BuddeBlog

Malta enjoys effective cross-platform competition, with 52% of broadband connections being through Melita’s cable network, 46% through GO’s DSL network, and the remaining 2% through Vodafone’s WiMAX network.

More than half of all broadband subscriptions are bought in a bundle with other telecom services. Broadband speeds, once relatively slow by comparison with some European markets, are now among the fastest in the region. The government early mandated a minimum service of 4Mb/s, while Melita has a Fibre Power offer of up to 100Mb/s across most of its footprint. GO provides a service of up to 20Mb/s

The government has endeavoured to improve connectivity for islanders; in 2008 it set up ‘Project Blue Skies’ to subsidise broadband to households which had no or only dial-up internet connections.

More recently, the government – while acknowledging that the market alone is unlikely to deliver FttH-based broadband to all premises – has launched a programme to facilitate FttH infrastructure, particularly in areas considered commercially unviable by the main telcos.

The anticipated roll-out will initially concentrate on classic network hubs (schools, hospitals, businesses and public service providers), eventually reaching all premises nationally. A variety of investment and operational models will be assessed, with the aim of securing a model which will require the minimum public aid.

The call for expressions of interest is part of the ‘Vision 2015’ programme by which the government is aiming to maintain developments in the ICT, e-health and e-learning sectors. The current minimum 4Mb/s service will be upgraded to 100Mb/s in order to future-proof the country’s infrastructure and consumer requirements for IP-based services.

The main operational models under consideration include:

• A private model by which a private operator would build and operate the network, with public funds made available where required. The government would in exchange impose certain obligations on the operator.
• A joint venture model, wherein the network would be part-owned by the state while the private sector would build and operate the network.

For more information on Malta’s telecom market, see the updated report Malta – Telecoms, IP Networks, Digital Media and Forecasts.

Operators across Europe are fast developing their LTE strategies, in many cases having waited for appropriate spectrum to be made available while they assess products and services using test licences.

Consumer demand for mobile data is straining networks, while anticipated demand (taking into account that smartphones now make up 60-70% of all handset sales) will only exacerbate the problem in coming years.

MNOs have limited wiggle-room to meet demand for mobile data, which is why they are desperate to secure additional spectrum, either through auction or purchase from other operators.

Yet spectrum will go only so far. The key to their success with LTE, a technology on which they are counting to address the continuing slide in mobile voice revenue, partly rests with the fixed-line networks which will carry the lion’s share of traffic.

To this end Austria’s MNOs have looked to securing deals with fixed-line operators which have existing FttX infrastructure. T-Mobile Austria’s LTE development dates to 2009, when it trialled a service from 60 cell sites in Innsbruck. The service went live in late 2010, a month after T-Mobile secured blocks in the 2.6GHz band at auction. By early 2012 LTE networks also operated in Vienna, Graz and Linz, offering data speeds of between 40Mb/s and 80Mb/s. The network expansion is costing some €500 million to 2014, and the operator estimates that at least 25% of the population will use LTE by 2013.

In Vienna, to forestall network capacity issues T-Mobile signed an agreement with the utilities provider Wien Energie to use the latter’s fibre-optic network, Blizznet, to connect its 130 LTE base stations to Blizznet’s 2,000km fibre-based network. By the beginning of 2012 some 300,000 people in Vienna alone had access to LTE.

Similarly, Telekom Austria is tapping into its own fast-developing fibre network to support its nascent LTE service. In mid-2009 the company started rolling out FttH to about 150,000 households in Klagenfurt and Villach, providing speeds of up to 1Gb/s. The FttH network, dubbed ‘FiberCities’, complements the company’s roll out of VDSL2 in rural areas using existing fibre backbone infrastructure. About 4,000 mobile base stations are being connected to the fibre network to support LTE projects in Vienna and Lower Austria.

These issues are explored in depth in the updated Austria – Mobile Market Insights, Statistics and Forecasts report.

Key developments:

LTE to be available to a quarter of all Austrians by 2013; mobile TV streaming success with more than 50 channels available; 2011 Frequency Utilization Plan opening up 800MHz spectrum for 4G use; strong subscriber growth keeping mobile sector revenue steady, Telekom Austria forms TA Group M2M subsidiary to manage its involvement in the M2M sector; 3 Austria buys Orange; regulator data to June 2010; operator data to Q3 2011, market developments in early 2012.

Companies covered in this report include:

Orange, 3 Austria, A1, T-Mobile, Tele2.

Henry Lancaster,

Senior Analyst, Europe

For more information see the updated reports:

Austria – Mobile Market Insights, Statistics and Forecasts;
Austria – Key Statistics, Telecom Market and Regulatory Overviews;
Austria – Broadband Market Insights, Analysis and Forecasts;
Austria – Digital Economy and Digital TV – Insights, Statistics and Analysis.

Cambodia has successfully managed its transition into a vibrant telecom market. Despite the country’s status as one of the least developed nations in the world and whilst it remains one of the poorer countries in Southeast Asia, Cambodia’s efforts to expand and upgrade its telecom infrastructure have certainly been bearing fruit. There was very little infrastructure remaining from before the tumultuous Khmer Rouge days. As a result, Cambodia bypassed rebuilding the fixed-line market and quickly launched into alternative technologies, jump-starting its telecommunications infrastructure with digital technology. Not surprisingly, mobile services have completely overwhelmed the market. By end 2010, there were nine mobile operators vigorously competing with each other in a market segment that was growing at a healthy rate. Coming into 2012 there were an estimated 13 million mobile subscribers (penetration 87%) in the country. The market was still in a very strong expansion phase as evidenced by the keenness shown by foreign operators seeking to be part of it. Most significantly some rationalisation had commenced in the market with two operators merging, thereby reducing the number of operators to eight.

Some limited fixed-line growth had earlier come about in Cambodia through investment under foreign assistance, but this mainly benefited the capital Phnom Penh and geographical coverage has not increased significantly since that effort in the 1990s. The number of fixed-line services remained relatively static for some years at around 50,000; by 2011 the numbers were starting to edge upwards. In the absence of any substantial fixed-line growth, however, mobile telephone services continue to completely dominate the overall telecom market in Cambodia. In fact mobiles represent more than 99% of the total number of telephone services in the country.

Wireless technology has been especially advantageous for Cambodia in achieving rapid network roll-out and replacement of a fixed network badly damaged by 20 years of war. In addition to the thriving mobile networks, wireless local loop has been useful for rapid provision of a limited number of fixed-line services. However, while Cambodia has exemplified the fact that wireless local loop offers a viable option for rapidly expanding telecom access in developing countries with low levels of fixed infrastructure, the potential of this technology has yet to be fully exploited in the country.

The expansion of internet services has also been overshadowed by the mobile phenomenon. Internet uptake rates remained disturbingly low for many years, presenting one of the lowest penetrations in the region. Of course, the limited fixed-line infrastructure has been a major inhibiting factor in the rollout of both dial-up and ADSL internet services. The internet market started to change in 2007 when wireless broadband services first began to appear in a serious manner. There has been a surge in the number of operators interested in mobile broadband and especially WiMAX. By 2011 there had been a major upturn in internet numbers on the back of the increased broadband penetration. Overall penetration remained low, however.

The country’s telecom regulatory regime appeared in total disarray in 2010. Early in the year the licensed WiMAX operators were waiting on their frequency allocations from the government. But the MPTC awarded the same frequency bands to another operator. This triggered a long-running dispute that was threatening to disrupt the WiMAX market. Given the strategic importance of wireless infrastructure in Cambodia this was shaping as a major blow to the country. By 2011 there appeared to have been some resolution of the problem and some of the licensees were rolling out their networks.

Market highlights:

• Cambodia’s mobile market continued on its positive expansion path in 2010/2011, although the annual growth was slowing;
• With mobile penetration of around 87% coming into 2012, the market has passed the 13 million subscriber milestone;
• Cambodia had nine licensed mobile operators in a crowded, highly competitive market that invited questions about its likely overcrowding and the possible need for some sort of early rationalisation. The expected rationalisation had started in 2010 with the first merger;
• The development of fixed-line services continues to be sluggish, although the market has picked up a little momentum;
• The internet segment has also been languishing for some time, but there are promising signs that the widespread introduction of wireless broadband services will see a long-term surge in growth;
• By 2010/2011 there was evidence that the anticipated surge was starting, after internet subscriptions grew by almost 100% in 2009.

Cambodia – key telecom parameters – 2010 – 2011

(Source: BuddeComm)

For detailed information, table of contents and pricing see: Cambodia – Telecoms, Mobile, Internet and Forecasts

Nigeria is one of the biggest and fastest growing telecom markets in Africa, attracting huge amounts of foreign investment, and is yet standing at relatively low levels of market penetration. Far reaching liberalisation has led to hundreds of companies providing virtually all kinds of telecom and value-added services in an independently regulated market. After failing for the fourth time in 2011, a fifth attempt to privatise Nitel, the incumbent national telco, is currently underway.

The West African country has overtaken South Africa to become the continent’s largest mobile market with now over 90 million subscribers, and yet market penetration stands at only around 60% in early 2012. However, subscriber growth slowed significantly during the global economic crisis, re-accelerated in 2010 but then slowed again in 2011. Much of the remaining addressable market is in the country’s rural areas where network rollouts and operations are expensive. This in combination with declining ARPU levels is forcing the networks to streamline their operations and to develop new revenue streams from services such as third generation (3G) mobile broadband, mobile payments/banking, and others. At the same time the operators are rolling out national fibre backbone networks to support the ever increasing demand for bandwidth. At least two operators are rolling out fourth generation (4G) LTE networks.

Nigeria is also the most competitive fixed-line market in Africa, featuring a second national operator (SNO, Globacom) and over 80 other companies licensed to provide fixed telephony services. The alternative carriers combined now provide over 95% of all fixed connections, the majority of which has been implemented using wireless technologies. This gives the network operators the opportunity to also enter the lucrative mobile market under a new unified licensing regime and has helped them to secure hundreds of millions of US$ in investments from local and foreign investors.

Nitel’s monopoly on international fibre bandwidth via the SAT-3/WASC submarine cable system ended in 2009 when Globacom’s Glo-1 cable landed in the country, followed by the Main-One cable in 2010. Additional submarine cables are scheduled to go online in 2012, which will deliver a further boost to the country’s underdeveloped Internet and broadband sector. New powerful players from the fixed-wireless and mobile network operator camps have entered this market with 3G mobile and advanced wireless broadband services such as WiMAX. The Internet Protocol (IP)-based next generation networks currently being rolled out are enabling converged voice, data/Internet and video services. VoIP is already carrying the bulk of Nigeria’s international voice traffic. Applications such as e-commerce, online banking and e-payments, e-health, e-learning and e-government are rapidly evolving.

This annual report contains a market overview and analysis, key statistics, regulatory issues, profiles of major players, including financial results where available, and two scenario forecasts for the mobile market in 2013 and 2016.

Market highlights:

• The largest mobile market and the most competitive fixed-line market in the region;
• New competition in international fibre bandwidth is set to revolutionise the market;
• Profiles of major players, including financial results;
• Privatisation of Nitel underway again;
• Estimates for end-2012 for fixed-line and Internet market;
• Forecasts for mobile market to 2013 and 2016.

Estimated market penetration rates in Nigeria’s telecoms sector – end 2012

(Source: BuddeComm based on various sources)

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

Overall the Middle East continues to register strong mobile subscriber growth despite high penetration levels. Underpinning this growth is stronger competition from mobile network operators and to a lesser extent, Mobile Virtual Network Operators (MVNOs). A number of trends have emerged that are likely to influence future market direction. Key among these is increased subscriber growth due to both competition and mobile broadband.

Mobile subscription levels are high in part due to multiple SIM card ownership and demographic factors. Multiple SIM card ownership is common due to the high proportion of prepaid users relative to total users. With no lock in contract to any particular service provider, end users can purchase prepaid services to take advantage of market promotions. Another factor driving multiple SIM card ownership is the lack of mobile number portability in many markets and the emergence of MVNOs which can better cater to specific market segments. Demographic factors underpinning mobile subscriber growth include large expatriate populations in some Middle Eastern countries, particularly in the Gulf region. The latter deserves particular mention given expatriates make up the majority of the population in some cases and are quite fluid in nature, entering and leaving the host country on an as needed basis.

The second major factor likely to underpin future subscriber growth is mobile broadband. Strong competition is lacking in many of the region’s fixed broadband markets due to non existent or immature regulatory regimes in relation to network access or unfavourable economics to support development of aGreenfieldoperator to engage in extensive infrastructure-based competition. In this void mobile network operators have emerged as viable competitors, given the reach of their existing networks, developed product distribution channels and well established customer base and brand. To present a viable alternative, mobile network operators have had to invest in 3G/4G networks and mobile backhaul. The increasing affordability of smartphones is improving the business case for deploying mobile broadband networks in the mobile markets of lesser developed countries.

However like mobile broadband operators everywhere, mobile broadband operators in theMiddle Eastare beginning to engage in price competition and are at risk of being relegated to merely access providers, losing a significant chunk of the value proposition to OTT players. Hence Middle East mobile broadband operators can learn much from more mature mobile broadband markets, where lack of spectrum, the increasing cost of upgrading infrastructure and ultimately, quality of service, are becoming key issues for operators.

See also:

• Global – Mobile – Smartphones, Touchscreen Tablets and Handset Market Insights
• Global – Mobile – Spectrum Hot Real Estate
• Global Mobile – Key Statistics and Trends at a Glance
• Global Mobile Broadband – The Fast Growth of LTE