Spain’s regulator improves wholesale access covering 65% of the population

February 21st, 2017, by

In recent years the value of Spain’s telecom market has fallen steadily, with the sector affected by the poor economic climate which has contributed to high unemployment and reduced disposable income among consumers. However, a five-year recession, with tumbling GDP, effectively ended in 2014 when the economy showed a steady return to growth for four quarters in succession. Growing confidence among investors was palpable starting in 2015, and the improved business climate augurs well for the sector into 2017.

Spain has one of the largest mobile markets in Europe, with effective competition from four MNOs and a growing number of resellers and MVNOs. This competition, together with regulated roaming and MTRs, has driven down the cost of mobile calls in recent years though the number of subscribers has fallen since 2011 as customers cancel multiple SIM card ownership in response to the economic crisis. The market has seen considerable changes in recent years, including the acquisition of Yoigo by Másmóvil and the release of 900MHz frequencies for mobile broadband use. There have also been growing investments in network upgrades to support LTE and HSPA+ technologies, while MNOs and vendors are also investing in 5G technologies and services. The auction of additional spectrum in 2016 is helping operators keep pace with the growth in demand for mobile data. Both Orange Spain and Vodafone Spain have acquired fixed-line operators in a bid to compete more effectively with Movistar in their bundled service offerings.

Broadband penetration is on a par with the EU average. Subscribers continue to contend with relatively high access price, though access speeds have recently begun to improve in line with upgraded networks. The incumbent telco Telefónica, operating under the Movistar brand, has invested in fibre infrastructure while cablecos now commonly provide data at up to 300Mb/s. The regulator has in recent years promoted fibre network sharing, and has developed a pricing structure for shared fibre infrastructure. In early 2017 it formulated new conditions for wholesale access to Telefónica’s fibre networks covering some 65% of the population. In the cable sector, Vodafone Spain is in the process of delivering DOSCIS3.1 technology capable of providing data at above 1Gb/s.

The strong growth in the number of fibre broadband connections is beginning to tell on the sector’s dynamics. Although several operators are investing in fibre, either in their own networks or through sharing arrangements, Telefónica is by far the dominant player.

This report introduces the key aspects of the Spanish telecom market, providing statistics on the fixed-network services sector, and profiling the main players and their strategies to meet an increasingly competitive environment. The report also assesses the main regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection. In addition the report provides statistics and market analyses on the mobile sector, including an assessment of regulatory issues, a profile of the major providers, and an analysis of mobile data services such as SMS, MMS, i-mode, HSPA, LTE, 5G and mobile TV. The report also covers the fixed and wireless broadband markets, together with developments in related technologies such as fibre and broadband powerline. It includes broadband subscriber forecasts to 2021.

For detailed information, table of contents and pricing see: Spain – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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Slower growth in Tajikistan’s mobile market and fixed broadband penetration remains very low

February 17th, 2017, by

Of all the former Soviet republics, Tajikistan’s telecommunications infrastructure was arguably the least developed. With a telecom network that was near total collapse, the government has had the daunting task of bringing it up to modern standards. Telecommunications has become one of the most dynamically developing sectors within the Tajikistan economy.

Tajikistan’s mobile sector has been on a strong growth path for over a decade. It continues to be the standout feature of the country’s telecom industry. Tajikstan’s mobile market has experienced relatively strong growth over the last five years. However as the market has moved closer to a saturation phase there has been an inevitable slowing in the growth rate. Market penetration reached 100% in 2016. Market penetration is to grow at a slower rate over the next five years to 2021. There are five major operators in the market: Tcell, Babilon Mobile, MegaFon, Tacom / Beeline and TK Mobile. Tcell has the largest overall market share with over 30%

Despite the recent launch of 4G/LTE services, the overall the telecom sector has continued to struggle. Tajikistan has one of the lowest fixed-line teledensities in the region and one of the lowest broadband levels of broadband penetration. Internet penetration stood at around 21% in Tajikistan by 2016, increasing from 17.5% in 2014 and 19% in 2015. Fixed line penetration in Tajikistan remains low at around 5.3%. It has been growing at a very slow rate over the past few years due to the dominance of wireless markets.

Fixed broadband subscriptions in Tajikistan stood at a lowly 0.07% penetration by 2016 increasing only marginally from 0.06% in 2011. Further slow growth in anticipated over the next five years as 4G rollouts continue and there is an increased dependence by consumers on wireless networks. Market penetration is predicted to remain low over the next five years to 2021.

Note: It is pointed out that there are considerable inconsistencies with the market statistics available for Tajikistan as well as the total absence of statistics for some indicators.

For detailed information, table of contents and pricing see: Tajikistan – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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Does Australia need a proper nbn?

February 17th, 2017, by

Here we go again with more useless debates about whether the country needs a first-class national broadband network or a second-rate one; and again there are discussions around what other flavours of the multi-mix technology can we now add to it to strengthen the brew. By now we have lost most of Australians in this useless debate, and we are making very little progress.

Of course we need a first-class nbn, and that is what we would expect those in charge, both in government and in the nbn company, to deliver to the Australian people.

Rather than addressing the core of the problem those involved in these debates pick on certain elements; and often, yes, there are two sides to such detailed issues. But in this nitty gritty debate everyone involved misses the bigger picture – or perhaps deliberately avoids addressing it.

In such situations I have always argued for going back to the core – why we are building an nbn in the first place. Given all the government money spent, the answer has to be ‘in the national interest’, and if you dig deeper you get into the social and economic benefits we have been talking about for a decade (healthcare, education, national productivity, digital economy and so on).

So if we look at the nbn with the national interest in mind what sort of infrastructure is needed to deliver those national outcomes?

There is little argument about this from all of those involved in these endless debates. Such an infrastructure needs to deliver the following: capacity, robustness, security, low latency and ubiquity. Once we agree on this I think nearly everyone will say that the answer is FttH.

The real question then is how do we get there?

If we don’t build an infrastructure based on FttH we will get into trouble, and the endless arguments are a clear indication that the nbn in Australia is in trouble.  For example, looking at the patchwork nbn we are getting right now – because of its reliance on old technologies the mixed technology might work in one area but not in another; or better here and worse there.

Roughly a quarter of nbn users have complaints about the quality of their service. It could well be that one house has a perfect connection while the next one has an abysmal service. And there are many possible reasons for that, which sometimes makes it very hard for the nbn company to fix the different problems.

For national services such as e-health, education, government services, finance or business, a network with consistently good characteristics nationwide is necessary. If such an infrastructure can’t be delivered then the institutions that need to build those digital services simply won’t do it. It is a chicken-and-egg situation. So if you don’t build a first-class network you won’t create the supply, and when you don’t have a good supply of services you won’t get the demand.

However, it is totally wrong to then claim that because there is no demand Australians don’t need a proper nbn.

If, as Prime Minister Turnbull maintains, at this point in time we can’t afford such a network it would still be necessary to build an nbn with that end goal in mind – and to very clearly communicate the vision and provide the right strategies for it. So far neither the government nor the nbn company has provided such a vision or strategy.

Talking about money, building an nbn is one thing. Making sure that people can afford it is another. So, apart from the infrastructure characteristics that are mentioned above, an important inclusion in the business model of the nbn needs to be recognition of the reality that people will only buy what they can afford. So building any infrastructure that will result in unaffordable prices for the users is also not the right thing to do. The Government is the only one who can take the national economic and social benefits into account; commercial organisations can’t do this, as these benefits don’t show up in any financial format on their P+L.

Regrettably it appears that on both counts – proper infrastructure plans and the need for affordable services – the government and the nbn company, despite spending something like $50 billion, have failed to come up with the right solution for Australia.

Paul Budde

For more information see:

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Brazil’s government approves additional funding for National Broadband Plan

February 16th, 2017, by

Supported by a population of some 204 million, the Brazilian telecoms market is among the largest in Latin America. Telecoms revenue has been adversely affected by the ongoing economic crisis which has dented consumer confidence and reduced spend on services.

The country’s telecom infrastructure will be significantly augmented during the next two years as additional submarine cables become ready for service. In addition, the government-owned SGDC satellite, due to be launched in March 2017, will provide defence communications for the Ministry of Defence as well as broadband services to support the National Broadband Plan (PNBL), a project which recently secured additional funding.

Substantial investments and regulatory reforms were implemented before the FIFA World Cup was held in 2014 and again before the 2016 Olympic Games. The Games stimulated investment in infrastructure, though the chief beneficiaries were the host cities rather than the country at large.

The fixed-line market has been hit by consumers substituting services for mobile and VoIP solutions. The broadband market is also one of the largest markets in the region, though broadband penetration is only slightly above the Latin American average, trailing behind neighbouring Chile, Argentina, and Uruguay. The mobile market is dominated by the four network operators Vivo, Claro, TIM and Oi. All four secured spectrum in the 2.5GHz band with which they are expanding their LTE networks and so capitalising on consumer demand for mobile data services. The government has also sanctioned the use of the 700MHz band – previously allocated to TV broadcasters – for mobile broadband use, though the spectrum will not be fully released by broadcasters until further into 2017.

The mobile subscriber base grew rapidly for a number of years, in line with the increasing footprint of mobile networks, but since late 2015 the number of subscribers has fallen sharply. This was partly due to operators cancelling dormant SIM cards, as also to pricing competition which eroded the need among some consumers to hold SIM cards from different providers and so take advantage of cheaper on-net offers. Another factor has been the economic recession.

A new BuddeComm report provides detail on Brazil’s telecom market, including an assessment of infrastructure developments and the regulatory environment. It profiles the main fixed-line operators and examines their strategies in the light of relevant company financial and operating statistics. The report also reviews the digital media and broadband markets, accompanied by analyses and broadband scenario forecasts to 2021. In addition the report examines the mobile voice and data market, including a range of statistics and analyses, as also scenario forecasts.

For detailed information, table of contents and pricing see: Brazil – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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We urgently need a new internet

February 15th, 2017, by

Let’s be honest about it. Nobody – including those very clever people that were present at its birth – had the slightest idea what impact the internet would have in only a few decades after its invention.

The internet has now penetrated every single element of our society and of our economy, and if we look at how complex, varied and historically different our societies are it is no wonder that we are running into serious problems with the current version of our internet.

There are some very serious threats to the internet, the key ones being:

  • Cyber-terror and cyber-war
  • Cyber-crime
  • Political (government) interference (Russian and Chinese hackers, Prism, Stuxnet, etc)
  • Privacy intrusion (governments, Google, Facebook, Amazon, etc)

So far the reaction to all of this has been to create draconian regulations which will never be successful, because the internet was never designed to cope with such complexities.

The internet is now so critical to our society that we can’t afford to lose it and so we are beginning to accept the breaches, hacks and interferences, because the need to use it is greater than the concerns we have in relation to the abovementioned activities. This is creating very dangerous situations politically, socially and economically.

We have been somewhat  sheltered by the fact that over the last half century – in western democracies – we have had good institutions, both private and public, which in general terms have been addressing these negative outcomes with the good of all in mind.

While this is, in general, still the case it is not too difficult to see that populist regimes might have other ideas about what defines the ‘public good’ and that they will want to use the internet for their own purposes.

On the other hand, we see the more responsible governments increasingly being forced to intervene and regulate, as they are unable to get on top of the abovementioned issues. We know this is futile but they feel they have no other option.

Rather than following this path it would be much better to address the underlying technology issues of the internet. There is no way that we can avoid terrorists, criminals, and disruptive populist factions who will always look for ways to misuse the internet; but we can make the internet much safer than it is now.

Unfortunately however, the current internet cannot be fixed. So we need a new one.

My colleague Martin Geddes has written an excellent article on why the old net is broken and why it can’t be fixed.

It is not going to be easy to resolve this.  It basically means that, bit by bit, the old internet will need to be replaced by a new one. The good thing is that the engineers involved in both the old and the new internet know what this new internet should look like – in some places this (industrial) internet infrastructure already exists.

What is needed is the commercial and political will to start working on replacing the old with the new.

Based on Martin’s article a group of my colleagues have started a discussion on this topic. I am a firm believer that our industry will need to drive this new development, so we will have to create further awareness of the problem and at the same point the way forward.

There is widespread support for looking at RINA for both the strategic and the technological guidance that is needed. There is a good description of RINA on Wikipedia – the following is only the introduction to it:

RINA stands for Recursive InterNetwork Architecture and is a computer network architecture that unifies distributed computing and telecommunications. RINA’s fundamental principle is that computer networking is just Inter-Process Communication or IPC. RINA reconstructs the overall structure of the Internet, forming a model that comprises a single repeating layer, the DIF (Distributed IPC Facility), which is the minimal set of components required to allow distributed IPC between application processes. RINA inherently supports mobility, multi-homing and Quality of Service without the need for extra mechanisms, provides a secure and programmable environment, motivates for a more competitive marketplace, and allows for a seamless adoption.

As mentioned, I firmly believe that our industry has a vital responsibility to show leadership and ensure that our societies and economies get a better and safer internet than the version (Martin calls it a prototype) that we have now. The industry is starting this discussion which will hopefully lead to a safer internet for all.

Paul Budde

See also: BuddeComm Intelligence Report – Internet Governance, E-Security and Net Neutrality Insights

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