Telecom
Providers are making more money from Internet. But what part of the Internet:
Fixed Line or Mobile?
The
latest Telecommunications Market Information Report published by the OUR
(Office of Utilities Regulation) as declared in the article “Telecoms
Revenue Tops $20b As Internet Picks Up Speed”, published Friday September
9, 2016 by Steven Jackson, The Jamaica
Gleaner can help settle this debacle!
Covering Q3 ending in September 2015, the results are a continuation of the increasing revenue trend being set by Internet revenue:
1.
JA$20 billion in total revenues from
voice mobile, fixed and Internet segments
2.
JA$13 billion for Voice Mobile revenue
3.
JA$2.6 billion for Fixed Line revenue
4.
JA$4.5 billion for Internet revenue
These
figures presented in the Telecommunications Market Information Report for Q3 of
2015 ending September 2015 are YOY (Year on Year) increases over the
corresponding periods in Q3 of 2014 as follows:
1.
JA$20 billion in total revenues from
voice mobile, fixed and Internet segments
2.
6.5% increase for Voice Mobile revenue
3.
16% increase for Fixed Line revenue
4.
53% increase for Internet revenue
In
the previous Telecommunications Market Information Report for Q2 of 2015 ending
June Internet revenues surpassed the $4.2 billion mark or 153 per cent higher
year on year as noted in my blog article
entitled “Why
OUR Telecommunications Market Information Report indicate Jamaicans love
Snapchat and High-Speed Internet”.
So
does this mean Internet usage is on the rise? And if so, what segment of the
Internet Market is responsible?
Telecoms profit from
Internet – Mobile leads the charge with 1 million subscribers
Good
to keep the stats from the latest Economic and Social Survey Jamaica published
by the Planning Institute of Jamaica in the back of your minds as you
contemplate how much money Telecom Provides make:
1.
2.8 million Jamaicans
2.
1.46 million Jamaicans use the Internet
Breaking
these figures down the users of Internet are as follows:
1.
1.3 million mobile Internet users
2.
161,000 broadband subscribers
3.
966 narrowband or ADSL subscribers
These
users have also increased Q3 of 2015 ending September 2015 when compared to the
same period last year:
1.
40% increase for mobile Internet users
2.
3.5% increase for broadband subscribers
3.
0% increase in narrowband or ADSL
subscribers
So
clearly the growth is coming from Mobile Internet, which now has 1 million
subscribers and 1 million problems. This includes a recent Islandwide Internet
outage where Mobile, Fixed line and Broadband Network, went down between Friday
September 2nd and Saturday September 3rd 2016 as reported in my Geezam blog article entitled “FLOW Jamaica
Network Outage due to 1 Million Satisfied Customers”
So,
with Internet being so important, what segment of Internet makes the most
money?
Fixed Line vs Mobile -
Postpaid Fixed Line Growing slowly but more profitable
As
was the case the last time, data collection from Digicel wasn't easy, as
they're not publicly listed as is FLOW Jamaica.
But
clearly, Jamaican love for Social Media Apps such as WhatsApp and Instagram may
account for the explosion in Mobile Prepaid Data; Snapchat is best used on
Wi-Fi from a FLOW or Digicel Play Cable Service.
Still,
90% of the JA$6 billion per quarter is actually made by the slower growing
fixed Line or Landline segment, being as they are postpaid. Albeit the figures
appear to show the revenue is higher for Internet, which comprises mobile
Internet, Broadband and narrowband subscribers, the reality is that Broadband
and narrowband or ADSL subscribers are a part of Fixed Line.
Fixed
Line customers, who are at home, subscribe to Broadband and narrowband in the
form of FLOW Horizon Cable service and ADSL (Asynchronous Digital Subscriber
Line); these are mostly postpaid subscriber, with the exception of Browse and
Talk, which is a monthly subscription.
FLOW
is in the process of upgrading to VDSL (Vectoring Digital Subscriber Line) with
plans to introduce FTTH (Fiber to the Home) soon as predicted in my Geezam blog article entitled “How FLOW’s 70 Mbps VDSL in St. Ann
means FTTH, 4G LTE on North Coast”.
They,
however, have not been focusing on launching LTE (long Term Evolution) as LTE's
high CAPEX (Capital Expenditure) and low ROI (Return on Investment) means
they'll not be investign in an LTE buildout as noted in the article “FLOW
Hikes Mobile Data Plans To Boost Income - Cheapest Product Doubles In Price; Now
Offering 'Recharge' Loan Facility”, Published Wednesday September 21, 2016
by Steven Jackson, The Jamaica Gleaner.
C&WJ/FLOW
Jamaica Managing Director Garfield Sinclair made this declaration to
shareholders at the company's annual general meeting on Wednesday September 7
and he'll most likely stick to that declaration. Their focus is instead on
making more money from Prepaid Mobile Data, which they've done as noted in my Geezam blog entitled “FLOW Jamaica new Data
Plans as FLOW ID, My FLOW App and Streaming Needed”.
The
figures present by Telecommunications Market Information Report for Q3 of 2015
make it quite plain; Fixed Line not Mobile is the real money maker.
Albeit
growing faster in terms of subscribers, until Mobile is 90% postpaid as argued
in my Geezam blog article entitled “FLOW Jamaica FAM Postpaid
needs FLOW ID, My FLOW App and Mobile Money”, Mobile Voice and Data will
not match the revenues made by Fixed Line customer who are also Broadband and
narrowband, which is mostly Postpaid.
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