Archive for June, 2012

Interesting e-retail case study

Wednesday, June 27th, 2012

European e-retailer Pixmania which is a subsidiary of the Dixons Retail Group, has opened 20 new stores in European cities including Paris, Marseille, Madrid, and Barcelona in the past two years and plans to transform its online orders in other markets into stores over the next few years.

Their web sites currently attract 30 million visitors a month and its annual sales for both the web and stores total around 900 million euros (US $1.1 billion).

The company says by opening more stores, it is targeting approximately 80% of European shoppers who continue to buy products that Pixmania sells including electronics, high-tech, furniture, fashion, etc, in stores.

Currently the web accounts for 5% of total European furniture sales, 10% of television sales and 20% of camera sales. It is expected that Pixmania’s stores will represent 50% of the company’s sales within five years, up from 25% today.

The preparation for purchasing often takes place online. Depending on the product category, it is estimated that consumers conduct between 20% and 80% of their research before buying online. However, there will always be a segment of consumers that want to buy in stores because they want to see and feel a product and take it home with them immediately.

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East Timor celebrates a decade of independence: expanding telecom services remains a priority

Wednesday, June 27th, 2012

East Timor, which has adopted the name Timor-Leste and has come to be commonly known by both versions of the name, is continuing its effort to simply maintain integrity as a nation. The country ranked number 23 in the 2011 Index of Failed States, not a promising statement on its national development status; however, this was up from 20 in the 2009 Index. So in the last few years East Timor has lifted itself out the ‘critical’ 20 category with some modest gains in the way it manages itself. The nation has been pressing ahead with the regeneration of its economy and the rebuilding of infrastructure. The effort to roll out telecommunications infrastructure in particular has been a key part of this. Despite the considerable energy that has been going into this rebuilding, the prevailing social and political environment continues to present major challenges to those seeking to improve the country.

After years of struggle and heartache East Timor gained its independence from Indonesia in 2002. The euphoria had hardly diminished when political instability and the civil unrest erupted in the country in 2006 and continued into 2007. Despite the election of a new government led by Nobel Peace Laureate Jose Ramos-Horta in 2007, opposition to the administration caused further violence and looting. A state of emergency declared in 2008 was lifted a few months later, following the surrender of most of the rebels. There has been no major political unrest since then.

To the outside observer, the country appeared to have started reasonably well in rebuilding its entire infrastructure following the turbulence that ensued after the referendum of 1999. However, the events over the 2006-2008 period caused major concerns about the direction of East Timor; it remained difficult to assess the long term impact of these events on the country’s fragile economy. It is noted that government spending has increased dramatically over the last few years in line with the country’s increased energy income.

East Timor remains one of the poorest countries in the Asia-Pacific region, despite the implementation of a National Development Plan and the considerable progress it has made since independence. The ongoing challenges are significant; the public sector administration, law and justice, and governance are all crying out for further attention, whilst a critically low skills base, high population growth and limited prospects to generate jobs combine to compound the situation further. East Timor faces a complex array of problems. It will need substantial assistance from the international community, for some time to come.

In the meantime, throughout this most difficult of political periods, the country’s telecommunications sector has been expanding with the mobile telephone sector experiencing a particularly strong and sustained surge. After recording huge annual growth rates over a number of years from 2006 onwards, by the start of 2012 the country’s mobile subscriber base had increased rapidly in a short period of time and penetration had passed the 50% mark. Fixed-line network expansion was still languishing coming into 2011, however, with fixed teledensity down around 0.3%. Although it was difficult to get accurate figures on the internet market, it was clear that growth in this sector remained highly constricted and there was little optimism about online activity in East Timor in the short term. Whilst there was a limited broadband service in the country, the number of subscribers for this type of access remained low.

East Timor finally became a member of the International Telecommunication Union (ITU) a few years ago. While the ITU does provide some statistical information on this market, it has continued to be a difficult task to obtain official statistics for the country’s telecom sector. Where official statistics are not available, BuddeComm has attempted to provide estimates.

Market highlights:

  • After surging in the 2008/2009 period, the East Timor mobile market grew by around 30% in both 2010 and 2011; it was continuing at a similar pace in 2012;
  • Mobile subscriber numbers had reached 600,000 and penetration was at 50% by the end of 2011;
  • In sharp contrast with the mobile market, both fixed-line subscriptions and internet usage in its various forms remained especially low, with only modest growth likely in the short term;
  • On the broader national front, however, the country’s recent history of political and civil unrest continued to cause uncertainty and predictions for development were guarded;
  • Indeed, the political situation has been proving a major distraction for government, putting a damper on development programs and infrastructure building;
  • Despite this, the 10th anniversary in 2012 of the country gaining its independence from Indonesia was cause for widespread celebration;
  • The country ranked number 23 in the world on the 2011 Index of Failed States, not a very promising statement on national development.

Note: The coverage provided of East Timor’s telecoms market is relatively limited due to its early development stage.

East Timor – key telecom parameters – 2011 – 2012

Category

2011 (e)

2012 (e)

Fixed-line services:
Total number of subscribers

3,200

3,400

Annual growth

10%

6%

Fixed-line penetration (population)

0.3%

0.3%

Internet:
Total number of subscribers

1,000

1,200

Annual growth

10%

20%

Internet subscriber penetration (population)

0.08%

0.11%

Internet subscriber penetration (household)

0.4%

0.5%

Mobile services:
Total number of subscribers

600,000

750,000

Annual growth

36%

25%

Mobile penetration (population)

50%

62%

(Source: BuddeComm)

For detailed information, table of contents and pricing see: East Timor (Timor Leste) – Telecoms, Mobile and Internet

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The compelling business of M2M

Tuesday, June 26th, 2012

According to Telstra Australia, M2M services generate a much higher ARPU on a per megabyte basis than traditional mobile data services.

The company’s M2M services generate $3.60 of ARPU per month and use up 1.7MB of data on its network, while traditional data services generates $30.87 of ARPU and uses 104MB of capacity. Those figures mean that M2M has a monthly ARPU per megabyte of $2.12, compared with just $0.30 for traditional data, showing that M2M gives a return five to ten times greater than traditional Telstra products.

The main applications used by companies so far have been around utilising the connectivity to embed wireless into their products for their customers, such as retailers, utilities and the automotive industries.

However there remain many serious challenges to the M2M market. While 9% of Australian businesses are using M2M services the average company is still quite unfamiliar with the concepts of M2M and IoT.

Furthermore, on the technical side, standardisation of the technology (as well as the individual products) remains the most important issue that needs to be resolved. Over the last two decades the experienced certain technological problems for which proprietary solutions were developed and as a result there are literally hundreds of niche market solutions and products.

It is only now that the bigger picture of IoT starts to emerge, and it becomes clear that the real power of this concept lies in the interoperability between the various M2M applications – this, linked to data centres and analytics, shows the power of not just collecting data for the individual purpose of the application, but of linking that to other relevant data and using analytics in real time. This means that the data can be used to take immediate or preventative action to make future predictions about processes as they are evolving, and to manage situations in real time.

Because of the niche market developments there is also no clear leader or group of leaders who have sufficient market power to take industry leadership on these issues.

As we are talking, not about a specific technology but about a technological concept, we also need to take into account the larger ecosystem. At the moment it is the users (retailers, utilities, car manufacturers) who are taking the lead and obviously they are not in the best position to coordinate cross-industry developments. The electricity utilities, for example, will most likely be the largest group within the IoT community and they have a history of developing their own technologies and applications more or less in isolation.

The mobile operators are another key group in the ecosystem, but the question is whether they are the right group to, for instance, coordinate the technology behind the applications.

There has been an absence of leadership from the IT industry, which could be the glue between all of these developments, and systems integration in particular would be the key here.

The reality is that as we are talking about literally billions of sensors, devices etc that will be linked into the IoT there is a great risk of embarking on the wrong technology, and concern about this is currently hampering progress in this industry.

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When is a 4G network really 4G

Tuesday, June 26th, 2012

The terminology of 4G can be quite confusing, as there are 4G networks that use LTE and/or WiMAX technologies. Often 4G is used as a marketing tool to boost a company profile. It is also referred to as a progression beyond that of a 3G network. Meanwhile the ITU refers to 4G technology as International Mobile Telecommunications-Advanced (IMT-Advanced) while 3G was termed IMT2000.

Theoretical speeds for a 4G network using LTE-Advanced are 100Mb/s/50MB/s f(down/up) or a mobile network and 1Gb/s for fixed services. The 3rd Generation Partnership Project (3GPP) is calling for LTE-Advanced specifications to have speeds of 3Gb/s/1.5GB/s.

So if the standards are not confusing enough then there is the hardware that must be compatible with 4G networks and seamlessly switch between accessibility of those technologies. The user may not notice that on a voice call but the hungry data user will no doubt see the degradation in data throughput.

So when Apple released its latest iPad (3) in March 2012, it was initially promoted as WiFi +4G. But after some reported customer concerns, the Australian Competition and Consumer Commission (ACCC) took issue with the advertising, as consumers in Australia could not connect to the current or any currently planned 4G networks. The new iPad works on 700MHZ and 2100MHz 4G networks and both these 4G frequencies are not available in Australia and not expected for some time either.

After some rebadging of the product material, the iPad was then advertised WiFi + Cellular with the disclaimer “…this product supports very fast cellular networks. It is not compatible with current Australian 4G LTE networks and WiMAX networks”. Interestingly on its iPad website in the content code (the code is behind the scenes of what we see in the browser) it still states – “Get the new iPad with Wi-Fi or Wi-Fi + 4G” in late June 2012.

The Apple company agreed to a $2.25 million fine in June 2012 in an out of court settlement, payable to the regulator, the ACCC, for misleading Australian consumers.

For more information on the mobile LTE telecommunications market see the separate reports that we provide information including:

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Medical Body Area Networks

Tuesday, June 26th, 2012

The Federal Communications Commission (FCC) in Washington has advanced its wireless health care agenda by adopting rules that will enable Medical Body Area Networks (MBANs), low-power wideband networks consisting of multiple body-worn sensors that transmit a variety of patient data to a control device. MBANs provide a cost effective way to monitor every patient in a healthcare institution, so clinicians can provide real-time and accurate data which allows them to intervene if necessary.

Wireless devices that operate on MBAN spectrum can be used to actively monitor a patient’s health, including blood glucose and pressure monitoring, delivery of electrocardiogram readings, and neonatal monitoring systems. MBAN devices will be designed to be deployed widely within a hospital setting and will make use of inexpensive disposable body-worn sensors. MBAN technology will also make it easier to move patients to different parts of the health care facility for treatment and can improve the quality of patient care by giving health care providers the chance to identify life-threatening problems or events before they reach critical levels.

The Commission allocates 40 MHz of spectrum at 2360-2400 MHz for MBAN use on a secondary basis. It will accommodate MBAN use through an expansion of the existing Medical Device Radio communication (MedRadio) Service. This structure, which will permit MBAN devices to operate on a ‘license-by-rule’ basis in which users will not have to apply for and receive individual station licenses, will lead to the rapid and widespread development of innovative new MBAN applications.

The 2010 National Broadband Plan recognized that the use of spectrum-agile radios and other techniques can significantly increase the efficient use of radio spectrum to meet growing demand for this valuable resource. The development of the MBAN concept illustrates how advanced technology can enable the more efficient use of spectrum to deliver innovative new services. Because MBAN devices will share the spectrum with existing primary users, the rules contain registration and coordination provisions to protect vital flight testing operations conducted by aeronautical mobile telemetry (AMT) licensees.

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