BuddeBlog

Before, during and after his inaugural speech (January 2009) President Obama spoke of the national benefits of broadband, and the changes which have been set in motion in the US telecoms market that were unheard of even a year ago. During the previous administration the incumbent telcos and cable companies had been given more freedom. As a consequence, innovation and competition dwindled and the US was no longer a leader in telecoms. With the digital economy just around the corner the new administration clearly sees telecoms as a spearhead in its social and economic policies.

However, since that time, the White House has lost some of its initial leadership. Rather than continuing to directly lead the changes as they did before and after the Inauguration, they handed that leadership back to partisan politicians. Congress and Senate are still heavily dominated by the lobbying of the vested interests and a lot of them are more interested in their own political power, which is severely damaging the national interest of America. There is no way that under those out-of-date political arrangements these politicians can lead the country in a democratic way.

The President obviously is very much aware of this, hence his State of the Union address. The current political environment is not particularly conducive to the introduction of the serious changes that the White House are proposing, the President will have to regain leadership and has to come back with innovative policies along the lines that myself and others have been discussing with his advisors in the White House.

These policies need to be developed on a step-by-step basis, rather than just concentrating on the support of Congress – perhaps more time needs to be spent to win the support of the people. The President had and largely still has the people behind him, and he should show leadership to these people, and together with them make these steps. It will be hard for the politicians to continuously keep blocking policies that are clearly supported by the people of America.

Rather than trying to reform Washington, perhaps the White House should, in parallel, work with the people and businesses to get new innovative policies implemented. Leadership is contagious, in Australia the Liberal Opposition behaves exactly like the Republicans in the USA – they vote everything down. However the Government is supported by everybody else, they have even been able to win the support of the incumbent telco, and that will ensure that the NBN will be built in this country, despite the politics. The USA cannot afford to not make changes similar to those that are taking place in other developed telecoms markets.

Paul Budde

We have just written a new report on the current telecommunications situation in the USA:

• USA – Analysis of broadband policy developments in early 2010

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Ireland’s telecom market has suffered from poor broadband take-up, underinvestment and mismanagement among some of the key operators. Falling GDP since the beginning of 2008 has been compounded by the effects of the financial crisis and recession. This has hit the incumbent operator eircom particularly hard, with its parent company facing bankruptcy and eircom itself being sold to STT in January 2010. These factors will continue to have dire implications for the government’s efforts to improve Ireland’s telecom infrastructure into 2010.

Overall telecom market revenue fell by about 12% in 2009, year-on-year, dragged down by the poorly performing fixed-line, mobile and broadcasting sectors, the effects of the recession and also the lower consumer cost derived from a plethora of bundled products. There will be little relief for operators in 2010 or 2011 as the continuing effects of the economic crisis dampen consumer spend.

Nevertheless, the sector offers some hope of resilience in coming years, aided by government investment as well as the impending auction of 1800MHz and 900MHz spectrum aimed at stimulating the mobile broadband sector. The competitive nature of Ireland’s telecom market – with some 450 licensed operators – also bodes well for consumer pricing.

Fixed-line penetration has fallen steadily in recent years while mobile penetration has increased to the degree that by early 2010 about a quarter of households had a mobile but no fixed-line telephone service.

The number of broadband subscribers continues to climb steadily, but consumers are hampered by poor delivery and some of the slowest access speeds in Europe. This has also restricted consumer uptake of high-end services such as IPTV and VoD. Few advances are to be expected during the next few years, as little commercial investment has been allocated to fibre networks, leaving the principal fibre infrastructure to lie in backhaul.

Ireland – key telecom parameters – 2008, 2010

(Source: BuddeComm)

Key Highlights

• The mobile sector share in overall revenue has fallen steadily in recent years, reaching less than 45% by early 2010. This share is likely to drop further in coming years in response to regulated measures affecting roaming and interconnection tariffs, as well as competition among the triopoly of providers and the small number of MVNOs.
• LLU for broadband access has grown slowly compared to other markets. Shared access has generally been favoured over full LLU. This trend may reverse during 2010 following the regulator’s decision to cut shared access wholesale line charges to less than a Euro (among the cheapest in Europe).
• In common with EC policies, the regulator hoped to rejuvenate the mobile data sector by aiming to liberalise the current 900MHz and 1800MHz bands, making them available for 3G or compatible wireless services. Two of the MNOs’ licences expire in 2011 while the third expires in 2015. New licences to be awarded on a liberalised basis will provide operators with greater flexibility in their use of spectrum.
• Mobile broadband subscribers using operators’ HSPA networks have been the largest contributor to overall broadband growth since the beginning of 2008. By early 2010 about 15% of all mobile subscribers were on HSPA networks. Although mobile broadband has earned a place in promoting broadband access, the pricing structure of mobile data services needs to be reduced in coming years to make them more attractive to consumers.

BuddeComm’s annual publication, Ireland – Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Ireland.

For more information see: Ireland – Telecoms, IP Networks, Digital Media and Forecasts

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Finland’s telecom market is dominated by four providers: the Finnet Group, TeliaSonera, Elisa and DNA, founded in 2007 by six of the largest operators which broke away from the Finnet Group and which now controls Finnet’s mobile network business. The country has traditionally been at the forefront of telecom technologies and innovation, particularly in the mobile and broadband sectors.

Finland was one of the first EU countries to develop a national fibre network to future-proof the country’s requirements for telecom and IP-delivered services. Its aim to provide a 100Mb/s connection to all households and businesses by 2015, remains among the most ambitious in Europe.

Overall telecom market revenue has fallen steadily since 2007. Little respite is anticipated for operators in the fixed-line and broadcasting sectors in 2010. However, nearly half of all turnover is from the resilient mobile sector despite it having been affected most from regulatory measures and stiff competition. Turnover from fixed-line telephony will continue to fall in coming years in line with lower access and call charges, consumer migration to VoIP and the substitution of fixed-line for mobile telephony.

Nevertheless, there is considerable scope for further telecom development as the country moves towards a resilient All-IP future. The bulk of tangible investments in telecom networks has been in developing the mobile sector, which has been buttressed by technologies including LTE and HSPA+ as well as the allocation of sub-1GHz spectrum for 3G use.

Finland – key telecom parameters – 2008; 2010

(Source: BuddeComm)

Key highlights

• The mobile sector share in overall revenue has been steady at about 48% in recent years. This share is unlikely to drop in future given the considerable investment in network upgrades. All three MNOs reported steady revenue in 2009, despite regulated measures affecting roaming and interconnection tariffs, as well as competition from number of MVNOs.
• The mobile and mobile broadband sectors are excellently placed given Finland’s pioneering allocation of 450MHz spectrum for digital mobile services. All three MNOs have also used the 900MHz band to build out their 3G networks.
• The government’s national Broadband Action Plan has set out one of Europe’s most ambitious fibre deployments, aiming to provide 100Mb/s to all citizens by 2015, part funded by public funds and part through an innovative tax on operator revenues. The success of this enterprise will in coming years provide a lesson for other European markets struggling with less ambitious policies.
• Mobile broadband subscribers using operators’ HSPA networks have been the largest contributor to overall broadband growth in recent years. Excellent network infrastructure will be supplemented by LTE deployments during 2010 on the back of November 2009 launches by TeliaSonera in neighbouring Norway and Sweden. By 2011 about 30% of all mobile subscribers are expected to be on HSPA networks.

BuddeComm’s annual publication, Finland – Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Ireland.

For more information see: Finland – Telecoms, IP Networks, Digital Media and Forecasts

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