BuddeBlog

Germany is among a number of EU countries which have freed up valuable spectrum in the 2.6HGz and 800MHz bands for other uses, including mobile broadband. Provision was made in the government’s 2009 National Broadband Strategy (including a recent update – Deutschland Digital 2015) to allow the 800MHz band to be used for mobile broadband access in sparsely populated areas, and so support the target for nationwide availability of at least 1Mb/s services by mid-2011 and 75% coverage of 50Mb/s services by 2014. Indeed licensees are committed to addressing broadband ‘white spots’ as part of their licence conditions. T-Mobile, O2 and Vodafone are required to provide 90% population coverage with LTE in rural areas before they can proceed with extending their networks to more populated areas (spectrum in the 1.8GHz, 2GHz, and 2.6GHz bands do not have such coverage obligations, principally due to their less advantageous propagation characteristics). Only one operator must meet this obligation in a specified area, and MNOs are free to decide among themselves their areas of deployment. It is thus likely that the country will thus be carved up by the three to avoid network infrastructure duplication: indeed the three licensees expected to begin co-operating on rolling out a joint LTE network less populated areas by the end of 2010.

At the May 2010 auction, O2, Vodafone and T-Mobile each won two paired 5MHz blocks in the 800MHz band, while E-Plus failed to win (though it secured up spectrum in other bands: 20MHz of 1.8GHz, for GSM/GPRS/UMTS/HSPA, 19.8MHz of 2GHz, for 3G/UMTS/HSPA/LTE, and 30MHz of 2.6GHz, for LTE/Wimax). Since the licensees did not decide on the block allocation among themselves, the process was decided by the regulator in September 2010: O2 was given the first lower blocks, Vodafone the two middle blocks, and T-Mobile the upper blocks. Licenses are for 15 years (to December 2015)

A number of LTE trials were undertaken in both the 2.6GHz and 800MHz bands before the auction of these frequencies. Further developments have come swiftly following the allocation of licences: T-Mobile has committed itself to launch commercial LTE services by the end of 2010 in the 800MHz band (with equipment from NSN), and aimed to serve up to 1,000 locations. O2 announced similar plans to deploy an LTE network in rural areas of Germany using the 800MHz band, with a wider scale commercial deployment to follow in up to 1,500 locations during 2011. For its four urban LTE networks (in Munich, Halle, Teutschenthal and Ebersberg) O2 will operate in the 2.6GHz band to provide up to 100Mb/s. Its chosen equipment vendors are Huawei and NSN.

Vodafone launched an LTE service in Heiligendamm in late 2010, the first of 1,500 areas scheduled to be covered by March 2011 (technology partners are Huawei and Ericsson). The service is under the ‘LTE Zuhause’ banner, providing data at up to 70Mb/s, though mobile broadband in rural areas may only reach 3Mb/s to 5Mb/s.

As for E-Plus, failing to secure 800MHs spectrum means that it will face difficulties deploying mobile broadband in rural areas, or improve coverage within buildings (a key benefit of lower spectrum). To address these shortcomings E-Plus may rely on the regulator restructuring 900MHz spectrum when it comes up for auction again in 2016.

Overall, the LTE-based offers are expensive by the standards of DSL, but where no DSL is available the LTE option is a considerable improvement on satellite-based broadband alternatives, even those the next generation satellites are capable of 5-10 Mb/s data rates.

For more information on Germany’s broadband and mobile markets, see the separate reports:

Germany – Broadband Market – Overview, Statistics & Forecasts;

Germany – Mobile Market – Mobile Data Services and Forecasts;

Germany – LTE network strategies for 2011;

Germany – Mobile Market – Statistics and Forecasts.

Industry revenue overview

BuddeComm estimates that the overall telecoms services revenue exceeded $41 billion in 2010, reflecting the mildness of the downturn in Australia compared with other countries. However growth is likely to remain very subdued in 2011 and 2012. This is attributable to the decline in 2009/10 in key Telstra segments such as its fixed line business.

While Telstra has successfully defended its market share in the past the carrier no longer expects this to continue. In particular it reported an accelerating decline in its fixed line business. As a result of this, in June 2010 its share of the total market was just over 60% and this is expected to decline further in 2011 and 2012.

Optus’s share of service revenues continues to languish at between 21% and 22%. However Telstra’s inability to sustain its growth suggests that even with subdued growth Optus’s share could surpass 23% in 2011 and 2012. Although the Vodafone and Hutchison merger created a significant competitor to Optus the full potential of the VHA business has not yet been realised in its share of total industry revenue.

Telstra

Telstra is Australia’s largest telecommunications provider, offering a full range of telecom services throughout Australia, including basic access services to most homes and businesses, local and long-distance telephone call services, and mobile and Internet services. This report gives an overview of Telstra’s main areas of operation, strategic business units, local and international subsidiaries, and a brief financial result summary, as well as key operating statistics in the areas of network and operations data, billable traffic data, and mobile, broadband and pay TV subscribers up to mid-2010. An overview of Telstra’s Next Generation Network and ADSL network is also provided.

The report also provides financial results for Telstra for FY2008-FY2010, together with an overview of the key highlights during each period. Detailed financial statistics and comparisons are given for each of Telstra’s service areas including mobile, Internet and Internet protocol solutions, public switched telephone network, and international operations.

Soon after the government announced the National Broadband Network in April 2009, Telstra finally accepted that change was inevitable and it acted swiftly. The company announced its support for the NBN and its willingness to work together with the government. The company also put its weight behind the trans-sector concept, which will be the avenue to generating new revenue. Negotiations were launched, with the government investigating how Telstra could best participate. These negotiations have been complex and tough, and they are continuing. An initial agreement to negotiate further was signed in December 2009, followed by the signing of a Heads-of-Agreement in June 2010.

Sensis

Sensis is Telstra Corporation’s advertising subsidiary and Australia’s leading information resource. Since its inception in 1991 the company’s core business has been advertising through its White and Yellow Pages print directories, which are distributed to 97% of Australian metropolitan households. Other divisions include the Sensis search portfolio, including sensis.com.au, Sensis 1234 and Sensis Mobile; CitySearch, an online city guide; and Whereis products and services which deliver location and navigation services.

Sensis is also a partner in some of China’s most popular websites including real estate and home furnishings website, SouFun.com (sold); auto websites Autohome.com and Che168.com; and digital devices websites IT168.com and PCPop.com.cn.

Optus

Optus offers a range of communications services including mobile, national and long-distance services, local and international telephony, business network services, Internet and satellite services and subscription TV. This report provides an overview of the main divisions within Optus, including consumer, business, small and medium business, and wholesale and satellite. A breakdown of key operating statistics is provided for Internet, broadband, voice, and pay TV services, along with highlights of the company’s financial results.

Financial summaries for Optus are provided for the years 2009 and 2010. For the latest financial year, results include revenue and EBITDA for each main operating division of mobile, business, wholesale, consumer and SMB fixed; revenue breakdowns for each service division of mobile, voice, Internet, pay TV, data and IP, satellite, ICT and managed services; plus a detailed breakdown of revenue within each of these service divisions. An analysis of Optus’s 2010 financial results and a market analysis for 2010 are also included.

The Optus customer access network is comprised of a fibre and an HFC network.

• The fibre network serves major business customers via Optus-laid fibre in all capital cities, major suburban business districts and major regional centres, and also provides transmission capacity between the Optus network facilities (exchanges and fibre access nodes), and to many of Optus’s DSLAM sites.
• The HFC network is a wholly Optus-owned network used for telephony, high-speed data and pay television to residential, non-business customers.

The company has 3G services in Sydney, Canberra, Melbourne, Brisbane, Adelaide and Perth and is expanding to many regional areas. In 2010 Optus began trialling LTE technology in Australia in a bid to establish a regionally compatible LTE network to enhance and enable mobile broadband services.

The company is also encouraging businesses to use cloud services over the IP network, which were launched after successful trials during early to mid-2010.

Market highlights:

• Telstra still dominates the overall Australian telecoms market with more than a 60% market share of overall revenues in 2009/2010.
• Telstra’s annual results for 2010 showed declining revenue in most segments, and this is expected to fall further during 2011 and perhaps into 2012.
• Telstra and NBN Co entered into a Financial Heads of Agreement on the rollout of the NBN.
• There were a number of changes to the Sensis group which impacted the growth rates during both FY2009 and FY2010.
• Optus has continued the rollout of its 3G dual band mobile network, with voice coverage now reaching over 97% of the Australian population.
• Optus mobile continued to grow, with service revenue increasing 13% on strong demand for smartphones, mobile broadband, and popularity of cap plans.
• In 2010 Optus began trialling LTE technology in Australia.

For detailed information, table of contents and pricing see: Australia – Telco Company Profiles – Telstra and Optus

One of the larger Eastern European nations, Poland is defined by as an upper middle-income country by the World Bank. Since its transition to a market economy Poland has experienced sustained economic growth, assisted by its accession to the European Union which is now its main trading partner. Like many of its neighbours, Poland was affected by the recent global financial turmoil through declining demand for its exports, a slowdown of credit activity, and lower foreign direct investment inflows. However the country fared well as it was the only EU nation to escape recession in 2009, attributed to less dependence on external demand, limited pre-crisis imbalances as well as relatively sound and well-capitalised financial system. The EU estimates Poland’s real GDP to expand by 2.7% for 2010, rising to 3.3% for 2011.

Poland’s telecoms market has been shaped by EU policy, with markets liberalised and the incumbent privatised. Ongoing action by an active regulator such has improved market conditions, particularly in the network access sector.

Poland’s fixed broadband market is one of the largest in Eastern Europe due to its large population. Broadband represents the majority of Internet connections. Fixed broadband access is available via DSL, well-established cable TV networks, FttX and wireless. Healthy infrastructure-based competition is evident while a tougher regulatory regime is improving the wholesale market.

Poland is one of Europe’s more sizeable TV markets. Programming is accessible via cable TV, terrestrial free-to-air, broadband TV and satellite. The significant number of competing infrastructure operators for each delivery platform suggests continued consolidation of the fragmented market. Digital TV uptake is improving due to increasing affordability of both TVs and programming.

Poland possesses a well-developed mobile market with high mobile ownership levels. A number of mobile network operators offer services along with a number of mobile virtual network operators. Average Revenue per User levels have stabilised after falling in recent years due to retail tariff competition, regulatory mandated reductions in mobile termination rates and take up of mobile services by lower spending consumer segments of the market. 3G and 4G networks have been launched and coverage is expanding to support delivery of mobile broadband and content.

Market highlights:

• Poland’s broadband market continues to speed up; all four major cable TV operators offer DOCSIS 3.0-based fixed broadband services, offering up to 120Mb/s. Competing telcos are expanding the reach of FttX-based services.
• Possible consolidation may be underway in Poland’s fragmented cable TV market, with Poland’s second largest cable TV operator up for sale.
• Mobile market competition has intensified after a new market entrant became the first to launch commercial LTE services in Eastern Europe and the fourth globally. Two competing operators have been given permission to deploy a combined LTE network.

Poland broadband and telecoms statistics – 2010; 2011

(Source: BuddeComm based on industry data)

For detailed information, table of contents and pricing see: Poland – Telecoms, Mobile, Broadband and Forecasts

Health and Ageing Minister Nicola Roxon has announced an e-health conference to be held in Melbourne at the end of November.

She is urging leading health experts, consumer groups and IT specialists to attend the E-Health Summit, to discuss a promised technological revolution in the delivery of healthcare.

“It is an important opportunity for stakeholders to discuss how electronic health and tele-health will drive the delivery of healthcare into the future,” says Roxon

“The Gillard Government is investing almost $470 million to introduce e-health across the health system – including the introduction of personally controlled electronic health records to be rolled out from July 2012,” she adds.

The E-Health Summit will take place on November 30 and December 1 at the Melbourne Convention Exhibition Centre.

See also Australia – Digital Media – E-Health

As we have said before, it is great to have the Opposition back in the debate about Australia’s broadband future.

During the SBS Insight discussion in which I took part Malcolm Turnbull repeatedly stated that ‘we all are in favour of fast broadband’. This was the same message that Helen Coonan, then Liberal Minister for Communication, gave us back in 2007; it is a pity that this message has not been reiterated between then and now.

Fortunately broadband is now coming back onto the Opposition’s agenda, in a positive way, and that is great news indeed.

But the world did not stand still in those intermediate years. The government and the industry have been working together and for the first time in decades the industry can present a united front on the NBN. Telstra and 95% of the industry (there are a few exceptions – notably AAPT) have been and still are collaborating in an effort to achieve the best outcome.

The first industry group to do this was actually established with the blessing of Helen Coonan, back in 2006, when she announced the $1 billion wholesale network initiative. This group, now known as the Digital Economy Industry Work Group, worked with her on some of the strategic issues related to this plan.

That industry initiative also had the broad support of Stephen Conroy, then Shadow Minister for Communication. At the time of the election the industry indicated that it could work with both parties on the strategic issues concerning broadband policies for Australia.

Unfortunately, after the election the Coalition – now in Opposition – turned its back on what is now known as the NBN and refused to be involved in the industry discussions that were taking place. I joined in with other industry groups in repeatedly asking the Opposition to participate in constructive discussions with the industry. I provided them with lists of issues that I believed needed improvement (including more information on the social and economic benefits that the NBN could deliver) and invited them to address those issues – all to no avail.

There is no one-size-fits-all solution for national broadband plans. There are different ways to get there, all based on the unique political, social, economic and geographic situation of each country.

But at a certain point the procrastination should stop and a plan needs to be developed. The NBN is the result of the broad cooperation that exists between nearly all the parties involved in this national infrastructure plan.

Could there have been alternative approaches? Yes, of course. But today we have the NBN, and thanks to this we now have a cooperative Telstra.

So do we now want to undo all of that?

I have mentioned DEIWG, but after the strategic work had been done it was the Communications Alliance that sat down and started to work on the nitty gritty of the implementation plans. As with DEIWG, literally hundreds of volunteers from the industry put their heads together within that organisation to come up with the best solutions.

Malcolm Turnbull now asks whether there are better solutions. Communications Alliance is a very open organisation, so if the Opposition had better ideas why didn’t they put them forward during the last three years when all of this was being discussed in minute detail?

It is rather arrogant of the Opposition to now say throw it all away – we have better solutions. It would be a massive waste of the valuable resources that the industry has put into this process.  Malcolm also indicated that he didn’t want to delay the NBN, but how can you not delay the NBN by basically asking for a total review?

The last thing the industry wants now is to have to start that process all over again. One of the main reasons we began it in the first place, in 2005/2006, was that we were falling behind our trading partners – due to a lack of national broadband policies under the previous Coalition government. Nobody in the industry wants to spend another three years on yet another plan.

Paul Budde

For more information see:

• Australia – National Broadband Network – Changing the media model
• Australia – National Broadband Network – Competition and Regulations
• Australia – National Broadband Network – Deployment Strategies
• Australia – National Broadband Network – Early Projects
• Australia – National Broadband Network – Government’s Trans-Sector Conference
• Australia – National Broadband Network – Industry at crossroads
• Australia – National Broadband Network – Market Forecasts 2015, 2020
• Australia – National Broadband Network – Municipal Networks
• Australia – National Broadband Network – NBN Co and Infrastructure
• Australia – National Broadband Network – Overview and Analysis
• Australia – National Broadband Network – Telstra
• Australia – National Broadband Network based on Trans-sector model
• Australia – National Broadband Network Trans-sector projects