Archive for August, 2008

Torpedo fall short in Brazil

Friday, August 29th, 2008

Torpedo fall short in Brazil

SMS, popularly known as ‘torpedo’ in Brazil, has been slower to catch on in this country than in other Latin American markets. In 2008, we estimate that the average number of text messages sent from Brazilian mobile phones is not much more than 10 per month, compared with about 140 in Venezuela.


This is mainly due to the high price of SMS in Brazil. In 2007, Brazilian operators were charging US$0.18 on average per message, while in neighbouring Argentina the cost was US$0.05. In Colombia an SMS was costing on average US$0.06 and in Venezuela US$0.03. In June 2007, Claro lowered its SMS price by 20% to R$0.30 (US$0.19), the lowest at the time in Brazil.


In mid-2008, TIM Brasil was charging R$0.39 and Vivo R$0.35 per message. Claro still charged R$0.30. Vivo, however, also offered several SMS packages, including one at R$14.90 for 100 text messages to be sent within a period of 30 days.


Reducing SMS prices would certainly lead to increased traffic, which would more than compensate for a temporary drop in revenues, but operators have been unwilling to test this theory; instead, they have blamed the low SMS take-up on lack of interest or ignorance on the part of the public rather than on high prices.


Nevertheless, mobile data is a promising source of revenue in this country. Given its size, Brazil is the largest market for mobile data in Latin America, with a growing demand for ringtones, mobile games, and Portuguese mobile content.


According to the latest official data, SMS traffic in Brazil increased by 20% in 2006, to 8.4 billion messages, compared with 7.0 billion in 2005. Around 90% of messages were person-to-person, while the application-to-person market accounted for the remaining 10%. Revenues from data services averaged about 7-8% of total operators’ revenues in 2006. During 2006, operators generated revenues of R$2.4 billion (US$1.2 billion) in SMS traffic.


See also:

Brazil – Mobile Market – Overview & Statistics;

Brazil – Mobile Operators.

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WiMAX licence owners concerned about spectrum cap

Friday, August 29th, 2008

WiMAX licence owners concerned about spectrum cap

New Zealand WiMAX licence owners say that the Commerce Commission’s decision to limit each WiMAX licence to 40MHz of spectrum is discouraging telcos from building networks.


However, the regulator claims that the 40MHz cap, which is in force until December 2012, is designed to increase the number of players with WiMAX spectrum, and that 40MHz is sufficient spectrum to deploy a nationwide network.


Operators however claim that it does not make sense for several firms to deploy separate networks. They are also complaining that they are unable to utilise their WiMAX licences until current licensees lose their rights to frequencies in 2009 or 2010.


See also:

New Zealand – Broadband – Statistics, Overview & Providers;

New Zealand – Wireless Broadband – Statistics, Overview & Providers.


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NZ Communication launch delayed to 2009

Friday, August 29th, 2008

NZ Communication launch delayed to 2009

After previously signing a nationwide roaming deal with Vodafone New Zealand, NZ Communications had hoped to begin services in October 2008, but has fallen behind with its network rollout, with just 50 base stations built out of the 450 it had planned. Launch is now unlikely before 2009.


The mobile operator has so far been unable to put in place co-location agreements with Vodafone and Telecom Mobile. New legislation which will speed up co-location is expected to be introduced by the New Zealand government in November 2008.


See also:

New Zealand – Mobile Communications – Statistical Overview and Major Operators;

New Zealand – Mobile Communications – Analyses;

New Zealand – Mobile Communications – Spectrum.

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Mobile prepaid subscribers base declines in Australia

Friday, August 29th, 2008

Mobile prepaid subscribers base declines in Australia

The period from 2000 to 2005 saw strong growth in the Australian prepaid mobile market. However from 2006 onwards the percentage of prepaid subscribers has been steadily decreasing from 50% in 2005/06, to 49% in 2006/07 and to 45% in 2007/8. BuddeComm predicts that this figure will fall further to 44% in 2008/09.

The transition to 3G and mobile broadband is a significant underlying reason for this trend. Also in a maturing market people seem to be more confident to use postpaid and capped prices are providing lower prices and the security of not getting a bill shock.

Table 1 – Australian percentage prepaid subscribers per operator – 2006 – 2009

Year ends June






























(Source: BuddeComm based on industry estimates)

For more information, see separate reports:

Australia – Mobile Communications – Subscriber Statistics.

Australia – Mobile Communications – Revenue Overview

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New era for Australian broadband politics

Friday, August 29th, 2008


The very public statement from the Shadow Minister for Communications, Bruce Billson – that the Opposition is in favour of structural separation – is providing Australia with a unique opportunity to arrive at a bipartisan policy on this issue.

This point had almost been reached prior to the election, at least in relation to the infrastructure needed for the digital economy. It is great to see that both parties are united in their view on open networks, competition and innovation.

Time and again the Minister has indicated that he will not back down on his policy promises and on several occasions he has applauded the structural changes that have been implemented in Britain, New Zealand, Singapore and elsewhere.

Aside from Telstra, everybody else in Australia (including most of the financial institutions) is, in one way or another, in agreement that structural changes are needed to move forward. Interestingly, Macquarie Bank, which is now involved in Telstra’s bid for the NBN, is a forerunner in buying parts of the soon to be structurally separated local telco, PCCW, in Hong Kong.

So if we all agree that this is the best course to take, let’s do it.

Telstra has been given plenty of opportunity to offer its own alternatives and on many occasions the industry has invited the incumbent to join in the national discussion on how to best move into the future.

I have been instrumental in bringing to Australia from the Netherlands an executive from KPN, the national telco that has chosen an unregulated (voluntary) solution. But Telstra has shown no interest at all in any of the alternatives.

The only course of action now is to give the ACCC the power of structural separation. This needs to be accompanied by a strict deadline – for example, that draft legislation is to be introduced within a three-month period and that legal process is to be in place within a year. This will give Telstra three months to change its position and sit down to work out a solution that suits everybody.

In every other country, without exception, this government strategy has worked and as a consequence the final legislative implementation has been one that best suited each individual local situation. To date the full implementation of structural separation has not been necessary.

However, none of the telcos in these countries moved without a strong stick being wielded by the government.

By coming up with a firm decision, the government can also save itself a lot of headaches, as such a strong signal will – as has been the case in all those other countries – most probably be enough to produce a more amicable solution. Any more ‘lovey-dovey’ solutions from the government would only prolong Telstra’s battle of denial, delay and disruption and would not give the telco the right incentive to act more responsibly.

The sooner we can get the government to take this action the sooner we can clean up the mess and stop the rather phony NBN RFP process.

Paul Budde

See also:

Australia – National Broadband Plan

Australia – National Broadband Plan – Analysis mid 2008

Australia – National Broadband Plan Analysis RFP

Australia – National Broadband Plans from Telstra, Terria & others

Global – Infrastructure – Strategies for the Digital Economy

Global – Broadband – Regulating Fibre Access

Europe – Structural Separation Developments – 2008

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