BuddeBlog

The telecommunications industry is rapidly moving in the direction of broadband.

Broadband enables the delivery of integrated voice, data and video services. Until now we have been forced to treat these technologies separately, as there were no economically affordable integrated solutions that would allow for large-scale deployment.

This broadband concept is supported by the development of nextgen networks, via which it becomes technically possible to deliver these integrated services at very competitive costs. The new networks can easily drive the price of existing voice and data services down by 60%-80%. However, the catch is that there is a large pent-up demand for video-based applications; therefore the money that is saved should be made available to develop new integrated services that include video.

Based on this nextgen development, it is essential that the setting up of any new broadband/telecommunication networks – or the modification of any existing networks – should be approached with this integration in mind. Henceforth, developments will be driven by applications, making it possible for the developer to freely use voice, data and video as basic elements of their applications.

The structure to facilitate these developments, therefore, also needs to be adjusted at the management level. To operate within the new environment an ‘integrated’ upper management is essential. It is crucial to establish, at that level, a system integration (SI) function that includes the various IT&T services necessary to operate the nextgen network.

Providers of individual IT&T services would not be the appropriate partners to run the systems integration function, as this would lead to a conflict of interest. The SI function should be independent.

Nextgen networks are no longer the sole domain of corporates and government agencies. There is currently a very rapid development of broadband among small businesses and residential users, and this presents us with a unique opportunity to use telecommunications and data infrastructure to the wider benefit of the economy.

See also:
Global – Broadband – Trends and Developments – Infrastructure
Global – Analysis – Infrastructure – Network Outsourcing in 2003
Global – Broadband – FTTH Infrastructure issues
Technology – Infrastructure – Last Mile 5 – FTTC, VDSL

Despite global market setbacks and the country’s own economic difficulties, Japan’s telecommunications sector has continued to exhibit dynamic characteristics, as it finds new and innovative ways to grow.

As the second largest telecom market in the world, Japan has continued to experience strong, but somewhat erratic, growth in its telecommunications sector. New entrants – both foreign and domestic – have helped drive this growth. Restrictions on foreign capital have been removed, but NTT has thus far been quarantined from this process.

After six years of remarkable expansion, the mobile telephone sector in Japan is now moving into a maturing market phase. Growth is finally starting to slow. Despite an open and highly competitive mobile market, NTT DoCoMo has been able to maintain its market dominance. The success of DoCoMo’s i-Mode Internet service, for example, has been nothing short of phenomenal. DoCoMo controls around 60% of the market.

As Japan’s mobile growth slowed, the mobile subscriber base reached 77.2 million (penetration 61%) by June 2003 and was growing at an annual rate of around 9%.

NTT DoCoMo made a brave move and launched the world’s first Third Generation (3G) mobile network in October 2001. By June 2003, its 3G service had just over 530,000 customers. However, it was well short of its target of 1.5 million 3G customers by April 2003. By contrast, NTT DoCoMo’s rival, KDDI, which launched its 3G offering 6 months after DoCoMo, was having considerably more success. By June 2003, KDDI had signed up a remarkable 8.5 million customers.

[3G technologies: NTT – WCDMA; KDDI – CDMA2000 1xRTT.]

In terms of Internet penetration, Japan ranked third in Asia (behind South Korea and Singapore) with Internet users representing 45% of the population by end-2002. After a relatively slow start, Japan has been the fastest growing broadband market in Asia in the last few years. By early 2003, 30% of households in Japan accessed the Internet via broadband, up from just 8% at end-2001. It is forecast that, by 2005, 66% of households in Japan will access the Internet via broadband.

Japan continues to dominate Asia’s e-commerce activity, accounting for an estimated US$40 billion of the region’s total e-commerce market in 2002.

Peter Evans
Senior researcher Asia

See also:
BuddeComm Annual report – 2003 Asia – Volume 4 – Japan
Web Reports on Japan

Broadband cheaper than a bridge
The South Waikato District Council (SWDC) has approved the expansion of its broadband wireless network. It has set aside $750,000 for the project which will make high-speed Internet available to about 95 per cent of the district’s population.

“It’s not a large investment,” said Noel Ferguson, the council’s economic development manager. “We spent more on a bridge last year than we did on the broadband project.”

The project will proceed regardless of whether the district receives any financial support from the PROBE initiative. Beginning with business areas, the expansion will be complete by Christmas 2003. Further services, such as toll-free voice, are planned to follow.

New Network for Nelson and Tasman
Electricity supplier Network Tasman has started work on a high-speed optical fibre telecommunications backbone in the Nelson and Tasman areas. About 100 km of cable — developed and produced by Corning and provided by General Cable New Zealand — is being installed by United Gooder.

WorldxChange tests VoIP
Wired Country has appointed WorldxChange Communications to conduct VoIP (Voice-over Internet Protocol) trials on its open-access broadband network. The trial will aim to prove the technology as well as assess the potential for integration of Wired Country’s mix of fibre-optic and wireless into the WorldxChange network.

Stronger than expected interest from the Waiuku community has led to the district’s inclusion in Wired Country’s broadband network ahead of schedule. The first stage of the network will now cover Papakura, Drury, Pukekohe, Tuakau and Waiuku. Neil Simmonds, CEO of Counties Power, Wired Country’s owner, has also confirmed the company’s intention to roll out a full IP-based network in several regions throughout New Zealand over the next six to 12 months.

See also: New Zealand – Broadband Market.

The message that the APEC conference in Thailand delivered to the rest of the world was similar to the one that came out of the ITU conference in Geneva:

‘China has reached critical economic mass’

I am very impressed with the role of the Australian Prime Minister John Howard has played in this respect. He has lifted the international profile of Australia and I give him full marks for his efforts in relation to China. Thanks to his government’s diplomatic activities, many doors have opened for Australian organisations to play a key role in that country.

This applies across the board. Our minerals, of course, are always eagerly sought after by China, but we are now in a position to also use Australia’s favourable position to move beyond our traditional wares.

In Geneva I heard that China needs to significantly increase its spending in education and Australia should be well-positioned to play a key role here. The Olympic Games have already forged many sporting and cultural links that are currently producing results; and many other industries should be able to jump on this bandwagon.

The government has opened the door and is steering Australia in the right direction. But Australians will have to actually grasp this opportunity and get to work on their own plans to become involved in this exciting new market. This is something the government can’t do for them. Australia doesn’t have a good track record in overseas trade, but the government has now created a golden opportunity for the country – one that should not be missed.

At the telecoms conference in Geneva I was also asked to comment on the various developments in Asia, and to that end I asked our senior Asia researcher, Peter Evans, to prepare some highlights for me to use during my interviews.

Peter’s notes on China are reproduced below and I hope they will go towards helping our telecoms industry to acquire a share of the burgeoning Chinese telecoms market.

China, led by its rapidly expanding mobile market and an equally energetic Internet market, continues to be the standout performer in Asia’s dynamic telecom market.

One of the world’s booming telecommunications markets, China has been experiencing telecom investment and revenue growth of around 30% per annum over the last few years.
Total Investment in 2002 (est): US$40 billion
Total Revenue in 2002 (est): US$60 billion

In relative terms the growth in fixed line subscribers in China has slowed slightly. Nonetheless, the market has an annual growth of around 20% and by end-2002, the total fixed line subscribers had reached 215 million, representing a fixed-line teledensity of almost 17%.

Growth in China’s mobile industry has been continuing its extraordinary run. Following a 74% rise in mobile subscribers during 2001, China continued its strong mobile growth at an annual rate of around 40% through 2002 and into 2003. It had reached 234 million mobile subscribers by June 2003. China is the largest mobile market in the world in terms of subscribers, having passed the US in 2001. The country is expected to have a quarter of the world’s mobile subscribers (350 million) by end-2004. China has postponed any decision on Third Generation (3G) mobile licensing until 2004.

The telecom industry is watching China with interest following its entry into the World Trade Organization (WTO) in late 2001. It came at a time when the country’s telecommunication market had already gone through a period of enormous transformation. In the final WTO accession agreement, China agreed to a staged opening up of its previously heavily protected telecommunications sector. In the case of domestic and international fixed line telecommunications, for example, during the first three years after accession, foreign investors will be permitted to hold up to 25% equity in Beijing, Guangzhou, and Shanghai. By 2006, this will be increased to 35% (which will include 14 cities beyond the original three). And by 2007, foreign investors will be allowed 49% equity across the entire country.

See also:
2003 Asia – Volume 3 – China (Annual report)
China (Web reports)

Around 30% of road accidents involve trucks and half of these are rear-end collisions. The European Union’s CHAUFFEUR project developed an “electronic tow-bar” that allows one vehicle to automatically follow another at a safe speed and distance. The two vehicles are coupled electronically. While the first is steered conventionally by a driver, the second follows the leading one automatically.

The recently completed CHAUFFEUR2 project took this technology a stage further, allowing one truck to follow another whether or not it is equipped with the same technology. A further function, known as platooning, permits more than one vehicle to be towed electronically, where only the leading vehicle is physically steered by a driver. The system uses adaptive cruise control, vision sensing and data fusion. In the final demonstration in May 2003, a three-vehicle platoon was successfully demonstrated.

See also:
Global – Mobile Data – Vehicle Monitoring Systems
Global – Mobile Data – Satellite – Navigation, GPS, Location Based Services