Archive for July, 2000


Saturday, July 1st, 2000

After one of the most powerful lobbying bids in Australian politics the government has been able to pass the Digital TV Bill with only minor changes – this despite the fact that the stakeholders, such as News Limited and John Fairfax, were supported by the Internet and telecommunications industries and organisations such as the Consumer Association of Australia. In the end Democrats and the ALP cancelled each other out by voting against each other’s proposals for more fundamental changes.

The key points of change are:

– Internet services can be delivered via television, provided they meet strict criteria to not compete with broadcasting.

– The ABC and SBS are allowed to offer multichannelling, except for programs such as movies, sport, sitcoms, drama and national news.

– The enhanced TV services permitted to be delivered by the broadcasters were further limited (to protect the pay TV industry)

– With the exception of the news, datacasting can now also include current affairs.

It is a pity that the leaders of the country were not, in the end, able to come up with a vision that went beyond protecting the vested broadcasting interests. By protecting a $3 billion old world industry it is impeding the development of a new world industry, which potentially is worth $50 billion to the Australian economy.

It now all depends on how innovative datacasters and the public TV channels will be in creating content that will attract users and I am doubtful about their chances. One thing is for certain – we have missed out on an opportunity to leap-frog into the new world of digital TV.

Things are not looking good for the government as both the industry, as well are regional communities, are now questioning the policy.

(see Web report Australia- Broadcasting – Digital TV and Digital TV – Issues and Analysis)

We invite your comments: Comments Off on FINAL POLICY ON DIGITAL TV (AUSTRALIA) – JULY 2000


Saturday, July 1st, 2000

In July 2000 it was announced that the non-US assets of California-based ISP Excite@Home will be merged with UPC’s Chello Broadband. Both companies will hold 50% in the new company.

AT&T’s Liberty Media cable unit, the parent company of Excite, will invest US$187 million in the new company, to be called Excite Chello. Excite@Home and UnitedGlobalCom, parent company of UPC, will each invest $93.8 million.

The merger combines Excite’s assets outside the US, which include Australia, the Netherlands and Japan, with Chello’s strong broadband presence in Austria, Belgium, France, the Netherlands, Norway, Sweden, Australia, New Zealand and Chile.

In Australia the merger will further boosts the plans of Austar, Chello’s sister company to buy the Optus pay TV service. It would concentrate the combined Austar, Chello and C&W Optus broadband activities under one umbrella. While this might make sense from a business perspective, it might not necessarily be good for consumers as it will lessen competition in the market.

Consumer services will be branded Excite, whereas the company’s broadband access will be labelled Chello.

For Chello it will be a consolidation of its position and an opportunity to expand elsewhere. The investment from Liberty, which already has a cable deal with UnitedGlobalCom, also brings in a connection with Microsoft, which is eager to encourage the adoption of its platform for set-top boxes. For Excite, the merger is a chance for it to penetrate the European market.

We invite your comments: Comments Off on BROADBAND CONCENTRATION – JULY 2000


Saturday, July 1st, 2000

While visiting Germany earlier this month (Expo 2000 in Hanover), by far the most important news was that the country had won the honour of hosting the World Championship Soccer in 2006.

However, there were also some interesting bits of news in relation to our industry. Here follows a news roundup from Europe:

No Internet

First I have to share with you my disappointment that there was no public Internet access available in my 500+-room hotel, nor was there any at the international airport. As my laptop was being repaired I was depending on public access. It just goes to show that Germany is still lagging on the information highway. (This fact has been further established by research data from Forrester, indicating that e-commerce in Germany is 50% less than in Scandinavia and the United Kingdom.)

3G auction Germany

The telecommunications Regulator has confirmed that the action date for 3G spectrum will be 31 July – this despite the withdrawal of three of the eleven bidders. The Regulator played down earlier expectations that the auction of the four to six licences would bring in DM120 billion. If prices were to come even close to this amount it would have a significant effect on the success of 3G wireless technologies in competing with wired access technologies.

3G auction Netherlands

In the Netherlands the auction process started while I was over there. On the preceding day two more bidders had withdrawn (Hutchison and NLT) and the arena now contains six bidders and 5 licences. The expectation, based on the UK process, was DFL10 billion (AU$8 billion), but it is believed that the end result will be less than half of this. By the time I left the country the process was still slow and had only just reached DFL1 billion.

Unbundling of local loop

The European Commission has launched a set of new telecommunications plans, which include the unbundling of the local loop. The Commission hopes to have its final legislation in place before the end of the year. This would make it possible to introduce the service before the end of 2001. France and Germany have already passed legislation and will open these markets well before this date.

Other elements of the proposed regulations include a location service on mobile systems for emergency services, at no extra cost. However, for privacy reasons customers will have to opt-in in order to use the service. Calling Line Identification (CLID) and other telephone numbering issues are also discussed in the proposed plans.

Partnership deal Netherlands

The partnership between Dutch KPN, NTTDoCoMo and Hutchison caused a big stir in the industry. Together they will tackle the burgeoning mobile market in Europe. The deal was welcomed in the Netherlands as it will provide the Dutch incumbent with its much-needed platform to branch out into Europe. Like most European telcos KPN knows that it will have to expand internationally in order to survive. In the meantime Deutsche Telekom further positioned itself for a major acquisition (or acquisitions) in the USA and Telefonica (Spain) bought one of the Netherlands’ largest entertainment companies, Endemol.

Wireless loop licences France

In France two new companies First Mark Communications France and Fortel secured national licences for wireless loop services. Both are consortia from various French business groups. Furthermore each of France’s 22 national regions and 2 overseas regions received two licences for regional services.

Developments regarding ADSL

There were angry reports in the Frankfurter Allgemeiner Zeitung about Deutsche Telekom’s (DT) handling of its DSL service. The pricing structure is complex and still in a state of flux.

There are now close to 100,000 users, of which DT has the majority. Currently the service is limited to ISDN and is offered through a surcharge to this service. This, however, is set to change.

Customer service is another problem area, as DT has been accused of making this too complex by not providing an installation service and by trying to make the user responsible for all ADSL problems, causing frustration amongst their customers.

AOL and other providers will not be able to provide DSL services until later this year.

As for the rest, people are beginning to get into the holiday mood in Europe, with the arrival of summer – in spite of the fact that during my stay the north European summer temperatures were below the Australian winter ones!

Paul Budde

We invite your comments: Comments Off on ROUNDUP OF NEWS FROM MY EUROPEAN TRIP – JULY 2000


Saturday, July 1st, 2000

The results of the latest IT Trends Survey, jointly commissioned by SITA and Airline Business magazine, show that airlines are looking to take a leading role in online ticket sales. The IT Trends Survey, focused on the world’s top 150 carriers, reveals that although online sales is a relatively new channel, the Web is set to play an extremely important role in the sale of airline tickets in the next few years. This is as airlines push to increase online revenues and take advantage of reduced direct costs.

Although a third of carriers are not yet selling tickets via Web-based services, among those who are, the current practice is to sell through a variety of online channels, spreading the distribution to maximize online revenues. Asked on which Web-based services passenger tickets are currently sold, airlines gave these responses:

– Own Web site – 49%

– GDS/CRS Web site – 23%

– Online travel agencies – 21%

– Auction/bid sites – 19%

– Joint airline site – 9%

– New media sites – 3%

– Tickets are not sold on Web-based services – 34%

The survey shows that all airlines are clearly focusing strategically on dominating the online ticket market, saying that their own Web sites are by far the single most important Web channel for their organization. Asked which Web-based services they believed were the most important to their companies, the response from airlines was:

– Own Web site – 60%

– Online travel agencies – 13%

– Joint airline site – 10%

– GDS/CRS Web site – 6%

– Auction/bid sites – 1%

– New media sites – 0%

– Don’t know – 10%

The survey underlines the importance of Internet technologies to airlines seeking to gain competitive advantage, with online sales currently accounting for about 10% of total sales for those airlines using the Web.

We invite your comments: Comments Off on AIRLINES ADDRESS THE ONLINE TRAVEL MARKET – JULY 2000


Saturday, July 1st, 2000

Growth in the worldwide use of mobile phones peaked in 1999 and will decline steadily for the next few years, according to The Strategis Group. Still, the total number of wireless phone subscribers will rise from about 530 million early this year to more than 1.37 billion by 2007.

Driven by the introduction of cellular service in many emerging markets while mature markets continued adding subscribers, growth in cellular, PCS, and third-generation wireless subscribers hovered at around 50% annually in 1997, 1998, and 1999, the research firm said. It peaked at 54.4% last year, but will drop to only 31.6% this year.

Strategis foresees a steady decline in growth rates, forecasting 20.2% in 2001, 14.6% in 2002, and eventually a growth rate of just 7.9% in 2007. Still, it is the growth rate that is declining, not the size of the market. Thanks in part to increasingly open and competitive markets, demand for new value-added services such as wireless e-mail and Internet access, and new distribution strategies, worldwide service revenues should reach $295 billion by the end of this year and then nearly double to $521 billion by the end of 2007.

Helping to keep the market growing will be the introduction of third-generation wireless services in 14 Western European markets and seven Asia-Pacific countries by 2003. Strategis noted that the push toward third-generation services – which include higher-speed data services from wireless phones – is not as strong in the United States as it is in Western Europe and Asia.

US operators are not yet convinced that consumer demand will justify the cost of the services, but the next year will be critical in determining how serious US operators are about third-generation wireless services. on the Web.

We invite your comments: Comments Off on GROWTH IN MOBILE HAS PEAKED – JULY 2000