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Several scandals have rocked Uruguay’s state-owned telecom incumbent Antel in the past months. The news has been particularly shocking because Uruguay has a reputation as one of the least corrupt nations in Latin America. According to Transparency International, in terms of corruption Uruguay is ranked 23 out of 180 countries, along with Chile and France.

Although motivations and dynamics are not altogether clear, the wrongdoings may be a case of cronyism, starting with Antel’s questionable sponsorship, in 2008, of a female boxer who also acted as company ‘mascot’. Antel paid the boxer $US54,000 and employed her unqualified boyfriend as bodyguard for the company’s vice president Gonzalo Perera, although he appeared to have little need for such protective measures. Then, in July 2009, Perera claimed he was the victim of an attempted murder, but police investigation discovered he had faked the evidence. Following this incident, Perera was forced to resign from his post. He just managed to avoid being sent to jail, but instead was placed under psychiatric treatment and sentenced to community services.

On the very day when Perera resigned, Antel’s president Edgardo Carvalho received a phone call from someone claiming to be the Deputy Secretary of Parliament, who asked Carvalho to employ a former police officer. Carvalho complied with the verbal request and appointed the ex policeman with a US$1,000 monthly salary. In September 2009, it came to light that the phone call from the Deputy Secretary of Parliament was a hoax, and the ex police officer was sent to jail. Carvalho was forced to resign as he was deemed remiss in accepting such a request, as recruitment in state-owned companies should undergo a standard selection process, and not be implemented on the basis of a phone call.

Carvalho’s resignation coincided with the dismissal of Antel’s vice-president Gladys Uranga when it transpired that, since her appointment in July 2009, Uranga’s son, daughter, and sister had all been employed by the company.

Although shocking in the context of Uruguayan politics, the breaches are, on the whole, relatively minor compared with the scale of corruption found in some other Latin American countries. Moreover, the government of Uruguay acted promptly in redressing the problems.

Created in July 1974, state-owned Administracion Nacional de Telecomunicaciones (Antel) is responsible for the operation of the fixed-line telecom network in Uruguay. It provides all domestic telephony services on an exclusive basis, and it offers international telephony, mobile telephony, Internet services, and data transmission in competition with other companies.

After increasing 12% in 2005 and 6% in 2006, Antel’s operating revenues have had two successive years of negative growth. In 2007, the company’s operating revenues were down by 6%, and in 2008 by 12%. Net profits have also been declining, in 2007 by 15% and in 2008 by 14%.

See also: Uruguay – Telecoms, Mobile, Broadband and Forecasts

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It is gratifying to see that most of the key stakeholders involved in the broader ICT market have given their support to the government’s policy for development of the NBN, a new national infrastructure that will facilitate, through its wholesale arrangements, a range of very innovative and competitive new ICT (retail) services. 

An open infrastructure, separate from its applications, is going to deliver both new services and new players into the market. With the trans-sector approach people are beginning to recognise the potential to increase the size of a rather limited telecoms pie, and to realise that a decrease of market power from some of the telcos, on the one hand, can be more than compensated for by an increase in overall ICT business. 

In the next phase, which we are now entering, we no longer need to make a case for the trans-sector approach and its social and economic benefits. The government has clearly linked e-health, smart grids, smart cities and smart infrastructure directly to the success of the NBN and most of the other stakeholders (other government sectors, investors, industry, business and consumer groups, etc) are supportive of that concept as well. The government has also promoted the NBN as opening up the infrastructure for innovations, more choice and more competition. These policies are now a given, and should become the platform from which the next level of decisions is made. 

The next step is for the NBN infrastructure to be developed in a way that will make this happen. We need to ensure that the intention of the NBN, according to the trans-sector vision provided by the government, will now be carried out in its implementation. The government will need to follow this up with further supporting policies in other sectors (healthcare, education, energy, etc) and NBN Co will be the most critical element in the actual implementation. 

We certainly can’t underestimate the enormity of this project. It hasn’t been done anywhere else in the world and Australia is becoming the international benchmark here. It is essential that we keep the bigger picture, ie, why we want this NBN, clearly in front of us. It would be far too easy for this project to become bogged down in endless technical details. 

The government needs to make sure that the vision stays in place.

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Those who have followed the telecoms debate in Australia over the last few years will certainly have noticed that BuddeComm and Telstra have crossed swords on many occasions.

Our differences have been at a philosophical level.

Telstra saw that its obligation to look after its shareholders required it to operate on a commercial basis, and so to pursue strategies that concentrated on the more profitable elements of the market, through its vertically-integrated operation.

We at BuddeComm, on the other hand, believed that, obligations shareholders aside, the national interest was also a compelling factor. Telecoms is essential infrastructure that underpins our economy and our society and it is therefore necessary to also view it from that national interest point of view.

However, throughout this stand-off period we maintained that Telstra’s cooperation was vital when the telecoms infrastructure for the future was being created. It would be a waste of resources, time and energy if we had to develop two different future scenarios, one for the country and one for Telstra. That simply doesn’t make sense.

Even before the new CEO was appointed I sensed a change in attitude – a tendency towards a more inclusive future plan – and I made contact with the company in an effort to establish industry dialogue. When David Thodey was appointed as the new CEO this initial contact was firmed up and it very quickly became clear that we had far more in common than we had differences. The trans-sector approach towards the new NBN, in particular, was very much shared by Telstra.

This led to the industry Roundtable in September, where Telstra was represented by David Thodey, as well as by Geoff Booth, Group Managing Director NBN Engagement Telstra; Hugh Bradlow, Chief Technology Officer, Telstra; and David Quilty, Group Managing Director Public Policy & Communications, Telstra.

Again it became evident, and now in a wider industry forum, that there was plenty of opportunity to work together. There was a genuine interest on both sides to look for industry cooperation, especially in relation to showing ICT leadership to other sectors such as healthcare, education, energy, environment, etc.

The conclusion reached was that because of the inward-looking nature of the industry over previous years it had failed to engage with other sectors and to assist them in developing plans that would allow these sectors to undergo the massive transformation processes they are currently experiencing – something that can’t be done without ICT. In order to facilitate these changes a different attitude is required from the telecoms industry.

With the assistance of Telstra – and, more importantly, with the support of the company towards the vision for the NBN and the trans-sector concept behind this project – the industry can now speak with one voice on these strategic issues. This will greatly assist the industry to communicate with other sectors to provide them with ICT leadership on how we can assist in this transformation process.

Obviously both Telstra and BuddeComm have encountered scepticism about the change that is taking place in their relationship with each other; it is understandable that some – especially those not integrally involved – find it rather hard to believe a situation like this can improve so quickly.

However, there is a genuine understanding at Telstra that, based on the NBN, we can increase the size of the pie, and that a whole range of new business opportunities are on the horizon. Certainly this will take time, but with a combined effort it should be possible to successfully negotiate these changes.

BuddeComm also strongly believes that, with the future vision for the industry now being a shared one, many of the operational issues can be resolved using a more business-style approach, within the regulatory parameters proposed by the government. Once the broad outlines of the future of the industry are clear at a strategic level business decisions need to be made that will allow both Telstra and the industry to arrive at the established goal over the next five to ten years. Obviously there will be many headaches along the way but, if the process is grounded in a long-term strategic plan, such difficulties can be resolved.

It is also in the interest of Telstra and the rest of the industry to make the necessary business decisions, within the parameters set by the government but without too much regulatory or government interference. The last thing the industry needs is to become a political football in Parliament.

Paul Budde

See also:

Australia – Trans-sector Thinking Leading to Smart Communities

Australia – National Broadband Network – Overview & Analysis

Australia – National Broadband Network – Critical Considerations

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In a new edition of their report ‘Mobile Broadband Cards, Routers, Services, and Subscribers’ Infonetics Research predict mobile broadband cards to be an $8.4 billion market by 2013.

Report highlights:

• The mobile broadband card market grew 10% sequentially in the first half of 2009, driven by increasing adoption of HSPA and demand for netbooks
• Manufacturer revenue from mobile broadband cards is forecast to hit $8.4 billion worldwide by 2013
• Worldwide, the number of mobile broadband subscribers is expected to near 1 billion by 2013 (including phone and PC based W-CDMA/HSPA, CDMA2000/EV-DO, and LTE subscribers)
• Mobile subscriber growth is being fueled by people seeking basic voice service, particularly in BRIC countries (Brazil, Russia, India, China), all migrating to 3G, which in turn will drive mobile broadband subscriber adoption
• CDMA operators have been quicker off the blocks with mobile broadband, rolling out EV-DO earlier than GSM operators upgraded their networks to W-CDMA/HSPA, resulting in significantly higher CDMA2000/EV-DO mobile broadband card adoption
• Between 2009 and 2013, worldwide service provider revenue from mobile broadband services is forecast to more than double

See also:

Global Mobile and Technical reports

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Killarney Vale Public School have launched a new system of payment called ‘Easy Canteen’ that relies solely on the sending of an SMS text message to order their recess and lunch time orders from the canteen.

Killarney Vale is the first school in Australia to launch this technologically-savvy system, which allows parents to pay for their child’s school canteen lunch order and even school uniform purchases with the quick flick of a text.

The system provides an effortless, convenient, low-cost and cashless payment option for parents. It can be done in an instant, parents open their own account and with a quick text message, funds are automatically transferred.

See also:

Australia – Mobile Data – SMS – Overview & Statistics

Australia – Mobile Media – Premium Rate SMS

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An Ebook reader, sometimes also called an Ebook device, is a device used to display Ebooks. It may be a device specifically designed for that purpose, or one intended for other purposes as well. The main advantages of these devices are portability, readability of screen in bright sunlight, and long battery life. They carry a virtual public library of information, facts, and data anywhere you go, easy access to books and text size adjustments making them excellent to read.

Any Personal Data Assistant (PDA) capable of displaying text on a screen is capable of being an Ebook reader, but without the advantages of e-ink displays.

In 2009 new marketing models for Ebooks were being developed and dedicated reading hardware was produced. Ebooks (as opposed to Ebook readers) have yet to achieve global distribution. Only three Ebook readers dominate the market, Amazon’s Kindle model, Sony’s PRS-500 and the Dutch BeBook from Endless Ideas.

The US Trade Wholesale Electronic Books Sales Statistics shows a drastic increase from over a year ago, rising from 8 million dollars to 16 million dollars, and it only shows the fifteen or so booksellers that released their Ebooks statistics.

The market in 2010 will see Wireless connection, Subscription business models and Touch screens.

The newest generation Ebook readers, are based on electronic paper, or epaper, on which the text and pictures are displayed by electronic ink or eInk.

In the current technology the paper is made of a thin layer (coating) of conductive synthetic material. The coating contains millions of capsules filled with oil, with floating black and white pigment parts in it. These pigment parts react to an electrical load.

This information was kindly provided by R&D Media Group Pty Ltd the Australian arm of the developers of the BeBook reader see www.bebook.net.au

See also:

• Digital Media – E-Education & E-Science
• Global – Mobile Media – Content & Services Trends

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Cisco is using the large scale developments in smart grids to focus the attention on the opportunity to base smart grids on the IPv6. In particular they concentrate on the security improvements that this standard can bring to the industry. Internationally there is government attention to ensure that the power grids can handle potential threats and security therefore is a paramount issue.

When upgrading these power grids to smart grids there is a unique opportunity to address these issues. IPv6, the successor technology to IPv4, has a 128-bit addressing space, enabling it to handle far more addresses than its predecessor, which uses  32-bit addresses. If utilities adopt IP-enabled power metering for millions of subscribers connected to the electrical grid there could be problems addressing them all over IPv4. However Ipv6 has shedloads of addresses and is therefore future proof.

See also:

• Technology – IPv6 1 – Addressing
• Technology – IPv6 2 – Autoconfiguration, ICMPv6 & Neighbour Discovery
• Technology – IPv6 3 – Headers & DNS
• Technology – IPv6 4 – Address Selection & Mobility
• Technology – IPv6 5 – Multihoming & SHIM6
• Technology – IPv6 6 – Address Management
• Technology – IPv6 7 – Transition & Adoption

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There is a keen interest in m-payment and m-banking among mobile operators in developing countries as one way of generating new revenue streams, in an environment where the average revenue per user (ARPU) in the voice market has fallen below US$5 per month in many cases. The revenues are indeed growing, but can this new business also be profitable?

The often quoted pioneer success story in this sector is M-Pesa in Kenya, introduced by Vodafone’s Safaricom network in 2007. It allows SMS-based money transfers, irrespective of whether the recipient is another M-Pesa customer or not, and even to non-Safaricom customers. Users can also deposit cash into the M-Pesa account and withdraw it through a network of thousands of authorised dealers such as shops and petrol stations, or at one of 110 PesaPoint ATMs throughout Kenya (with hundreds more planned), without the use of an ATM card. The service does not require the user to have a bank account, nor is there a minimum amount.

M-Pesa attracted 1.6 million users within 12 months and broke the 3 million barrier in 2008. By May 2009, the number of users had doubled again to six million – more than the 4.5 million account holders at all Kenyan banks combined. By this time it was carrying around US$200 million per month, the equivalent of about 8% of Kenya’s GDP.

The majority of transactions are between KES2,000 and KES5,000 (US$27 to US$67). The average M-Pesa user currently sends transactions totalling US$33 per month through the system, that’s US$400 per year, compared to the average m-payment transaction volume per user worldwide of US$670 per year.

Worldwide there were 43 million m-payment users in 2008, generating a total transaction volume of US$29 billion, according to research by Gartner and Arthur D. Little. Based on these figures, Kenya has more than 10% of the world’s m-payment users and represents close to 10% of the world’s total transaction volume. That’s huge for a country that represents 0.5% of the world’s population and 0.05% of the world’s economic output!

So m-payment is already a multi-billion dollar business. In transaction volume, yes. In terms of actual revenue for the mobile operator it’s of course less than that. Transaction fees in Kenya are around 1% of the transaction value, so the average user pays the operator about US$4 per year in transaction fees.

That’s not much to make a profit on, and Safaricom has indeed stated that M-Pesa by itself is not yet profitable. But it is growing very fast and already makes up 4% of the operator’s total revenues (up from only 0.6% last year).

And this direct revenue is not the only benefit for the operator: Safaricom has found that the voice ARPU of M-Pesa users is 25% higher compared to non-M-Pesa users, simply because they can keep their phone accounts topped up more conveniently and therefore more regularly, and consequently call and text more.

Taking this into account, m-payment and m-banking can indeed be a key component in a strategy for a mobile operator in an emerging market to increase ARPU, and ultimately to improve profitability as well.

See also:

• Kenya – Mobile Market – Overview, Statistics & Forecasts;
• Global – Mobile Data – M-Commerce & M-Payments.

Peter Lange – Senior Research Analyst, BuddeComm

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There were 43 million m-payment users worldwide in 2008, generating a total transaction volume of US$29 billion, according to research by Gartner and Arthur D. Little. Based on these figures, Safaricom’s M-Pesa service in Kenya with its 6 million users and US$200 million transaction volume per month has more than 10% of the world’s m-payment users and represents close to 10% of the world’s total transaction volume.

That’s huge for a country that represents 0.5% of the world’s population and 0.05% of the world’s economic output!

However, Safaricom (a member of the Vodafone group) has stated that M-Pesa by itself is not yet profitable. But it is growing very fast and already makes up 4% of the operator’s total revenues (up from only 0.6% last year) – a welcome new revenue stream in an environment where the average revenue per user (ARPU) in the voice market has fallen below US$10 per month and even below US$5 for some operators.

And this direct revenue in transaction fees is not the only benefit for the operator: Safaricom has found that the voice ARPU of M-Pesa users is significantly higher compared to non-M-Pesa users, simply because they can keep their phone accounts topped up more conveniently and therefore more regularly, and consequently call and text more.

See also:

• Kenya – Mobile Market – Overview, Statistics & Forecasts;
• Global – Mobile Data – M-Commerce & M-Payments.

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Tanzania’s economy has been showing solid growth since 2000, and the International Monetary Fund (IMF) predicts only a moderate decline of GDP growth to 5% in 2009 as a result of the global economic crisis, before 7% and more will be achieved again from 2011 onwards.

The country’s mobile sector has performed well in relation to its GDP per capita, compared with other countries in the region where a lower degree of competition has been allowed. The seventh mobile operator has just entered the market, with at least four more preparing to launch. At less than 40% market penetration, there is ample potential for further growth. However, annual revenue per user (ARPU) has fallen below US$5 per month for some operators, forcing them to develop new revenue streams and streamline their operations.

Tanzania’s Internet and fixed-line sector has lagged behind other countries in the region with comparable GDP per capita and literacy levels. It is now expected to outperform some of its neighbours in the coming years, following the arrival of the first fibre optic international submarine cable two months ago, the launch of the third 3G mobile broadband service, and the commitment of the government to a national fibre backbone rollout.

Amidst these revolutionary events, the national telco has terminated the contract with an external management firm and is looking for new direction. There may be an opportunity opening up for a new investor, which would make some of its employees happy – expats love this stable, peaceful country with its tropical beaches, abundant wildlife and other natural wonders.

For more information, see BuddeComm’s updated report:

Tanzania – Telecoms Market Overview & Statistics.

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