ATT and Time Warner Merger

So in case you haven't heard AT&T is acquiring Time Warner Cable (TWC) for $85.4 billion. TWC has three divisions which are as follows:

• HBO, which consists of domestic premium pay television and streaming services (HBO Now, HBO Go), as well as international premium & basic pay television and streaming services.

• Warner Bros. Entertainment, which consists of television, feature film, home video and video game production and distribution. Warner Bros. Film franchises include Harry Potter & DC Comics, and its produced TV series include Big Bang Theory and Gotham.

• Turner consists of U.S. and international basic cable networks, including TNT, TBS, CNN and Cartoon Network/Adult Swim. Also, Turner has the rights to the NBA, March Madness and MLB. Time Warner also has invested in OTT and digital media properties such as Hulu, Bleacher Report, CNN.com and Fandango.

One can quickly see this is not a bad investment for AT&T on the heels of their acquisition of DirecTV last year. 

Period	11-Dec	12-Dec	13-Dec	14-Dec	15-Dec
Gross Margin	53.56%	53.51%	53.25%	76.79%	75.46%

So where is telecoms heading? As I have been telling colleagues in the industry the game is down to two things 1) Bandwidth and 2) Content. So ATT has both Wired(Fiber to the Home) and Wireless (Mobile) offerings and with 5G around the corner, it means that they don't only have pipes but also have significant content which they intend to push to customers. 

So bringing this home it begs the question who is really positioning themselves to not only be the dominant player in the broadband game, but also have the content that not only appeals to a local market but regional and international markets as well. As make no mistake there is value in Caribbean content the issue here who is going to corner the market and become the leader in the converging media and communications industry. Flow (Now Liberty Global) and Digicel have made inroads into the media space and One Caribbean Media (OCM) has made inroads into the telecoms space, so let's see how the local market plays out as vendors seek to make Over the Top (OTT) and TV Everywhere products smarter and more personalized.

Schedule F Overview (Quality of Service requirements)

Trinidad and Tobago celebrated carnival 2016 on the 8 & 9th of February. Ronnie and Caro won band of the year with their presentation Tears Of.....  So by now, you are asking yourself what does a Mas band have to do with Telecommunications. Well, strangely enough, Band leader Ronnie McIntosh highlighted in a TV6 interview that customer service was key to the band's success.

Mas bands like Telcos have to satisfy a diverse consumer population, the key is how do you satisfy increasing customer demands whilst managing cost. As a starting point providers must meet their regulatory obligations. You will recall I mentioned Schedule F in a previous post. Schedule F can be broken down into eight areas and I will highlight a few KPIs to give the readers a feel for what is measured by the TATT (Local Telecoms Regulator) given that concessionaires normally have to provide the regulator with quarterly updates on performance.

General 

1. Service Activation Time - Fixed Telecoms/ Subscription broadcast ≤ 10 working days. Mobile Telecoms ≤ 2 working days. 
2. Service Re-activation Time - ≤ 24 hours or the next working day.  
3. Consumer Query Response Time -  85% of occurrences  within the following timeframe:

• ≤ 40 seconds Customer Service 
• email contact: ≤ 24 hours or the next working day 
• Customer Service Center: ≤ 1 hour

Public Telecommunications Access Services 

1. Public Payphone Availability - ≥ 85%

Public Data (Internet) Telecommunication Services

1. Average Bandwidth to Consumer - Dial-up access: ≥ 28.8 kbps Broadband access: ≥ 128 kbps or ≥50% of advertised throughput.

Subscription Broadcasting Services

Wholesale and Interconnection services

Network Services

1. Call Drop Rate - Fixed access: ≤ 1.5 % Mobile access: ≤ 4 %
2. Call Failure Ratio - Fixed Access: 0.5% Mobile access: 3.5%

Speech Quality 

Internet Access Services

1. Internet Access Local Network Availability - ≥ 95% 

Achieving QOS requirements are not going to satisfy the demanding telecommuting customer in this day and age and actually, you may find yourself with little or no customers if your aim as an organization is to just meet your concession requirements. So set aggressive targets to ensure that the organization focuses on exceeding customer expectations as what separates you from the competition is ultimately going to be the level of service offered to your customers.

TATT is also proposing to implement the Consumer Rights and Obligations Policy  (Additional/revised QOS requirements) which may be a tall order for certain companies. A quick review of one of the KPIs (Repair times) in the current draft is shown in the table below.

18 months from the implementation of this policy the expectation is that all providers must be able to complete 75% of repairs within 24 hours for fixed-line telecommunications. Now whilst this is great for the consumer lets take any day in the week. In most T&T households mom & dad are working and not at home until after 6pm  so this translates into a next day or weekend technician visit (KPI already shot). Whilst there are solutions to address these shortcomings in the proposed policy I will leave that for another time.

So is your provider meeting their QOS obligations as defined in Schedule F? 

What are Telcos to do with their copper plant?

 
Recently we have seen major players in the local telecoms market advertising Fiber to the home (FTTH) or Fiber to the Node (FTTN). Engineers will tell you that FTTX is ultimately the best fixed access technology available today supporting GPON, EPON etc and as such is "future proof". But what are operators to do with their legacy copper plant? The answer is simple. Sweat that asset as long as possible, even against a backdrop of impending Local Loop Unbundling (LLU) regulations.

 On the Cable end they have DOCSIS 3.1 which allows 10 Gbps per network node downstream and 1 Gbps upstream which, despite the shared-bandwidth nature of their networks will enable cable operators to remain extremely competitive. On the Telco side, you have VDSL2, which allow telcos to deliver 100 Mbps services over copper assuming copper infrastructure was previously redesigned to have shorter loop lengths as shown below.


New technology being tested/implemented in Telcos is G. Fast which was tested recently by Cable and Wireless Panama. Download speeds were as high as 500 Mbps existing copper fixed lines. With this technology operators with significant copper plant can "sweat those assets" all things being equal. Obviously, operators have to take this on a case by case basis as in some instances (competitive pressure, quality of existing copper plant, etc.) it may just make good business sense to go the FTTH route. However, note that it doesn't stop here as on the horizon is 5 Gigabit broadband (See bandwidth comparison below). So think carefully as you may not want to wreck that copper plant just yet.

Adapted from Huawei

Watch out that message may not be private!!!!

I came across a judgement in the European Court of Human Rights (ECHR) dated 12th January 2016 and thought I should share. The terminated employee who was previously classified as an engineer in charge of sales in a private company filed a complaint where he claimed that his right to respect for private and family life, home, and correspondence had been violated by his employer. At his employer’s request, he created a Yahoo Messenger account for the purpose of responding to clients’ inquiries.

The employer On July 13, 2007, informed the employee that his Yahoo Messenger communications between July 5 to July 13, 2007 were monitored and that the records showed he had used the internet for personal purposes. The employee countered in writing indicating that he only used Yahoo Messenger for business purposes at which point the the employer provided transcripts of messages between the employee and family members some of which dealt the health and sex life. The employee was subsequently terminated on 1st August 2007 for breach of the company’s internal regulations which prohibited the use of company resources for personal purposes.”

The employee challenged his employer’s decision at the ECHR. The court dismissed the employees complaint sighting that the employee had been duly informed of the company’s regulations. The court placed on record that it was not unreasonable for an employer to verify that employees were performing assigned tasks during working hours moreso as the employer had access to the employee's account given that it contained client-related communications.

Most local companies have some rules surrounding the use of the communications tools which traditionally would be email and correspondence and as such some companies may have to review these regulations as they may be dated and not contain clauses surrounding social media apps. However, employers need to beware as well given that reading an employee's communication may have implications under the Interception Of Communications Act  depending on how the password was obtained.

Does your organization have regulations surronding the use of personal computers, email systems etc? If so do employees adhere to the policy?

Third Mobile Operator in Trinidad and Tobago

Loaded cell tower 
Photo credit : Hassan Voyeau 

So recently we would have seen several companies articulate the position that a third mobile operator in T&T is not feasible in a market where mobile penetration as at December 2014 was 149.1% and only two operators will get a 4G license in the 750Mhz spectrum. We have seen residents object to mobile towers being built in their communities and in some cases they have gotten towers removed. The issue has always been the provision of mobile coverage vs customers concerns around radio frequency emissions from these sites. However, results from studies/test all indicate that local towers meet the compliance levels set by TATT and even the standards set by the Federal Communications Commission (FCC) in the USA.

Most mobile towers are already fully loaded as a result co-location (tower space is rented to other providers) and the number of services being provided via these towers such as Mobile, Wireless broadband etc.

One solution available to TATT if they want further competition in the mobile space is the introduction of a Mobile Virtual Network Operator (MVNO). An MVNO is really a wholesale arrangement that allows the Mobile Network Operator (MNO - Digicel or TSTT) to sell excess capacity to an MVNO. Virgin Mobile and Red Pocket Mobile are perfect examples of MVNOs.

So what should happen next?

TSTT and TATT battle!!!!!

The biggest news item to close off 2015 was TSTT successfully averting a licensing fiasco. TSTT and Digicel had concessions that expired on the 29th December 2015. The concessions that expired are:

Public International Telecommunications Services - Digicel & TSTT
Subscription Broadcasting Service (TV) - TSTT
Public Domestic Fixed Telecommunications Network - TSTT
Public Domestic Mobile Telecommunications Network - Digicel & TSTT


With TSTT holding on to > 50% market share in all markets (mobile?) except television a shutdown of these services would have dire consequences for T&T not just from a commercial standpoint but also from a national security standpoint as well. A simple check of TATT's (Local Telecoms Regulator) website reveals that apart from TSTT, concessions for Flow, Network Technologies Limited and Open Telecom expire today (4th January 2016)

Flow
Public International Telecommunications Services
Subscription Broadcasting Service (over a Public Domestic Fixed Telecom. Network only)
Public Domestic Fixed Telecommunications Network

Network Technologies Limited
Subscription Broadcasting Service (over a Public Domestic Fixed Telecom. Network only)
Public Domestic Fixed Telecommunications Network.

Open Telecom
Public International Telecommunications Service


So a few questions come to mind.

1) The concession document is a standard contract with adjustments made for each provider depending on the services offered and market being served (national, niche/community). The document also defines quality of service requirements (Schedule F - which will be discussed in a future post). So if clauses were amended/removed has this now placed TSTT at an advantage/disadvantage over other concessionaires?

2) Have other providers signed their renewals or are they still in negotiations? If negotiations are ongoing with the other providers why was TSTT forced to sign its renewal?

3) When will TATT give us its side of the story?

Finally, a concession is renewed by the line minister on the recommendation of TATT upon application by the concessionaire to TATT and secondly TATT also examines the concessionaire's previous compliance with the conditions of the concession to determine whether the concession should be renewed.

We're back!!!!

After a well deserved rest I have a lot of things to share with you for 2016. So look out its going to be an awesome year.