The Signal #8: holiday 2015; drones; US wireless carriers in 2015


Holiday 2015; drones; reflections on wireless in 2015 – The Signal #8

Friends –

Happy holidays to you and yours. Welcome to the last edition of The Signal in 2015, in which we reflect on the year that was.

Here’s 2015 in a nutshell: we were standing at the UPS counter, when the UPS guy posited that perhaps we could send our document by drone, because “Amazon is working on prototypes, right?”  Yup, this was the year that drones, at least the concept of them, went mainstream.  Meanwhile, the Federal Aviation Administration has put forth its guidance on drones – any drone above .55 pounds (9 oz or 250 grams) will need to be registered. So much for ad hoc beer delivery to ice fishermen. (h/t to Lakemaid Beer for the pic)

Does a drone (UAS) that weighs under 9 ounces exist?  A GoPro Hero skates in at 3.9 oz (about a quarter-pound); a 3DR Solo with GoPro Hero and gimbal mount, weighs 3.9 pounds. In sum, that drone under your holiday tree will need to be registered with the FAA. After multiple reports of drones interfering with, say, fire operations, this is not a surprise. California banned paparazzi drone use in October 2015.

In mobile in the US, 2015 had some throwback elements while also showing all signs of a saturated market.

  • The throwback element: carriers competing on content services! Verizon launched its Go90 service, and T-Mobile launched its Binge On mobile video offering, which, by being zero-rated, proved yet again that net neutrality is complicated. (To use the Comcast/NBCU merger argument, is there consumer harm here? Let us know!)

  • Signs of saturation: US operators sold pretty much the same phones, and generally competed on handset financing plans and bundles. Even as it launched a connected car offering, integrated acquisitions AOL and Millennial Media, and talked up IoT revenue, Verizon also talked about earnings plateauing in 2016.  Verizon revenues for the last five years are below. Note the drop in service revenue with the shift to equipment installment plans.

Verizon quarterly earnings, Q3-2010 – Q3-2015

A saturated market usually means M&A will follow.  Given the FCC kibboshed SoftBank’s ambitions to merge #3 and #4 (T-Mobile and Sprint), merger between any of the national carriers is unlikely. Further, most small operators with >1M subs have already been acquired. Will US operators go global for growth? Or move to adjacent markets as Verizon has in acquiring Hughes Telematics, Terremark and AOL? Will a carrier buy Dish much as AT&T bought DirecTV? Or will Dish buy a carrier?

On that note, we wish you a wonderful and restful new year, and extend warm wishes for 2016. To our friends in Japan, we will say 本年は大変お世話になりました。来年もよろしくお願いいたします! 

from Team Blue Field

PS – At least one of us will be at CES 2016. Look for observations on CES 2016 in a future edition.

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Jon Metzler, Founder and President 

Phil Keys, Analyst

Sandro Olivieri, Product Strategist





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