As some people guessed yesterday, Verizon's "big" announcement today is that it is rolling out a 20 Mbps symmetrical FiOS high-speed service. This means the connection offers 20 Mbps rates in both the upload and download directions, perfect for video gaming or video sharing or otherwise sharing large files.
It's something that cable operators can't do, or can't do very easily on a wide scale. And Verizon clearly aims to hurt cable with this new service. During a webcast to discuss this new product Susan Retta, Vice President of Broadband Solutions for Verizon said "cable modems simply don't have upload speeds that come close to this service."
The timing is also really, really good for Verizon. Comcast is enmeshed in a controversy about limiting its customers' ability to upload content at the exact same time that Verizon is expanding upload capacity, a fortuitous contrast that is no doubt not lost on the telco (or Comcast). I even suspect that Verizon moved up its announcement to strike at its main rival while the iron is hot.
One of the first questions posed during the webcast is whether Verizon will ever cap the amount of content that customers can upload. "We don't impose caps on our subscribers," Retta said. "We intend to give them the bandwidth that they ordered and expect."
The service, priced at $64.99 per month, about $20 higher than Verizon's 15/2 Mbps FiOS service, comes with a few value-adds including an Internet security suite and 1 GB of network-based backup. It's currently available in New York, New Jersey and Connecticut but will roll out across the company's FiOS footprint eventually.
Posted by Cynthia Brumfield at 2:52 PM | Print | Comments (0)AT&T issued its Q3 07 earnings report this morning and the news was good, relatively speaking. The nation's number one telco posted undeniable revenue growth, not always a given for incumbent telcos these days. AT&T's revenues rose by 3% year-over-year and 2% sequentially to $30.1 billion.
Net income jumped 38% over Q3 06 levels and 5% over Q2 07 levels to reach $3.1 billion.
The fuel behind the growth was wireless -- AT&T posted a record-breaking net gain of two million wireless customers during the quarter, boosted hugely by the 1.1 million new iPhones sold during Q3 07. By quarter's end, AT&T served 65.7 million wireless voice customers, a 12% spike over year-ago levels.
The rise of mobile data services fueled wireless revenue growth even faster. AT&T generated $10.9 billion in wireless revenues during the quarter, up 26% over Q3 06 wireless revenues.
Another strong performer for AT&T was its multichannel video service, particularly its fiber-to-the-node U-verse TV service. During the quarter, AT&T added 215,000 net new video customers, a run-rate 79% higher than the net video adds for Q3 06 and 8% higher than the net video customers added during Q2 07. At the end of the quarter, AT&T served 2.1 million video customers representing 6.7% of its consumer household footprint.
The number of U-verse customers more than doubled during the quarter, with AT&T gaining 75,000 net new U-verse video subscribers. At quarter's end, AT&T had 126,000 U-verse customers.
Another growth segment for AT&T, broadband service, continued to post gains, although at a slower rate. During the quarter, AT&T added 499,000 net new broadband customers, a run-rate that is 10% lower than the 556,000 net adds during the year-ago quarter, but up by 14% over Q2 07 levels. At the end of the quarter AT&T counted 13.76 million high-speed customers.
The customary weakness for the telco (and all incumbent telcos), continued erosion in local access lines, continued during Q3 07. AT&T lost 1.21 million local access lines during the quarter, up from a loss of 1.13 million lines during Q3 06.
During the earnings call, EVP Rick Lindner sounded optimistic about the company's ability to continue growing its wireless business even if the scorching growth rate of this quarter isn't repeated. "We would expect some slowing in terms of penetration but still a very strong market in terms of gross adds and a very competitive market in terms of handset pricing and devices," he said.
Interestingly, Lindner wouldn't answer any questions about the rumors that AT&T is about to buy its DBS partner, EchoStar. He did, however, note that AT&T is on tap to make a decision by year-end about whether to stick with only one DBS partner (as it stands now, AT&T has deals with both EchoStar and DirecTV, mostly as a result of the company's acquisition of BellSouth). "As those contracts [with EchoStar and DirecTV] expire…we will announce plans going forward. I would expect that to occur at the end of this year, beginning of next year."
Finally, Lindner provided background details on a massive U-verse TV outage that occurred this weekend. The fault stemmed not from the controversial architecture of the U-verse network, but from a software glitch. " The U-verse outage was caused by a software load put into our systems on Saturday night and that software load unfortunately impacted the database that tracks and maintains the programming packages that customers are subscribed to," he said.
Service was fully restored by late-Sunday and customers are getting credits to compensate for the inconvenience.
| AT&T Key Statistics | |||||
| 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | |
| Total access lines (mil.) | 67.53 | 66.47 | 65.43 | 64.08 | 62.87 |
| Net access line change (mil.) | (1.13) | (1.06) | (1.04) | (1.35) | (1.21) |
| Retail Consumer Access Lines | 38.74 | 38.23 | 36.70 | 36.40 | 35.81 |
| Net access line change (mil.) | (0.52) | (0.51) | (1.53) | (0.30) | (0.59) |
| Total Broadband (000) | 11,604 | 12,170 | 12,861 | 13,300 | 13,760 |
| Quarterly adds (000) | 556 | 566 | 691 | 439 | 499 |
| Penetration of Consumer Primary Lines | 29.6% | 31.5% | 33.7% | 35.0% | 37.0% |
| Video Customers (000) | 1,400 | 1,510 | 1,697 | 1,897 | 2,112 |
| Net Adds | 120 | 110 | 187 | 200 | 215 |
| Satellite Video | 1,397 | 1,507 | 1,684 | 1,846 | 1,986 |
| Net change | 117 | 110 | 177 | 162 | 140 |
| U-Verse Customers (000) | 3 | 3 | 13 | 51 | 126 |
| Net change | 3 | - | 10 | 38 | 75 |
| Video Penetration of Consumer Primary Lines | 4.2% | 4.6% | 5.2% | 5.9% | 6.7% |
| Total Consumer Revenue Connections (000) | 49,578 | 49,650 | 49,309 | 49,555 | 49,639 |
| Wireless Voice Customers (mil.) | 58.7 | 61.0 | 62.2 | 63.7 | 65.7 |
| Net Adds | 1.3 | 2.3 | 1.3 | 1.5 | 2.0 |
| Wireless Revenues (bil.) | $ 8.7 | $ 8.8 | $ 9.1 | $ 10.4 | $ 10.9 |
| Wireless Data Revenues (mil.) | 1,106.0 | 1,288.0 | 1,456 | 1,651 | 1,813 |
| Wireless Data ARPU | $ 6.32 | $ 7.19 | $ 7.88 | $ 8.77 | $ 9.34 |
| Total operating revenues (mil.) | $29,392 | $29,558 | $28,969 | $29,478 | $30,132 |
| Net Income | $ 2,220 | $ 2,204 | $ 2,848 | $ 2,904 | $ 3,063 |
| Source: Emerging Media Dynamics, Inc. analysis of company data. © 2007. | |||||
Mark Glaser has this great piece about how gadgets are killing our face-to-face interactions and it struck home with me. Although he is stating the obvious, Glaser elaborates on how "real-life interactions are on the outs as cell phone conversations, texting, instant messaging and Facebook emails start to take up more of our time."
He offers the following example of an experience he had while in London:
Last year when I visited London, I noticed an acute case of what I call gadget haze, with so many hipster urbanites connected at all times to smart phones or MP3 players. When I got lost, I asked a woman if I was near SoHo, and it took a moment for her to realize that someone real in front of her was actually talking to her. Slowly, she removed herself from her bubble, took off her headset, asked me to repeat what I said. Eventually she pointed me in the right direction and put the headset back on.
The reason this struck home with me is that I had the reverse experience recently -- I was the one in a gadget haze. Last week I took a plane trip during which I remained plugged into my iPhone at the airport and on the plane (blame it on Radiohead). Amid hundreds of people, I was in my own little world, listening to music while reading a magazine.
I couldn't tell you much about the airports or the what the pilots said or whether anything interesting happened around me. There was a moment, however, when the flight attendant asked me a question and I pulled out the earphones. I then fell into a conversation with my row-mate, who was in the midst of travel hell (cancelled flights, 12-hour delays, etc.) and was clearly in need of human connection. What he got for most of the flight, I later realized, was a zombie who was a million miles away.
After we talked, and I plugged back in, I felt, well, bad, with a slightly anxious feeling in my stomach. I realized that I had no real memory of my day's travels. I understood that I had not really connected with anyone in person for hours and hours until my row-mate interrupted my fugue state.
Then it hit me: being constantly connected to gadgets is akin to what psychologists called a dissociative disorder. Dissociation generally means not being connected and in its extreme form is the hallmark of true mental illness. According to the American Mental Health Association
Dissociation is a mental process that causes a lack of connection in a person's thoughts, memory and sense of identity. Dissociation seems to fall on a continuum of severity. Mild dissociation would be like daydreaming, getting "lost" in a book, or when you are driving down a familiar stretch of road and realize that you do not remember the last several miles. A severe and more chronic form of dissociation is seen in the disorder Dissociative Identity Disorder, once called Multiple Personality Disorder, and other Dissociative Disorders.
Glaser worries about the social skills of future generations and their ability to interact with the real-world. I'd take that a step further and wonder, based on my recent experience, if we're all making ourselves slightly mentally ill by tuning in and dropping out (and not in the good 60s kind of way either).
The New York Times' David Halbfinger has this piece today about the growing selection of original movies and shorts on iTunes. Edward Burns' upcoming film "Purple Violets" will have its premiere via iTunes on November 20, a first commercial debut for Apple's online movie store.
Granted, movie studios passed on theatrical distribution for the indie film because it was deemed too limited for a national release, but still it's the kind of content that will distinguish iTunes from its rivals and give Apple a greater degree of independence from Hollywood. Apple's already had a taste of success with "original" content by distributing at no charge via iTunes Wes Anderson's 13-minute short film "The Hotel Chevalier," a prequel to the "The Darjeeling Limited," which has been downloaded 400,000 times since September 25. ("Hotel Chevalier" is now being shown in theaters along with "The Darjeeling Limited" and isn't available via iTunes anymore.)
Given the bumptious relationship that Apple has with Hollywood over the sale of films and TV shows via iTunes, Apple is very smart to expand its content supplier pool beyond the major studios. As I've said before, if Apple wants to make iTunes a success, it's going to have to make strategic investments in original content. As is the case with "Purple Violets" and "The Hotel Chevalier," Apple doesn't have to actually go out and make the films from the ground up. It just has to build ties with filmmakers who do.
Posted by Cynthia Brumfield at 7:48 AM | Print | Comments (0)The New York Times' Brad Stone has this bit about how Comcast is responding to the allegations that it blocks P2P uploading on its high-speed Internet service. Stone believes, and I agree, that the Comcast PR people are "genuinely baffled" about the accusations that Comcast uses Sandvine's technology to thwart users from uploading videos using BitTorrent. (In my earlier post I suggested that Comcast truly doesn't know why there are problems using BitTorrent.)
But Stone's conversation with a non-PR Comcast executive was not all that enlightening either. Comcast still insists that it doesn't block P2P uploads, but merely slows them down sometimes, which is probably true -- most ISPs do this as a routine matter. My sense is that Comcast really believes what it says. There is no "secret agenda to shut down file-sharing applications."
Yet...that still doesn't answer why in fact the uploads are being blocked, as evidenced by the AP's unsuccessful attempts to upload the Bible using BitTorrent using multiple Comcast connections. In the absence of a clear explanation, a lot of folks are going to get paranoid about what Comcast is really up to and start hunting around for gunmen on the grassy knoll. That would not be good for Comcast because conspiracy theories live on forever and prompt endless scrutiny, and not of the good kind.
As Stone writes:
The problem Comcast may now be facing is that in the absence of a plain explanation about what the company does to disadvantage certain applications in the name of managing traffic on its network, anecdotal reports and conspiracy theories fill the vacuum.Posted by Cynthia Brumfield at 12:00 AM | Print | Comments (1)
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