Archive for December, 2011

NUS Electricity Report and Cost Survey – 2010

Saturday, December 31st, 2011

The NUS Consulting Group’s 2009-2010 International Electricity Report and Cost Survey provides an annual update on what is happening in this industry, as well as comparative movements in worldwide prices.

This year’s benchmark reveals interesting developments in the world’s electricity industry as all countries in the survey, other than the USA, have reported pricing increases. This survey focuses on delivered prices, which include commodity price, transmission and distribution costs, standing charges and other taxes and imposts that a user has to pay in the delivered price.

Much of the world community has embraced the concept of deregulating electricity supplies which has led to increasing price volatility as the cost of commodity inputs to generation – i.e. coal, oil and natural gas – has risen.

Italy maintains its top position in a pricing comparison as the country with the most expensive delivered electricity price.

During the period under review there was a weak rebound in underlying demand for electricity as the fiscal stimuli took effect in Western economies but the high level of demand destruction witnessed during the preceding 12 months has provided some spare generation capacity to absorb the increasing activity.

Rising oil prices lifting power prices

Since the last survey, the price of Brent crude – the benchmark for European oil prices – rose from the low $50s per barrel in May 2009 to the high $80s per barrel in May 2010, which partly reflected a recovery to an equilibrium pricing from the lows experienced in January 2009, as well as reflecting the weakness of the US dollar during this period. In addition, the €/$ cross rate from January to May 2010 fell from around 1.45 to 1.22 in response to the European Union (EU) credit crisis. These factors explain the lift in electricity baseload prices across Europe from April 2010 after they had generally drifted down through most of the previous year.

One of the more interesting points to arise from the study is that of the 15 countries surveyed the rankings of the top nine (most expensive) and bottom three (least expensive) stayed the same, with only marginal jostling for position between Finland, Sweden and France.

Table 4- Survey of top 15 countries based on prices as of 1 June 2010

Country

2010 Rank

2009 Rank

Cost (US₵)/kWh

Percentage Change

Italy 1 1 15.72 +8.7%
Germany 2 2 12.98 +8.6%
Austria 3 3 11.84 +0.6%
Spain 4 4 11.52 +4.0%
United Kingdom 5 5 11.31 +8.2%
Netherlands 6 6 11.07 +6.5%
Belgium 7 7 10.32 +7.4%
United States 8 8 9.27 -0.9%
Poland 9 9 8.66 +4.4%
Finland 10 12 8.47 +20.6%
Sweden 11 10 8.29 +6.9%
France 12 11 7.62 +5.7%
Canada 13 13 7.27 +10.0%
Australia 14 14 6.88 +5.2%
South Africa 15 15 6.40 +32.8%

(Source: The NUS Consulting Group International Electricity Report and Cost Survey 2009/2010)

The survey is based on prices as of 1 June 2010 for the supply of 1000kW with 450 hours use. For deregulated supplies, 1 June contract pricing was obtained during the week of 26 April 2010. All prices are is US cents per kWh and exclude VAT. Where there is more than a single supplier, an unweighted average of available prices was used. Where available in each country and widely used by the consuming public, deregulated or liberalized contract pricing was used in this survey. The percentage change is calculated using the local currency in order to eliminate currency movement distortion.

In Europe, Finland experienced the largest single-year increase in electricity at over 20 per cent, while Italy had the second largest year-on-year increase at 8.7 per cent, guaranteeing its position as the most expensive surveyed country. Of interest is that most countries in Europe reported lower commodity prices for electricity, but recorded overall increases mainly because increased costs for transmission/distribution, or increased taxation for supply.

South Africa reported a 32.8 per cent rise in its electricity pricing over the past year. While their country retained its position as the lowest-cost nation in terms of electricity pricing, South Africans are now reeling from two consecutive years of rises, topping over 30 per cent per year. Most analysts, including NUS Consulting, expect this trend of price increases to continue for many years to come.

In North America, Canada remains one of the lowest cost surveyed countries in terms of electricity pricing, with only Australia and South Africa recording lower costs. The United States witnessed a slight decrease in pricing over the survey year making this the second consecutive year electricity prices have declined.

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Summary of FttH network operators

Saturday, December 31st, 2011

Exhibit 1 – Summary of FttH network operators

Operator/states in operation

Operating model

Year started

Services

Description

Arise

Victoria

VI

Launched first FttH community in 2006.

Internet,

phone,

electronic fax

Small operator inMelbournedelivering services to 450 homes in the VicUrban Aurora Estate. Parent company is IP systems.

BES/E-Wire

Western Australia

OA/VI

Launched first FttH community in 2004. Was operating HFC from 1993 (MATV).

Internet, analogue and digital FTA,

SelecTV, FOXTEL in some estates

The first commercial FttH operator inAustraliadeploying services intogreenfieldestates. Still has connected more fibre services than most competitors inAustralia.

ClubCOM Utilities

Victoria

OA network operating VI at present

FttH operator for golf course estates Sandhurst,SanctuaryLakesand two new estates (Sandarra and Esperance).

HaleNet

Queensland

VI

Launched first FttH community in 2006.

Internet

Small operator in regionalQueensland. Services Stanthorpe, a small community south-west of Toowoomba.

OPENetworks

Queensland

OA

Started in 2007. Launched first FttH community in 2009.

Wholesale access

voice and internet,

FTA and pay TV and (if required) WiFi

First registered open access wholesale-only carrier/operator based out ofBrisbane. Has projects inQueensland,New South WalesandVictoria. Networks managed and supported by Fujitsu.

OptiComm

All states

OA

Launched first FttH community in 2007.

Wholesale access,

voice and internet, analogue and digital FTA, FOXTEL, AUSTAR, SelecTV, residential and business

A Hills Industries joint venture company. Up-and-coming provider with a big backing. Has projects inQueensland,New South Wales,VictoriaandSouth Australia. Likely to be the largest Australian operator of FttP networks within the next 12 months. Has won projects with NBN Tasmania andWestfieldto add to their impressive portfolio of customers.

thepacific.net

New Zealand

VI

Internet,

phone, analogue and digital FTA

Small boutique operator in Nelson, at the tip of the southislandofNew Zealand.

Pivit

QueenslandNew South Wales

VI

wholesale

Launched first FttH community in 2004.

Internet,

phone, analogue and digital FTA,

FOXTEL in some estates

Privately-owned; has been around 11 years. Parent Delfcam started operations in 1998 as PABX service provider. Pivit is currently the second largest FttH operator inAustraliawith four residential estates under contract.

Service Elements

All states

VI

Commenced FttH operations in 2007.

Internet,

phone,

analogue and digital FTA,

VoD, pay TV in some estates

An IT&T solutions provider and integrator in operation for around 19 years, providing IT and telco services from SME to corporate. Entered the FttH market in late 2007 and is growing rapidly across states.

Telecom

Wholesale

New Zealand

Wholesale

Internet,

phone,

digital FTA

The former Telecom NZ wholesale division which has now been structurally separated from the retail organisation.

Telstra

All states

VI

Commenced pilot FttH network in 2005. Launched Velocity in 2006. Has been operating as a carrier since 1901.

Internet,

phone,

digital FTA, FOXTEL in all estates where permitted

Australia’s incumbent carrier with revenues of $20 billion per year.

TelstraClear

New Zealand

VI

Launched first FttH community in 2007.

Internet,

phone,

digital FTA

New Zealandarm of Telstra. Operating since 1991. Currently only has one estate nearChristchurch.

TransACT

ACT

VI

Quasi multiple access for internet

Launched first FttH community in 2007. Operating since 2001.

Internet,

phone, TransACT IPTV and VoD RF overlay for FTA TV reception

Since 2001 TransACT has been rolling out a hybrid FttC network to provideCanberraand Queanbeyan with broadband and telephony communication services. Originally using VDSL equipment, it migrated to traditional DSLAM deployments in Telstra exchanges. TransACT is now retrofitting VDSL2 into its FttC network that passes some 60,000 premises, and supplying FttP in mainlygreenfieldareas. TransACT now services over 50,000 customers and provides FttP services to seven new suburbs and is the preferred provider for a new township inNew South Wales.

Open Access Networks

All states

OA

2008

Wholesale access

voice and internet, analogue and digital FTA, FOXTEL, AUSTAR, and SelecTV

With its sister company Universal Communications Group (UCG), has been retrofitting networks into large MDU’s and other communities. It has brownfield FttH deployments completed for a large retirement village and Sanctuary Cove, which amount to over 1,800 homes connected, making it currently the largest brownfield FttH network operator inAustralia.

Comverge Networks

OA

1997

Internet,

POTS telephone,

VoIP,

back-to-base security,

analogue and digital FTA, FOXTEL, AUSTAR and/or SelectTV in all estates where permitted

Comverge Networks designed and commenced construction on its first HFC network in 1994 as the integration arm of Pacific Broadband Networks (Pacific Dunlop) at Hope Island Resort on the Gold Coast. Since then Comverge Networks has migrated through FttN and FttK architectures to now offering full FttH networks employing point-to-point and point-to-multipoint architecture.

(Source: Stephen Davies)

Note: Operating model – vertically integrated (VI); open access (OA).

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ICT solutions for global warming and energy saving

Saturday, December 31st, 2011

The ICT industry will play a key role in dealing with problems such as global warming and saving energy. Simply by making processes and systems more efficient, savings will naturally start to occur. Furthermore, by giving the end-users more control we will see an increase in energy efficiency.

Once the utilities are able to provide that level of decentralisation – with end-users increasingly taking charge of their own energy management – a large number of energy efficient devices and management tools will flood the market. Among many others, companies such as Google, Microsoft and Cisco are all vying for this market. Their products and services will be eagerly pursued by the users, partly because there is an overwhelming willingness to address the environmental issues we are facing as a community, and partly because energy prices are only going to rise and customers will be looking for products and services that will allow them to maintain the lifestyle they want, within their budget.

There is demand, but it could take years with the current level of progress before the supply side will be ready to deliver.

We are already seeing that environmental awareness is proving to be a major driver for the greening of the ICT industry. Data centres are among the industry leaders in launching a major greening campaign, not only for altruistic motives but also because they are major users of electricity which is becoming an expensive commodity.

Interestingly, desalination plants are going through a similar rapid development for the same reason, supported by R&D which is now suddenly becoming available to make their plants far more energy-efficient, a process that will be completed within the next 5-10 years.

While criticism has been levelled at countries such asIndiaandChinaregarding their enormous use of rapidly depleting (and polluting) fossil energy sources, these countries are actually among the biggest investors in alternative energy sources such as solar energy and biofuels. These countries, and most probablyBraziland perhapsRussia, are going to be key players in this market over the next decade.

Broadband will also be a major contributor to addressing the many problems we are facing as a result of a rather wasteful and inefficient period of global growth. Tele-working should become much better promoted and much better organised. E-health and e-education can (and should) now be delivered worldwide. Many services that previously required hardware products can today be supplied over broadband as software-based applications. Many of the abovementioned energy-saving applications can be delivered and managed via broadband networks. A trans-sector view regarding these developments could deliver some significant cost savings by avoiding costly overbuilds of communications networks.

It is amazing what we can do in this field once we, as a community, really focus on it. While we still have a massive task ahead of us, 2007 was the year the pendulum started to swing in the other direction. Even though the financial crisis of 2008 overshadowed the climate change challenges, at the same time the economic stimulus packages aimed at infrastructure developments could assist us in fast-tracking some of the smart grid build-outs.

With combined human effort now directed towards a much more environmentally-friendly world, massive changes can be expected over the next five years and beyond, and the ICT industry will take a leadership role in this process.

While ICT is not the solution to all these problems, there will be no solution without ICT.

Furthermore, CSIRO economic modelling shows that 2.7 million jobs would be created by 2025 ifAustraliacommits to being carbon-neutral by 2050.

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Statistics on fibre-enabled communities

Friday, December 30th, 2011

InAustralia and New Zealand there are close to 200 communities that are reticulated (or planning to reticulate) with FttH. Once fully deployed, this will represent in excess of 200,000 households connected to fibre; however, as with all broadacre developments, the construction of the estate and release of lots is done in a staged approach which can take up to 15 years to achieve fully deployed status. Only one fibre community, Somerly inWestern Australia, is fully deployed with no further development.

By early 2011 there were an estimated 20,000 households connected inAustralia.

The next few years will see strong growth of approximately 200% per annum in fibre-connected homes as more developers sign on to deployment of this advanced broadband technology.

Table 1 – Homes connected to fibre – 2005 – 2010

Year

Dwellings connected

2005 1,000
2006 3,000
2007 6,000
2008 10,000
2009 18,000
2010 (e) 35,000

(Source: Titan ICT Consultants)

Communities by provider

The leading FttH provider in terms of homes connected is Broadcast Engineering Services (BES) inWestern Australia, followed by Pivit inQueensland. These two companies were the pioneers in the reticulation of fibre ingreenfieldestates inAustralia, both starting deployments in 2004/05. However by 2011, OptiComm has substantial works in progress and Telstra is also involved in a lot of fibre communities.

Table 2 – FttH communities inAustraliaandNew Zealandby provider – 2010

Provider

Communities

Homes

Projected

Passed

Connected

Telstra

76 75,410 230 120

Arise

2 8,600 250 100

Open Access Networks

2

2,600 1,800 1,800

Pivit

4 5,000 1,300 1,300

OptiComm

20 60,000 180 50

Private

11 3,212 650 555

BES

7 11,000 7,000 3,500

Telecom NZ

2 3,450 0 0

Telecom Wholesale

11 4,005 0 0

Inspired i-Land

3 900 0 0

Service Elements

7 37,000 2,600 1,100

TransACT

7* 10,400* 2,200 1,150

ClubCOM

4 4,028 1,267 894

thepacific.net

2 498 0 0

TelstraClear

1 2,000 0 80

TBA

3 21,870 0 0

Comverge Networks

5 2,440 1,880 1,400

OPENetworks

6 5,007 833 433

Total

156 200,640 20,190 12,482

(Source: Titan ICT Consultants)

Note: *TransACT plus one township-preferred supplier, with 6,000 projected homes in negotiation)

Table 3 – Percentage breakdown of FttH communities by provider – 2010

Provider

Percentage

Arise

1%

BES

7%

ClubCOM

1%

FUZEconnect

1%

Inspired i-Land

2%

OptiComm

2%

thepacific.net

1%

Pivit

3%

Private

8%

Service Elements

1%

TBA

2%

Telecom NZ

1%

Telecom Wholesale

8%

Telstra

57%

TelstraClear

1%

TransACT

1%

(Source: Titan ICT Consultants)

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Netherlands – Cablecos’ mobile services adding to bundled services mix

Wednesday, December 28th, 2011

The Dutch telecom market has one of the most developed infrastructures in Europe, providing a solid foundation for the country’s IP-services offerings. Almost 90% of the population uses the internet, while the high broadband take-up has benefited from government support and competing cable, fibre and DSL platforms. FttH networks have become also a significant feature of the country’s broadband landscape, with an effective collaboration between national, regional and municipal governments working with the industry and with academic institutions to ensure that the Netherlands maintains its broadband lead into the fibre age.

The strong broadband infrastructure has provided a range of content and digital products, including bundled offers. There are at least a dozen operators offering a double-play package (fixed-voice telephony and broadband), while several others offer TV and broadband and full triple play services (TV, broadband and fixed voice) to more than a million subscribers. In late 2011 T-Mobile launched a quad-play offer, utilising the digital TV service from KPN’s Digitenne.

Mobile penetration is approaching 130%. The sector’s growth since 2006 has largely been due to strong competition among the network operators and the range of MVNOs which has kept consumer prices low. The recent market entry of the cablecos Ziggo and UPC Nederland has created additional competitive pressure – both operators were awarded spectrum in the 2.6GHz band, allowing them to complement their existing bundled services (based on fixed-line access) with mobile voice and broadband offers.

The DTTV sector has shown strong growth since ASO at the end of 2006. By the end of 2011 more than six million households watched digital TV, or 75% of all TV households. Most digital viewers (almost 60%) subscribe to cable, while 24% watch digital DTH and 25% DTTV.

A bill to make the Authority for Consumers and Markets responsible for telecoms regulation from the beginning of 2013 may revitalise regulatory matters, with a greater focus on consumer protection. The ACM will be the merged authority incorporating OPTA, the Consumer Authority and the Netherlands Competition Authority (NMa).

Netherlands – Key telecom parameters – 2010; 2012

Sector

2010

2012 (e)

Broadband:
Fixed broadband subscribers (million)

6.33

7.10

Fixed broadband penetration rate

38%

44%

Mobile broadband connections (million)

0.71

1.12

Subscribers to telecoms services:
Fixed-line telephony (million)

7.23

7.28

SIM cards in service (million)

20.62

20.85

SIM penetration (population) 125% 127%

(Source: BuddeComm)

Key Highlights

  • The excellent cross-platform infrastructure in the Netherlands has helped to propel the country to the top of international league tables for broadband penetration. KPN’s DSL network reaches 99% of all homes while cable networks reach 95%. The DSL sector, which commands about 54% of broadband connections, is set to fall in coming years as the numerous municipal fibre networks increase their geographic reach and lead to increased customer churn to FttH alternatives.
  • Fibre infrastructure is a stimulus for the country’s budding trans-sector developments, serving as a model for similar strategies in other European countries. The regulator was among the first in the world to institute an effective wholesale regime, guaranteeing other telcos with non-discriminatory access to the incumbent’s network at fixed rates.
  • Mobile data revenue ha shown steady growth, though not proportionate to the far higher growth in data transmitted on mobile networks. This data traffic is straining existing networks, largely through the uptake of smartphones and applications, with the result that operators have substituted flat-rate schemes for usage-based tariffs. The recent spectrum auctions will alleviate network congestion in coming years and facilitate the development of services based on LTE.
  • Mobile TV is dominated by Mobiele TV Nederland, launched by MTVNL to compete with KPN’s Mobiel TV service: KPN ended its service in 2011 following poor subscriber uptake, and to reusing the freed up capacity to improve its Digitenne DTT platform.
  • In the cable TV sector the regulator has reversed its Open Cable ruling which had obliged UPC and Ziggo to open their networks to competitors. This recognised recent market developments, competition, consumer use of bundled fixed telephony, internet access and TV, and the digitisation of services such as interactive TV, HDTV and VoIP.

BuddeComm’s quarterly publication, Netherlands – Telecoms, IP Networks and Digital Media, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors in this leading market, including regulator data to mid-2011 and operator data to September 2011.

For detailed information, table of contents and pricing see: Netherlands – Telecoms IP Networks Digital Media and Forecastse

 

 

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