Archive for August, 2012

Are we giving up on broadband equality?

Thursday, August 30th, 2012

One of the worldwide challenges in relation to the development of national broadband networks is equality.

Broadband is critical for the digital infrastructure and it is essential that everybody enjoys the same level of quality and affordability. This is a major challenge and as a rough measuring stick approximately one-third of the people in developed economies would miss out if there were not a requirement for equality.

We see some of the problems related to this issue arising in other countries. The digital infrastructure is essential for commerce, healthcare, education, government services and M2M services such as smart grids. Governments would find it hard to sell their e-health, e-government and e-education programs just to those who enjoy access to good quality infrastructure. Nevertheless this is exactly what is happening in countries with a patchwork of broadband islands. A structure of this kind severely impedes the development of the digital economy.

Furthermore, if there is no broadband equality people who are missing out on good quality broadband would be greatly disadvantaged economically – for example, the people living in regional towns and communities on the outskirts of larger cities. Lack of affordability would severely affect the more vulnerable sections of society.

The major new inflection point in the digital industry is that from now on more devices than people will be connected to that infrastructure – internationally we are talking about trillions of devices and sensors. The infrastructure needs to be sufficiently robust to handle this gigantic computer network, which must be able to process and analyse massive volumes of data in real time. This includes monitoring, data gathering and real time analyses of the environment, sustainability, biodiversity, traffic, infrastructure, weather, people movements, national health (epidemic monitoring) and so on. Many of these ICT systems need to be nationwide and require nationwide networks with a minimum level of quality and capacity.

These requirement have very little to do with the speed of the network. Far more important for such services are capacity, robustness, affordability, security, privacy and low latency.

Because of the difference in population density the overall architecture of the network can be designed in such a way that it does not require the same technology everywhere. Built-up areas such as cities need technology that has the capability necessary for concentrated requirements; rural areas, on the other hand, do not have a concentration problem and so different technological requirements apply there. In other words, you don’t need to replace every copper-based ‘dirt track’ in the country with a four-lane FttH highway to achieve the outcome needed for the abovementioned requirements.

Internationally it is accepted that, capacity-wise, the best technology is FttH. It will future-proof the abovementioned requirements (at least for the next 20-30 years). Some people argue that we do not need such robust infrastructure, but let us go back five years, to a time when we had not even heard of smartphones and tablets – or ten years, when most people were still using dial-up to access the internet.

It is not difficult to envisage that developments like these will not stop, and that they will only accelerate over coming years. The last thing we want is to have to dig up the country again in five or ten years’ time because we decided in 2013 to go for the cheap option.

The cheap option that is proposed by the Australian Opposition is FttN. This technology still relies heavily on the ageing copper infrastructure and the proposed extended use of the cable TV network on the ageing coax networks.

Among the many other problems that this cheap solution brings with it is that there will not be a guarantee of equality. As we see in the UK, for instance, the quality of their broadband patch network – as measured in network speeds – varies from 2Mb/s to 80 Mb/s. The quality is a matter of the luck of the draw, depending on where you live and what the quality of that ageing network is. A chain is only as strong as its weakest link and the copper and coax parts are the weakest links in the broadband network. These parts would severely hamper the future-proofing of the network, and they will eventually have to be replaced in any case.

While copper and coax can be used in a transitional situation, such a transition needs to be part of the more future-proof plan, which will stipulate what the situation will be when the time comes for the copper and coax elements to be replaced.

For that reason most countries have abandoned FttN as a ‘final solution plan’ and have replaced it with a long-term all-fibre strategy. What has been missing so far from the Opposition is a plan beyond copper. At face value at least their FttN plan is presented as their end solution.

Obviously, for the reasons mentioned above, such a plan – or rather the lack of it –  is unacceptable for the national services and applications in healthcare, education, etc that could be delivered over a proper broadband network.

It is essential, before technical decisions are made regarding the various technologies that can be used in infrastructure, to first establish what it is needed for. Only once that is established the technology around it can be designed. By all means take into account what is available now and how that can be used within such an overall plan; but making any technical decisions – especially decisions about infrastructure that requires long-term planning – without even knowing what it is needed for is reckless future planning indeed.

Paul Budde

See also:

Australia – National Broadband Network – Digital Economy

Australia – National Broadband Network – Infrastructure Analysis

Australia – National Broadband Network – Cost Benefit Issues

Australia – National Broadband Network and the Opposition – mid-2012

United Kingdom – National Broadband Policy to 2015

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Asia’s huge mobile/broadband capacity is a solid foundation for growing the digital economy

Thursday, August 30th, 2012

Asia presents a massive presence in the global mobile and broadband markets. The region owns 49% of the world’s mobile subscribers. And when it comes to the development of broadband internet Asia makes a strong claim to be leading the world. On the back of the mobile and broadband market segments and their respective capabilities, Asian nations have been busy building a formidable alliance with the digital economy.

Following more than a decade of strong growth, mobile markets across Asia continued to expand during 2011 and into 2012. By end 2011 there were a total of 2.9 billion mobile subscribers in the region and with annual growth running at 10% the numbers were expected to hit 3.2 billion by end 2012. With some markets saturating and the impact of the shaky global economy still being felt, it is not surprising that the growth rate has slowed somewhat over the last year or so. This is after a period where annual mobile subscriber growth rates in Asia had been well in excess of 50%.

Overall regional penetration had reached an estimated 76% by mid 2012; although this figure is impressive in a region where the population was around 4.2 billion, it nevertheless suggests that there is still more room for subscriber growth across Asia. More than 18 countries in Asia had mobile penetration levels in excess of 100% going into 2012 and two (Macau and Hong Kong) had mobile penetrations in excess of 200%. Not surprisingly, the Global Financial Crisis caused some caution in mobile markets across the region for a year or two, but after a pause the momentum has quickly picked up again. The business emphasis has shifted from general subscriber growth to value added and mobile broadband.

Particularly relevant in the context of rapidly growing markets that still have some further room for expansion are India and China where monthly net additions have regularly been close to 10 million subscribers. These two countries combined account for around 60% of overall market share in the Asia-Pacific region. Led by China and India the region will continue to grow its mobile subscriber numbers on the back of other markets with large populations and relatively low penetration rates such as the Philippines, Pakistan and Indonesia.

In the developing economies, quick and easy mobile uptake has for a long time been the preferred, and often the only, option for subscribers, given the low levels of fixed-line deployments. In order to prevent ARPU slide in these markets, operators are offering value added mobile services such as mobile banking, remittance payments and mobile health services that take advantage of lack of access by the poor to social infrastructure such as banks and hospitals. As a consequence of these mobile-based services, the digital economy is alive and well in many of the emerging markets across Asia.

In the meantime, the developed markets in the region, such as Japan, South Korea, Hong Kong, Singapore and Taiwan, have positioned themselves well to exploit mobile data and broadband wireless opportunities and lead the rest of the region into the next generations of mobile applications. In fact, through the leadership of these markets Asia makes a strong claim to be setting the global benchmark when it comes to the development of mobile broadband internet access.

The rate of adoption of mobile broadband started increasing rapidly across Asia with the overall increase in mobile penetration combined with networks being progressively upgraded to next generation platforms. The initial wave of 3G services took a while before it saw any substantial growth in wireless data services across the wider regional markets; however, as 3G moves towards 4G and as speeds increase, as service improves and as content providers offer more. In South Asia, in particular, more people own a mobile phone than a PC, giving the delivery of mobile data services huge potential there.

By early 2012 Asia had a mobile broadband penetration of 11%; this represented 460 million mobile broadband subscribers in the region; two of Asia’s markets – South Korea and Singapore – had more mobile broadband subscribers than population by end 2011; Japan was not far behind on 90% mobile broadband penetration at the time.

The 3G licensing process and the progressive launch of 3G services in Asia is already well advanced. However, a few countries had been particularly slow in opening up their 3G markets. But by 2012 the last significant player to embrace 3G, the recalcitrant Thailand, was finally making substantial progress along this path.

For broadband internet generally – the combination of fixed and mobile – Asia makes a strong claim to be leading the world when it comes to its development. Broadband in its various forms has indeed been a fast growing segment in the Asian market. The energetic expansion of broadband has certainly been more of a phenomenon in the developed economies of the region, but most of the relatively poorer developing countries of the region are increasingly adopting broadband at a rapid rate. Te choice of technology platform varies across the region.

With DSL continuing to dominate the world’s fixed broadband market, Asia maintains its ranking as the leading DSL region with around 43% of the global DSL subscribers. In fact by end-2010 China claimed around an estimated 110 million of Asia’s 146 million DSL subscribers. In recent times, we have seen FttX as a growing alternative platform for broadband access in Asia. In the leading technology markets of Japan, South Korea and Taiwan, FttX has been displacing other forms of high speed internet access. DSL has dropped to just 20% of the broadband market in Japan. Asia, with 68 million fibre-based broadband connections by end 2011, accounted for around 80% of global subscriptions.

While there has been some activity in the providing of WiMAX networks, the real value of this platform is in its mobile form. Initial provisioning of mobile WiMAX in Asia has certainly commenced, but with a few exceptions the technology has not yet impacted on the mass market. In any event, in their various forms mobile wireless broadband systems are becoming a key feature of the broadband access landscape across Asia.

Over a number of decades the economies of Asia have progressively built substantial fixed-line national networks followed by national mobile networks. More recently the focus of infrastructure building has shifted to the upgrading of domestic telecom networks to Next Generation Networks (NGNs). This process has seen large scale investment by Asia’s leading telecoms markets in new-generation Internet Protocol (IP)-based telecommunications networks. The developed economies have each taken this a step further, rolling out a new fibre-based National Broadband Network (NBN) or its equivalent. Inevitably, those countries that have their government promoting the implementation of broadband strategies and backing new fibre-based roll-outs are the ones that are setting the pace. Even some of the lesser-developed markets are pushing hard on this front. Singapore and Malaysia provide two interesting case studies. In any event, those countries placing the emphasis on ensuring that the population has access to high speed broadband internet will be well prepared for the wider implementation of the digital economy.

 For detailed information, table of contents and pricing see: Asia – Mobile, Broadband and Digital Economy Overview

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YouTube’s ‘Love Football’ wedges into broadcast sport

Wednesday, August 29th, 2012

Sport is the holy cow of the cable and pay TV operators around the world these operators keep an iron grip on their exclusive deals with the sporting organisations. Hundreds of billions of dollars are paid for this, so the stakes are enormous. The problem, however, is that most of these deals are not made with the sports fan in mind. It is up to the cable and pay TV operators to decide on the broadcasting schedules, which are often very selective and where delayed broadcasting is used to maximise the advertising value of the deal.

But it is highly unlikely that in the short term this situation will change. However, what will eventually force change is when fans start to move to other services; and this is already happening – albeit on a small scale – in relation to broadband-based services. In the end the trend will be firmly established when enough customers abandon cable and pay TV subscriptions and move to broadband-based services. This will not yet affect the 20% hard-core sports fans but around the world there is already a sharp decline in pay TV subscriptions.

In the end it will be the so-called OTT services that will offer the customer choices, both in viewing and in prices, and will win them over from the shackled services offered by the traditional players. This will be more of a slow process, similar to what happened in other sectors such as music, publishing and retail. YouTube’s ‘Love Football’ channel is one of those small steps forward along this road.

For this YouTube is partnering with digital rights specialists, Rightster, and the international sports media rights agency, MP & Silva. They bring to a special YouTube channel highlights from Italy’s Serie A, France’s Ligue 1, US Major League Soccer, Brazil’s Serie A and the Championship, FA Cup and Capital One Cup from England.

In addition the service will offer subscriptions to YouTube content from favourite leagues, including clips of interviews with players and managers. Documentaries and behind-the-scenes footage are also part of the channel offering.

See also:

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Breakthrough in M2M

Wednesday, August 29th, 2012

The certification of an LTE radio chip from Altair Semiconductor by Verizon might finally bring some leadership to the M2M/internet of things market, which – as BuddeComm has been saying – has been suffering from a lack of direction. This means that companies can now build sensors and devices containing Altair’s chip, thus avoiding the lengthy testing process in order to get their equipment onto Verizon’s network. This will also greatly stimulate innovation, as many small but highly entrepreneurial companies simply could not afford to go through the testing process.

Telecom networks in the developed countries already have more devices than people connected to their infrastructure, and literally trillions of devices will follow over the coming decades.

Verizon is a sizeable player and with this certification Altair’s chips will now find their way to hardware makers, who can be assured – without needing to go through their own certification process – that their products will be accepted on the Verizon network – and, we expect, soon on other networks also. This will lead to mass production, which will have a positive effect on process and such a move will therefore stimulate further uptake by other telcos around the world.


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Ukrainian incumbent Ukrtelecom ditches FttN for FttH: a growing trend in Europe

Wednesday, August 29th, 2012

Ukrtelecom earlier this year suspended plans to deploy a large scale FttN network, and is instead preparing for an FttH network based on GPON technology. The operator has observed developments elsewhere in Europe, citing Russia as an example (though the experience of KPN in the Netherlands as also a number of operators in France, the Baltics and Scandinavia would provide further examples).

It asserts that a well-managed FttH network can be more cost effective than FttN, and is indubitably the best long-term option to adopt. The move follows a four-fold increase in the company’s fixed broadband network investment target for 2012, to UAH550 million (the company’s broadband infrastructure is taking up 60% of overall investment for the year).

The company’s focus on FttH should benefit rural areas during the next few years following recent legislation which established a universal service fund to subsidise internet services in these regions.

The fund is to be capitalized via a 3.5% tax on revenue from telcos, to be managed by the regulator in conjunction with the state’s revenue service. The regulator estimated that the tax would bring in around €157.6 million annually. Given that Ukrtelecom has the most extensive presence in rural areas as a result of its legacy copper network, it is expected to be the main beneficiary of subsidy payments.

For further analysis on Ukraine’s broadband market, see the updated report Ukraine – Broadband and Digital Media Markets – Insights, Statistics and Forecasts

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