Archive for January, 2014

Economic malaise risks telecom sector recovery in Bosnia-Herzegovina

Friday, January 31st, 2014

Bosnia-Herzegovina made remarkable economic progress since emerging from war in the 1990s to the financial turmoil of 2009. Since then the country’s economy has slowly recovered, though GDP is expected to reach only 0.5% in 2013 following negative growth in 2012. Future economic prosperity relies to a great extent on the country’s integration with the European Union. In preparation for eventual membership, the country has sought closer integration with the EU and adopted a range of commitments to political, economic, trade, and human rights reform. It has also aligned its telecom policies and regulatory measures to prepare it to compete effectively within the EU.

The market has been liberalised and a regulatory framework created based on the EU’s regulatory framework for communications, promoting competition as the most efficient way to offer communications products and services. Ongoing introduction of secondary legislation by the regulator is slowly improving the regulatory environment. To this end, the regulator has promoted fixed-line and mobile number portability, reduced interconnection tariffs and allowed the three incumbent operators to provide services outside their original concession areas.

The telecom market is characterised by three zones, each with an incumbent telco. The largest operator BH Telecom dominates in the FBiH, while Telekom Srpske operates in Republika Srpska and HT Mostar is active in Herzegovina.

The fixed-line broadband network is comparatively underdeveloped, with the result that investments made in 3G mobile upgrades by BH Mobile and Telekom Srpske will facilitate broadband connectivity in the country to a greater extent than is common elsewhere in Europe.

Although a number of fixed-line operators offer services the market is dominated by the three incumbent operators, which hold a combined market share of 99%. All three incumbents are subject to specific obligations designed to improve competition.

Internet services are available through the incumbents and alternative operators. Internet usage in Bosnia-Herzegovina is showing signs of significant growth on the back of competition and the improved availability of services.

The three mobile network operators (MNOs), each affiliated with one of the incumbent fixed-line operators, provide near-national coverage. Their networks, being upgraded to support services based on HSPA technology; will in coming years support broadband in rural areas where fixed-line infrastructure is insufficient. In addition, mobile data and mobile broadband offers will provide future revenue growth given the limited potential of mobile voice services.

For detailed information, table of contents and pricing see:

Bosnia-Herzegovina – Telecoms, IP Networks, Digital Media and Forecasts

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Market consolidation in Norway sees TeliaSonera exit the broadband sector

Thursday, January 30th, 2014

In common with other Scandinavian countries, Norway has a sophisticated telecom market with high broadband and mobile penetration rates and a well developed digital TV sector. Although not a member of the European Union, its telecoms sector is synchronised with relevant EC legislation. Telenor and Tele2 are the dominant operators in all sectors, though there is increasing competition from new entrants. The report introduces the key elements of Norway’s telecom market, providing statistics and an overview of the regulatory environment, the fixed network operators and their services, and telecom infrastructure.

In the broadband sector a number of smaller operators and resellers compete against the main players Telenor and NextGenTel (sold to Telio in 2013). Mobile broadband has become a key development in recent years, with LTE networks among the most advanced in the world. The report profiles Norway’s fixed and wireless broadband markets, together with developments in related technologies such as Broadband Powerline, wireless broadband, and internet via satellite. It also provides broadband forecasting scenarios to 2012 and 2020, and assesses the strategies of the main players.

Norway’s small but sophisticated broadcasting market became all-digital by the end of 2009. The main operators have focussed on upgrading fixed-line networks to ADSL2+ and VDSL2 in recent years, providing a solid infrastructure for delivering bundled services.

The mobile market is dominated by the triopoly of Telenor Mobile, TeliaSonera’s NetCom and the new player Mobile Norway. Services from these operators are supplemented by those from a growing number of MVNOs. A new entrant, backed by, secured spectrum at the December 2013 auction. The market is well advanced in LTE/4G developments, with both Telenor and NetCom spearheading networks in the region. Mobile Norway, a joint venture now controlled by Tele2, also adds to the competitive mix. Nordisk Mobiltelefon, recovered from its bankruptcy in early 2009, operates a 3G network in the 450MHz band. The report profiles the mobile voice and data market, providing statistics on the main operators, a review of the key regulatory issues, and a snapshot of the consumer market for services such as SMS, mobile TV and mobile broadband.

For detailed information, table of contents and pricing see:

Norway – Telecoms, IP Networks, Digital Media and Forecasts

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Swisscom launches 1Gb/s FttP service, plans to extend fibre to one million premises by 2015

Wednesday, January 29th, 2014

Switzerland currently has the highest broadband penetration rates in the world. It also has a competitive mobile market served by a triopoly of international players. The country’s mountainous topography helped to establish a number of cable networks, and although in recent years DSL became the preferred means for accessing broadband and bundled services the platform’s dominance is being eroded by the rapidly emerging fibre-optic sector, spearheaded by Swisscom and a number of regional utility companies. Although not a member of the EU, the country’s economic integration has meant that its telecom market deregulation has followed the EU’s liberalisation framework, including the recent regulations on international voice roaming. This report presents a statistical profile of Switzerland’s fixed network, ass assessing the regulatory environment and noting the status of local loop unbundling as well as the provision of broadband as a universal service. It also evaluates the strategies and performance of major service providers Swisscom, UPC Cablecom and Sunrise, and looks ahead to market developments in coming years.

In the broadband sector, UPC Cablecom’s extension of 100Mb/s services since 2010 has spurred Swisscom to intensify its VDSL network rollout as well as invest more fulsomely in its national fibre network in a bid to remain competitive. To this end, Swisscom has set aside for fibre networks a significant proportion of its planned CHF8 billion infrastructure investment to 2015. Much of this has been facilitated by cooperative deals struck with regional utilities. The report profiles the main players in the DSL, cable, fibre and wireless sectors, detailing technological developments for the provision of bundled services. It also provides subscriber forecasts to 2020 and examines regulatory issues surrounding municipal fibre, legislation providing for local loop unbundling, and the provision of broadband as a universal service.

Switzerland’s digital TV infrastructure supports one of Europe’s more developed markets for converged media. Many areas of the country have switched from analogue to digital TV transmission, paving the way for digital dividend spectrum to be used for other services including mobile TV and mobile broadband.

The mobile market has undergone considerable change in recent years, with two of the three mobile network operators changing ownership. The second player Sunrise, having had its merger with Orange blocked by regulatory authorities, was acquired by a private equity firm and has since bought up two of the main MVNOs in the market. Mobile penetration is on a par with the European average while mobile data use among consumers has increased rapidly. Operators have upgraded their networks with high-end mobile technologies in a bid to encourage consumer use of mobile data services, thus providing some stability to otherwise declining ARPU. The regulator has encouraged operators to collaborate on a shared LTE network, so reducing investment costs, while all MNOs had launched commercial LTE services by mid-2013. In addition, GSM spectrum has been allocated for 3G use, thus enabling network operators to extend their 3G reach. A range of spectrum bands auctioned in 2012 has further enhanced operator abilities to improve mobile broadband offerings. Mobile TV has also progressed, with Swisscom Broadcast having been awarded a national mobile TV licence using the DVB-H standard.

For detailed information, table of contents and pricing see:

Switzerland – Telecoms, IP Networks, Digital Media and Forecast

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The future of Fixed-Wireless in Africa

Tuesday, January 28th, 2014

Fixed-wireless systems were once hailed as the solution to Africa’s lack of fixed telephone lines. Why then have these services remained stuck in a niche market, and what can operators do to revive their business?

The concept makes perfect sense: a wireless base station can be deployed much faster and cheaper than running hundreds of copper lines to each dwelling in the area. The fixed-wireless technology of choice that emerged about 15 years ago was CDMA-2000. Available in frequency bands such as 450MHz and 800MHz, it offered superior area coverage compared with GSM 900/1800 mobile systems and significantly lower capex for a wide-area deployment. For a while, the EV-DO high-speed data variety of CDMA-2000 was even the fastest third-generation (3G) broadband technology widely deployed in Africa, supporting up to 3Mb/s until HSPA-based mobile systems caught up with it.

Since CDMA-2000 supports full mobility, many subscribers were classified as mobile rather than fixed-wireless, in many cases against complaints from GSM mobile operators who claimed the CDMA operators were not licensed to provide mobile services. However, the inevitable ultimately prevailed and converged service- and technology-neutral licensing regimes in a growing number of African countries removed the distinction between fixed and mobile.

Still, CDMA continued to represent less than 5% of all mobile and wireless subscriptions in Africa. In the continent’s biggest market, Nigeria, the technology lost over half a million or 16% of its subscribers in the first nine months of 2013, while GSM mobile operators added almost nine million, or 8%, during the same period. The reasons for this are manifold: most CDMA networks do not provide nationwide coverage, handset options and international roaming are more limited, HSPA became available with higher data rates, and the GSM/HSPA operators simply already had the critical mass in terms of subscriber base and market power to dominate the sector.

Nigeria’s CDMA operators tried to compete by merging, by advertising their better quality of service (because their networks were not as congested as the GSM networks), and by offering very competitive pricing, but many who didn’t have the critical mass have gone out of business. However, the technology may have a future in the emerging market for machine-to-machine (M2M) connectivity.

WiMAX has been a similar story: initially a superior technology, coming from the wireless broadband domain rather than voice, it too tried to go mobile by evolving into the 802.16e ‘Mobile WiMAX’ standard, but it remained a niche market for the same reasons as CDMA-2000. However, WiMAX’s greater bandwidth capability has enabled some operators to make a business case out of triple-play services, bundling broadband internet access with VoIP telephony and IPTV/video on demand (VoD). It is also being used as a point-to-multipoint backhaul platform for mobile networks.

Some WiMAX networks became takeover targets for their frequency spectrum, which is also suitable for LTE, the fourth-generation (4G) mobile technology. Vodacom in South Africa, for example, bought a stake in wireless ISP iBurst when the country’s telecom regulator, ICASA, was not moving fast enough with spectrum allocations needed by the mobile networks to expand their broadband services. Vodacom sold the stake again when it was finally able to obtain its own spectrum licence. iBurst itself then moved on to migrate its WiMAX platform to LTE, not just in South Africa but also in other countries where it operates, as far afield as South Sudan, the world’s youngest independent nation. RCS, another WiMAX operator in South Sudan, is doing the same.

LTE for fixed-wireless applications may seem like technological overkill, especially in a place like South Sudan – “from nothing straight to 4G”, as iBurst’s CEO put it in an interview. But what are the alternatives?

  • CDMA-2000 does not support the speed broadband customers want in the long term, and further development of the technology is not taking place.
  • Even 3G technologies with all the bells and whistles such as Multi-Carrier and MIMO are struggling to cope with the ever-increasing demand for bandwidth-hungry applications in many markets.
  • WiMAX, considered a 4G technology, is converging with LTE – the two actually have many similarities.

The increased spectral efficiency of LTE compared with all previous technologies enables operators to squeeze more traffic into their available bandwidth, and to target a vast pool of potential customers who already own popular devices such as mobile smartphones and tablets. Never mind that strictly speaking it is not a fixed-wireless technology, economies of scale will eventually make it the cheapest option, even for legacy CDMA operators whose 800MHz or 450MHz spectrum is now highly desirable for cost-effective wide-area LTE deployments. Qualcomm has announced that chipsets supporting LTE at 450MHz will become available in February 2014.

Not to be forgotten as a fixed-wireless access technology though, is WiFi. With mobile networks struggling to meet capacity demand, more than half of all mobile data traffic is already offloaded to WiFi, including many developing markets. Airtel announced in 2013 that it will roll out tens of thousands of carrier-grade WiFi access points across its 17 operations in Africa, and possibly expand to more than 100,000 depending on the success of the initiative. Companies with an existing large WiFi footprint or access to a large number of sites may become interesting partners for mobile operators in the future.

For more information see: Africa country reports

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Online advertising – four key sectors

Tuesday, January 28th, 2014

There are four key online advertising categories including in-game advertising, social network advertising, on-line video advertising and search engine advertising.

The dynamic in-game advertising sector is growing quickly and is already a billion dollar industry worldwide. McDonald’s is one of the biggest buyers of real-time in-game advertising space in the US.

With online gaming now also being incorporated into social media (such as games based on virtual simulations available on Facebook, for example); in-game advertising has again caught the attention of advertisers. In 2013 a study by AppNext estimated around 10-30% of revenue for social game developers was generated by in-game advertising.

In 2014 ad spending on social networks will continue to grow as where there are large audiences – there is advertising. Between 2012 and 2013 average social network ad spending per user grew by just over 20% worldwide.

Online video advertising is also one of the key online advertising growth areas and Hulu was one of the first to have a successful online advertising model. Today it has hundreds of advertisers using the service and a growing number of users.

Finally there is search engine advertising which provides direct accountability for marketing dollars spent. As mass audiences are fragmenting, search advertising enables organisations to become less reliant on traditional advertising.

For related information, see separate report: Global Digital Media – Advertising and Marketing in the Digital Age.

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