Archive for December, 2012

Telekom Deutschland looks to DSL vectoring to meet broadband targets

Sunday, December 23rd, 2012

Telecom market overview

Germany’s telecom market is supported by one of the largest and more affluent populations in Europe. Although the VATM expected total turnover to fall slightly in 2012, BITKOM forecasted a 2.8% growth in IT and telecoms in the year, falling to 1.6% in 2013. The market has been propped up by broadband and mobile data services while revenue from mobile voice services will continue to fall steadily.

Mobile market

The mobile sector will be a key growth area in coming years, with MNOs keen to develop their mobile data revenue to offset declining voice revenue. LTE networks are being built out rapidly to accommodate consumer needs for quality data and services, while MNOs since the end of 2012 have been able to utilize the 800MHz band for LTE in urban as well as rural areas.

Germany – Key telecom parameters – 2010; 2012

Sector

2010

2012 (e)

Subscribers to telecoms services (million):
Fixed-line telephony 31.8 29.9
Fixed broadband subscribers

26.9

30.7

SIM cards in service

111.0

115.2

Telecom penetration by service:
Fixed-line telephony 38% 36%
Fixed broadband penetration rate

30%

38%

SIM penetration (population) 133% 140%

(Source: BuddeComm)

Market Highlights

  • Telekom Deutschland is looking to DL vectoring to meet the government’s broadband targets, so extending the capacity of copper while delaying higher investment in fibre networks. Regulatory approval is still required since vectoring affects altnets which rely on copper access.
  • The excellent broadband infrastructure in Germany has helped maintain the country as one of the more mature in the region. Although DSL accounts for most connections, consolidation within the cable sector has established a small number of significant players able to take advantage of scale to invest in network upgrades. The merger of Liberty Global’s Unity with Kabel BW in mid-2012 brought together Germany’s second and third largest cablecos.
  • The number of homes passed with fibre has been slower than expected, largely due to economic restraints on telcos.
  • The volume of mobile data traffic has grown sharply since 2006, brought on by the expanded network coverage, steadily improving transmission rates, the growing availability of data-intensive applications, and the prevalence of more capable devices. In addition, the reduced rates for mobile data services and the introduction of transparent tariff models for data use will further encourage data use among subscribers during the next few years.
  • MNOs have invested in LTE in a range of frequencies, while they are now free to utilize the 800MHz band in urban areas across all 13 Länder having fulfilled their rural coverage obligations

BuddeComm’s annual publication, Germany – Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s largest countries. The report includes the regulator’s market data for 2011, VATM market data for 2011, telcos’ operating and financial data to September 2012, and market developments to December 2012.

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

 

 

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Slowing subscriber growth in Vietnam’s mobile market offset by take up mobile broadband services

Sunday, December 23rd, 2012

Vietnam has for some years now been aggressively expanding its national infrastructure and growing its subscriber bases across all market segments. Progress in developing the mobile market has been especially impressive, although there has been a substantial moderation in growth of late; and whilst the internet market, and particularly the roll-out of broadband Internet, is still in the early stages of development, the last five years have seen a significant surge in the country’s online access. Most significantly, there has been a major push into mobile broadband.

The broad market growth is happening amidst a confusing set of market statistics. As Vietnam’s telecom sector continued expanded in a relatively strong fashion through 2011 and into 2012, the figures published both by the government and the operators were often contradictory and earlier figures were often revised. The government reported that there were 154 million mobile subscribers by end-2010, an increase of 40% for the year and representing an overall penetration of 174%. The total figure included 16.4 million fixed-line services by end-2010. Yet in September 2012, according to Vietnam’s General Statistics Office (GSO), the number of telephone subscribers nationwide was 135.9 million, which included 15 million fixed-line subscribers and almost 121 million mobile phone subscribers. The government has been casting the recent activity in the market as positive growth; yet there appeared to be a major revision of the mobile subscriber statistics being published. The conflicting numbers made it difficult to obtain a considered view of the market. In this report, where there is any doubt about the statistics issued by the government/operators, the most likely figures are published in our tables of statistics.

In any event, there is no doubt, despite the at times puzzling statistics, that Vietnam’s telecom sector has been through a period of particularly strong growth. It is reasonable to say that the country’s mobile market has been on a long run of growth and that even as the annual rate of mobile subscriber growth fell below 10% a year in 2011 the market remained competitive and offered a good platform for further growth.

The country’s fixed-line subscriber growth has certainly not been as impressive as the mobile sector. With the government again hedging somewhat on reporting fixed-line statistics, this market segment has been struggling to a certain degree over the last few years. It seems that growth has now flattened out or is in decline. This is not to underestimate the fixed line infrastructure that has been already been put in place. The excellent national coverage already achieved is indeed impressive. As for the internet, the government continues to take a cautious position; government reticence has not, however, stopped the online market from moving along a solid growth path. Internet user penetration was estimated at a very healthy 38% coming into 2012. The broadband segment growth was particularly strong, although much of the growth was in mobile wireless broadband rather than fixed broadband.

At the same, as of September 2012, the total number of internet subscriptions nationwide had reached 4.4 million, reaching a point that the GSO described as ‘a year-on-year surge of 14%.’ The GSO also reported that revenues in the telecommunications sector in the first three quarters of 2012 reached VND123 trillion (US$5.9 billion), up 7.6% compared with the same period last year.

Around eight years ago there had been less than three million mobile subscribers in the country; the intervening years have seen an incredible expansion in the marketplace. At the same time, the government has stepped up the process of sectoral reform, although there was sometimes a lot of rhetoric and not much action. In any event the government has allowed a sufficiently open market to basically let competition drive the growth. In recent years the revitalised telecom sector in Vietnam had become the target for a fresh round of investor interest, although recent signs of a weakening economy have been causing concern to investors. While the market continued to attract investor interest, a cautiousness exists now as the global industry senses that ‘the bubble has burst’ in Vietnam. It is generally agreed that the country has come out of a period of wishful thinking and must now face certain realities.

The government has overseen the introduction of a level of competition into the telecoms market and this, combined with a generally improved economic climate within the country, triggered a round of strong growth in the telecom sector. But the work on reform is far from finished. One project on the drawing board is expected to allow an increased level of ‘equitisation’ (the Vietnamese government’s word for ‘privatisation’). This proposal has certainly sent a message to would-be investors that the rules were changing in a positive way and the investment door was open. However, the fact that these equitisation plans have not yet been acted upon has been worrying. Nor is it completely clear what form the government’s involvement in the telecom sector will take in the future.

Market highlights:

  • Vietnam’s mobile market stood at an estimated 130 million subscribers in early 2012, for a 144% penetration.
  • The country’s annual growth rate in mobile subscribers has fallen from its boom year highs, moderating sharply in 2011/2012 to less than 10%.
  • In the 2007/2011 period the country’s fixed broadband internet market has surged, jumping almost 300% in that time to reach more than 4.5 million by coming into 2012.
  • Overall fixed broadband penetration remained relatively low, however, at under 5% of population.
  • Although interest in broadband services in Vietnam had finally picked up, much of the growth in 2011 and 2012 has been in mobile wireless broadband.
  • Growth in fixed-line subscriber numbers flattened out then, by 2011/2012 had started to decline (with some inconsistent figures continuing to come from the regulator).
  • Following on from the successful launch of its Vinasat-1 satellite in 2008, Vietnam moved quickly to put a second satellite into orbit, launching Vinasat-2 on schedule in May 2012.
  • Vietnam appears to have lost its way on plans for the so-called equitisation (privatisation) of Vietnam’s state-owned telecom operators; however, a merger of the two VNPT subsidiaries looked highly likely.
  • In the meantime, rationalisation of the mobile market has started with Viettel acquiring the cash-strapped EVN Telecom at the start of 2012 and the proposed merger of Vinaphone and Mobifone.

Vietnam – key telecom parameters – 2011 – 2012

Category

2011

2012 (e)

Fixed-line services:
Total number of subscribers

16.0 million

15.0 million

Broadband internet:
Total number of fixed broadband subscribers

4.40 million

5.30 million

Mobile services:
Total number of subscribers

127.3 million

140.0 million

(Source: BuddeComm)

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

 

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Testing network design in first release sites (2010)

Saturday, December 22nd, 2012

In early 2010 the company revealed its plans to select a number of sites on the Australian mainland where it will validate and test the technical and economic performance of different FttH network designs. It plans to test a set of various network configurations including the use of outdoor or indoor optical network terminals and aerial or underground cabling.

Rollouts started in mid-2010 and will all be fully operational in 2011. These tests will be conducted across a representative sample of suburban and rural premises reflecting a number of differing characteristics including terrain, climate, demographics and housing types, including detached and semi-detached houses and apartment blocks.

There are also plans to establish an NBN integration laboratory where vendors can test their equipment in an end-to-end environment. Likewise, service providers will be able to test proposed NBN connections in the laboratory.

Work is conducted in three stages: passive deployment, active deployment and the provision of access to service providers.

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Service pricing

Saturday, December 22nd, 2012

One of the criticisms that has been made about FttH is the services are typically higher in cost than other DSL-based services. While this may be true for some providers, the reality is that most FttH operators and retailers offer a number of special incentives when first connecting and their prices are more than competitive.

Pricing for FttH services starts from as little as $19.95 for a 512kb/s service from FUZEconnect. Many providers offer a standard 10Mb/s symmetrical service for between $30-$100 per month, depending on download limits. Telstra’s most basic service is $40 per month for 8,000/384kb/s with a measly 200Mb download limit.

OptiComm (through its retailers) and FUZEconnect both offer high-speed 25/1Mb/s services at reasonable prices ($50-$99). TransACT currently offers one of the fastest residential broadband services in Australia at 30/10Mb/s service, but it is expensive at $130 per month plus ISP charges. Telstra’s fastest offering is 30/1Mb/s at $99 per month with speed limiting after using the 200GB allowance.

WorldxChange in New Zealand provides access to fibre in over 21 estates across the Auckland, Bay of Plenty, Canterbury, Marlborough, Northland, Otago and Wellington regions. All include the VoIP phone service, Xnet VFX. In mid-2011 two Fusion speeds were available, 100kb/s symmetrical and 30/6Mb/s. Monthly fees are NZ$45 or NZ$99, plus usage charged at NZ$0.0128 per MB (NZ$1.28/GB). So if a user consumed 50GB minimum, total cost would exceed NZ$100.

For this industry to expand and have long-term viability with credible competition, some of the major telecom providers such as Optus, Primus, AAPT and iiNet need to get involved at the retail level.

 

 

 

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ACCC revises list of POIs

Saturday, December 22nd, 2012

In March 2011, the ACCC revised its list of 121 initial points of interconnect to the National Broadband Network following submissions to its public confirmation process.

Following consultation between the ACCC and NBN Co, NBN Co has now proposed to relocate five POIs, add two POIs and consolidate one POI. Other proposed additional or relocated POIs did not meet relevant planning rules.

The ACCC also noted that the location of actual POI facilities may change subject to technical feasibility issues such as physical space and the availability of power and cooling. NBN Co has already advised the ACCC that there are some Telstra exchange service areas where NBN Co will be constructing its own facilities because sharing relevant Telstra exchange buildings was not technically feasible.

NBN Co will advise the ACCC when the alternative POIs had been selected in such cases and how the competition criteria and planning rules are met in respect of that alternative POI.

 The ACCC indicated that the availability of competing fibre infrastructure was a key element of its competition criteria when formulating the list. As a result it has also made available a list of the number of competing fibre infrastructure owners across the country via its web site.

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