BuddeBlog

Moves within the European Commission (EC) to develop a more harmonised approach to national regulators (NRAs) have been brooding since at least October 2006, when the European Regulators Group (ERG), the EC’s principal advisory body which comprises representatives from the EC and each of the 27 national regulators, proposed a number of steps aimed at delivering a more harmonised approach to regulating the telecoms markets in the EU.

In May 2007 the ERG started work on this project, identifying priority markets where a common regulatory approach might benefit consumers, and developing a guide for NRAs to remedy shortcomings and to advise other NRAs in areas where they have gained experience. Much of this work is the result of the challenges faced by regulators from market developments, including VoIP, international roaming retail tariffs, wholesale broadband access, and how the evolution from legacy to next generation, IP-based networks will affect the regulatory approach to IP interconnection and interoperability issues.

The EU’s telecoms commissioner has successfully tackled some of the issues: in the face of opposition from mobile operators and the Global Mobile Suppliers Association (GSA), the EC has managed to deal with exorbitant international roaming charges, placing a sliding scale of tariff caps for the next three years. Yet difficulties remain as a result of the residual interest which national governments have in the incumbents. A case in point is Portugal: in April 2006 the EC sent Portugal a formal request to abandon the special rights held by the state in Portugal Telecom, believing that the special powers held acted as a disincentive to investment from other member states in violation of EC Treaty rules. Despite continuing EC concerns over the golden share, in March 2007 the government reiterated its desire to keep its golden share in the national operator.

Secondly, the EC is aware that not all NRAs are particularly efficient. The EC’s annual reports of the state-of-play of Europe’s telecom industry rely heavily on contributions from NRAs, and lacunae in the required market analyses are numerous. Although the EC makes the rules, the NRAs enforce them, to a greater or lesser extant and through different processes and approaches. Harmonising these approaches will be particularly important in coming years as operators and incumbents progress with their Next Generation Networks (NGNs). Already there is some diversity in NRA approaches to NGNs, with the German example (including a three-year regulatory holiday for Deutsche Telecom, locking out competitors from wholesale access to its hybrid fibre/VDSL network) representing the most inimical to the EC’s vision..

Under-performing regulators have also been viewed as a fundamental obstacle to the European telecoms market, worth some €290 billion in 2006, reaching its full potential. Thus it is that the Commissioner, Viviane Reding, in October 2007, will elucidate plans to overhaul EU telecoms legislation, take control of some regulatory powers currently held at a national level, and push through the break-up some incumbents to increase competition in the industry. The proposed measures would come into force in 2010.

One of the areas where the EC wants to expand its powers relates to remedies ? currently, NRA decisions on remedies (in areas such as wholesale product obligations) can be commented on by the EC, but not vetoed, and this is one of the limitations which the EC aims to address. However, the ERG is opposed to the veto power over remedies, arguing that NRAs would have a clearer picture of the national markets and environments. Similarly, the European Telecommunications Network Operators’ Association (ETNO), which represents European incumbent operators, believes that better harmonisation can be achieved with existing systems, and does not require another bureaucratic layer.

The proposals have worried Europe’s incumbents, which fear the EC’s enthusiasm for structural separation. Yet this last measure has had some notable success: after BT hived off its network access division from its consumer operations in 2005, setting up Openreach in the process, the company has gone from strength to strength, while fair competitor access to the local loop has made the UK’s broadband market among the most competitive in Europe. Opposition to these plans from companies such as France Telecom, both on the regulatory aspects as well as on functional separation, is as much due to national pride as to preserving the status quo, but a über regulator covering the E27 is perhaps inevitable, given the extraordinary inconsistencies which frustrate the Brussels’ bureaucrats.

See also:

Europe – Regulatory Environment

Tweet This Post

Media centres provide total content management solutions through ‘one source multiple delivery platform’ capabilities. They offer global transmission of services like Internet Protocol TV (IPTV), Video-on-Demand (VoD) and streaming distribution capabilities via terrestrial fibre optics and satellite. They also offer:

• Broadcast quality studio, mobile and post-production services;
• origination services for linear TV networks and live events;
• High Definition TV (HDTV) production and origination; and
• quality control and media management services, including encoding and storage.

My first home media centre experience was back to 1981, when I demonstrated in my home in the Netherlands the ‘Home of the Future’, together with the local consumer electronics and telecoms industries. While very little of that service took place in any integrated format, I was able to demonstrate most of the services that we are still trying to introduce some 25 years later. The concept was already there all those years ago. The next event I attended was in 1994 when Comcast launched, very much ahead of its time, the first media platform delivering, which had, amongst other services, Video-On-Demand (VoD). I was there again when the relaunch of this service took place exactly a decade later, at the same NCTA show, in the same city, New Orleans.

The big difference between these three events is broadband. In 2007 we now have an infrastructure platform that is able to deliver video quality entertainment over such networks. Of course, the market hasn’t stood still in the meantime and there are now several players, all coming from different industries – the cable TV industry in the USA, the telcos, the IT industry and the consumer electronics industry.

Media centres certainly have the potential to power an entire family of devices designed to work together. These devices can power a single TV directly, while also serving as the central manager of all the digital content in a home. The concept is right; now we just have to figure out the right model and the right business approach, and this requires industry cooperation.

Migrating from PC-centric beginnings
Home networking is now migrating beyond its PC-centric beginnings, to incorporate a variety of consumer electronics (CE) devices, from digital TVs, to multi-room DVRs, digital media adapters, set top boxes and game consoles. The drive to incorporate IP-based connectivity in more CE and PC devices is being driven by both telecom/network operators and consumer electronics manufacturers. By the end of 2006, 76 million home LANs were deployed.

IPTV and multi-room DVR demand is driving cable, satellite and telecom operators to consider a variety of new high-speed home networking technologies, ranging from Coax (Moca, HPNA, Hana), to powerline, to WiFi (802.11n).

TV and other CE manufacturers are incorporating IP-based connectivity to enable a path to both user-created content and to new Internet-based media portals. This will be vital for Internet TV growth.

The awareness and demand for media home networking is growing among consumers. According to iSuppli’s Q1 2007 consumer demand survey:-

• 61% of respondents “agreed” or “strongly agreed” that they wanted the ability to connect the internet to their TV.
• Male respondents were even more favourable with a 71% “agreed” or “strongly agreed” response.

Across select computing, consumer electronics and consumer networking devices, iSuppli’s research identified nearly 240 million networked devices shipped in 2006. These devices will grow to nearly 760 million networked devices by 2011. By 2011, WiFi will be the most common physical interface, followed by Cat 5, and powerline, and Coax, in relative percentage of shipments. The technology choice will be significantly influenced by which geographic region devices are shipped into.

Among the different physical interface technologies, 802.11x is projected to have the largest silicon TAM through 2011; however, we will see a sharp rise of Coax and Powerline.

For more information see:-

Global – Digital Media

Global – Digital Media – Home Media Centres

2007 Global Digital Media Volume 2 – Content and Application Markets

Tweet This Post

As the Internet economy, digital media and other telecommunications activities become more established; the need for modern and efficient infrastructure is becoming more critical. Broadband services are becoming an essential commodity, and while some countries like Japan and Korea are leaders in this area, many other countries are failing to keep pace with demand.

In 2007 we see that fixed broadband is still mainly confined to the developed markets. This is because there are enough good quality fixed networks in place to allow for roll outs of the technology. There are now close to 300 million broadband subscribers worldwide, and DSL is by far the most popular access technology.

At this stage other technologies, such as fibre and satellite are minor players. DSL has so far been the most effective and economical route to global broadband deployment. The emphasis of the next phase of broadband is on increasing speeds, which via ADSL2+ and VDSL will eventually lead to Fibre-to-the-Home (FttH). The market will need to focus on fibre because in the coming years the use of popular high-bandwidth applications will dramatically strain existing copper-based networks.

Asia is the one region of the world where FttH has started to emerge as a serious broadband platform. Not unexpectedly, the movement towards fibre is occurring in Asia’s more developed markets where positive government intervention has been playing an important role.

In 2007, Japan continues to lead the world in fibre deployments, and South Korea is rapidly rolling out. The US is also focusing on fibre, and will probably catch up to Asia over the next ten years. In Europe, deployments by municipality and property developers have shown the fastest growth, although the telcos still account for a higher proportion of lines installed. On a government level, those of Ireland, The Netherlands and Sweden have been among the more progressive FttH providers, installing extensive fibre connections to neighbourhoods or homes.

The focus of Broadband over Powerline (BPL) has changed within the last year from broadband connectivity to smart meters on broadband infrastructure, which allows householders to reduce energy costs and energy companies to better manage their networks. The next step for BPL is to make the transition from the current trial status to the commercial arena, and this will require the establishment of an appropriate regulatory framework to support the technological developments that are occurring.

It is a positive sign that this sector is looking at alternatives for broadband use; beyond the usual high-speed Internet access. It is important for the overall industry to realise that Internet access will be just one of many services that will be delivered over broadband infrastructure. There are other important services emerging that will depend on high quality broadband infrastructure, such as e-health, education, e-business, digital media, e-government, smart utility meter reading, etc. In countries where the national telco is lagging behind, we are seeing that local governments have no choice other than to take a leadership role – just as they have done with similar infrastructure over the last 100 years.

Key Highlights:

• There will be close to 500 million broadband subscribers worldwide in 2012.
• Overall telecom industry spending grew by more than 12% in 2006, driven by the demand for broadband and high-speed services.
• DSL is the most common broadband access technology worldwide, capturing over 65% of the market.
• VDSL and VDSL2 will provide telcos with the ability to not only offer telephony and high-speed Internet access, but also High Definition TV (HDTV), VoIP and multiple and simultaneous video streams over the same copper pair. However there are still a number of issues hindering the uptake of this technology.
• The cable modem sector lags behind DSL with only around 22% share of the market, however VoIP technology has provided the sector with new opportunities; evidence of this coming from North America and Europe in particular.
• Worldwide cable telephony services revenue is expected to reach around $11 billion in 2007.
• At the moment around 50% of Internet traffic is consumed by less than 5% of Internet users, however it is only a matter of time before the other 95% catch up. This will result in a wild growth of local infrastructure projects over the next five years.
• To compete with fixed broadband, it is essential for reliable high-speed wireless technologies to be developed. The competing technologies include the intermediate mobile standards like GPRS, emerging 3G standards, the fixed wireless technologies such as WiFi, WiMAX and a range of proprietary services operating in 3.4GHz band.
• Latin America is one of the world’s fastest growing regions in terms of broadband uptake, with an annual growth rate of around 54% in 2006. However broadband penetration at the end of 2006 was only 2.5% – considerably less than the global average of 5.4%.
• The USA is one of only two countries in the OECD in which cable subscribers outnumber DSL subscribers. However DSL is expected to overtake cable in 2008, and the telcos’ massive fibre deployments will vastly improve the speeds and bandwidth of the telcos broadband networks, allowing for new services such as IPTV. The response by cable may be DOCSIS 3.0, a relatively cost-competitive, easy-to-deploy ‘wideband’ answer to the telcos’ fibre networks.

This annual report offers a wealth of information on the worldwide fixed broadband industry, and includes analyses, statistics, trends and forecasts. The report also provides a market overview of the various broadband technologies, including DSL, cable modem, fibre, BPL and broadband satellite. Regional information is also included, providing a comprehensive overview of how broadband is progressing around the world.

Subjects covered include:

• The current broadband market
• Worldwide and regional broadband statistics
• Broadband infrastructure analysis
• The DSL market
• The cable modem market
• FTTx market
• Broadband over Powerline (BPL) market
• Broadband satellite
• Regional information

For more information see: Global Broadband – Broadband is Essential Infrastructure

Tweet This Post

Companies that have been upgrading their networks to 3G are unable to recoup their investments in spectrum and technology. As we have consistently predicted since 1998, there is no need for 3G, beyond efficiency upgrades required in situations where mobile operators are running out of network capacity. Up until now this has been limited to a few cities in Europe – beyond that there has not, to date, been an economic need to upgrade the current 2G systems.

Mobile data has not delivered the extra revenues needed, and after a decade of flogging more than a dozen different mobile data flavours, it has now become clear that only wireless broadband will be able to deliver the much-needed break to move into the Wireless Broadband market.

Technologies such as WiMAX, Flarion and Ultra-Wideband (UWB) will become more prevalent, and these are much better suited to cater for the demand of such services. Key issues here are high speed and low cost. The current mobile technologies are unable to deliver on both. Furthermore, the entry levels to these frequency agnostic new technologies for newcomers are low, which makes it much easier for competitors to undermine the mobile operators. The WiFi operators have seen significant consolidation over the last few years, and they are now in a prime position to also aggressively move further into the WiMAX market.

Mobile operators are presently scrambling to find new directions. However, most of them are like slow-moving elephants, and it will be almost impossible for them to halt their current 3G rollouts in order to replace them with wireless broadband.

This is further complicated by the fact that commercial wireless broadband services are still one or two years out, and for UWB this might take even longer. On top of that, once these systems are available Voice over Internet Protocol (VoIP) can be delivered over them at a fraction of the cost of mobile calls (at least 90% cheaper than mobile calls). This means cannibalisation of their mobile network, something they are certainly not looking forward to.

The writing appeared on the wall in 2005/06 when the mobile vendors began to introduce so-called 3.75G – and even 3.99G (!?) – services, such as High-Speed Downlink Packet Access (HSDPA). This is like seeing those confusing 2.5G business model scenarios all over again. Most operators are still in the early stages of the rollout of 3G, a clear indication that 3G was too little, too late.

So far, very few mobile operators have made any significant investments in these new 3G versions, and I would warn against any such investment in the wake of new wireless broadband developments. True, WiMAX and UWB will also have to deliver on their hype, but there is a positive groundswell towards this development and it is very much in line with other communications developments, like the Internet, broadband, MP3, Digital Video Recorders (DVRs), etc.

The far more cost-effective wireless broadband mesh networks will spread like wildfire. The Unwired example in Australia shows that, through clever partnerships, nationwide interconnection can be developed at relatively low cost – in that case via a partnership with the regional pay TV operator, Austar.

While I do not underestimate the market power of the mobile operators, they are certainly going to get a run for their money, particularly since many of their business models are based on unsustainable handset subsidies, extraordinarily high termination rates and expensive fixed-to-mobile prices.

As well as new entrepreneurs entering this market we will also see municipalities becoming involved in such networks – especially those that are suffering from poor fixed broadband infrastructure. The United States is leading this market.

Mobile operators will now have to decide whether to move further into the mobile market with 3.75G and 3.99G solutions, or to become involved in the very disruptive wireless broadband technologies. Most of them will be betting each way, which will make it even more difficult for them to focus on the new opportunities.

If they have it their way, they would want to delay the introduction of their wireless broadband services (4G) until 2012-2015.

Tweet This Post

So far mobile price competition remains limited here, and with Voice over Internet Protocol (VoIP) around the corner to direct customers back to the fixed network it is highly unlikely that Australia will ever see a similar level of substitution. Nevertheless more and more calls are moving to the mobile networks, but in most situations they keep their phone lines.

The low level of interest was confirmed by research from AMR Interactive, published in 2005, which revealed that 90% of Australians aged over 15 surveyed do not intend abandoning their fixed-line and using a mobile phone exclusively. The researchers interviewed 1,915 consumers. Some 71% of users who intended on retaining their fixed lines, believed that relying on a mobile phone for all their calls was simply too expensive; 60% of fixed-line retainers would also do so for either dial-up or ADSL Internet access.

AMR respondents’ key reasons for retaining their landline were:

• Using only a mobile is expensive – 71%;

• Need the phone line for internet access – 60%;

• Other family members need to access the fixed-line – 46%;

• Don’t feel secure without the fixed-line – 35%;

• Family makes a lot of international calls – 20%;

• Quality of mobile coverage isn’t good enough – 30%;

• Don’t want other people using my mobile – 19%;

• It’s too much trouble to notify everybody – 16%;

• Need home line for security system – 19%.

Tweet This Post

Cellular mobile networks have been built for voice services and even more importantly have been finetuned over the years for efficient and effective voice transmission. While technologies such as GPRS and WAP allow, in principle, for a large range of mobile data services, these networks can never be optimised for that. For example in order to get guaranteed delivery of data and guaranteed speeds, parts of the networks would have to be ‘partitioned off.’ This would never be possible on a network dedicated to voice.

The majority of mobile data users are in the corporate and professional segments for applications shown in Table 1. This trend will continue as 3G mobile data services are gradually being introduced by the mobile operators in the coming months. Mobile data (non-SMS) applications for the consumer segments are given in Exhibit 1.

While around 60% of users have used SMS, the market remains 90% dominated by young people. Ringtones and graphics are used by 10% of mobile users and a similar number uses MMS. Less than 3% of the GSM mobile phone users use mobile data services (Internet access, emails – mainly linked to laptops). This accounts for less than 1.5% of all wireless traffic over the network. However, this group represented around 15-20% of total billing revenue.

The major problem is the low level of speed and the very high costs; once this has been solved more users will start linking up their PCs at home or at their office. Another problem relates to the difficulties experienced by consumers in handling and managing the mobile data operation/procedure. To many consumers, it is still a complex task and they just simply give up trying after one or two attempts, especially when help desks in call centres prove ineffective. After all, mobile data use is often an impulsive activity and the majority of consumers are not prepared to keep trying or seek help when the application does not work. Operators need to address these issues if they want to increase the take-up level.

Bluetooth is seen as another key development in this market, however, like all other new market technologies it is another example of over-hyped and under delivered. In the business market, the executive travel market is also seen as having great potential for the data market, however the wireless Local Area Network (LAN) technology is better suited for their applications (see separate report: Australia – WiFi Hot Spot Market Overview and Analyses).

Regarding the cellular mobile market, the mobile future has more to do with what we call ‘enhanced voice services’ such as messaging and low-level information services.

Exhibit 2 – Top six mobile residential data applications

Rank Application

1 Ringtones

2 News and Sport

3 Pictures

4 Adult entertainment

5 Databases

6 Games

(Source: Paul Budde Communication)

Table 1 – Corporate interest in mobile initiatives

Interest Percentage

Email with attachments 28%

Dialled voice calling 20%

Corporate intranet/network 18%

Internet 17%

PIM 15%

VoIP 14%

Instant Messaging 13%

Email without attachments 13%

Push to Talk 12%

Video Conferencing/streaming 10%

(Source: Vodafone and Nokia (Telphia 2003)

Tweet This Post

In Australia, Alcatel didn’t shy away from telling the government, albeit indirectly, to give Telstra a safe investment harbour so that it could secure its own $3.5 billion order from Telstra to build an Fibre-to-the-Node (FttN) network. Yes, money always talks. By signing only a Memorandum of Understanding (MoU), and not a proper contract with Alcatel, Telstra is now successfully using Alcatel to put pressure on the government to get its way, rather than following what the government outlined in its new telecoms plans in late 2005. These plans call for an operational separation of Telstra with an economically viable and transparent wholesale regime for competitors.

It is important to consider the public interest here, rather than giving in to Telstra’s bullying tactics. This should not be viewed as a one-off investment or lucrative vendor deal.

Tweet This Post

I find it amazing that, nearly ten years after I gave my presentation at the dotcom event, First Tuesday, the mobile hype persists.

Hundreds of dotcommers were present at that event, when I mentioned WAP=CRAP (WAP was a technology launched on 2G mobile systems to allow Internet access). I well remember the rumble going through the audience and the passionate debates that followed my presentation.

Now I am sure that at a certain stage m-commerce, m-payments, mobile video and mobile marketing will flourish, but this won’t happen until the industry gets its act together. The fundamentals are so wrong that a rapid turnaround is just not possible.

Why then are people hanging on to this Holy Grail?

Those involved in the m-applications, especially those with a marketing background, can intuitively recognise the enormous opportunities that exist, but they don’t necessarily understand the complexities of the industry. For the last decade most of them have been banging their heads against a brick wall – the operators – and they have finally given in. I know of dozens of these companies who have given up after years of trying. They are all disillusioned about the industry, and rightly so, as most of them had the right ideas, the right concepts and the right business models.

Why mobile marketing won’t work

• Mobile operators protect their lucrative voice service which, together with SMS, accounts for 90%+ of their mobile revenues.
• The current mobile technology is not optimised for data and therefore not suited for mass use of mobile data applications, without very significant new investments.
• The billing and customer management services are archaic and won’t be able to manage the degree of sophistication needed for mobile marketing.
• Mobile operators are engineers, not marketers – they have excellent marketing groups but corporate decisions taken are based on engineering and monopolistic opportunities in voice.

(Source: BuddeComm)

However, it now appears that fewer and fewer of them are persisting with the battle. Interestingly, in the annual marketing survey by AFR Boss magazine, it was found that, of the new market approaches used last year, 9.4% mentioned mobile marketing. However, looking forward into 2007/2008, only 3.4% indicated that mobile marketing would be a likely future marketing approach.

I believe it is getting too late for the telecoms industry to turn around – I think they have already lost the game. By preventing our marketing and advertising talent from using mobile marketing they have alienated them to such an extent that many will not come back.

Remember the walled gardens and portals used by telcos and media companies in the 1990s, to monopolise the Internet? The new Internet media companies used the ‘open Internet’ infrastructure to launch their services, they were successful not the those who launched the ‘walled gardens. Since than they have completely taken over the lead from the telcos, because of their ‘greed’ they opted for the wrong business model and there is no way these companies will ever become serious Internet media companies.

Look at IPTV. By throttling down broadband speeds and protecting interests, such as, for example, Foxtel in Australia, the incumbents have lost the war here as well. IPTV has been overtaken by web-based video and TV.

As happened with mobile data, some researchers continue to hype up the market for IPTV, mobile marketing, mobile TV and IPTV, basically supporting the hype generated by the vendors of technologies. Unfortunately, this keeps the confusion alive.

After fixed, the operators will have to retreat to their infrastructure in mobile also and leave the marketing to the appropriate experts in this market. Unfortunately their grip on the market is such that it could well be 2010-2012 before they finally break down the barriers to mobile marketing and other mobile-related services.

Paul Budde

See also: Global Mobile Data

Tweet This Post

A huge change is taking place in telecoms infrastructure, with the traditional telephone systems being replaced by an IP-based infrastructure. This will facilitate data communications and file transfers via networked computers. IP is now adapted for voice communications (VoIP) and most corporate users are on IP networks. However the true value of IP is that it is becoming the core of the next generation public networks (NGNs); facilitating affordable triple-play business models that seamlessly integrate voice, data and video. NGN projects are very complex in nature however, and due to this their progress still remains slow.

Once NGNs are in place, there will be a major impact upon current infrastructures. Voice services will be placed under increasing pressure from Voice over Internet Protocol (VoIP) and mobile communications will consolidate in mature markets but continue their spectacular growth in developing countries. Wireless broadband will also begin to challenge 3G, as it is much better suited for the delivery of mobile data, including Mobile VoIP.

Fixed VoIP is becoming more prominent in corporate and government markets, due to the fact that good NGNs are already in place. In the residential market, VoIP has traditionally been viewed as a ‘hobby’ product linked to the Internet – but this appears to be slowly changing, with residential VoIP subscribers more than doubling in 2006. However the real breakthrough for VoIP will be when NGN quality broadband networks are delivering triple play business models to the mass market. The uptake of VoIP will further reduce the revenues of telcos and add more pressure on them to seek new revenues streams. Separately VoIP will become an integral product offering in most Internet media products.

The growing importance of e-commerce has led to a further key trend, where companies are moving away from building and/or maintaining their own networks, and outsourcing to NGN operators. With an increase in data services both in the business and the residential market, the market for outsourcing and other forms of external assistance will continue to grow. Based on convergence developments around IT and telecoms and driven by broadband, a significant growth in outsourcing starting to emerge. The overall outsourcing sector is expected to grow by around 8% in 2007.

In recent times the telecom space has become a key focus for many of the IT vendors, and some services firms have developed specialist areas aimed at attracting and capturing telecoms outsourcing deals. Cost savings are still the major driver to outsource, but improvements in quality are increasingly becoming a key reason.

Key Highlights:

• Already around 50% of all global telecoms traffic is done over IP, and this will increase to 75% in a few years time.
• A modest growth in telecoms capital expenditure is expected over the next three years; capital expenditure for NGN’s will focus on broadband/triple play expansion plans.
• Managed services, the use of specialist third parties to deliver IT services, generally on a one-to many basis, is set to increase significantly over the next five years.
• An increase in VoIP subscribers has usually been driven by mass-marketing efforts by the incumbents, and the inclusion of VoIP in double/triple play models. This has been witnessed in France and the Netherlands.
• While we have not witnessed a major move towards VoIP to date, 2006 did see an increase in users in the residential market.
• In terms of VoIP subscribers, Japan led the VoIP market in 2006 with almost 14 million subscribers, followed by the USA and France.
• One of the drivers behind NGN deployments in the US is VoIP, which has become one of the fastest growing US telecommunication sectors, boasting growth rates of around 150% in 2006.
• A number of community and municipal NGN networks are emerging in Canada, including the research, education and health network spearheaded by CANARIE, which received additional funding in March 2007 to develop the CA*net5 network.
• By 2015, over 90% of customers will be using VoIP-based telephone services (both fixed and mobile).
• Skype is still the global market leader, with over 170 million registered users; around 30% of these are business users.
• The market for VoIP equipment is growing at around 25% per year.
• The future of VoIP lies in video web conferencing. Web-based videoconferencing is presently one of the largest growth markets. Pent-up demand has been building for decades, and while services have been launched in the past, both the technology and the economics failed to deliver a compelling product for users.
• As in the rest of the world, VoIP is one of the most important convergence issues facing regulators in Latin America.
• NGNs are expected to play a significant part in achieving the goals of the European Union’s eEurope initiative, which aims to widen access to the Internet, improve and extend services and ensure that everyone in Europe reaps the benefits of the Information Society.
• The growth of NGNs in Asia is mostly focused on the developed markets and has been heavily dependent on the local support being provided by the governments in those markets.
• VoIP is continuing to gain ground in Africa following deregulation, steady improvements in Internet bandwidth and a growing number of service providers entering the market. Telkom South Africa is planning to invest US$5 billion into its NGN over the next five years.
• In Bahrain in the Middle East, Batelco is operating a program to install a Multi Protocol Label Switching (MPLS)-based IP network which will form the basis of Bahrain’s NGN. However in May 2007 Batelco threatened to stop investment in its NGN unless it was given more favourable regulatory treatment.

For more information see:
2007 Global NGN, IP, VoIP – Analyses, Statistics and Forecasts

Tweet This Post

Moves within the European Commission (EC) to develop a more harmonised approach to national regulators (NRAs) have been brooding since at least October 2006, when the European Regulators Group (ERG), the EC’s principal advisory body which comprises representatives from the EC and each of the 27 national regulators, proposed a number of steps aimed at delivering a more harmonised approach to regulating the telecoms markets in the EU.

In May 2007 the ERG started work on this project, identifying priority markets where a common regulatory approach might benefit consumers, and developing a guide for NRAs to remedy shortcomings and to advise other NRAs in areas where they have gained experience. Much of this work is the result of the challenges faced by regulators from market developments, including VoIP, international roaming retail tariffs, wholesale broadband access, and how the evolution from legacy to next generation, IP-based networks will affect the regulatory approach to IP interconnection and interoperability issues.

The EU’s telecoms commissioner has successfully tackled some of the issues: in the face of opposition from mobile operators and the Global Mobile Suppliers Association (GSA), the EC has managed to deal with exorbitant international roaming charges, placing a sliding scale of tariff caps for the next three years. Yet difficulties remain as a result of the residual interest which national governments have in the incumbents. A case in point is Portugal: in April 2006 the EC sent Portugal a formal request to abandon the special rights held by the state in Portugal Telecom, believing that the special powers held acted as a disincentive to investment from other member states in violation of EC Treaty rules. Despite continuing EC concerns over the golden share, in March 2007 the government reiterated its desire to keep its golden share in the national operator.

Secondly, the EC is aware that not all NRAs are particularly efficient. The EC’s annual reports of the state-of-play of Europe’s telecom industry rely heavily on contributions from NRAs, and lacunae in the required market analyses are numerous. Although the EC makes the rules, the NRAs enforce them, to a greater or lesser extant and through different processes and approaches. Harmonising these approaches will be particularly important in coming years as operators and incumbents progress with their Next Generation Networks (NGNs). Already there is some diversity in NRA approaches to NGNs, with the German example (including a three-year regulatory holiday for Deutsche Telecom, locking out competitors from wholesale access to its hybrid fibre/VDSL network) representing the most inimical to the EC’s vision..

Under-performing regulators have also been viewed as a fundamental obstacle to the European telecoms market, worth some €290 billion in 2006, reaching its full potential. Thus it is that the Commissioner, Viviane Reding, in October 2007, will elucidate plans to overhaul EU telecoms legislation, take control of some regulatory powers currently held at a national level, and push through the break-up some incumbents to increase competition in the industry. The proposed measures would come into force in 2010.

One of the areas where the EC wants to expand its powers relates to remedies – currently, NRA decisions on remedies (in areas such as wholesale product obligations) can be commented on by the EC, but not vetoed, and this is one of the limitations which the EC aims to address. However, the ERG is opposed to the veto power over remedies, arguing that NRAs would have a clearer picture of the national markets and environments. Similarly, the European Telecommunications Network Operators’ Association (ETNO), which represents European incumbent operators, believes that better harmonisation can be achieved with existing systems, and does not require another bureaucratic layer.

The proposals have worried Europe’s incumbents, which fear the EC’s enthusiasm for structural separation. Yet this last measure has had some notable success: after BT hived off its network access division from its consumer operations in 2005, setting up Openreach in the process, the company has gone from strength to strength, while fair competitor access to the local loop has made the UK’s broadband market among the most competitive in Europe. Opposition to these plans from companies such as France Telecom, both on the regulatory aspects as well as on functional separation, is as much due to national pride as to preserving the status quo, but a über regulator covering the E27 is perhaps inevitable, given the extraordinary inconsistencies which frustrate the Brussels’ bureaucrats.

See also: Europe – Regulatory Environment.

Tweet This Post