Moving to the next stage of the Satellite games

Posted on by Roger Entner

AST Spacemobile (AST) and AT&T just completed the first call between a regular smartphones using just the electronics and antennas that are common for decades in mobile devices using a satellite as the cell site. AST has talked about its technology for years, laid out its plans to investors and received only the scantest of interests. Unlike Apple’s technology that uses special chips in Apple’s new iPhone 14 smartphones to send text messages through a satellite connection the AST solution works with any phone. While T-Mobile and SpaceX’s announcement last year of bringing satellite connectivity to any phone was a vision statement, AT&T and AST’s call was the proof of concept. We know now that it works not only on paper but also in the field.

The first part of the feasibility study was the reverse of the actual proof of concept. AST put a cell phone on a satellite and built a base station on the ground. With this ingenious way, AST could exactly dimension the size of the antennas, the strength of the signal amplifiers, processing power requirements and the power consumption that the satellite would have in order to work in space and make the connections to smartphones from there. It is much easier to tinker with and faster to interate the hardware when it is on the ground than hundreds of miles in space.

The hard work begins now. Until now, the FCC has been a lot less accommodating to AST than the other innovative satellite providers. The FCC needs to allow AST to use regular terrestrial frequencies that have been exclusive to mobile service also for satellite service. Historically, the FCC has been very accommodating to satellite providers like Lightsquared to use their satellite frequencies for terrestrial communications, but this resulted in basically no usage for several reasons. The satellite to mobile spectrum conversion players forgot for the longest time to include their spectrum in mobile standards. If you are not in the standard, nobody will build devices that have your band in them. The next hurdle is to get devices that include a band that nobody is yet using for mobile communications as it costs money to include a new frequency band. This problem does not exist with the AST solution as all devices that have a cellular connection can connect to the satellite. What is needed from the FCC to move from a proof of concept to mass adopted reality is the permission to use regular cellular frequencies with satellites and the permission for AST to launch enough satellites. Then AST has to raise more money to build and launch the satellites.

Where AST and AT&T differentiate themselves is the data throughput they promise: Speeds of up to 50 Mbit/s and the ability for streaming video. While this is certainly handy when fighting wild fires in a remote part of a state or recovering victims from a plane crash in a remote part of the state, it becomes down right indispensable for people documenting on a live stream when they have climbed a mountain and then call first responders because they are too tired to climb back down.

While initially mentioned that the smartphone to satellite connections would be used just for FirstNet, it is almost inconceivable to stay restricted to first responders. The ability to eliminate outdoor dead spots and to provide full geographic coverage is huge. Based on our Recon Analytics Mobile Pulse data the ability to “make a calls anywhere” is the third most important purchase decision factor based on 161,976 respondents. From May 2022 to end of March 2023, 10.9% of respondents ranked it their most important decision factor choosing a mobile provider, 10.5% chose it number 2 and 10.9% as their third most important factor.

AT&T has a very promising solution on its hand. Bring ubiquitous outdoor coverage to first responders everywhere in the United States, something that has not been done before. But not only with text messaging with a long time delay like Apple does now and got a lot of accolades for, but with streaming video. This is a real game changer for first responders. It is also a game changer for consumers in areas with low signal strength or coverage holes outdoors. With AST’s technology they are gone. Consumers will still have to content with issues when being indoors as they do not have direct line of sight to the satellite and the buildings they are in are potentially interfering with the signal.

Now that we know this is possible, how quickly will regulators pull out all the stop signs that are preventing the real world application for it? How quickly can these satellite get into space and who will be the first to deliver ubiquitous outdoor coverage to first responders and consumers with what real world speeds?

Fixed Wireless is America’s Preferred Next Internet Connection

Posted on by Roger Entner

Americans love the internet, accessing it from home and on the road. Until 2007, Americans essentially had two choices when it came to home internet: cable internet or DSL. To the cable industries great credit, they were the first to provide high speed internet access to most Americans with DSL, a slow “other choice” if cable was not available or was too expensive. But beginning in 2007, the telecom companies began to build out fiber, first with Verizon FiOS, and then by AT&T launching fiber service in 2013. By launching fiber networks, telecom companies brought competition to cable in the home broadband market and offered Americans more choices for connecting to the Internet.

In the last three years, the competitive landscape has changed again, for the benefit of American consumers of all stripes.  The mobile network operators have launched Fixed Wireless Access (FWA) and, as we saw during Hurricane Helene, satellite provider Starlink proved its prowess in rural, hard to reach geographies.

FWA has become such a popular choice that the cable companies are losing home internet customers to FWA providers, a trend that has thumped the cablecos market cap. Since launch, Verizon, T-Mobile and AT&T added 10.675 million customers to their FWA service.  And almost all of those subscribers came from cable companies.

FWA service is typically slightly less expensive that fiber or cable home internet, but its satisfaction scores across all 16 cNPS categories is higher.

Part of the reason for the superior cNPS scores are a better purchasing and installation experience for consumers, lower price points and the ability to easily return the product if it does not meet the customer’s satisfaction. This leads to the customers who use the service to be happy with it, while the unhappy customers cancel the service, return the router and continue service with their existing provider and continue to be less than happy with them.

The high satisfaction and lower price for FWA and the dissatisfaction with the other choices available has led FWA to become the preferred next home internet provider of choice for Americans.

Based on interviews with 288,490 Americans conducted between July 2023 and December 2024, 44% of Americans would choose an FWA as their next provider if they would have to make a choice other than their existing provider, 25% would choose a fiber provider, 17% a cable provider, and 6% each would choose DSL or a satellite provider (predominantly Starlink.)

The change in customer preferences is also an opportunity. FWA is the first home internet offer that is being advertised on a nationwide basis, both on a standalone and converged basis. More than 70% of FWA customers are using the mobile solution of the same provider. We are also increasingly seeing a remarkable amount of customers who are switching from one FWA provider to another indicating both a preference for FWA as well as a high aversion to the available wired solutions available. It is also a wakeup call for existing providers, especially cable, to improve their service, both on a technical basis with DOCSIS 4.0 and a relational basis in how they interact with their customers. We are full of hope as some cable providers are introducing NPS as a metric they look at and full of dismay as FWA is being described as CPI or Cell Phone Internet. By describing FWA as cell phone internet, these cable providers do themselves a disservice as cell phones have nothing to do with FWA other than the network they use and shows a blindness to the real threat FWA provides to them. As long as cable views FWA as CPI it will continue to lose as it lives in its own world disconnected from the preferences of everyday Americans.

This has interesting implications for the spectrum policy world. Cable, understandably, is trying to prevent new licensed, full power spectrum to be authorized for cellular use. Why would they? That additional spectrum will enable the mobile operators to offer even more FWA options.   While the wireless industry is pushing hard for more full power, commercial spectrum, it is not a done deal.   In 2024, we have seen FWA speeds and the availability to sign up with FWA in urban market decline indicating that the growth of FWA is becoming more of a supply issue than a lack of demand. Hence the need for more full power spectrum to amp up network capacity to support more FWA.

The outgoing 118th Congress failed to provide Americans with a spectrum pipeline and the FCC with general spectrum authority (Congress provided for temporary spectrum authority to reauction the returned AWS-3 licenses.) The chances that the incoming 119th Congress that takes over in 2025 will provide a spectrum pipeline with licensed, full-powered spectrum is much higher. The last Trump White House leaned much more heavily on the Department of Defense and was able to clear the 3.45 GHz spectrum for commercial use in a record one-year time period. The incoming Senate Commerce Committee Chairman, Senator Cruz (R-TX), has also traditionally been less accommodating to Department of Defense preferences and FCC failure to live up to its congressionally mandated requirements.

In a nutshell, FWA has higher satisfaction scores than any other technology and more Americans want FWA as the way they connect to the internet than any other choice. It is up to Congress to decide if Americans get their wish.

Impact of AI on Storage Requirements

Posted on by Don Kellogg

AI Adoption Will Impact Corporate Storage Requirements

By Mitch Klaassen

AI adoption is expected to drive exponential growth in data storage demand through 2028. In response to a Recon Analytics survey, commissioned by Seagate Technology and conducted in November 2024 on this topic, 61% of infrastructure buyers who predominately use cloud storage for AI data management  said they expect storage requirements to at least double by 2028, coming from longer retention times of 6 months to forever, 73% using daily or weekly LLM checkpointing, and 80% deem data replication for AI very or moderately important. 95% of storage buyers, using AI or planning to, say they are taking measures to accommodate the growing storage requirements, including 61% adopting more scalable storage, 56% implementing data management software, 49% using compression techniques and 55% upgrading existing storage infrastructure.  Recon Analytics’ research finds that wherever AI is adopted, existing storage practices will need to be upgraded to realize the full potential of AI.

Adapting Beyond Traditional Storage

As storage requirements grow, expect both cloud and on-premises storage to continue to grow. According to the 1,062 respondents surveyed, cloud storage is expected to remain the main storage vehicle for AI with 65% of data stored in the cloud versus in-house in 2024 and increasing to 69% by 2028 [see figure 1].  61% of respondents who predominately use cloud storage say their storage requirements will increase by over 100% over the next 3 years.

Figure 1: Cloud Usage as Percent of Customer’s Storage Current vs Future

46% of respondents believe that existing data storage methods will not be enough to keep up with demand.  Additional data storage solutions are being adopted to manage the increasing file sizes and quantity generated by AI [see figure 2], including 61% expanding usage of cloud storage solutions, 55% upgrading existing infrastructure, 56% adopting enhanced data management software and 49% implementing data compression techniques.

Figure 2: Measures Companies Take to Adapt to Growing Data Needs from AI

 

AI Infrastructure Components

Storage ranks as the second most important component of AI infrastructure per the survey respondents, only following security in importance [see figure 3]. 25% of respondents said security was the most important components followed by 18% saying storage. Sixty-six percent of respondents ranked storage amongst their four most important infrastructure concerns, while 68% ranked security in the top four. Compute and energy have been the hot topics of the AI conversation over the past few years, but storage and security are ranked higher when looking from the storage infrastructure buyer perspective.

Figure 3: AI Infrastructure Component Importance

 

Storage Growth from AI Model Retention

90% of respondents who have adopted AI believe longer data retention improves the quality of AI outcomes [see figure 4]. Of which 93% claim data retention requirements have changed due to the implementation of AI and the ability to refine models including checkpoints. The more data storage a company utilizes the more they see that longer retention times improve the quality of AI outcomes [see figure 4].  The importance of data replication to a company’s AI data management strategy also increases the amount of storage a company uses [see figure 4]. 52% of respondents who are currently using AI and who are also using more than 100 PB of storage, deem data replication improves AI outcomes as very important.   

Figure 4: Longer Data Retention Times Improve AI Outcomes by Current Storage Usage

73% of respondents say AI training is driving increased data storage as they are backing up their previously saved checkpointing data on a daily to weekly basis [see figure 5]. Compounding the storage impact of saving AI checkpoints, infrastructure buyers also need to factor in how long they will save each checkpoint as part of the LLM training. Of those respondents saving checkpoints daily (28% of respondents), 32% are retaining data for more than 12 months while 29% are retaining for six to 12 months. Companies already using 100+PB of storage are saving and backing up checkpoints on a daily to weekly basis with 87% of them storing these checkpoints in the cloud or in a mix of HDD and SDD [see figure 6].

Figure 5: Frequency of AI Model Training Checkpoints by Current Storage Usage

Figure 6: Checkpoint Backup Frequency and Location for Companies with 100+ PB of Storage

AI Adoption will Drive Future Storage Growth

As AI use cases and adoption becomes more pervasive, Recon Analytics forecasts companies will see exponential growth in their storage requirements. This will become even more evident when businesses move from their early AI trialing phase to being active AI users.  Training LLMs, data replication and longer data retention periods, all key elements of an AI strategy, will require increased storage investments to be successful.    

Study Background: In November of 2024, Recon Analytics surveyed 1,062 storage infrastructure buyers and decision makers from companies reporting greater than $10 million in annual revenues and in excess of 50 TB of current storage capacity across 10 counties. Each respondent included in the survey had to have already adopted AI or have plans to adopt AI in the next 3 years. Of those 1,062 respondents 72% are currently using AI and 28% plan to use AI in the next 3 years.  This study was commissioned by Seagate.

Amdocs uses its North America analyst conference to layout its path to ongoing success

Posted on by Don Kellogg

By Mitch Klaassen and Daryl Schoolar

During the week of September 22nd, Amdocs hosted a two-day North America Analyst Event at its Plano Texas location, just north of Dallas. Approximately 20 analysts attended from the leading North American research firms, including two from Recon Analytics. Amdocs shared its market vision, corporate strategy, and solutions and services aimed at enhancing efficiencies and boosting revenue growth for communication service providers (CSPs).

During the two-day event, Recon Analytics saw three themes emerge that are key to Amdocs’ ongoing success: Amdocs’ focus on helping CSPs enable network monetization; commitment to GenAI to power its future success; and the desire to move beyond the telecommunications vertical. All three of these themes complement or are in line with Amdocs’ number one strategic goal of maintaining its revenue growth by providing its customers with the tools needed to ensure their own ongoing success.

Enabling network monetization

Amdocs made it clear during the analyst event that its go-to-market approach is based on providing solutions that solve its customers’ problems rather than on out-of-the-box products. Currently, when it comes to its mobile operator partners, one of the biggest challenges those partners face is generating ROI from their 5G network investments. Only 6% of the 100 mobile operators that Recon Analytics surveyed at the end of 2023 said that revenue growth was the biggest benefit they experienced from deploying 5G. Rather, the most common response to the question was increased network capacity. Amdocs is very much aware of this challenge and is committed to solving it in two distinct ways – thought leadership and its portfolio of solutions……

GenAI powering Amdocs’ solutions

Amdocs used the second day of its event to talk about what it is doing with GenAI and how the technology is working its way across its solutions portfolio. Anthony Goonetilleke, Group President – Technology and Head of Strategy, got the discussion going by sharing his vision of how GenAI can improve the lives of its CSP partners by creating greater efficiencies that will help both lower the costs of doing business and make network monetization easier……

Figure 1: Percent of respondents, by size segment, who said AI bot would negatively impact their perception of a customer service experience

Source: Recon Analytics; Study date: 08/28/2024-09/18/2024; n=1,424; MoE = 2.6%

Creating pathways into new verticals

Amdocs has historically been telco-focused, working with some of the largest CSPs globally. While telco remains the company’s core focus, it is looking for growth opportunities within other industry verticals. Company acquisitions, such as Astradia for mainframe to cloud conversion, play a role in supporting this strategy.    Astradia gives Amdocs a way to get its “foot in the door”, so to speak, with other industries that are still utilizing legacy mainframe computers. This growth strategy makes sense, but it does come with its own challenges……

The full research-note on Amdocs’ analyst conference is reserved for clients. If you are interested in learning how to access the complete research-note, please contact Daryl Schoolar at [email protected]

Starlink – The Customer Perspective

Posted on by Roger Entner

As you are likely aware, Recon Analytics runs the fastest, largest, most flexible customer insights service in the market. We survey over 200,000 mobile consumers, over 200,000 home internet consumers, and more than 20,000 businesses every year about their experiences and intentions. With our consistent set of questions and our massive sample size, we do not only pick up on small nuances in the changes around how large operators are perceived. Over time, we also pick up enough data to get a read even on the smaller providers.

Starlink has grown significantly over the last few years, and we now have enough respondents on a regular basis to report on this growth as part of our comprehensive data set. Over the last year, we found over 1,300 Starlink respondents who tell us with robust statistical significance about their experiences. *

What do customers tell us?

85% of the respondents are in rural areas, 5% live in suburbs, and 10% in zip codes classified as urban areas. They are mostly white, as we would expect from a predominantly rural population.

Who did they use before Starlink?

Unsurprisingly, the largest groups of customers for Starlink are either coming from small rural providers or have never had an internet provider before.

A full 11% of Starlink’s customers are new to home internet, as they often live in very rural areas. The largest individual contributors to Starlink’s growth are CenturyLink, Spectrum, and Frontier.

How about service issues?

Starlink customers tell us that they experience fewer service outages than cable customers, but more than fiber customers. Starlink customers also tell us that they experience near industry-leading speed consistency with the most reliable router.

Customer-reported Issues in the last 90 Days (arithmetic average of providers)

 Internet connection went downInternet was slower than usualI had to reset Wi-Fi routerDevices disconnected from the network
Starlink30%24%20%19%
Major Fiber24%31%27%25%
Large FWA25%27%27%25%
Major Cable39%34%33%28%
Major DSL33%32%28%26%
153,770 Respondent from 7/7/2023 to 7/5/2024 (Starlink, AT&T Fiber, Verizon FiOS, Comcast, Charter, Cox, Optimum, Frontier, AT&T Internet, Centurylink, T-Mobile FWA, Verizon FWA)

Considering that Starlink is a service that requires a direct line of sight to a passing satellite, these metrics are impressive. Starlink has been able to get 6,146 working satellites into orbit, providing significant capacity and reliability to its subscribers. It has also been able to manage bandwidth, even during peak hours. It is also clear that Starlink’s router is among the most stable in the market.

How satisfied are Starlink customers with their service?

We are also collecting component net promoter scores (cNPS)* by looking at the customer experience in 16 different dimensions. Starlink’s cNPS scores for all the metrics that do not involve interacting with a person are among the best we are seeing in our data.

Selected cNPS categories

 Complete ExperienceEasy InstallationStreaming VideoConnecting/Maintaining WiFi ConnectionGaming
Starlink+42+30+44+37+23
Major Fiber+18+18+22+18+12
Large FWA+40+52+39+36+29
Major Cable-2+8+6+2-7
Major DSL-10+5-6-8-20
149,625 Respondent from 7/7/2023 to 7/5/2024 (Starlink, AT&T Fiber, Verizon FiOS, Comcast, Charter, Cox, Optimum, Frontier, AT&T Internet, CenturyLink, T-Mobile FWA, Verizon FWA)

Starlink provides excellent scores when it comes to the technical delivery of the service. It is very similar to Fixed Wireless Access, in that when it works, it works very well and when it does not work, the service provider makes it easy to return the product within 30 days with either a total refund or only having to pay for services rendered. Furthermore, especially with Starlink, the rural alternatives are generally underwhelming. Most Starlink customers come from DSL providers or other satellite providers that are just not competitive when it comes to speeds and latency. Even though Starlink is $99 per month after $499 plus cost for the equipment, value for price cNPS is a very healthy +19. When you have no other options, even pricey internet looks like it’s worth it.

In all of our technical categories, we see constant year over year improvements of aggregate cNPS scores. The service providers are trying to provide a better service, and customers recognize it.

Starlink needs to improve in three categories: Billing support over the phone, technical support over the phone, and in-store experience.

More selected cNPS categories

 Billing SupportTechnical SupportIn-Store Experience
Starlink-1-3-17
Major Fiber+1-3-8
Large FWA+24+22+29
Major Cable-13-14-16
Major DSL-15-20-27
149,625 Respondent from 7/7/2023 to 7/5/2024 (Starlink, AT&T Fiber, Verizon FiOS, Comcast, Charter, Cox, Optimum, Frontier, AT&T Internet, Centurylink, T-Mobile FWA, Verizon FWA)

Fixed Wireless is the benchmark: Great in-store experience where customers can get the box, generally without an upfront cost, and take it home. Starlink’s in-store experience numbers are very similar to those of the mobile providers that predominantly sell through Best Buy, Target, and Walmart. It’s a channel where salespeople are not that educated about the product and its ins and outs. Fiber providers with a store are doing a much better job. The challenge for Starlink is that due to the heavily rural customer base, which implies a low population density, it is not cost effective to open its own stores. One solution is to invest in having its own salespeople in its third-party retail stores. The other challenge is support. While Starlink has a similarly great cNPS number for having an easy-to-understand bill like FWA, the billing support numbers are radically different. Generally, an easy-to-understand bill is correlated to billing support satisfaction, and while correlation does not imply causation, it is a necessary prerequisite.

Overall, Starlink’s mostly rural customer base is very satisfied. Customers like it despite the above average monthly cost and the high cost to purchase the satellite dish and router. Where things get interesting is that Comcast for Business just came to an agreement with Starlink to offer Starlink nationwide to businesses. In our business survey, where we speak with up to 800 businesses of all sizes, we find that fixed wireless access is making significant inroads with cNPS metrics that are similar to what we see in the consumer space. We are actively looking at the impact that the Starlink/Comcast for Business has on the market.

*We ask if they would recommend component elements of a product or service on a scale from 0 to 10 as a battery of questions and then calculate a net promoter score from it. We subtract the percentage of people who rate it 9 and 10 from the percentage of people who rate it 0 to 6, which gives us the net promoter score for this component.

Congress stands in the way of broadband competition

Posted on by Roger Entner

5G fixed wireless access (FWA) is transforming how Americans are accessing the internet. In less than three years, 7.9 million customers signed up with FWA as their preferred internet solution. Recon Analytics interviewed more than 40,000 home internet customers in the first 12 weeks of the year and the results are clear: FWA customers are happier with their service than with service through any other technology. The only thing standing in the way of greater success is more capacity, which is why mobile operators are clamoring for more licensed full-power spectrum.

Chart 1:

FWA is the clear winner across the board

The ranking in Chart 1 makes sense, but is surprising at the same time. The mobile network operators built a very robust offering. FWA is not the fastest service, but under the current usage parameters it satisfies its customers not only on the traditional product side such as easy and convenient installation, a superior router experience, delivering an easy-to-understand bill, and online self-help customer service that people actually like, but also on the service side, ranging from the internet usage categories, to support over the phone and, most importantly, value for money.

It is important to keep in mind that there is a double bias going on with FWA customers. First, the vast majority of FWA customers have the same provider for their mobile service. Customers who are unhappy with their mobile service do not select the same provider and network for their home internet service. Second, there is a survivorship bias. Customers who sign up with FWA typically do this while they are still using a previous service with which they are unhappy. It is very easy and convenient to install and, if necessary, to return the FWA router and cancel the service, so prospective customers give it a try and take advantage of the cancellation poicy if it doesn’t work. We have a hard time finding  customers who try the service and are unhappy with it, but have not returned it yet.

Customer service and connectivity

Chart 1 also reiterates what we have known for a long time: cable companies have poor customer service and need to improve. Telecom providers who are phasing out DSL networks and focusing on fiber provide substantially better customer service. What might surprise people is the strong performance of satellite service. This is mostly driven by Starlink, which is getting successively better over time, as a provider of last resort for many of its customers.

Recon Analytics also asks its home internet respondents every week what kind of issues they experienced with their internet connection. Chart 2 is ordered top to bottom with how often respondents experienced an outage. The most common issue, which was internet connection going down, is at the bottom. Furthermore, it is also ordered from left to right by how often they experienced their internet connection going down.

Chart 2:

As we can see in Chart 2, most of the issues are in one of two groups: internet connection going down or slowing down, and router issues forcing people to reset their router or having devices disconnect from the network.

Cable providers had the most issues in all four categories. Up to 43% of respondents reported that their internet connection has been interrupted, while fiber and FWA customers reported the least problems in this category. The newer, better routers provided by fiber and FWA providers also caused fewer problems compared to the routers from cable companies and DSL providers. One fiber and DSL provider told me that once they went away from sourcing the cheapest router to providing an excellent router, it was a game changer for them. The change reduced customer service calls and churn and improved customer satisfaction, more than offsetting the cost of the better router.

How to create more and better home internet choices

As of right now, the Congress and the FCC have created meaningful competition through up to three new providers with up to four brands in the markets where mobile network operators have been able to launch their service. It is incredible that even though we have seen network speeds for some providers decrease from 200 and more Mbps to low 100s Mbps, cNPS scores have not declined. MNOs still have enough capacity to provide their customers with sufficient bandwidth for what customers describe as a superior experience. Verizon and T-Mobile said that they have enough capacity for 5 and 7 million customers respectively with their initial FWA build. They are two thirds to that goal and will probably reach it by the end of 2024. After that, it will become more difficult and expensive to find the necessary capacity to compete with cable and DSL providers as vigorously as they do today. FWA is the fastest growing segment of the home internet market, while cable subscriptions are decreasing.

The government has three options, but the choice is pretty clear: It can spend $80 billion on various fiber incentive programs (BEAD, RDOF, etc) to bring another provider to markets where there is no provider offering more than 100 Mbps speed. It can take $80 billion from the wireless carriers for more spectrum (C-Band Auction for 240 MHz yielded $81 billion) and get three new broadband competitors in the form of FWA providers. Or, it can do both and create more and better home internet choices for Americans with a net zero cost.

The iPhone upgrade game

Posted on by Roger Entner

The launch of a new iPhone is still the most significant event in the wireless year. When consumers prepare to get their next iPhone, they are also undertaking a major financial decision and are often using that opportunity to evaluate new mobile service provider options. The different wireless carriers are engaging in different strategies for retaining and attracting customers who are getting a new iPhone. AT&T is offering the same deals for new and existing customers with almost every plan. T-Mobile requires customers to either add a line, upgrade their plan or be on their most expensive plan. Verizon is targeting only their best customers and new customers with the best offers.

The results are telling: AT&T’s John Stankey said during AT&T’s Q3 earnings call that AT&T “saw the strongest iPhone preorders we’ve had in many years.” Meanwhile, Verizon’s Hans Vestberg said during Verizon’s Q3 earnings call that “we continue to see muted upgrade levels.” T-Mobile’s Mike Sievert said customers don’t feel they need to take advantage of the device upgrades.

We can see in near real time how the respective carrier strategies materialize in the marketplace. We collected around 30,000 respondents between the iPhone 15 launch and last weekend, giving us faster and more in-depth data on what is happening than anyone else. Based on our data ending, 10/22/23 AT&T has the most iPhone 15 upgrades of any carrier despite being the smallest of the nationwide mobile network operators (MNO). Followed by T-Mobile, who had the lowest upgrade rate in the industry but it’s iPhone sales were buoyed by the highest net adds. They were trailed by Verizon, who is the largest MNO, with the second lowest upgrade rate and the lowest net adds. As one would expect, Xfinity and Spectrum are trailing the MNOs as they are offering significantly less generous device promotions.

iPhone Model Distribution by Carrier
Mobile Make ModelAT&TT-MobileVerizonXfinity / ComcastSpectrum / CharterOtherTotal
iPhone 153%4%6%<1%1%1%16%
iPhone 15 Plus3%1%3%<1%<1%<1%8%
iPhone 15 Pro11%10%8%2%<1%1%33%
iPhone 15 Pro Max15%14%10%1%1%2%43%
Total33%29%27%4%3%5%100%
Source: Recon Analytics Device Pulse   

The premium iPhone is becoming a super-premium product. We can see this with the heavy skew towards the iPhone 15 Pro and Pro Max, Apple’s most premium products. More than three quarters of all iPhone 15s are the two premium versions of the iPhone, with the Pro Max outselling the Pro. This shows the pricing power that Apple possesses as the cheapest iPhone 15 Pro Max was $100 more expensive than the iPhone 14 Pro Max but received a storage upgrade.

North America MWC may not be as big as Barcelona, but it still provides value

Posted on by Editorial Recon Analytics

By Daryl Schoolar

During the last week of September, GSMA, along with its partner CTIA, held their annual North America conference in Las Vegas. Given the regional focus of the conference, the news and activity coming from it pales in comparison to the Barcelona version. However, that does not mean MWC Las Vegas is without value. We had several meetings that alone made the event worth attending. Plus, some companies still use the conference as a platform for announcements, while the exhibit floor provides guidance on the state of mobile communications in North America.

Of the major U.S. mobile network service providers only T-Mobile and AT&T had a show floor presence this year, but that did not mean other mobile providers didn’t make their presence know. Some of the operator highlights and messages from MWC Las Vegas 2023 are as follows:

AT&T: The company’s booth was dedicated to enterprise solutions, with connected vehicles occupying significant space. This is fitting given that Hardmon Williams, SVP, Connected Solutions for AT&T, used his keynote session to announce the company is now the connectivity provider for electric car manufacturer Rivian. Hardmon also discussed the frequent software updates of electric cars, which in turn increases the importance of network connectivity to support those updates.

MobileX: The competitive outlook for the U.S. prepaid market should intensify with the announcement by MobileX that it will launch a prepaid service exclusively through a retail partnership with Walmart. The driving force behind MobileX is Peter Adderton who has a track record of launching successful prepaid brands with Boost in the U.S. and Australia. Walmart’s interest in working with MobileX appears to be a competitive move against its online rival Amazon and its recently announced sales partnership with Dish’s Boost offering.

NTT DoCoMo: On the first day of the show the Japanese mobile operator announced it will be deploying an Open vRAN solution using NVIDIA GPU for hardware acceleration. NVIDIA will be supporting both the X86 and the ARM architecture. This is significant, as it not only gives NVIDIA a major Open RAN win, but will help overall create more Open RAN deployment options.

T-Mobile: The established U.S. mobile operator T-Mobile captured the most attention at the show with its announcement of a SIM based SASE offering using network slicing. This marks the first commercial service offering using 5G network slicing in the U.S. T-Mobile’s slicing will go commercial later this year. This is an important step in 5G evolution, helping to prove commercial viability of slicing. To help grow slicing, T-Mobile CTO John Saw announced that the company has made network slicing available nationwide to application developers. T-Mobile also took full advantage of the exhibit floor to show multiple wireless enterprise solutions and to host public sessions inside its booth. It was one of the liveliest spots on the floor.

Verizon: Verizon did not make any specific service announcements at MWC Las Vegas, but it did release a statement at the start of the conference highlighting its progress in transforming its network and the subsequent benefits. Those highlights included fiber network investments, mid-band and mmWave spectrum coverage, 5G fixed wireless access, and cloud-native network transformation. Verizon Business CEO Kyle Malady used his time on stage at MWC to push back against FCC’s plan to reintroduce Net Neutrality, as a solution looking for a problem that does not exist. b

Of the three largest RAN suppliers in the region, only Nokia was on the floor. However, that doesn’t mean the conference lacked an infrastructure presence. Some of our vendor observations from the conference are as follows:

AWS: The company had a substantial presence on the show floor. Booth space was primarily dedicated to meetings and educational conversations regarding AWS’ telecom service provider and enterprise solutions. Digital transformation, and the role AWS can play in helping mobile operators with their transformation remains a strategic interest. Supporting that strategy, Sameer Vuyyuru, head of WW business development for communication service providers, gave a keynote presentation about how mobile operators are using GenAI to improve operations and customer experience.

Dell Technologies: From Dell’s hospitality suite overlooking the show floor the company promoted itself as the best option for operators looking for an IT hardware partner for building cloud-native networks. This includes servers to support Open RAN. Dell also participated in a private network demonstration with Airspan, Dish Networks, and Druid.

Nokia: As a sign of the shifting nature of network infrastructure, hardware specialist Nokia used its time at MWC Las Vegas to talk about software. Its message at the conference was “Network as Code” and participated in the open developer gateway conference held at the show. Nokia was also found at the GSMA booth demoing virtual reality to help drive interest in the mobile API opportunities.

Pivotal Commware: Pivotal Commware continues to focus on how to improve 5G mmWave economics through coverage extension and network planning and management tools. The company continues to make progress in this area indicating an increase in its U.S. deployments and that it is seeing its commercial opportunities expanding beyond the U.S.

Qualcomm: The company showed together with Quectel a 5G cellular module for laptops that can aggregate cellular and Wi-Fi signals. This is a nifty capability that focuses on the best performing link. In addition, Qualcomm continued its tradition of educating analysts about new market developments and technological innovations.

Beyond the specific vendors listed above, a significant percentage of vendor booth space remains dedicated to IoT, FWA, private networks, and indoor coverage solutions.

Realistically the U.S. version of MWC will never rival the Barcelona one. The U.S. version is mainly for North American operators and vendors while the one in Spain is global. That focus reduces participation. Vendors can bypass the show and still meet with customers and prospects. However, this does not mean the show should be written off. It remains a good source for one-on-one interactions and as a mid-year gauge of industry growth since Barcelona.

MobileX wins major prepaid points with Walmart deal

Posted on by Roger Entner

The world’s largest retailer created a unique partnership with Peter Adderton’s MobileX, making the new mobile provider an instant player in the prepaid business.

Walmart is the largest distribution channel for prepaid in the United States. At a minimum, due to its unique partnership, one would expect that MobileX will get appropriate exposure in Walmart stores and placement on Walmart+.

MobileX comes in two flavors: It is using AI to create a personalized plan for every customer or they can sign up for a very competitively priced unlimited plan. The AI plan starts at $4.08 per month with 1 GB of high-speed data, making it the lowest priced plan in the market. The $14.88 5G high-speed data plan is aimed at Mint Mobile, whereas the $24.88 30 GB plan – including Canada and Mexico – is aimed at Straight Talk and Boost Infinite.

The rivalry between Amazon and Walmart is as intense as it gets. Both companies – one being the largest online retailer, the other the largest physical retailer – are colliding. Amazon pushes into physical stores with Whole Foods, Walmart pushes into online retail with Walmart+. Both are eying the mobile market as a market of critical importance.

After Amazon struck a deal with Dish for Boost Infinite for Prime customers, it was only a matter of time – two months to be exact – before Walmart struck back with its exclusive MobileX deal.

Furthermore, one can imagine that Walmart, as the largest prepaid retailer in the United States, needed to broaden its product portfolio. Walmart’s long-standing partner TracFone has languished ever since the legendary FJ Pollak got sick and passed away. Now that Verizon has acquired TracFone, things have gone from okay to worse. TracFone’s share has shrunk and Total, a brand that was launched in Walmart, has been repurposed to be a standalone brand with more than 2,000 retail stores.

Mint Mobile, another up and coming prepaid brand with more than 1.5 million customers, is being acquired by T-Mobile. Boost Mobile, due to Dish’s close relationship with Amazon, has a sudden onset of the bubonic plague in the eyes of the folks from Bentonville, Arkansas. This makes the prepaid market suddenly a consolidated market whereas Walmart is looking for a large number of independent choices for their customers to choose from.

Just in time, Australian maverick Peter Adderton enters the stage with a new way of offering wireless and creating a new choice that is not owned by one of the three mobile network operators. Getting an independent brand like MobileX is a smart move from Walmart as it gives its customers more choice and strengthens its bargaining position vis-à-vis all other partners.

Adderton rose to fame in the United States by launching Boost Mobile. While he sold Boost Mobile in the U.S. to Sprint, he kept Boost Mobile in Australia, where it is the largest MVNO. Being a loud and boisterous voice gives him an outsized social media presence and his operational chops give him the credibility to successfully launch another mobile brand – if he’s done it twice before, he can also do it a third time.

When scouring for hints in the press release the word “unique” stands out. Knowing the players in a market personally allows us to better understand the motivations and actions. Numbers and facts tell you some of the guard rails, but they don’t make decisions; people do with their idiosyncrasies and personal values.

I am finding it hard to believe that Adderton would give up exclusivity, even to Walmart, for a distribution partnership. Such an exclusive retail partnership created an almost 10 million subscriber Straight Talk brand and was the backbone for the remaining 11 million TracFone customers. I personally believe there is more to the story than what is in the press release, but only time will tell the exact terms of the deal between Walmart and MobileX.

With all three mobile network operators increasing prices for their legacy customers, with Verizon and T-Mobile even increasing headline prices, there is an opening for lower price options. The success of Charter and Comcast taking significant share in postpaid is a testament that price is the largest purchase decision factor. Not everyone is willing or able to pay $95 per month for a single line.

At the same time, not everyone lives in the Charter or Comcast territory or has persistent heartburn from past exposure to their customer service on the fixed side. This creates significant opening for independent fighter brands like MobileX, especially when they have the backing of a large retail organization like Walmart. Ninety percent of the U.S. population is within 10 miles of a Walmart store. It instantly solves the physical distribution problem that most wireless brands have as online is just not enough.

Despite a more than a decade push by the carriers, the share of online sales of wireless stubbornly stays below 20%. The percentage of online sales of mattresses is roughly twice as high. At the same time, physical retail is expensive, with the average store costing between $1 million and $2 million to open. When you multiply that by a thousand or more stores, you suddenly are talking about real money.

The Affordable Connectivity Program – Will Congress Do the Prudent Thing?

Posted on by Roger Entner

Recon Analytics recently conducted the largest survey run to date to assess whether consumers eligible for the Affordable Connectivity Program (ACP) are actually enrolling and if so, what they are using their ACP funds for.  

We conducted nationwide consumer surveys among ACP-eligible Americans from April 28 – May 5, and August 18 – 27, 2023. We asked 29,141 ACP eligible Americans if they use ACP, and if so for what. 

We were not at all surprised with our survey findings, but some policymakers might be.

Recall that ACP is a program that provides “eligible” Americans $30 per household for internet connectivity.  Who is eligible?  Figure 1 sets forth the categories of citizens eligible for ACP.  These “categories” of low income individuals are from existing federal government subsidy programs.

Figure 1

Of the almost 53 million ACP-eligible households, more than 20 million have signed up. The states with the highest number of consumers receiving ACP subsidies are “red” states Louisiana, Ohio, Kentucky, and North Carolina.  

The program is currently set to expire in early 2024 absent additional funding by Congress.The big question inside the Beltway is whether funding the ACP is a good use of taxpayer dollars.  The ReconAnalytics survey indicates that if Congress is interested in seeing itself reelected, extending the ACP funding might be a good idea.

The Data Says ACP is Working to Close the Digital Divide … Among Republican Voters

When we compare ACP enrollment across red states and blue states (defined by the party who won the last senatorial election in the state) , we observe that the percentage of households which would lose access to the internet is higher in red states than in blue.  39% of ACP enrollees live in Red States and  34% live in blue states.  Members of Congress ignore this reality at their peril.

But what about the enrollees, what are they using their ACP subsidy for?  Consider that the largest proportion of households at risk of losing ACP are ones with school-age children.  No surprise then that our survey reveals that these same households use their ACP subsidy for school work online.

In aggregate, about 55% of respondents who told us they would be unable to access the internet without ACP were white, 16% Hispanic, 12% black, 9% Asian, 6% Native American or Pacific Islanders and 2% were of another race.

Figure 2 – ACP Enrollees by Race, Ethnicity, Age and Income Distribution

Full Time Period     
Income$0-10k$10-25k$25-50k$50-75kTotal
Not able to access the internet w/o ACP36.2%39.2%34.8%28.4%36.2%
Race & Ethnicity Distribution     
White47.9%59.2%57.5%48.9%54.5%
Hispanic18.8%14.1%17.5%15.3%16.3%
Black15.8%10.6%11.0%13.4%12.3%
Asian9.2%7.4%6.7%15.3%9.1%
Native American & Pacific Islander5.4%6.9%4.4%5.3%5.5%
Other2.9%1.9%3.0%1.9%2.4%
Age Distribution     
18-2931.0%15.9%20.5%22.5%21.5%
30-4426.4%21.2%33.6%45.0%31.0%
45-6034.3%40.5%32.9%25.6%33.9%
>608.3%22.5%13.0%6.9%13.6%

In Figure 3, we are looking at the activities that ACP households in general and in Figure 5, ACP households that would lose internet access but for ACP, are engaged in.

We show the data for both survey waves to highlight the consistency of the results over time. The two most used applications for their ACP connections are personal communications and banking, payments, investments and personal finance. In other words, ACP subscribers are using their subsidy to allow them to connect to the Internet and engage in the digital economy, whether it’s paying their bills or buying school supplies for their children.  Almost a quarter of ACP recipients use their internet connection for purchases, more than one in five (22%) need their internet connection for work, one in five (19%) for online education, and one in 8 (12%) to access government programs.

Figure 3: Behavior pattern of ACP-eligible Americans regardless of ACP participation

Figure 5 shows the impact of losing ACP. It also shows what applications really matter to people who critically depend on ACP for their broadband connection.  Banking and financial transactions, education and access to government programs are priorities for these citizens.

Almost half of ACP recipients would lose internet access altogether if ACP were to go away. 

This potential outcome presents a Catch-22: the government has pushed many programs online as a cheaper way to deliver services to low-income Americans.  Due to ACP,  22% of the targeted beneficiaries of this policy are receiving those services.  If ACP goes unfunded, 22% of the the very Americans Congress says it wants to help out of poverty will be stranded.

Seems like ACP is working but perhaps will be so effective, Congress will kill it, but at their peril.

And then there were three…

Posted on by Roger Entner

Sometimes old album titles say it best. Today, AT&T marks the start of the expansion of AT&T’s fixed wireless home internet service called AT&T Internet Air. After offering it in its DSL footprint for the last few months, it is now becoming the third nationwide mobile network operator (MNO) to launch a 5G (where available) internet offer.

AT&T is starting in Los Angeles, Philadelphia, Cincinnati, Harrisburg/Lancaster/Lebanon, PA; Pittsburgh, Chicago, Detroit, Flint-Saginaw-Bay City, MI; Las Vegas, Minneapolis-St. Paul, Phoenix (Prescott), AZ; Portland, OR; Salt Lake City, Seattle-Tacoma, Tampa-St. Petersburg (Sarasota), and Hartford-New-Haven, CT. Notably, Los Angeles is Charter’s largest market and a T-Mobile FWA stronghold, Philadelphia is Comcast’s home market, and Seattle is T-Mobile’s home market. If the carriers are looking for attention, these launch markets are certainly going to attract it. Another very interesting market is Phoenix. Gigapower, a joint venture in which AT&T is involved, is building out fiber in Mesa, AZ. While the two are about 100 miles apart, it will be interesting to see how the two technologies will be adopted in the same market.

With nationwide combined 3.45 GHz and C-Band of 120 MHz on average, and with at least 100 MHz in every market, AT&T can put significant bandwidth behind its FWA offer. The theoretical maximum speed achievable with 100 MHz of spectrum is 2.3 Gbit/s. It is important to keep in mind that what is possible in theory is also possible in reality – and that wireless is a shared resource. Will someone sitting next to a tower be the only person on the cell to get 2.3 Gbit/s? Possibly, but even though quite a few wireless speed testers have reported wireless download speeds of 600 to 800 Mbit/s, it is far from certain on a loaded network. Even half the theoretical speed is still more than respectable. Quieter than its competitors, AT&T has rolled out its mid-band network to more than 175 million pops.

AT&T Mid-Band Spectrum Depth of 3.45 GHz and C-Band