Archive for April, 2015

External analysis of the Australian Fibre-to-the-Home (FttH) architecture

Thursday, April 30th, 2015

Analysis by Herman Wagter, Chief Architect of CityNet Amsterdam:

The recently published architecture of the Australian FttH network shows an intelligent and interesting approach (courtesy Peter Ferris for explaining some details). The first observation is that even in a vast country like Australia people live closely huddled on a small part of the land.

About 67% of the population lives in the top 50 urban areas; if you include the major rural areas you can reach 85% of the addresses in 1.5% of the land. So it makes sense to provide 93% of the addresses with FttH and the remaining with radio (5%) and satellite (2%).

For the 90% which will get FttH they have chosen a surprising combination of options in their architecture. The next-best-thing to full point-to-point in my opinion, full with potential to support different kinds of technologies and future upgrades if and when needed.

Let me focus on the interesting choices: over-provisioning in a point-to-point topology in the deepest part of the last mile, under-provisioning in the concentrated parts of the outside plant.

The basic building block of their architecture is a group of up to 200 addresses. A fibre local loop is deployed with 3 (!) fibres per address. In an aerial deployment 12 local drop fibre connectors (pre-terminated drop line, no splice needed) are made available on the poles per 4 addresses and used when and how required. The same approach is used for underground cabling. This setup will allow for layer 1 unbundling future expansion, support of point-to-point Ethernet to businesses, multiple ISPs to same address, support for 3G/wifi mobile broadband and so on.

All fibres for these 200 addresses concentrate in a Fibre Distribution Hub (FDH), a cabinet in the street or cleverly combined with other uses like a seat in the park. In the FDH the connections are made to either a splitter (for PON) or a single fibre (point-to-point) in ducts leading toward higher layers of the network. It is even foreseen to change the splitters for filters if WDM becomes financially viable.

Up to 16 FD’s are concentrated into a Fibre Serving Area Module (FSAM, max 3,200 addresses). The capacity in the concentration cabling initially deployed is enough to support PON as a technology to each home, plus some extra for businesses and other uses. Some sort of redundancy is built in by an interesting “dual-loop” structure by geographical separate paths in the connection of FDHs to FSAM location. If needed the capacity to one or more FDHs can be increased by deploying more cables in that path.

The FSAM is a planning construct initially but it allows also for future expansion. The number of addresses is ideally suited to be served by a prefab active equipment cabinet (know as Controlled Environment Vaults, or APOPs in the Netherlands), if needed. These CEVs bear a lot of resemblance to the prefab APOPs Reggefiber deploys outside city centres. They can be truck-rolled to a given location, placed within a day.

At the start FSAMs are just a passive concentration point.

Again some redundancy is introduced by geographical different routes for the cabling to the Fibre Access Node (FAN, equivalent to an exchange/central office), maximum size 76,800 locations/addresses.

It makes a lot of sense for the geography with lots of suburbia. The key is having space in the street for these FDH cabinets. Just install a lot of point-to-point fibre in the part where a lot of labour is required (you don’t want to redo that ever) and allow for all kinds of upgrades, options for expansion, unbundling locations, active equipment deeper into the network, as you see fit in the future.

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Game production in decline

Thursday, April 30th, 2015

The Australian video game industry is declining.. The industry employed 581 people at the end of June 2012, according to the latest figures from the Australia Bureau of Statistics, down from 1431 several years ago.

These businesses generated $89.4 million in revenue in 2012. That was down from $137 million in 2006-7.

During the year Australian developers produced 245  games and incurred $49.9 million in related production costs.

Games produced exclusively for consoles like Sony’s PlayStation or Microsoft’s Xbox incurred the highest average cost per production at $1.2 million.

By contrast, games developed exclusively for mobile and Web platforms had the lowest average cost per production at $74,000. These figures exclude titles developed simultaneously for multiple platforms, which incurred an average cost of $845,800 per production.

While games making has languished, the film and TV business has continued to flourish. The ABS survey also showed that income generated by film and video production businesses increased from $1.6 billion in 2006-07 to $2.2 billion in 2011-12.

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Hoyts stream

Thursday, April 30th, 2015

Cinema group Hoyts, aims to compete with Telstra and FOXTEL with a new movie streaming service called Hoyts Stream and is expected to launch in 2014. Hoyts would also rebrand its Oovie DVD kiosks in retail outlets, which will be renamed Hoyts Kiosk.

Hoyts would compete with online service Quickflix to get access to Hollywood movie content, as well as FOXTEL, Telstra’s BigPond movie services, Apple TV and Fetch TV.

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Thursday, April 30th, 2015

iSOFT is a listed firm in Australia which provides e-health solutions to both private and public sector healthcare provider organisations. In April 2011 the company was purchased by US-based IT company CSC.

The rise of next generation or Web 2.0 web services provides an opportunity for firms to utilise a more standardised tool set to develop e-health applications. This is critical given the IT environment for healthcare systems varies widely. iSOFT provides tools and support for systems integration projects.

The firm has extensive links via centres in India. It operates a product development centre in Chennai and a centre focussed on customer solutions in Hyderabad and employs over 1,000 IT staff. As such the firm is well placed to connect IT suppliers in India with customers in advanced economies such as Australia and is a good example of globalisation in professional services at work. The development of applications in India for e-health purposes in advanced economies is a key future driver of growth in their domestic IT sectors.

The firm is based on a 2007 merger between iSOFT in the UK and IBA Health in Australia and is now one of the largest providers of healthcare IT systems and services, listed on the ASX200 share market index in Australia. iSOFT is well placed to take advantage of increased spending on e-health systems as a fibre optic-based national broadband network is built connecting up a significant proportion of the premises in Australia (around 90% by 2019).

In 2008 the firm earned nearly $100 million before income tax and depreciation on revenue of around $360 million. This represents a near quadrupling of revenue from 2007 ($75 million). However growth has come at the expense of profit margins which fell around 15% between 2007 and 2008 to 27% as revenue surged. It remains to be seen whether the firm suffers further erosions to margins as revenues continue to improve.

It should be noted that the firm earns more than 50% of its revenue in the UK and a further 25% in continental Europe. While sales in Australia, New Zealand and Asia may hold up well in 2010/11, poor economic conditions may hamper the firm in Europe over the next couple of years.

While broader economic conditions may be poor in Europe until 2011, spending on e-health solutions is likely to be boosted as part of larger economic stimulus packages which many governments, including Australia, are currently enacting to offset the impact of recessionary conditions.

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Jumbuck Entertainment Ltd (Jumbuck)

Thursday, April 30th, 2015

Company overview

Jumbuck Entertainment Ltd (Jumbuck) is a provider of chat and dating messaging applications to wireless carriers. Founded in 1999, Jumbuck has agreements with over 100 leading global mobile carriers. It is listed on the ASX (code JMB).

Jumbuck maintains an increasingly popular suite of services that includes Power Chat, Fast Flirting, Chat Del Mundo, Chat do Mundo, Mobilove and MLove. Other services include general apps for the iPhone and company specific apps based at consumers such as the Pizza Hut app.

Jumbuck’s services are unique in that they connect carrier communities in different countries, forming a global community in which users can meet new people, chat with friends, hang out, establish a profile, share images and video, and form a list of friends.

In 2008 Jumbuck acquired Plutolife, a leading northern European PSMS-based flirting community with expertise in D2C mobile and a range of carriers and media partners.

Jumbuck previously owned Oztion Pty Ltd, the largest Australian-owned online auction community, which it sold in 2010. Jumbuck is headquartered in Melbourne, Australia with offices in Brazil, Germany, Norway, Ukraine, the United Kingdom and the United States.

In 2012 the company launched its Heroes platform in North America for sporting teams that allows team followers to interact with their team. The platform in 2012 launched the Rabo Direct Pro12 Rugby competition.

In mid-2012 Jumbuck Entertainment restructured its operations in a bid to reduce operating costs by 26%, resulting in about $2 million in annualised cost savings. The company at the time employed about 18 people in Australia.

Company key financial snapshots

In financial year 2009/10, the company reported its first loss since 2006/07. In 2010/11 it reported revenue decreases of 44% year-on-year and an NPAT loss more than 150% year-on-year.

In FY2013 revenue fell 44%, year-on-year. The decline was attributed to structural changes associated with carriers shifting from paying for data traffic to sharing end user revenues, to the development of premium SMS billing services to improve compliance with regulatory and carrier requirements, and to the stronger Australian dollar.

Year Revenue EBITDA EBIT Net profit/ loss
$ (million)
2009 19.134 5.110 4.078
2010 12.910 -1.030 -2.770 -2.460
2011 7.219 -6.730 -7.923 -6.197
2012 4.839 -6.044 -7.066 -6.587
2013 2.715 -8.603 -9.126 -9.137

(Source: BuddeComm based on company data)

Year EPS (cents)
2009 8.3
2010 -5.0
2011 -12.7
2012 -13.5
2013 -18.7

(Source: BuddeComm based on company data)

Location 2012 2013
Revenue ($ thousand)
Australia 507.69 806.93
Asia Pacific 105.28 83.69
Europe 1,654.59 920.77
US 1,388.22 594.83
Americas (other) 719.50 140.29

(Source: BuddeComm based on company data)

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