Archive for April, 2002

AN END TO THE BANDWIDTH PRICE COLLAPSE – APRIL 2002

Monday, April 1st, 2002

The dramatic price collapse caused by the infamous ‘bandwidth glut’ may be nearing an end, according to a new report by research group TeleGeography. The new report, Terrestrial Bandwidth 2002, confirms that the supply of city-to-city bandwidth far exceeds actual needs. More than 6.5 terabits of lit capacity now traverse London – four times more than the combined bandwidth requirements of the forty largest cities in Europe.

The staggering increase in telecom capacity has sent bandwidth prices and, by extension, carrier revenues into a downward spiral. Prices for capacity between major cities in the US and Europe have fallen by approximately 70% annually in each of the past three years. For example, two years ago, an OC-3 (155Mb/s) circuit between New York and Los Angeles cost $1.8 million per year. In the first quarter of 2002, the same lease could be had for less than $150,000.

With prices already at or even below costs, however, it seems unlikely that the capacity oversupply will depress prices any further. Any future price collapse would come as a result of other market forces, rather than the continuing capacity glut. Bandwidth prices are no longer driven by supply and demand according to TeleGeography .They’re driven by short-term costs, and by the fear of bankruptcy court. But as prices fall below costs, carriers will not be able to remain solvent.

Steep price declines have been an industry concern for several years. The report highlights another problem stemming from turmoil in the telecom sector: a lack of market transparency. Individual carriers’ prices still vary dramatically. The research company has found that the highest price for a given circuit will often be four times greater than the lowest price. This disparity suggests that neither bandwidth sellers, nor buyers, have systematic knowledge of their comparative position in the marketplace.

Table 5 – Yearly OC-3 lease prices on major US routes – 2000-2002
Route
1Q 2000
1Q 2001
1Q 2002
2000-01
change
2001-02
change

LA – NY
$1,800,000
$600,000
$200,000
-70%
-70%

Miami – NY
$900,000
$200,000
$100,000
-80%
-50%

Atlanta – NY
$400,000
$200,000
$70,000
-50%
-70%

Chicago – NY
$400,000
$200,000
$70,000
-50%
-70%

Atlanta.- Dallas
$300,000
$200,000
$60,000
-30%
-70%

LA – San Francisco
$200,000
$90,000
$30,000
-60%
-70%

NY – Wash. DC
$200,000
$50,000
$20,000
-80%
-60%

Boston – NY
$100,000
$50,000
$20,000
-50%
-60%

(Source: TeleGeography Inc)

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TELECONFERENCING FOR THE VISUALLY IMPAIRED – APRIL 2002

Monday, April 1st, 2002

A revolutionary new teleconferencing system that puts blind and partially sighted people in touch with each other has been developed for the British Royal National Institute for the Blind (RNIB) by Chelston Call Systems using speech processing resources from Aculab.

The teleconferencing system was commissioned by RNIB for the launch of its groundbreaking new Talk and Support service, the first project of its kind in the world. Launched in March 2002, it allows people taking part to use the phone to share ideas, support each other, gain information and learn to cope more easily with sight loss – from the comfort of their own homes.

RNIB had the added challenge of helping blind and partially sighted people who also may have hearing difficulties, so quality of sound is crucial to them. One of the key advantages of Aculab platform is that it provides developers with high density speech processing in an extremely compact and flexible form.

Another criterion was that conference facilitators needed to be able to be located within RNIB’s WAN telephone network or be home based, with office based controllers who could conference into the call. They could offer individual support to conference participants, but take them off-line into a separate area for one-to-one conversation when necessary.

Another major challenge was the fact that the management and setting up of teleconferences needed to be fully accessible and operational for visually blind and partially sighted users.

According to recent research, there are almost two million blind and partially sighted people in the UK, and 90% of these are over 60 years old.

The Talk and Support project has been created thanks to a generous donation of £1.1 million from Barclays Bank PLC which will fund the project for three years before it becomes self-financing.

Still in its pilot phase with plans to become nationwide by 2004, the service is already changing the lives of its participants beyond expectations.

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THE VOD EXPLOSION – APRIL 2002

Monday, April 1st, 2002

Research from Strategy Analytics predicts that half of U.S. homes will be regular video-on-demand users by 2008, spending $26 billion on VoD services during the next seven years.

The research firm found that more than 8 million US homes are passed by VoD-capable cable networks. The number is expected to rise to nearly 50 million by the end of 2003.

Activated VoD homes (those with set-top boxes loaded with VoD software) number about 2 million today, and could rise to 7.6 million by end 2002.

VoD revenues are forecast to reach $287 million in 2002, but will then rise rapidly to reach $3.5 billion by 2005 and $8.2 billion by 2008. Subscriptions will be the leading VoD business model, accounting for nearly two thirds of revenues, according to the research firm.

Source: SkyReport.

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QLD TO HELP EAST TIMOR – APRIL 2002

Monday, April 1st, 2002

The Queensland Government is supporting a "Connect East Timor" campaign, which seeks to raise $4 million to provide basic telecommunications for about half the new nation’s population. While looking also to the public and industry for support, the state is providing offices, computers, Internet access and support staff.

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PROFITS DOWN FOR COMMERCIAL RADIO AND TV STATIONS – APRIL 2002

Monday, April 1st, 2002

Broadcasting financial results for 2000-01 released by the Australian Broadcasting Authority show drops in profit for both commercial radio (down 5.4%) and commercial TV (down 57.3%) despite small increases in revenue in both sectors.

Commercial radio licensees generated $746.6 million in revenue, with $608.2 million going to expenses. Broadcasting profit of $138.4 million and represents a 5.4% decrease over the previous year’s profit of $146.3 million.”

The amount of revenue generated by the 245 radio licensees that reported (out of a total of 249) represents a 1.2 per cent increase over the previous year’s amount of $737.5 million (generated by 240 licensees). Expenses increased by 2.9% over the previous year’s amount of $591.2 million.

Commercial television licensees generated $3,278.7 million in revenue in 2000-01, with $2,935.8 million going to expenses. This produced a broadcasting profit of $342.9 million which represents a 57.3%decrease on the previous year’s profit of $803.5 million.

The amount of revenue generated in 2000-01 by 48 television represents a 0.2% increase over the previous year’s amount of $3,271.0 million, also generated by 48 licensees. Expenses increased by 19% over the previous year’s amount of $2,467.5 million.

Of the revenue of $3,213.9 million generated by the three major networks, the Seven Network and its affiliates accounted for $1,187.2 million (36.9%), the Nine Network and its affiliates $1,348 million (41.9%), and the Ten Network and its affiliates $678.7 million (21.1%).

The Seven Network and its affiliates earned $62.1 million more than they did in 1999-2000 (up 5.5%), the Nine Network and its affiliates earned $31.3 million less than they did in 1999-2000 (down 2.3%), and the Ten Network and its affiliates earned $22.4 million less than in 1999-2000 (down 3.2%).

The Seven Network and its affiliates spent a total of $346.4 million on Australian programming, representing a 34.2% increase over the previous year’s amount of $258.1 million. The Nine Network and its affiliates spent a total of $259.5 million on Australian programming, representing a 2.4% increase over the previous year’s amount of $253.5 million. The Ten Network and its affiliates spent a total of $86.6 million on Australian programming, representing a 6.8% increase over the previous year’s amount of $81.8 million.

Australia – Radio – Digital Radio.
Australia – Radio – Overview and Statistics

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