BuddeBlog

Aged-care provider Feros Care and the Northern NSW local health district have formed a new telehealth partnership that will benefit northern NSW residents.

The partnership involves a trial service in the Tweed and Murwillumbah areas in late 2011, where residents will use a monitoring system for six to eight weeks. Homes will be equipped with telehealth technologies and trained telehealth nurses will monitor patients’ health in collaboration with GPs.

It is hoped the service will help individuals better understand their condition, recognise changes or issues earlier, reduce their anxiety associated with their illness and increase their confidence to remain active and independent.

The trial will see patients calling a ‘telehealth hub’ and recording their vital signs with the equipment provided. The patient’s information goes via Bluetooth or infrared straight to the device which is then downloaded and sent to the aged-care provider.

It is hoped that the NBN, along with further initiatives from the government, could reap vast improvements in telehealth – and enable Feros to adopt a video link for telehealth consultations.

For more information see:

Australia – Digital Economy – E-Health – Initiatives, Pilots and Projects

Australia – Digital Economy – E-Health – Overview, Stats and Analysis

Australia – E-Health, E-Education, E-Government

Digital Economy – E-Health Insights

One of the issues that is causing the industry some concern is the possibility that the current design of the NBN will create an environment of wholesale dominance, equally there is concern about potential monopolistic behaviour from NBN Co.

There are a range of options here to address these issues, all of which have their pros and cons. Australia is the international trailblazer and that means we are on our own. We have no benchmarks to draw upon – as a matter of fact, we are the international benchmark.

Let us first address the issue of wholesale dominance.

In 2009, before the NBN design was created, BuddeComm warned that it was critical to ensure that the wholesale entry barrier should be as low as possible. We gave as an example the situation in the Netherlands at that time, where a design consisting of many entry points was preventing companies from buying wholesale capacity on the Dutch FttH network, basically leaving the incumbent KPN as the only national wholesale operator on that fibre network. Since then some changes have taken place in other parts of the Dutch FttH market, but for the purpose of this discussion they are less relevant to the Australian situation.

We were very pleased when NBN Co designed a network with only 14 POIs (points of interconnect). However, after the facilities-based telcos complained, for obvious reasons, about the network being designed in this way the ACCC decided to increase the number of POIs to 121. This would allow them to maximise the use of the transmission networks that they already had in place and/or would extend to facilitate a distributed network design.

The counter-argument for more POIs is that, in order to avoid a monopoly that is unresponsive to market demands and has little incentive to reduce ongoing costs, it makes sense to allow for competition in the transmission market (networks that connect the POIs). In doing so this creates the possibility for wholesale competition, where these players have to be innovative and cost-effective in developing value-added wholesale services in order to attract retail service providers (RSPs).

So, while more POIs does indeed limit the number of RSPs who want to deal directly with NBN Co, this transmission based competition creates incentives to offer RSPs more innovative and competitive priced options.

So far there are at least three transmission network operators that are most likely to embrace this concept: Telstra, Optus and Nextgen. There may be one more, but there will not be enough room for many more players here. There would separately be room for regional or even local transmission/wholesale operators (e.g. in CBDs).

So, on the one hand, we need to balance maintaining the maximum level of wholesale competition to ensure innovation and a downward pressure on prices while, on the other, making sure that such a design is not going to limit access to those organisations who do want to deal directly with NBN Co.

Also, because transmission in itself is plain utility, another threat could be that, for economic reasons, transmission consolidation will happen in the future, this also would require the regulator to step in to prevent monopolistic behaviour.

All of this means that the ACCC is playing a critical role in all of this. They are fully aware of the fine balance required in these situation and have clearly indicated that they will finetune regulations to ensure that sufficient competition occurs on the NBN, both in relation to possible monopolistic behaviour of NBN Co and to a possible lack of sufficient competition in relation to transmission/wholesale.

BuddeComm is confident that this will work. While nobody can predict how this market will evolve, the regulatory tools are in place to make sure that the situation can be adjusted in order to get the right competitive and innovative outcomes that the NBN can offer.

End-user prices – key to success

In the end, however, the commercial success of the NBN does not just depend on the design of the network, or on the technology and its many benefits. The commercial success of the NBN is completely dependent on the end-user price. It is a fairly simple exercise and follows a model that we also successfully used back in the 1990s to predict the success/failure of pay TV and the earlier forms of broadband penetration in Australia.

In relation to the NBN this looks as follows:

Broadband uptake* scenario forecasts 2015 – 2020

*Includes telephone access charge

(Source: BuddeComm estimates – Australia – National Broadband Network – Market Forecasts 2015, 2020)

So, whatever ROI NBN Co wants, or whatever charges NBN Co and the wholesalers might charge, or need to charge, the bottom line is very, very simple. If the price is too high there will not be the expected uptake.

This situation will dramatically change once trans-sector services start to kick in. At that point NBN Co and the wholesalers will be able to tap into new revenue from other sectors, such as business, media, healthcare, education, government services, smart grids, etc. However this unfortunately is a ‘build and they will come’ situation. These sectors will only start using the network when it has sufficient penetration.

As BuddeComm has been arguing since 2005, when we first began to talk about what is now known as the NBN, any cost benefit analysis needs to be based on the social and economic benefits from those trans-sector services and not on the ROI that NBN Co can generate based on telecoms charges. The value of the NBN is many times more than the telecoms charges generated from consumers and businesses subscriptions.

While the government accept this principle, so far the Opposition has not indicated that they support this concept and unless this is accepted across the political divide the future of any form of a national broadband network remains shaky.

The consumer price is also a critical factor in the change-over process.  Once the NBN is ready and Telstra and Optus have to contractually transfer customers to the NBN they can only do so if the end-user price is the same, or less, than their current charges. If the NBN prices would be higher there would be political upheaval as users will rightfully revolt against that. This politically reality ensures that the price will be right and that we will see the high uptakes as mentioned in the table above.

Paul Budde

For more information see:

• Australia – National Broadband Network – Market Forecasts 2015, 2020
• Australia – National Broadband Network – Coalition Opposition Policies
• Australia – National Broadband Network – Deployment Strategies
• Australia – National Broadband Network – Early Projects
• Australia – National Broadband Network – Industry at crossroads
• Australia – National Broadband Network – Introduction and Overview
• Australia – National Broadband Network – Key Analysis 2011
• Australia – National Broadband Network – NBN Co and Infrastructure
• Australia – National Broadband Network – Policies and Regulations
• Australia – National Broadband Network – Telstra
• Australia – National Broadband Network – The Internet of Things
• Australia – National Broadband Network – Trans-sector model
• Australia – National Broadband Network – Trans-sector projects
• Australia – National Broadband Network – Will Australian companies seize the NBN opportunity

Despite some restrictions and censorship, which culminated in the 2011 political and social unrest, Egypt is one of the most developed Internet markets in Africa in terms of users, international bandwidth and services offered. The country was again ranked fourth among African countries in the ‘Networked Readiness Index’ of the Davos World Economic Forum’s 2010/11 Global Information Technology Report. It is well connected through national and international fibre infrastructure and one of Africa’s first Fibre-to-the-Home (FttH) deployments. Egypt also has some of the lowest prices for DSL services on the continent, the result of a highly competitive sector with more than 150 Internet and data service providers.

The strongest growth is currently seen in mobile broadband services, which offers the network operators – Mobinil (backed by Orascom and France Telecom), Vodafone Egypt (VFE) and Etisalat – new revenue streams in an environment of falling average revenue per user (ARPU). All three have also acquired controlling stakes in leading data and Internet service providers: LINKdotNET, Raya Telecom and EgyNet.

Egypt became one of the first countries in Africa to launch 3G mobile services, following the award of the country’s third mobile licence in 2006. The record price that was paid for the licence indicated the potential that is seen in the Egyptian mobile market, and the penetration rate has indeed multiplied since then to more than 90% in early 2011. A fourth mobile licence is not planned before 2013.

Egypt also has the largest fixed-line market in Africa and the Arab region, with a highly profitable incumbent telco (Telecom Egypt) which was partially privatised through an IPO. A second national fixed-line licence tendered in 2009 received strong interest from international bidders, but the process has been postponed to at least 2013. Instead, two regionally limited triple-play licences for fixed-line voice, high-speed broadband and pay-TV services were issued in 2010. Efforts are underway to roll out next-generation networks, offering converged IP-based voice, data and entertainment services.

Market highlights:

• Mobile penetration has broken the 90% barrier;
• Decline in fixed-line subscriptions stopped in early 2011;
• Mobile ARPU continues to fall;
• Some of the lowest broadband and mobile tariffs in Africa;
• More than 200% annual growth in mobile broadband subscriptions;
• New mobile or fixed-line licences not expected before 2013.

Market penetration rates in Egypt’s telecoms sector – January 2011

(Source: BuddeComm based on various sources)

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

After months of negotiations, in mid-June 2011 GTD signed an agreement with Movistar for nationwide Mobile Virtual Network Operator (MVNO) services.

GTD will offer mobile telephone and mobile broadband services through its subsidiary Telsur, which has been assigned its own block of mobile numbers by Subtel. The MVNO service will be branded GTD Movil. It will include voice and Internet plans using both 2G and 3G technologies. GTD has chosen Samsung as its technology partner for the supply of equipment.

Chile’s first MVNO licences were issued in August 2007 to GTD Teleductos and to Telsur’s subsidiary Blue Two Chile. During 2008, Telsur negotiated with Movistar to use the latter’s network for mobile services branded Telsur Móvil; the plan never came to fruition, but negotiations for an MVNO with Movistar were taken up by GDT after it acquired Telsur in January 2010.

The GTD Group is a holding owned by Chilean investors led by the Casanueva family. It operates through seven subsidiaries, which provide voice, data, and video services for residential and business customers.

Compañía Nacional de Telefonos Telefónica del Sur (also known as CNT or Telsur) is the incumbent fixed-line carrier in Chile’s southern regions.

At end-2010, GDT Manquehue’s had a 2.4% share of Chile’s fixed lines in service, Telesat had another 2.4%, and Telsur accounted for 5.6%.

See also:

Chile – Mobile Market – Overview, Statistics and Forecasts

Chile – Fixed-Line Market and Infrastructure – Overview, Statistics and Forecasts

In June 2011 Google began a trial of Google+, a social networking initiative which allows for more discretion when sharing personal information with online contacts. It also provides an integrated service for communicating in different ways including a “hangout” service which allows for video chat and “huddle”, a group messaging service. It will be closely watched to see if Google’s latest social networking attempt is a success given the disappointment of Google Buzz. This development is the most recent in a spate of strategic moves in recent weeks.

For related information, see separate report: Google – An Innovative Leader on the Move.