ASSOCIATED WITH PERSONAL PAYPAL ACCOUNTS, OR WITH SOME CORPORATE CARDS THAT CANNOT BE USED FOR OVERSEAS PURCHASES. PLEASE EMAIL INFORMATION at DISRUPTIVE-ANALYSIS dot COM IF YOU HAVE PROBLEMS
It updates and extends the model for mobile data revenues worldwide, for both traditional and new forms of charging. It also analyses the impact of the Apple SIM, mobile data encryption (including SPDY), zero-rating, paid-peering, new vendors and other recent developments in regulation.
The baseline forecast for global mobile Internet access is $354bn by 2019. New business models such as "sponsored data" or "paid priority QoS" might add another $19bn incremental revenue - but may well cost more than that to enable, deploy and market. The report analyses more than 15 different policy use-cases, such as sponsored advertising, single-app dataplans, enhanced MVNOs, and IoT-related QoS.
Despite developing markets having more lax rules on neutrality, the bulk of the "enhanced monetisation" opportunity (2/3rd) is in North America and Europe.
In other words, for mobile, all the arguments about Net Neutrality (or Non-Neutrality) are largely a waste of time and effort in terms of new revenues, justification of 4G/5G investments and so on. The telco industry's voluminous research papers and theoretical models, from assorted academics, economists and consultants, fail to understand the practicalities involved - technical, commercial alike. It's a set of straw-man arguments.
The concept of two-sided markets applied to mobile data traffic - whether "sponsored" by content companies, or "prioritised" using QoS, simply doesn't fly in the real world. The academics ignore the realities of mobile application development, behaviour & perception of users, role of WiFi, encryption (see below), recalcitrance by smartphone platform providers, lack of willingness-to-pay and ability-to-bill, and about a dozen other issues.
In a nutshell: If mobile operators can't justify investing in 4G and 5G on their current trajectories, then changing the law (or preventing Internet regulation) isn't going to help. There is very limited money in "application-based" business models - except (ironically) zero-rating of certain apps' traffic, which seems to encourage new sign-ups or switching, albeit without any extra revenue from the Internet companies. Some very low-end users are adopting restricted plans for single applications or a curated selection, but as a general rule "anybody who can afford the whole Internet will not be satisfied with just half of it".
Mobile operators would be better off switching money away from lawyers and lobbyists, and towards genuine service innovation - or (as is actually happening) either consolidation, or just getting on with building networks and selling access with decent pricing and tiering, differentiating on coverage, speed, customer service, devices, bundled content and maybe time-of-day or location-specific plans.
The obsession with application-based charging models is mostly driven by DPI and policy vendors - there is very little (if any) demand from application and content players for prioritised QoS or sponsored data. This is critically important, as attempts to "non-consensually" filter or modify Internet traffic by application (blocking or "negative discrimination") are leading to a huge rise in encryption, also catalysed by surveillance fears.
Some mobile networks now have >50% encrypted data traffic, and that is inexorably rising as websites switch to HTTPS or (in future) SPDY or similar variants in default-encrypted HTTP2. The industry's attempts to halt the spread of crypto are likely to fail - the "Open Web Alliance" seems to be too little, too late, and over-focused on proxies which are intended to optimise telco intervention opportunities, rather than fix specific problems. The new report update gives a full analysis of where the encryption debate is likely to end up.
Report purchasers will get both the original full 150+ page 2014 report [details here] and also the new 35-page update document. Those buying the Corporate licence will also get a free one-hour conference call with Dean Bubley, the report's author, to discuss the findings in detail.
Payment is either with the links below (Paypal / Credit Card) or via bank transfer & invoice (contact information AT disruptive-analysis dot com)
For online purchasers, the PDF document will be sent by email, typically within 24hrs of receipt of payment, although sometimes travel schedules may mean a small delay. Please include company name for licence purposes, and VAT number for EU purchasers.
NOTE: PAYPAL's CARD PAYMENT SYSTEM CAN BE TEMPERAMENTAL, IF USED IN A BROWSER ALREADY ASSOCIATED WITH PERSONAL PAYPAL ACCOUNTS, OR WITH SOME CORPORATE CARDS THAT CANNOT BE USED FOR OVERSEAS PURCHASES. PLEASE EMAIL INFORMATION at DISRUPTIVE-ANALYSIS dot COM IF YOU HAVE PROBLEMS