BuddeBlog

Introduction
The first thing you notice on arrival is that this South Pacific island is more French than France itself.

The other surprise was that the earth (red) and the vegetation is very Australian, unlike that of other South Pacific islands, demonstrating the close Gondwanaland relationship between these two countries.

Another major feature of this island is the hospitality and warm smiles that are the trademark of the South Pacific.

And, last but not least, like Australia, New Caledonia also has a convict history – an era that began around the time that Australia’s was coming to an end.

The French people, supported by the French government, are determined to maintain the French character of Nouvelle Calédonie. Over US$1billion is poured into the territory every year by the mother country – New Caledonia and French Polynesia have by far the highest trade deficit in the Pacific, making them all the more dependent on France.

The French government is trying to recoup some of these subsidies through high import and export duties, which makes life in New Caledonia very expensive, as most consumer goods are imported from France.

The country is the world’s third largest producer of nickel, and during our travels we drove through some of these working mines. They are so large that they simply absorb the existing road system.

The mines do, however, leave deep scars in the environment and we saw the damage this does to the coastal reef system. Slowly but surely, however, more ecological requirements are being placed on the mining industry, especially now that this market is slowly being opened up for overseas (Canadian) investments.

Officially a new independency referendum is due between 2012 and 2020, but with 2,500 Frenchmen being added to the population on an annual basis this referendum could easily end up in the same place as all the previous arrangements – on the scrap heap. Currently 44% of the population is Kanak and 34% European, with a mixture of other South Pacific people, North African and Asians making up the rest.

Outside the capital, Nouméa, where over 70% of the 230,000 New Caledonians live, the situation is completely reversed. This is where Kanaky (what the indigenous people, the Kanaks, call their land) begins. There are only a few larger towns – maximum 5,000 people, 95% of which are indigenous. It is very strange to see French military police patrolling the street, as we saw in La Foa. This is a clear indication that France has no interest whatsoever in any independence movement. In the past they have not shied away from using brute force to impose their rule over the Kanaks.

Since 1998, in order to make independence less of an issue, the French government, under the so-called Nouméa Accord, has been pouring large sums of money into the development of the country, and we saw evidence of this during our travels, with big social and cultural centres in Kanak territory.

Nevertheless, the national 20% rate of unemployment is concentrated almost entirely around the indigenous people, and they earn only a third of the income earned by the French citizens of the country.

On the other hand, medical care and education are among the best in the Pacific. Infrastructure is another great gift from the French, as we experienced during our trip. There are not many South Pacific Islands where you can drive around the countryside with ease, which of course provides a great opportunity to make contact with the land and its culture.

Telecommunications
Modern services
In Nouméa I met with Olivier Verdier and Johnny Lasiman from OPT and they provided me with an update on the latest telecoms developments in their country.

While telecommunications was not a part of the Nouméa Accord, government policies have resulted in excellent communications services. OPT is able to cross-subsidise its services between post and telecoms, as well as between metro (=Nouméa) and the villages. Over the last few years both mobile and broadband communications have enjoyed a continuing boom.

OPT
The market is dominated by the state monopoly OPT; the market is simply too small to warrant infrastructure-based competition. There is limited competition in the Internet arena, with some five players. OPT also operates in this market through Offratel, a 50% joint venture with France Câble & Radio. Other players are MLS, Kanel, Edge and RENATER (university). Some consolidation is expected in the not too distant future.

Internet and broadband
Internet penetration is low, with only 20,000 subscribers, half of them on broadband. Prices are also relatively high, first in relation to equipment such as PCs (because of the high import duties), but also the subscription rates are relatively high, starting at US$30 per month for dial-up and $70 a month for entry level 128Kb/s broadband. The 128Kb/s service was introduced after the original higher speed/higher cost services generated a limited uptake only.

But progress remains a key issue as well, and in 2006 ADSL2+ will be introduced in the country, commencing, of course, in the capital Nouméa.

Optical cables
Nevertheless the government is determined to promote broadband and currently 50% of the local communities are connected to the broadband network. As a consequence, extensive fibre upgrades have already taken place in Nouméa and OPT is now also planning to link the west coast optical fibre cable to the east coast, from Koné to Poindimié. Currently Hienghène, a stronghold of the independence movement, is the only town on the east coast that has broadband access, linked with the west coast by microwave.

Talking about cables, Olivier also confirmed that an RFP was issued in December for a fibre optic submarine cable from Nouméa and Sydney, it is expected that a start will be made later on this year.

In the harbour of Nouméa we saw the big submarine cable maintenance ship from Alcatel, Ile de Rene. According to Olivier the ship is always in the harbour, indicating the high level of quality of the submarine cables in the Pacific; the ship doesn’t need to get out for cable maintenance work (

Mobile communications
Mobile communication is still a rapidly growing service; there are now 130,000 subscribers, of which 80% are on prepaid. And, indeed, in all the villages we visited on our travels I noticed that there was mobile coverage. This is not the case in the areas between these towns, which is further complicated by the ruggedness of the country and, of course, the low population distribution outside the capital.

Competition
OPT has pledged that it will not become involved in the content market and seven companies are active in this field, of which six are local companies offering ringtones and other content services via the incumbent’s mobile network.

Revenues are shared on a 60/40 basis in favour of the content providers. VoIP as a voice service remains a state monopoly and it will be interesting to see how technological developments in broadband are going to test the boundaries between basic services and content services.

Since 2003, to compensate for the lack of competition, 50% of the Board of OPT is made up of representatives from the 43 local communities. I questioned whether people power could influence, for example, the roll-out of broadband and Olivier told me about one of the board members, the mayor of La Foa, who is playing an active role for his community. I was not surprised by this, having visited La Foa and having experienced the pride and energy that is apparent in this community.

While we were in New Caledonia the government announced a relaxation of government legislative requirements in relation to OTP’s procurement requirements, this will open up opportunities for other suppliers to compete for the business of the carrier, and at the same time OPT will be able to negotiate more competitive contracts.

Paul Budde

Report of the week – New Caledonia – Telecoms Market Overview & Statistics

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The Dell’Oro Group has reported that Siemens again leads the overall DSL customer premise equipment (CPE) market in both revenues and units shipped. Siemens has held global market leadership for three consecutive quarters and currently leads with 14.6 % of total market revenues and 14.7 % of total units shipped. This quarter Siemens also took leadership of the North American DSL modem market, delivering 35.1 % of total units shipped. The portfolio of broadband customer premises equipment includes wired and wireless DSL modems, gateways and routers. In addition to ADSL modems, the portfolio includes residential and business-class gateways and routers, especially wireless (802.11x) models, WiMAX modems and feature-rich Integrated Access Devices (IADs), as well as remote device management software enabling a “no-touch” CPE deployment model.

See also: Global Broadband

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While wireless broadband can operate in both the licensed and unlicensed spectrum, in the end the licensed spectrum provides the right infrastructure for carrier-grade wireless broadband services.

In Australia spectrum for these services is dominated by Unwired. Not only do they have a near monopoly on this spectrum – they also have approximately ten times more spectrum than the mobile operators.

If we narrow wireless broadband down to WiMAX then we see that this technology can not be used within the spectrum range in which the current WiFi services operate.

Over time, devices will have an increased capacity to support multiple radios through silicon integration. Recently handsets were launched which support BluetoothforPersonal Area Networks (headsets). WiFi in the handsets will be next providing for LAN capability. Towards the end of this decade handsets (and other devices) will also include WiMAX.

With the ability to connect to several networks, these devices will startto manage a hierarchy of how it connects. I already can do this today with my notebook; it understandswired vs. wireless connections and has the ability to identify and select which wireless network I want to connect to. The wireless connection decision treewill need tobecome easier/seamless over time.

This, of course, sets the scene for interesting scenarios in the future. If wireless broadband is indeed getting off the ground along the lines I, and others, envisage, there is no doubt that a spectrum reorganisation will follow, opening up more spectrum for such services. Regulators around the world are currently addressing this issue, and in Australia the regulator, ACMA, is also actively preparing itself for such a changed environment.

In particular, there is a lot of pressure on utilising 2.5gHz spectrum, which is currently in use by broadcasters for electronic news gathering purposes (ENG). Often based on old technologies, many services are wasting an awful lot of spectrum. In the old days this wasn’t a problem, but, with more sophisticated products now being offered, this market needs be tidied up and reorganised in order to facilitate the many new developments that are in the offing.

See also: Broadband Wireless Global

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Horizon Global Ltd is a technology company listed on the Australian Stock Exchange (code HZG). It owns Horizon TV (Operations) Pty Ltd and has developed software to provide TV-like, high quality content and interactive services delivered over the Internet and is now progressing the commercial application of this software.

HTV is an Internet platform designed for users of cable, Asymmetrical Digital Subscriber Line (ADSL), DSL and other broadband technologies. HTV technology developed in two parts, HTV1 and HTV2, with HTV2 providing significantly enhanced characteristics and features over HTV1. In January 2003 the company announced that enhancements of HTV2 would be gradually and sequentially added to HTV1. Such enhancements included peer-to-peer networking, superior encryption, interactivity, and ultimately even better quality streaming. The technology is now referred to as HTV. The streaming and channelling capabilities of HTV were complete and ready for commercialisation in 2003. Attempts were being made to commercialise HTV via a combination of channel leasing, advertising revenue, and outright sale of the technology, but they have been unsuccessful so far.

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Micromedical Industries (Australia) plans to introduce a Bluetooth wireless monitoring system for heart patients.

Bluetooth allows digital devices, including PCs, cell phones, laptops and handheld computers, to communicate over a ‘spread spectrum’ of radio waves at rates of about 1Mb/s.

The Bluetooth technology is also suited for use with its Biolog cardiac monitor. The monitor, used in emergency applications, is being installed on hundreds of aircraft operated by some of the world’s leading airlines. The Bluetooth technology might also suit an artificial heart that is being developed by Micromedical Industries in collaboration with the University of Technology Sydney and the University of New South Wales. This heart, which has only one moving part, was expected to be ready for human clinical trials in 2001/2002.

Micromedical Industries has joined the Bluetooth special interest group, which has more than 1,500 members, including Intel, Ericsson, Nokia, IBM, Intel, Toshiba, Microsoft and 3Com.

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During 2005 we saw the telcos performing very badly on the various stockmarkets, and to some people this is puzzling.

From both residential and business users we see an ever-increasing appetite for telecom services; and we see media articles marvelling at all the new technologies, and the enormous uptake of broadband, mobile and so on. One could be forgiven for asking ‘what on earth could be going wrong with the telcos in such a vibrant business environment?’

And it is, in fact, the telcos that are having the problems, not the telecoms market as such. The reason for this is that the business structure of most of the incumbent telcos is not well-suited to face the new era into which we are moving.

Deregulation has opened up the market for more competition, and this, in conjunction with the success of broadband, is now enabling the generation of products that have the potential to be more profitable for those competitors. This is set to continue, undermining the monopolistic rents and profits that the incumbents have enjoyed around the more traditional telco products for the best part of the last ten years.
New technologies such as wireless and DSLAMs are now, for the first time, making it economically viable for infrastructure competition to bypass the incumbent networks.
New technologies are becoming cheaper by the day, bringing the barriers of entry down for a whole range of new companies to enter the telecoms market – Yahoo, Google, eBay, Amazon, News Limited, Microsoft, etc.
Link this with convergence and the picture is complete.

Vertically-integrated companies will not be able to fend off all the changes that are attacking their business. Unless they structurally separate themselves they are doomed.

Telcos in markets which are less developed face other challenges. Most of these markets are dominated by a phenomenal growth in mobile, often at subscription rates of $5 a month and even less. This, of course, requires enormously lean and mean telco machines, and some of the new players in this market are setting the scene.

But, here again, the old incumbents are experiencing great difficulty with these new business models. Their costs are far too high to successfully compete in this market and this will become more apparent once the high growth that is currently taking place begins to taper off. This will have far-reaching consequences for companies such as SingTel, which has aggressively moved into this market, but whose home base is still operating according to a very incumbent business style. This is causing problems in Australia, where SingTel’s subsidiary, Optus, has already seen a very significant drop in growth and in profits.

The Chinese operators are also far too bureaucratic to successfully enter the next level of telecoms development in their country. In this new environment growth will be less and competition will be fiercer. The companies are far too unwieldy to deal with these changes.

This, by the way, applies not only to mobile, but also to the fixed networks in that country.

In other countries where the players have adjusted better to the new environment, challenges include how to start preparing for the expensive investments needed to move forward. These include IP-based overhauls, fibre-based networks in the local loop and wireless broadband networks for a whole new range of mobility services.

I remain skeptical about the current 3G networks and expect that wireless broadband such as WiMAX is going to give the incumbent mobile operators a major headache.

As long as these companies are not prepared to face the unavoidable structural separation their share prices will remain under very severe pressure, as they will be a relatively easy target for their competitors. A vertically-integrated telco can only deliver mediocre products, aimed at ‘the average customer’, the lowest common denominator, while the top 60% of the market is asking for more and better services.

And this is where the competitors are going to concentrate their efforts.

Paul Budde

Roundtable with Paul Budde – Wednesday 1 February 2006
Theme: Planning the year ahead
Cost:
$395 per person (excluding GST) – this includes morning/afternoon coffee and lunch

Venue:
The Observatory Hotel
89-113 Kent Street, Sydney

Booking:
Call or email Christine Lewis to make your booking.
Online registration: http://www.budde.com.au/consultancy/public-workshops-seminars.html
Telephone: 02 4998 8144
Email: pbc@budde.com.au

See also:
Global – Analysis – The Market Moving into 2006
Global – Forecasts – NGN, Voice, Data, Broadband moving into 2006
Global – Forecasting (qualitative) 2006

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Greg Adams
The World Health Organisation is certain there will be an influenza pandemic at some time, and has set the odds of avian influenza (‘bird flu’) mutating into the next human influenza pandemic as “very high”.

It seems governments are worried enough to spend millions of dollars stockpiling drugs; and enough to come up with detailed influenza pandemic plans.

Telecommunications service providers will need to make sure they will be able to cope – because without quality planning there will be trouble.

Quarantines would put limitations on air and road travel, meaning an even greater reliance on telephone calls, video-conferencing, faxes, emails, and the like. Key infrastructure services are vital to maintain social and economic conditions and telecommunications will become a lifeline

A health pandemic, however, will not be like a typical, physical disaster, where network disruptions are going to be almost entirely localized hardware failures (towers down, cables cut and exchanges destroyed).

The network operators readily admit a pandemic will change the rules of the game. The issues appear to fall into four categories:
geography
manpower
longetivity
the preparation of end-users

A pandemic will almost certainly mean limits being placed on personal contact, through restrictions of movement, quarantines, and closures of public gatherings. Recommendations include that “as many staff as possible should be set up to work from home”. In such an event, the demands on the network would change overnight.

Normal business and residential activity represent two different traffic paths. If huge numbers of people in a small residential area were going online or dialling, we would see some congestion.

Although overall network usage won’t necessarily change, the demands on parts of the network would change enormously. There may be capacity issues resulting from the transfer of such a large amount of traffic.

Governments are advising that businesses should plan for up to half of all workers being off work for a fortnight (either sick or looking after others who are sick) at the height of a severe pandemic wave, and for lower levels of staff absence for a few weeks either side of the peak.

A pandemic event would not be short. A typical outbreak could last about eight weeks, and there could be more than one wave of infection.

Some of the key points concerning telecommunications are:
identify essential business activities (and the core people and skills to keep them running) and ensure that these are backed-up with alternative arrangements;
consider communication needs and how they might be maintained with other business units, suppliers, contractors, customers, and government;
ensure that communications management is part of your plan – have systems in place to allow you to communicate in a pandemic;
if working from home is not a well-established practice in your organisation, encourage staff to ‘give it a go’, say once a fortnight, to aid familiarity and to ‘iron out’ any computer connection/technological issues.

Obviously our telecommunications networks are generally pretty robust … but there are no guarantees.

This is an abstract from a much larger article that Greg Adams wrote for Topics, the monthly magazine of TUANZ New Zealand.
http://www.tuanz.org.nz/tuanz/index.cfm?022A6ECD-E018-8BD1-32AA-89B68EB0ADD2

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I don’t imagine many people would think that lawless and war-torn Somalia could ever be used as a shining example of telecommunications, but that’s just what it is.

Since the war of the warlords in 1991 the country has had no government. All infrastructure was demolished; there is no banking system; no national telecoms operator; no court system; and nobody pays taxes.

Yet the country has a thriving telecoms business. The national operator, Telecom Somalia, collapsed but, amazingly, their employees continued to work, and set up a de facto privatised company in 1994. Two other mobile operators launched their services in competition and all three are flourishing beyond belief.

But then, look at this. These companies voluntarily agreed to introduce operational separation and combined to set up a separate infrastructure that is used by all three of them.

Despite the lack of a banking and court system people pay their bills, and even the war lords don’t interfere as they all have a vested interest in good telecoms. The thousand-year-old Hawala money transfer system is used to pay bills and for overseas investment.

However, walking around with a mobile phone in Mogadishu would be asking for trouble, since individual gunmen, eager to get such a device, could confiscate it. And Internet security is basically focused around the front door of the Internet café, where an armed guard keeps control.

And there is no such thing as old-world telco services. Customers within a radius of 1.5Km of the capital, Mogadishu, receive 150Mb/s broadband services via a long-reach Ethernet connection. Elsewhere 11Mb/s is available.

Local calls over the networks are free for a monthly access fee of $10; a landline is installed within days.

Even old connections to the villages have been repaired, and Internet is now available throughout the country.

And what else do the people in Somalia want? They want to pay taxes. They are sick and tired of not having a government to look after national security, create the right environment for courts and bank systems and so on.

I would like to acknowledge the BBC story by Joseph Winter which prompted me to write this article.

See also: Africa

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ABS will roll-out a state of the art, next generation broadband infrastructure not yet seen in Australia or the Asia Pacific region. The VSAT allows for the fastest uplink currently available in Australia. With the ability to target various satellites at the one time, this infrastructure will provide excellent opportunities to deliver high-speed broadband into rural, regional Australia, and the Asia Pacific region.

ABS has identified the next generation technology to add to its current products and services. The technology enables two-way satellite links to the Internet via VSAT, allowing smaller terminals (1.2m in size) to emit sufficient power to transmit to the satellite eliminating the need for slow and costly return channel communications via land lines.

ABS provides broadband Internet connection services via one-way satellite connections and services over 200 customers including large ISPs, schools, universities, hospitals, Small SMEs, corporates and government offices. The company provides fast connection to the Internet via satellite and return links via traditional dial-up, DSL, ISDN or cable links.

The next generation system, capable of supporting high bandwidth applications (eg, videoconferencing), is scalable from a low start point to significant numbers of remote terminals. Supporting the new open standard Digital Video Broadcast – Return Channel via Satellite (DVB-RCS), it is now in commercial use in Europe by Eutelsat. The feedback from this customer is extremely positive.

Note: Australian Broadband Services (ABS) was the previous name of the company NewSat.

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I visited the Basement Studio in late 2002. It is a high-tech broadband studio in a modern office block above the famous Jazz club, close to Circular Quay.

However, it wasn’t just its state-of-the-art quality of the business that impressed me – there are probably many other up-to-date video-based studios that could be converted into broadband facilities. What blew me away was the vision, the passion and the drive behind this operation. This studio has to be the best-kept broadband secret in Australia – and it is probably unique even on a global level.

As a confirmed believer in the future of broadband it was gratifying to see what the studio is turning out – a very attractive video/audio broadband product, with offshoots in traditional TV, DVDs and DCs as well.

The studio is the brainchild of two Australian radio broadcasting veterans, Hamish Cameron and Doug Mulray – pioneers in FM, digital radio, and now broadband.

From a content perspective, when they first launched the Basement on the Internet, Cameron and Mulray hadn’t even heard of broadband. They saw a business model that could be used for the Internet and then, with the arrival of broadband, they realised they were developing a powerful product.

Telstra and Ted Pretty in particular, have to be commended for providing these two visionary men with the funding to translate their idea into reality. At the time this was done Telstra still very much believed that content was king and that it therefore needed to be involved in it – something I have always opposed, since I see Telstra as the operator and content providers as a totally different breed of people, requiring a totally different organisational concept. While Telstra has since steered away from owning broadband content, its financial support has allowed this company to become a global benchmark for broadband content production. Indirectly Telstra will profit from it, as all broadband operators are desperately looking for BSA (broadband-sucking applications).

It was also more by good luck than planning that the basement.com.au ended up, not inside a Telstra building, but above a jazz club. This allowed it to retain its unique identity and culture, enabling these free sprits to develop a truly customer-oriented service.

While the Basement Studio focuses on music, without any additional effort the same concept and set-up can be used over a range of other content products – from sport to corporate applications, news, and many other forms of entertainment.

It has long been my contention that high-speed always-on Internet access would be the initial broadband killer application and that content would follow two to three years later. This means that the golden age for companies such as the Basement Studio will begin sometime around 2005. I sincerely hope that the company will be able to hold its own between now and then, as it is ideally positioned to become a global player in this market. Australia is already well-known for entertainment content products – link this with an organisation such as the Basement Studio and you’re sitting on a goldmine.

The service is fully interactive, with the DJ in constant contact with her audience via e-mails and chat rooms. I suggested that this function should be exploited further, as it is the key element in broadband services. This is what differentiates a company like this from pay TV channels and other forms of entertainment.

While there is plenty of scope for further audience interaction the industry is moving rather rapidly and a range of new online music businesses have entered the market. In that period very little has happened at the Basement. In its current format it lacks the breadth of content and revenue streams that other opportunities are providing.

For information relating to STBs, see separate reports:

• Australia – Digital TV – Set-Top Box Overview and Analysis;

• Australia – Digital TV – Market Overview and Statistics.

Telstra closing the doors

During my visit in 2002 the writing was already on the wall but it wasn’t until 18 month later before Telstra BigPond finally decided to shut the doors on its thebasement.com.au broadband music site. As indicated above, Webcasting never reached the level of interest and by 2004 started to become overtaken by other video-based broadband developments. The channel, will continue to develop streaming content for Telstra. However, Webcasts and radio programming would cease.

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