Archive for March, 2012

Four million households within reach of the NBN by 2015

Thursday, March 29th, 2012

With all the foundations now in place NBN Co is ready to roll.

The rollout schedule launched by the company will see the NBN becoming available within the next three years – to around four million households, which is well over half the population ofAustralia. Of these households approximately 3.5 million will be able to obtain access to fibre; 300,000 to wireless broadband; and 200,000 to satellite broadband.

As with every large-scale infrastructure it is essential that the groundwork is done properly – otherwise major problems will occur during the implementation. All of the key ingredients are now in place – the legislation, the funding, the regulations and the contracts with Telstra and Optus. This does not mean that there will not be hiccups going forward, but the industry as a whole is confident that all the necessary work has been done to allow for a fairly smooth rollout. This took some time, but with an eye on the future it is time well-spent.

The rollouts will take place throughout the country; however, by the end of 2015, nearly all households and businesses in both Tasmania and the Northern Territory will be able to connect to the NBN. This further underlines the importance of linking regionalAustraliato the superhighway. Otherwise the first four million connections are fairly equally spread around the country.

Nevertheless many people will be disappointed to discover they are not on the initial rollout list. On it we can see several communities that have been working hard to be part of the first release and their inclusion is recognition of that hard work in getting their communities NBN-ready.

The broader importance of the NBN and the social and economic benefits that will flow from it are also becoming clearer. Earlier this week AGL said that thanks to the national broadband network it will be able to build the largest wind farm inAustralia, near Silverton in western NSW. It was access to the NBN that made this project economically viable, as it saved the company between $30 and $40 million in communications costs.

The concept of the internet of things, or M2M, is also gathering momentum, as more and more people begin to understand the power of utilising ICT solutions to address the many complex issues that confront organisations and society in general. By capturing key data – weather, energy, traffic movement, business and financial data, behaviour patterns and so on – and processing and analysing it in real time, information can be provided to people and organisations that will enable them to operate and function more effectively and productively. This requires a robust, secure and reliable infrastructure, which the NBN is able to provide.

Under the national digital economy strategy we will now also see many community health centres and GPs connected to the NBN – in particular, a large number in regionalAustralia. This will enable them to provide health consultancy services using video-based connections, thus avoiding some of the cost and stress experienced by patients and their families when they have to travel long distances.

The mobile operators are another group that is eagerly awaiting the NBN. The explosion in broadband requires them to roll out an increasing number of mobile base stations – literally thousands of these units are needed and they must be linked to fibre optic networks in order to handle the massive capacity required for mobile broadband applications.

The same applies to the explosion in smartphones and tablets now being used in the home, next to PCs and laptops – all connected to the broadband network at home. Many users are approaching their connection limit and will be asking for more capacity. Smart TVs will add further pressure on the current broadband home connections.

The NBN will be seen as a significant lifestyle tool. And, as one of my colleagues recently commented:  ‘There is no business case for quality of life’. But should that then be a reason not to build it?

Having access to the NBN does not necessarily mean connection; however BuddeComm estimates that, based on the pricing that is available at the moment, the service will quickly see penetration rates moving towards 70%. The entry price level to the NBN is equal to that of current broadband products; but the NBN offers a significant increase in quality and so, for most users, switching over to the NBN will be an obvious choice.

Affordability is a key factor in relation to uptake and in countries with competitive prices there is already a high level of growth in fibre uptake (50%-plus). Furthermore, once sections of the network are switched over to the new NBN the old copper network will be retired, so a 100% penetration rate will eventually be achieved. This is, of course, essential if we want to provide national e-health and national tele-education services as well. Organisations who want to provide mass market broadband services perceive ubiquitousness as one of the NBN’s most attractive elements.

So, after all the hard work involved in getting the foundations in place, we will now begin to see a rapid roll out of the service. And once the first few hundred thousand people are connected user-based stories will emerge. BuddeComm predicts that the NBN will soon be the next thing people want to have access to. Our colleagues in countries where high-speed broadband has already been rolled out, report that new applications, new opportunities and new uses are being discovered on a daily basis.

FinallyAustralia, also, can look forward to this exciting new future.

Paul Budde

For more information see: National Broadband Network (NBN) Research

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Digital infrastructure essential to manage the transition to the e-world

Wednesday, March 28th, 2012

Across the world there are a significant number of social and economic challenges – stagnating economies, ageing population, climate change, peak oil, aging infrastructure, lifelong education. A key problem associated with these challenges is a lack of smart government policies based on integrated solutions that cross sector boundaries. Political leadership is needed to address these issues. Over the last few years citizens all over the world have indicated that they are ready for change. We have seen this in relation to climate change issues and the readiness of users to take up new and modern means of communication and through them participate in many decision making processes.

In this annual publication BuddeComm advises that these challenges can be overcome, things will have to be done differently. There is no linear way forward – lateral solutions are needed. Over the past 60 years we have created a world of specialists who operate within bureaucratic organisations – many of them operating within silo-based structures. These silos need to be bridged and new horizontal structures established in which all sectors and disciplines work together.

Leadership from the top is needed if this is to be achieved. It is called the trans-sector approach and ICT is the glue needed to build more horizontal collaborative structures. Whether we are talking about smart cities, smart transport, smart grids, smart buildings or e-health – these are complex structures and progress can only me made through the smart use of technology; what for example is needed is good data that can be processed and analysed in real time, allowing people and/or machines to make instant decisions in relation to the management of the complex issues that we are facing – issues such as energy efficiency, traffic situations, weather activities, and personal health issues as well as commercial decisions. The infrastructure that can be used to link sectors together in a dynamic way is referred to as M2M or ‘the internet of things’.

Australia is building the large-scale national infrastructure necessary to underpin the transformations that are needed. The government is rolling out a national broadband network (NBN) that is based on the trans-sector principles, and this will help to create a smart country, smart cities and communities as well as smart buildings.

However the funding arrangements for these sectors are still silo-based, and trans-sector policies need to be developed in parallel to maximise the transformational opportunities that the NBN can provide.

To build a sound business model for the NBN the requirements of these sectors need to be taken into account as key areas in the delivery of social and economic benefits to the country. The government indicates that the NBN is a nation-building project and that it has a clear national purpose – it will underpin the digital economy as well as developments in healthcare, education, etc.

In this publication we provide background information on what is needed to properly develop the government policies and business strategies to reap those social and economic benefits. With the right vision this will seeAustraliataking a global leadership role in the development of new businesses – and indeed new industries – based on the combined features of the NBN: affordability, ubiquitousness, robustness, high capacity and low latency. This will involve both connected people and other connected elements (internet of things).

Assisting the transformation that the NBN can provide, the government launched a National Digital Economy Strategy. This strategy, together with the new infrastructure, requires a new way of thinking that will guide us through the transformation; and the trans-sector approach to the NBN will be critical in this process. In this publication we draw attention to the importance of looking across sectors to create synergy.

We are convinced that convergence offers unprecedented opportunities if the NBN is linked to trans-sector innovation, creating a true digital economy. Such a parallel strategy can break through the many silo-based structures that have been created over the last 50 years. And it can break through inflexible vertically-integrated structures that increase costs and impede competition and innovation.

Such an approach will most likely result in economic and social benefits worth many billions of dollars and, as we are already seeing, it will create significant new business opportunities for Australian companies. In healthcare alone there is talk of savings worth more than $10 billion; and $2 billion in smart grid.

In this annual publication we also discuss a new approach which applies across infrastructure projects, and looks at the potential synergies between the building of roads, sewerage systems and water and gas pipe networks, as well as telecoms and electricity networks.

Education, information and ongoing community engagement are going to be critical areas in ensuring that the projects receive the widespread support needed to make them successful. Adaptation issues, plus a review of silo-based regulations, funding mechanisms and legal barriers, need to be addressed.

Market highlights:

  • Spending on e-governments will double in the next five years.
  • Internet usage in schools sees data usage tripling – and doubling again in another year.
  • NBN-based videoconferencing pilots begin using Centrelink and Medicare departments.
  • Personally controlled electronic health records (PCEHR) to commence in 2012.
  • By 2020 more than 25% of specialist will be using telehealth to remote sites.
  • 80% of government interactions will be online or electronic by 2020.
  • E-health trials are commencing in NBN rollout areas acrossAustralia.

For detailed information, table of contents and pricing see: Australia – E-Health, E-Education, E-Government

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Sweden – LTE availability expected for 99% of the population by end-2012

Wednesday, March 28th, 2012

Sweden has fared better than most countries in weathering the ongoing economic downturn. GDP fell 5.3% in 2009 in the wake of the 2008 crisis, but recovered quickly, growing at some 5.5% in 2010 and by an estimated 3.8% in 2011. This performance has been mirrored in the country’s telecoms market: although telecoms revenue was stagnant for a number of years, and fell in 2008, sine then it has increased steadily and is expected to reach some SEK54.2 billion for 2012. The market has continued the trend for consumer migration to mobile voice and data services at the expense of fixed-line telephony. More calls are now made via mobile networks than the fixed network, while there are almost as many mobile broadband subscriptions as there are via the copper network.

Sweden was the first country in Europe to develop a broadband policy, as early as 1999. The country now has one of the highest broadband penetration rates in the region, and maintains one of the world’s most connected economies. Near-comprehensive DSL coverage is complemented by excellent urban cable infrastructure and significant fibre networks which attract high-end broadband subscribers. Open access networks in a number of municipalities enable providers to offer services far cheaper than if they had built their own networks. By 2013 about 90% of homes and business will be covered by FttH. Numerous networks open to a range of content and service providers have been built by organisations other than telcos, including municipalities, regional governments, housing associations and local utilities. Municipal and local area networks have quadrupled in reach since 1999.

Mobile phone penetration remains among the highest in the EU, while 4G services have been launched by operators. TeliaSonera launched the world’s first commercial LTE network at the end of 2009, and in early 2012 the company, together with Tele2, were the first to offer LTE smartphones. Despite market saturation subscriber growth remains steady, particularly in the 3G/4G sector. This has been mirrored by greater consumer take-up of mobile data services made possible by significant network investment. In addition, consumers are increasingly moving to mobile telephony for calls: mobile networks now carry the majority of traffic. By the end of 2012, 4G should be available to 99% of the population.

Sweden also has one of the most developed digital TV markets in the Nordic region. The government awarded multiplex licences as early as 1998. Multiplex ownership is separated from content broadcast over them: Teracom built, owns and operates the digital TV multiplex. When the DTTV network was launched in early 1999, Sweden was only the second country in Europe to have the system. The five-stage phased analogue switch-over process was completed by late 2007, ahead of schedule.

Key telecom parameters – 2010; 2012

Sector

2010

2012 (e)

Broadband:
Fixed broadband subscribers (million) 2.99 3.12
Fixed broadband penetration rate 38% 43%
Mobile broadband subscribers (million) 2.9 3.9
Subscribers to telecoms services:
Fixed-line telephony (million) 4.3 3.9
Mobile phone (million) 12.58 13.75
Mobile SIM penetration (population) 133% 141%

(Source: BuddeComm)

Market Highlights

  • The number of triple play subscriptions reached about 635,000 by the end of 2011, while the quad play subscriber base looks set to grow rapidly during the next few years as consumers take advantage of cheaper offers from operators able to exploit their upgraded networks. The range of offers is unlikely to widen, given that the most popular combination is broadband with fixed telephony, which represents over half of all bundled subscriptions. In triple play, fixed telephony with fixed broadband and TV represent most bundles.
  • The award of 15-year national licences in the 800MHz band has enabled MNOs to extend their rural broadband capabilities, utilising LTE technology. This will go far in meeting the government’s Broadband Strategy objectives. Sweden is also among the leading EU countries to use 900MHz spectrum for 3G services.
  • Mobile data use has grown considerably since 2007, and is set to grow more rapidly during the next few years as LTE and HSPA networks expand across the country Mobile data use is expected to increase by about 70% in 2012, though this will not be mirrored by a similar increase in mobile data revenue for operators given existing competition and regulatory measures on data tariffs.
  • Continuing constraints on mobile networks, despite the greater availability of spectrum, may encourage MNOs to introduce business models adjusting to customer demand, with pricing tiered based on speed and usage.

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

 

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Broadband boom expected to create investment opportunities in Burundi

Wednesday, March 28th, 2012

With stable GDP growth of around 5% p.a., a high population density and a high growth rate in a low-penetration mobile market, Burundi is one of the most attractive African telecom markets for investors, despite the fact that it is also one of the world’s poorest countries. 2012 will see the landlocked country connected to international fibre optic cables for the first time which will end its dependency on expensive satellite connections and give it access to much greater amounts of international internet bandwidth at lower prices. In preparation for the internet boom that is expected as a result, two of the five mobile operators have already launched 3G broadband services. Some consolidation can be expected in the future as five networks may find it hard competing in this relatively small market. A sixth operator licence was awarded in 2008 but the company hasn’t launched a service yet. In addition, the national telco, Onatel (which also operates one of the mobile networks) is scheduled to be privatised in 2012.

Market highlights:

  • High growth rate in a low-penetration mobile market;
  • Internet and 3G mobile broadband boom expected in 2012;
  • Five mobile networks, sixth licence awarded;
  • Consolidation among mobile operators expected;
  • Privatisation of national telco planned for 2012;
  • Stable GDP growth of 5% p.a.

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

Market

Penetration rate

Mobile 36%
Fixed 0.4%
Internet 3.5%

(Source: BuddeComm based on various sources)

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

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New ICT regulator for Jamaica to bring vigour to the telecoms sector

Wednesday, March 28th, 2012

In late 2006 the Jamaican government announced plans to amend the Telecommunications Act to create a single regulator for the telecoms, radio and TV industries. The proposed legislation envisaged merging the telecoms regulatory portfolio held by the Office of Utilities Regulation (OUR) with the spectrum management functions of the Spectrum Management Authority (SMA) and the radio spectrum technical functions of the Broadcasting Commission of Jamaica (BCJ).

The idea was shelved but recently resurfaced when the Minister for Science, Technology, Energy and Mining announced that a new regulatory body would oversee the entire the ICT sector, combining the functions of the three existing authorities. The scheme is aimed at minimising bureaucracy and eliminating some of the poor planning and dispute resolution which has hampered telecom sector development. Legislation required to set up the new agency is not expected to be passed until mid- to late 2013.

The plan for a single regulator is timely, given the struggles which OUR suffers from the limitations imposed by current legislation and the regulatory framework. This has left it ill-equipped to manage technological developments such as convergence and digital media, while inadequate powers to enforce decisions regarding network access and interconnection rates has led to a succession of legal wrangles among and between telcos.

Nevertheless, some further progress is likely during the year: in addition to the anticipated creation of a single ICT regulator, mobile number portability may also be introduced (the two mobile network operators, Digicel and LIME, have agreed to the measure in principal) while the universal service agreement may finally be extended to include broadband.

Henry Lancaster
Senior Analyst, Caribbean

For further analysis on Jamaica’s telecoms market, see the updated report Jamaica – Telecoms, IP Networks, Digital Media and Forecasts

 

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