Archive for September, 2012

Rebalancing telco infrastructure investments

Friday, September 28th, 2012

One of the reasons telecommunications has been so successful for more than 160 years is that it adopted a strategy that resulted in a seamless network all around the world. You can pick up a phone anywhere in the world and, with little or no instruction, make a call to anybody else in the world without worrying what phones and technology they are using on the other end of the line.

For 130 of those 160 years the telephone companies basically provided a national service for the good of their country. However, once telephone saturation started to occur in the developed economies and new technologies began to appear on the horizon, the system began to falter. The major problem for the telcos was delivering innovation at affordable prices. Government policies led to the introduction of market liberalisation and competition, which produced – over the last 30 years – an explosion in innovations.

But during that process the nature of the network operators changed. They were forced to be more competitive and innovative, and they became increasingly commercial and less focussed on the national good.

We have now reached a point where, on the one hand, good quality telecommunications infrastructure has become even more critical for the social and economic benefit of the country – because of the extra services that are now carried over it – while, on the other hand, these extra services require quality infrastructure that cannot be delivered on a commercial basis to all of the countries’ citizens.

The social and economic benefits of the services carried over the infrastructure do not show up on the balance sheets of the national operators, and as they are now operating in a competitive environment they can no longer afford the extra cost involved in looking after the national good.

Government policies need to be rebalanced. If infrastructure is critical for the national wellbeing some of the load of the infrastructure needed for this will have to be carried by the nation.

The best way to achieve this is not to bring back regulation – as some of the European telcos are suggesting – but to make structural changes that better reflect the future use of this infrastructure.

Today’s reality is that already telcos are no longer the gatekeepers. By using OTT services, and through devices such as smartphones and tablets, service providers and users are bypassing the telcos. The telcos have been slow to keep pace with these developments and have been pushed further and further back into their infrastructure and basic access business.

Moving into the future more developments will take place that will see the infrastructure being used for a range of different services. Next generation networks based on fibre and IP will, by their very nature, be much more open networks. Services such as M2M, e-health, smart grids and so on will require different access regimes. NGNs will allow for parallel connections, independent of each other, with no single gatekeeper in the middle.

If that is the reality it is much better to structurally separate the infrastructure from the services and develop a separate national infrastructure plan that better reflects the social and economic benefits that countries derive from it.

Tinkering in the margins with new regulations is only pushing the problem forward, and this has the potential to bring back the good old days where telcos were the inflexible and expensive gatekeepers. This would be a major step back.

Like so many other industries the network operators will also have to accept that the digital revolution is forcing them to transform themselves. Trying to hold that back will create similar problems to those experienced by other sectors that refused to transform in the wake of the emerging digital economy.

Paul Budde

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Libyan government back in control of Uganda Telecom

Thursday, September 27th, 2012

Uganda is one of the fastest and most consistently growing economies in Africa. The introduction of mobile telephony has revolutionised its telecommunications sector since Celtel/Zain (now Bharti Airtel) launched the first network in 1995, followed by MTN in 1998, Uganda Telecom (UT) in 2001, Warid Telecom in 2008 and HiTS Telecom, in which France Telecom’s mobile unit Orange bought a majority stake in 2009. The intensified competition has led to a price war which has accelerated subscriber growth but also the decline in average revenue per user (ARPU). The operators started increasing their tariffs again in 2011 and at the same time are trying to find ways of generating additional revenue streams. 3G and 4G mobile broadband services as well as mobile money transfer and m-banking services are at the forefront of this development in a country where less than 20% of the population currently has internet access or holds a traditional bank account.

A simplified and converged licensing regime has significantly reduced barriers to market entry and increased competition. Fixed GSM and WiMAX in combination with VoIP now make up more than half of the fixed telephony market. Improvements in infrastructure are making broadband access more affordable and enabling converged voice, data and digital media services.

Being landlocked, the country depended entirely on satellites for its international internet connectivity until 2009 when several international submarine fibre optic cables landed on the African east coast, to which Uganda is now connected via a national fibre backbone extending to its borders. By 2012, prices for international bandwidth had fallen to a fraction of their original cost, but retail pricing of broadband services is still relatively expensive, especially when considering purchasing power parity. However, wireless and mobile technologies such as WiMAX, CDMA-2000 1x EV-DO, HSPA and LTE are now putting the internet within reach of a much wider part of the population than DSL and other traditional fixed-line services have in the past.

Uganda Telecom is majority-owned by the Libyan government’s investment arm, the Libya Africa Portfolio (LapGreen). Its assets were frozen under UN sanctions against the Gaddafi regime in 2011, but in early 2012 the company stated its commitment to provide UT’s funding needs for the year, and in May 2012 its control over UT was reinstated.

With market penetration still below the regional average and annual GDP growth forecast to rise from currently 4% to 7% by 2015, growth prospects for Uganda’s telecoms sector are excellent.

Market highlights:

  • More than 90% of internet connections are mobile;
  • 3G mobile broadband pricing varies widely, consolidation expected;
  • First 4G (LTE) network launched;
  • Major tower outsourcing deal signed;
  • Libyan government back in control of Uganda Telecom;
  • New regulations for SIM card registration may put temporary pressure on subscriber growth;
  • Strong fixed-line growth fuelled by wireless systems;
  • Alternative fibre link to international submarine cables to be built.

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


Penetration rate

Mobile 47%
Fixed 1.6%
Internet 15%

(Source: BuddeComm based on various sources)

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


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Tweet your support for digital inclusion for all

Wednesday, September 26th, 2012

UN Broadband Commission uses power of social networks to urge the world to ‘B more with #Broadband’

From September 24 tweet your support for digital inclusion for all !

To coincide with the launch of the State of Broadband 2012 report, the Broadband Commission for Digital Development conducting an online experiment: How many people can be mobilized to lend their support for the Commission’s key message of broadband inclusion for all?

With just under one third of the world’s population online, a sustained and concerted global effort is needed to extend the benefits of broadband to underserved and marginalized communities everywhere. The Commission, which is co-Chaired by President Paul Kagame of Rwanda and Carlos Slim of Mexico, and co-Vice Chaired by ITU Secretary-General Dr Hamadoun I. Touré and UNESCO Director-General Irina Bokova, has been advocating strongly to push broadband to the top of the political agenda since it was established in mid-2010.

In addition to a set of four key advocacy targets for broadband inclusion and a Challenge to global leaders announced in 2011, the Commission, which held its sixth meeting in New York yesterday, has just released a new series of Country Case Studies showcasing national broadband strategies along with specific applications of broadband that are being used to accelerate progress towards the Millennium Development Goals (MDGs).

Harnessing the power of social networks, the ‘ B more with #broadband’ campaign coincides with the start of the High-Level Segment of the United Nations General Assembly, which will look at formulation of post-2015, post-MDG international development frameworks. The Broadband Commission believes that information and communication technologies – and specifically broadband – must serve as a lynchpin of these strategies

The Commission urges everyone who cares about digital inclusion to tweet this message:

I’m lending my voice to those offline. B more with #Broadband. #SGSglobal.

to show their support for public and private sector actions that will help bring more people online around the world.

There is now a good body of evidence pointing to the economic benefits of broadband. One recent OECD study, for example, indicates that a 10 per cent increase in broadband penetration raises per-capita GDP growth by 0.9-1.5 percentage points. Another study focusing on low and middle income economies indicates that every 10 per cent increase in access to broadband in developing countries results in a commensurate 1.38 per cent increase in GDP.

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3G mobile broadband finally arrives in Cote d’Ivoire

Wednesday, September 26th, 2012

Civil unrest following disputed presidential elections led to a contraction of Cote d’Ivoire’s economy in 2011, but GDP growth is expected to rebound to 8% in 2012 with a stable outlook.

Although it has two competing fixed network operators, the country’s telecommunications sector is dominated by mobile telephony, with South Africa’s MTN and France Telecom-owned Orange leading the market. The launch of three more GSM networks between 2006 and 2008 – Moov (owned by Etisalat of the UAE), KoZ (operated by the Lebanese Comium Group) and Oricel Green Network (backed by Libya’s LAP Green) – has accelerated the already fast growth and pushed mobile market penetration well above the African average. Two additional operators have been licensed and are preparing to enter the market, but problems with frequency spectrum allocation have caused delays. Some consolidation can be expected in this crowded market in the future.

The internet and broadband market has remained underdeveloped due to the high cost of international bandwidth, caused by a monopolisation of access to the only international fibre optic submarine cable serving the country until recently. This is now beginning to change, following the landing of a second cable in November 2011, with up to three more to follow in the near future. Significant reductions in retail pricing for some of the existing ADSL, WiMAX and EV-DO wireless broadband services can already be observed. The biggest game changer, however, will be the recent introduction of 3G mobile services.

Following years of delays, the first 3G licence was finally awarded in March 2012 and the first 3.5G mobile broadband service has been launched, offering up to 42Mb/s using HSPA+ technology. The extensive geographical reach of the mobile networks will now make the internet accessible to a much wider part of the population. With a national backbone network including more than 20,000km of fibre optic cable, Cote d’Ivoire is in a good position to translate these improvements in competition and infrastructure into a booming broadband market and digital economy.

Market highlights:

  • 8% GDP growth expected in 2012;
  • Competition in international bandwidth market leads to falling broadband prices;
  • 3G licences finally awarded, first HSPA+ mobile broadband service launched;
  • Consolidation expected in crowded market with seven mobile operators.

Estimated market penetration rates in Cote d’Ivoire’s telecoms sector – end-2012


Penetration rate

Mobile 83%
Fixed 1.2%
Internet 2.6%

(Source: BuddeComm based on various sources)

For detailed information, table of contents and pricing see: Cote d Ivoire (Ivory Coast) – Telecoms, Mobile, Broadband and Forecasts

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Harness broadband to empower girls and women

Wednesday, September 26th, 2012

At the sixth meeting of the UN Broadband Commission of Digital Development, that I am attending in New York City, Academy Award-winning actor and advocate Geena Davis addressed the meeting of the Broadband Commission for Digital Development in New York today with a call to the Commission’s 60 top-level members to use the power of broadband to bring new opportunities to women and girls worldwide.

Ms Davis urged the Commission to set up a special focus group on gender that would undertake research on the many ways broadband networks and technologies could be used to empower girls and women – for example, through access to education, health care and useful information such as farming advice, climate monitoring and commodity prices, but also as tools to foster female entrepreneurship and new business opportunities.

“Broadband is having a transformational impact on the media and entertainment industry, but its importance reaches much further than that…Broadband will be key to meeting the Millennium Development Goals, providing women with the means to educate themselves and their children; improve their own health and the health of their families and communities; start their own businesses; keep themselves safe; and innovate to build and shape the future they want. This Commission can play a powerful advocacy role by speaking out strongly for the greater engagement of girls and women in the digital revolution taking place all around us,” said Ms Davis.

Her call to action was enthusiastically received by the Commission, with several members agreeing to prepare a special report on opportunities and barriers for girls and women, to be presented at the next meeting of the Commission in Mexico City in March, 2013.

“The creation of this new Broadband Commission Working Group is a positive step forward in extending the benefits of broadband to all, and accelerating progress in meeting the MDGs – several of which focus on gender-related issues,” said Dr Hamadoun I. Touré, ITU Secretary-General. “We are grateful for the support of committed, high-profile ambassadors like Ms Davis, who greatly increase the impact and reach of our message about the catalytic role ICTs can play in gender empowerment.”

In June this year, Ms Davis was named ITU’s Special Envoy for Women and Girls in the field of technology. In this role she is actively promoting ITU’s new ‘Tech Needs Girls’ campaign through public appearances at high-profile events, where she speaks on the importance of extending access to technology to women worldwide, reinforces the importance of positive gender role models, and highlights the many exciting career opportunities available to young women in the high-tech sector.

The three-year Tech Needs Girls campaign will raise awareness worldwide of the role technology can play in empowering women. Through online multimedia content, major advocacy events around the globe and key partnerships with industry, government, civil society, media and other UN agencies, the campaign will highlight the potential of technology to transform women’s lives.

Earlier this year ITU launched a multilingual web portal focused on helping girls and women access training, job opportunities and career information in the fast-growing information and communication (ICT) sector.

The Girls in ICT Portal houses some 500 programmes, including over 100 scholarship programmes and some 70 contests and awards, more than 100 training and internship opportunities, over 100 online networks offering career support and mentoring, as well as tech camps and other activities.

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