Subscriber churn in the Australian ISP market

Rapid growth in Internet use, combined with easy market entry by Internet service providers (ISPs), has resulted in a highly competitive supply of Internet services. Australian ISPs range in size from a few large national operators to niche ISPs focused on specialised service. With many ISPs currently not profitable, subscriber retention is an important aspect of survival. This study develops a model which relates the probability of subscriber churn to various service attributes and subscriber characteristics. Estimation results show that churn probability is positively associated with monthly ISP expenditure, but inversely related to household income. Pricing also matters with subscribers preferring ISPs which offer flat-rate pricing arrangements.

Subscriber churn in the Australian ISP market

Rapid growth in Internet use, combined with easy market entry by Internet service providers (ISPs), has resulted in a highly competitive supply of Internet services. Australian ISPs range in size from a few large national operators to niche ISPs focused on specialised service. With many ISPs currently not profitable, subscriber retention is an important aspect of survival. This study develops a model which relates the probability of subscriber churn to various service attributes and subscriber characteristics. Estimation results show that churn probability is positively associated with monthly ISP expenditure, but inversely related to household income. Pricing also matters with subscribers preferring ISPs which offer flat-rate pricing arrangements.Internet; customer churn; pricing

The rise and demise of Lucent Technologies

We analyze the rise and demise of Lucent Technologies from the time that it was spun off from AT&T in April 1996 to its merger with Alcatel in December 2006. The analysis, contained in the three sections that form the body of this paper, considers three questions concerning Lucent’s performance over the decade of its existence. 1.How was Lucent, with over $20 billion in sales in 1995 as a division of AT&T, able to almost double its size by achieving a compound growth rate of over 17 percent per year from 1995 to 1999? 2.What was the relationship between Lucent’s growth strategy during the Internet boom and the company’s financial difficulties in the Internet crash of 2001-2003 when the Lucent was on the brink of bankruptcy? 3.After extensive restructuring during the telecommunications industry downturn of 2001-2003, why was Lucent unable to re-emerge as an innovative competitor in the communications equipment industry when the industry recovered?Communications equipment; innovation; global competition; financialization

Economic growth and the design of search engines

The Internet plays a growing role in the economy. This paper extrapolates this trend and analyses a world where most transactions take place in "cyberspace". We ask the following question: how does the design of the search engine affect the incentives to innovate and the economy’s long run growth rate? This is done in the context of a "qualitative" model where growth occurs because the number of varieties grows and consumers select a shrinking fraction of the available goods, of growing quality. They must use a search engine to locate goods. The search engine affects the market size of a good over its life cycle, and thus the incentives to innovate. Its structure has two conflicting effects. A visibility effect by which a greater hit score increases market size. A selection effect by which consumers are more picky and select higher quality goods, thus reducing the life span of any given good. While these two effects on growth cancel out for simple specifications, that is no longer the case if a firm’s score is variable along its life cycle or if he search process uses resources. It is shown that the discount effect of gradual recognition of popularity tends to reduce growth. Hence, growth is enhanced if the search engine is less sensitive to popularity. Also, growth is lower when the search engine rewards "web page quality" better because of the resources diverted away from R and D into advertising. But these mechanisms generate opposite level effects on the average quality selected by consumers. As a result the net effect on welfare is ambiguous

Market-to-Revenue Multiples in Public and Private Capital Markets

The behavior and determinants of market-to-revenue ratios in public and private capital markets is examined. Three samples are analysed: (1) all publicly traded stocks listed at some time on the New York Stock Exchange/American Stock Exchange/National Association of Securities Dealers Automated Quotation System in the 1980—2004 period; (2) sample of over 300 so-called ‘internet companies’ in the 1996—2004 period; and (3) over 5500 privately held venture capital-backed companies in the 1992—2004 period. Both company size and the most recent revenue growth rate are found to explain significant variation across companies in their market-to-revenue multiples — smaller companies and companies with higher recent revenue growth rates have higher multiples. We also document how the capital market appears to use a broad-based information set when setting market-to-revenue multiples for companies with negative revenue growth rates — transitory revenue growth components appear to be identified (in a probabilistic sense) by the capital market. Contrary to much anecdotal comment, we present evidence that the capital market behaved directionally along the lines predicted by capital market theory in the pricing of internet stocks in the 1996—2004 period

HIDRA: Hierarchical Inter-Domain Routing Architecture

As the Internet continues to expand, the global default-free zone (DFZ) forwarding table has begun to grow faster than hardware can economically keep pace with. Various policies are in place to mitigate this growth rate, but current projections indicate policy alone is inadequate. As such, a number of technical solutions have been proposed. This work builds on many of these proposed solutions, and furthers the debate surrounding the resolution to this problem. It discusses several design decisions necessary to any proposed solution, and based on these tradeoffs it proposes a Hierarchical Inter-Domain Routing Architecture - HIDRA, a comprehensive architecture with a plausible deployment scenario. The architecture uses a locator/identifier split encapsulation scheme to attenuate both the immediate size of the DFZ forwarding table, and the projected growth rate. This solution is based off the usage of an already existing number allocation policy - Autonomous System Numbers (ASNs). HIDRA has been deployed to a sandbox network in a proof-of-concept test, yielding promising results

Will we run out of data? An analysis of the limits of scaling datasets in Machine Learning

We analyze the growth of dataset sizes used in machine learning for natural language processing and computer vision, and extrapolate these using two methods; using the historical growth rate and estimating the compute-optimal dataset size for future predicted compute budgets. We investigate the growth in data usage by estimating the total stock of unlabeled data available on the internet over the coming decades. Our analysis indicates that the stock of high-quality language data will be exhausted soon; likely before 2026. By contrast, the stock of low-quality language data and image data will be exhausted only much later; between 2030 and 2050 (for low-quality language) and between 2030 and 2060 (for images). Our work suggests that the current trend of ever-growing ML models that rely on enormous datasets might slow down if data efficiency is not drastically improved or new sources of data become available

Assessing the Impact of Internet Adoption Levels on Competitive Advantage

This paper introduces a model for Internet adoption, namely: level 0 – e-mail adoption; level 1 – Web presence; level 2 – prospecting; level 3 – business integration; and level 4 – business transformation. Two broad Web site categories can be identified: informational Web site and transactional Web site. The competitive advantages in terms of differentiation, cost reduction, innovation, growth, and alliance that are affected by Internet adoption are examined. A questionnaire survey of 553 firms was conducted, of which 159 usable responses were received, resulting in an effective response rate of 28.8%. The results show that proactive business strategy, firm size and competitive advantage are found to be positively related to Web adoption level. Implications of the results for researchers and practitioners are discussed, and directions for future research are proposed

A conflict-free memory banking architecture for fast VOQ packet buffers

In order to support the enormous growth of the Internet, innovative research in every router subsystem is needed. We focus our attention on packet buffer design for routers supporting high-speed line rates. More specifically, we address the design of packet buffers using virtual output queuing (VOQ), which are used in most modern router architectures. The design is based on a previously proposed scheme that uses a combination of SRAM and DRAM modules. We propose a storage scheme that achieves a conflict-free memory bank organization. This leads to a reduction of the granularity of DRAM accesses, resulting in a decrease of storage capacity needed by the SRAM. In the DRAM/SRAM scheme, SRAM memory bandwidth needs to fit the line rate. Since memory bandwidth is limited by its size, searching for memory schemes having a small SRAM size arises as an essential issue for high speed line rates (e.g. OC768, 40 Gbps and OC3072, 160 Gbps).Peer ReviewedPostprint (published version