This week in telecom news, Apple is reportedly negotiating interconnection deals with ISPs to put together a CDN for its content. And the FCC has far more on its plate than Net neutrality in the wake of Comcast's and AT&T's dueling pay TV acquisitions. The FCC has yea or nay authority and has to assess the changing telecom market at the same time.
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The ITU released data that shows global Internet usage growing quickly, along with an estimate that there will be three billion global Internet users by year's end, with developing countries quickly signing on. Finally, Verizon and AT&T are the top ranked telecom operators according to a global Brand Finance. Read on for more on what you need to know in telecom news.
Apple may build CDN; negotiating interconnection deals with ISPs
Apple is reportedly in negotiations with Internet service providers (ISPs) for interconnection deals to deliver Apple content to consumers.
Apple has been rumored to be building its own content delivery network (CDN) after relying on other companies, like Akamai and Level 3, to deliver content including iTunes and apps, according to Ars Technica.
"Apple has been very busy with their build-out deploying a lot of boxes running Apache Traffic Server and buying a ton of transit, co-location, wavelengths and other infrastructure services," wrote Dan Rayburn, analyst and executive vice president of StreamingMedia.com, in a blog. "Their CDN is quickly growing and it won’t be long before we start seeing a portion of their content getting delivered from their new CDN."
Part of Apple's CDN plan, Rayburn wrote, is negotiating paid interconnection deals with "some of the largest ISPs in the U.S." Rayburn noted that other companies with their own CDNs, such as Microsoft, Google and Facebook, also pay ISPs for interconnection.
"Part of Apple's reasoning for building their own CDN is because of performance issues with iCloud, with Apple wanting to have more control over the end-user experience," Rayburn wrote.
Internet to reach 3 billion global users by end of 2014
The number of Internet users will grow to nearly three billion by the end 2014, according to a recent study by the International Telecommunication Union (ITU). According to the study, 78% of global Internet users come from developed countries, while 32% come from developing countries. By the end of 2014, 44% of the world's households will have Internet access.
One-third of households in developing countries will be connected to the Internet, according to the ITU study. In Africa, Internet usage is expected to reach 20% this year, up from 10% in 2010.While the ITU reports that Internet connections in Africa are in one out of 10 homes, connections are growing rapidly.
In developed countries, the ITU estimates Europe will have the highest penetration rate, with three out of four people using the Internet. The Americas are estimated to have the second highest projection rate, with two out of three people on the Internet.
The Asia-Pacific region is projected to make up approximately 45% of the world's Internet users by the end of 2014.
Mobile broadband is expected to reach 84% of users in developed countries and 21% in developing countries, according to the study. Mobile cellular subscriptions are estimated to grow to approximately 7 billion with 78% of mobile subscription growth coming from developing countries.
Telecom pay TV deals give FCC something to ponder
First Comcast announced it would buy Time Warner Cable Inc. for $45 billion, then earlier this month, AT&T followed suit with a $48.5 billion bid for DirecTV. Trends being what they are, rumors started flying immediately that Verizon was going after Dish Network Corp. Bloomberg reported that Verizon CEO Lowell McAdam said his company isn't in talks with Dish, that in fact, the rumor was someone's fantasy.
Whatever happens next, the Federal Communications Commission (FCC) has to decide whether to approve high-priced telecom and cable pay TV deals. The Wall Street Journal reported that FCC chairman Tom Wheeler could leverage the mergers to advance his net neutrality agenda. Tom Eagan, Telsey Advisory Group, said that the FCC has to assess these deals as part of an increasingly volatile marketplace, according to Bloomberg Businessweek.
If more deals that would revolutionize the telecom industry again are coming, it would be risky for the FCC to make its initial acquisition decisions in a vacuum, which could result in delays for all parties. For example, the FCC blocked AT&T from buying T-Mobile three years ago because it would have decreased the number of major wireless carriers in the U.S. But a Sprint/T-Mobile merger has been rumored, unless of course, as Channel Partners Telecom speculated, Comcast tries to scoop up T-Mobile to enter the traditional wireless business. The FCC would have to weigh whether a T-Mobile deal now would be substantially different than it was three years ago. --Kate Gerwig
AT&T and Verizon awarded top global telco ranking
Verizon and AT&T topped Brand Finance's list of 2014's most valuable telecom operator brands. Verizon received the top ranking with a brand value of $53.5 billion in 2014, an increase of 74% from the previous year.
"Verizon has finally come of age, acquiring Vodafone's 45% stake in Verizon Wireless to take full charge of its own affairs," Brand Finance said in a press release.
AT&T took the number two spot with a brand value of $45.4 billion, reflecting growth of 49% from 2013. Despite Vodafone's acquisition by Verizon and increasing its brand value to $29.6 billion, the U.K.-based carrier dropped to fifth place from third in 2013. This is due to strong performances by China Mobile and Deutsche Telekom's T brand, which took third and fourth place respectively.
Chinese telecom operators saw strong growth over the past year. In addition to China Mobile, China Unicom jumped four spots to take eighth place.
"Chinese brands continue to build brand value rapidly as the country's huge population becomes more urbanized, networked and interconnected," Brand Finance said.
Brand Finance's brand rating is determined by factors including trust, loyalty, corporate responsibility and governance.