Archive for November, 2014

Strong growth in FttP networks supporting bundled services in Spain

Saturday, November 29th, 2014

The value of Spain’s telecom market has contracted since the high of 2007, and it is likely to fall further during the next two years at least as consumers adjust to high unemployment, stagnant GDP growth and a tightening of domestic budgets. Although investment has also suffered, there is considerable activity in the mobile and fibre broadband sectors, which are propping up the sector overall. Spain’s market for bundled services has grown alongside considerable investment in faster IP networks, largely based on ADSL2+ and VDSL but increasingly focussed on FttP. Cable operators as well as Telefónica are at the forefront of the convergence markets, having launched 200Mb/s services to provide multiple-channel IPTV as well as VoD. Pay TV has seen considerable changes in recent years following the merger of Telefónica’s Via Digital with Canal Satélite Digital, and the acquisition by Telefónica of Canal Plus, which has given the incumbent considerable market dominance, with about three-quarters of the pay-TV subscriber base.

Spain has one of the largest mobile markets in Europe, with effective competition from four MNOs and a growing number of resellers. This competition, together with regulated roaming and MTRs, has driven down the cost of mobile calls in recent years. The market has seen great changes, including the auction of spectrum in a range of bands for mobile data use. Spectrum in the 800MHz band will become available for operators from January 2015.

The strong growth in the number of fibre broadband connections is beginning to tell on the sector’s dynamics, with fibre becoming one of the strongest growth sectors. Although several operators are investing in fibre, Telefónica is by far the dominant player. Operators are continuing to invest in their own networks, as well as networks being built through sharing arrangements.

A new report from BuddeComm introduces the key aspects of the Spanish telecom market, providing statistics on the fixed-network services sector, and profiling the main players and their strategies to meet an increasingly competitive environment. It assesses the main regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection. It also provides statistics and market analyses on the mobile sector, including an assessment of regulatory issues, a profile of the major providers, and an analysis of mobile data services such as SMS, MMS, i-mode, HSPA, LTE and mobile TV. The fixed and wireless broadband markets are reviewed, together with developments in related technologies such as fibre, and broadband powerline.

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

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Luxembourg’s Telecom revenue remains stable thanks to strong broadband sector

Friday, November 28th, 2014

Luxembourg has one of the smallest telecom markets in Europe, greatly supported by an influx of workers and migrants from larger neighbouring countries. Luxembourg City is also one of the political centres of the European Union, and so attracts affluent migrant employees.

Overall revenue from electronic communications services bucked the downward trend seen in many other European markets, growing slightly in 2012 with similar growth anticipated into 2014. Much of this growth is due to the strong mobile services sector while revenue from fixed-line telephony continued to fall. Steady growth is expected during the next few years at least as the Duchy’s upgraded network infrastructure attracts international interest from companies seeking high-end connectivity.

Total investment in fixed-line infrastructure has also risen steadily, and is expected to continue to do so for the next five year as operators migrate from copper to FttP and FttC. Equally, there is considerable investment in mobile networks to provide mobile broadband connectivity to subscribers based on HSPA and LTE technologies, though the amount invested in 2012 fell year-on-year.

Investment has been maintained in spite of the impact of the financial crisis and by the effects of Luxembourg’s general economic slump, which saw GDP fall in 2009, largely due to the knock-on effects of the poor economic performances of the Duchy’s neighbouring trading partners. Nevertheless, GDP per capita, at about US$116,000, provides one of the highest disposable incomes in Europe to maintain consumer spend on telecom services.

The incumbent POST Telecom (formerly P&T Luxembourg) remains the dominant player in all market sectors, despite the telecoms market having been liberalised in 1998. Regulatory measures during the last few years have encouraged broadband competition through local loop unbundling, yet the proportion of unbundled lines remains relatively low. As yet, there are few broadband subscribers on fibre networks but this is set to change as the country migrates to FttP architecture. POST Telecom has set aside €500 million to build its NGN, an open access platform which should allow for effective competition though high wholesale access prices may need to be addressed by the regulator.

In common with most other markets, revenue from the fixed line sector has been falling steadily. Indeed since 2005 income generated by mobile telecoms has far exceeded that from of fixed lines, while revenue from the broadband sector has propped up total revenue.

High mobile penetration has slowed subscriber growth in the mobile market since 2005. Partly as a result of fixed-mobile substitution, Luxembourg has one of the lowest fixed-line densities in Europe, at about 50%. As a consequence, revenue from the fixed line sector has been falling steadily as consumers migrate to mobile-only solutions. In 2005 income generated by mobile telecommunications exceeded those of fixed lines for the first time.

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

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Slow sector revenue growth bolstered by Telstra and 2nd tier operators

Thursday, November 27th, 2014

BuddeComm estimates that the overall telecoms services revenue will have grown only marginally in 2014, reaching about $42.9 billion. This will be largely due to the effects of continuing depressed revenue from Vodafone and Optus, offset by a resurgent Telstra and by a host of 2nd tier players which reported strong revenue growth in FY2014. These players in general anticipate reporting further revenue gains for FY2015. Competition among them, compounded by consumer expectations, continue to place pressure on pricing into 2015, particularly in the mobile voice and mobile data segments. Overall revenue growth into 2016 is expected to remain stable at about 1-1.5% annually.

Telstra retains its dominance in the Australian telecom market, enjoying a 61% market share of revenue. Its strong position has been aided by the poor strategic direction taken by Optus and Vodafone during the last two to three years, as well as by its own astute decisions undertaken recently. The sale of the company’s interests in some international businesses secured considerable profits which have enabled it to invest in new enterprises showcasing its growing interest in areas such as OTT services and healthcare.

Broadband continues to prosper as customers switch to mobile solutions

Australia’s broadband market has slowed since mid-2000s, reflecting higher penetration among consumers. The rapid growth in the number of wireless mobile broadband subscribers has maintained overall growth in the market in recent years, driven by smartphones and tablets. In 2014 the number of broadband subscribers is expected to have grown by about 2-3%, year-on-year. A key concern moving forward is how far operators should invest in DSLAM infrastructure. With the multi-technology mix for the NBN emphasising a combination of FttN and HFC architecture, the transition from DSL to fibre-based infrastructure will be on a far smaller scale than was envisaged only a year ago.

There has also been resurgent interest in WiFi, with Telstra in mid-2014 announcing plans to invest more than $100 million to build a network of some two million hotspots across the nation within five years. This is complemented by a growing number of municipal-backed WiFi zones.

In 2014 the residential broadband market is expected to be worth about $19.2 billion, a slight increase on 2013. With almost 90% of Australian households having home internet access by the tail-end of 2014, the sector is now more focussed on multiple broadband connections via both wired and wireless service providers.

The 2nd tier market

Developments in this market have been dominated by industry consolidation, a process likely to continue over coming years. Size and reach have proven to be crucial for operators to flourish in a market dominated by only a few players, and with progress with the NBN set to be ramped up following a management overhaul.

Mergers, acquisitions and sales have resulted in significant changes in revenue for some players. AAPT, acquired from Telecom New Zealand by TPG in February 2014, shows indications that declining revenue over the last few years will provide positive growth into 2015. In general terms, most operators excepting AAPT performed well in FY2014, and look set to report strong financial gains into FY2015 as they take advantage of their assets and skill in providing cloud and data centre services to the corporate and government sectors.

Mobile market

Overall mobile services revenue growth by MNOs over the last few years has slowed to about 1%, though stronger growth from Telstra, at about 5% in FY2014, has offset declines from both Optus and Vodafone. Stagnant revenue from Optus should be expected from these last two operators into 2015, though towards the end of 2014 Vodafone pledged its determination to fight back and improve its market share through customer acquisitions. Significant investment in mobile networks, despite opting not to secure spectrum in the 700MHz band at auction, should provide customers with greater confidence in the company’s network capabilities.

The number of mobile subscribers continues to grow steadily, and by late 2014 mobile penetration had approached 132%. While subscriber growth is likely to continue in the next few years, this will slow in line with higher penetration, being about 2% for 2014 and into 2015.

Telstra remains the market leader with more than 16 million subscribers, while Optus has around 9.4 million and Vodafone now has fewer than five million, compared to about 7.6 million in 2010, before network failures caused customers to churn to other providers.

The release of spectrum for LTE use in early 2015 will go far to enabling Telstra and Optus to deliver their promised 98% population coverage with LTE by the end of 2016. Vodafone has concentrated on refarming its 800MHz concessions, lessening its spectrum disadvantage. Increases in capital expenditure by these MNOs will be required in coming years before notably gains in revenue can be realised.

A new BuddeComm report provides data and analyses on Australia’s telecom sector, including a wealth of statistics relating to various market segments. The report assesses overall market dynamics, the key financial and operating performance of the principal players, and developments in the mobile, fixed-line and broadband sectors. These sectors continue to be affected by changing consumer use of services, the widespread deployment of LTE technologies, and the new market realities resulting from the review of the NBN under which the preferred multi-technology architecture has rekindled investment in HFC plant and existing DSL infrastructure.

For detailed information, table of contents and pricing see: Australia – Telecoms Industry – Statistics and Forecasts

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Nepal’s telecom sector sees growth pick up, with mobile internet access increasing rapidly

Thursday, November 27th, 2014

Efforts to expand the telecom sector in Nepal have met with many challenges. Nepal’s mountainous topography has made it extremely difficult to develop its telecommunications infrastructure. Furthermore, Nepal had been struggling under an adverse economic situation caused largely by political instability. Over the years, acts of terrorism and the activity of the Maoist rebels operating throughout the country have taken their toll on the telecom network – both directly and indirectly. Of late, it has been the tardiness of the government in addressing market reforms and developing national policies that has been weighing on the overall development of the telecom sector.

The country has certainly been on a road to recovery from the long years of civil unrest. Nepal’s transition to a considerably more stable nation had begun by 2007. The country’s first elections for over nine years were held in 2008; a clear victory going to the Maoists who were as a result to become a party of government. Although the way forward was not necessarily going to be smooth, with this remarkable turnaround following years of great difficulty, the scene was set to build on the considerable progress already made in recent times in meeting the growing demand for telephone services. Not only has there been strong subscriber growth, especially in the mobile sector, but there was evidence of a clear vision in the sector, including putting a reform process in place and planning for the building of necessary telecommunications infrastructure. Most importantly, the Ministry of Information and Communications (MoIC) and the telecom regulator, the National Telecommunications Authority (NTA), both became very active in the performance of their respective roles. However, as already noted, by 2013/2014 there was evident concern that some of the momentum of the reform process had been lost.

The Nepal Telecom Company, the state-owned incumbent operator, has been the major builder and operator of the national telecom network. For a long time it held a monopoly over all aspects of telecom in the country. With the opening up of the market, Nepal Telecom lost its monopoly on basic telecom services a little more than a decade ago with the licensing of United Telecom Ltd (UTL). It subsequently surrendered its monopoly on mobile services with the licensing of Spice Nepal Pvt Ltd, later known as Ncell, in 2004. The period after 2006 saw notably strong subscriber growth, especially in the mobile segment of the market. Mobile penetration went from 5% in 2007 to more than 70% in 2014.

Despite all the energy that has gone into the sector, there was still a significant disparity between the high coverage levels in the cities and the coverage available in the underdeveloped rural regions. Progress on providing some minimum access had been good, however.

For detailed information, table of contents and pricing see: Nepal – Telecoms, Mobile, Internet and Forecasts

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Fibre-to-the-Home in Asia-Pacific reaches 100 million milestone

Wednesday, November 26th, 2014

Growth of content and demand for bandwidth is credited with helping to boost take-up of the Fibre-to-the-Home (FttH) also known as Fibre-to-the-Premise (FttP) technology

New figures have revealed that 100 million people in the Asia-Pacific region are now subscribed to FttH) services.

The major milestone, shown by analyst house Ovum’s latest statistics, was announced by the FttH Council Asia-Pacific, which promotes and encourages the adoption of fibre technologies.

Work by the council, including the sharing of accurate and unbiased information about regulatory policies, standards and best practice, is credited as contributing to the successful take up of FttH services in the region.

According to the researchers, Asia-Pacific is leading the world in FttH subscribers and this is a major milestone which represents a tremendous financial investment and a strong understanding of the future of networking infrastructure. It reflects the growth of content and the continuous demand for content.

This region also reflects a wide range of deployment models – from strong government goals to innovative wholesale-retail models to crossing the digital divide with support for e-health and e-education in rural regions. In addition this major milestone was achieved through innovative solutions from fibre cabling suppliers along with component and equipment vendors.

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