Archive for September, 2015

Asia quietly expands broadband as fibre replaces copper infrastructure.

Wednesday, September 30th, 2015

Providing a solid foundation for the roll-out of broadband access across Asia, fixed broadband services continue to grow at a steady, not spectacular, rate. In the process, fixed broadband provides online access for hundreds of millions of households and businesses throughout the region. The big change in this segment of the market has been the transition to new and expanding fibre networks. Whilst National Broadband Networks (NBNs) have come in a variety of shapes and sizes they are very much a characteristic of the more developed markets. The construction of new NBNs is also boosting the presence of fibre across those markets that have adopted for a national approach. In the meantime, Asia could claim to be the global leader in the rollout of FttP. Coming into 2015, it had 140 million fibre subscribers, representing around 75% of the total world fibre segment.

Whilst it is always tricky to choose a market that is ‘typical’ of the region, one market that has long been a measure of where Asia is heading is Singapore. Singapore’s fixed broadband market has a dominant presence in this island state where an improbable household penetration of 107% was being claimed in May 2015. (For more information on Singapore, see chapter 5.) Other strong markets in terms of household penetration include South Korea (96%) and Hong Kong (92%). A middle-ranked country, Malaysia has also made rapid progress in recent years and reported 70% household penetration for broadband access as at March 2015.

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Competition sees mobile penetration pass 200% in Maldives

Tuesday, September 29th, 2015

The Maldives has a small population of slightly more than 350,000. By mid-2015 its total mobile subscriber base had passed 700,000 and mobile penetration had exceeded 200%. Most importantly, on the back of this mobile network it had a rapidly expanding mobile broadband capability, with 3G, 3G+ and, more recently, 4G. These mobile options were additional to the small but important range of fixed broadband services, mainly DSL-based. At the same time, the number of fixed telephone lines (including payphones) was around 22,500.

Providing good communications for the Maldives has for a long time been paramount, with its relatively small population living on many islands across the archipelago (over 1,000 islands of which around 200 are inhabited). The nation can claim to have met this challenge with considerable success. It now prides itself on having built one of the most advanced telecommunications systems in the region. With the country’s well-developed national network, the capital Malé is particularly well served, as are the tourist resort islands; this was further enhanced by the provision of a submarine cable connection to Sri Lanka back in 2005; at the same time the opportunity has been taken to provide undersea links between the main atolls, thereby substantially strengthening the domestic connectivity. And a second submarine cable linked the archipelago to India in 2006.

Efficient telecommunications services have been established to all inhabited islands by the national telco, Dhiraagu. Despite having been criticised in the early stages of development for its high tariff structure whilst operating as a monopoly provider, the company has played an undeniably important role in building networks and delivering telephone services across the archipelago. Dhiraagu’s shareholding was opened to public investment in late 2011 when an IPO saw the government sell off some of its stake. In a somewhat surprising move, Bahrain’s Batelco subsequently acquired the whole of C&W Communications’ 52% stake in Dhiraagu.

A second mobile licence was issued in due course, the new operator Wataniya Telecom becoming operational in 2006. Wataniya was acquired and rebranded Ooredoo in 2013.

Despite a slow start to the opening up of the market, the introduction of a level of competition quickly saw a boom in the country’s telecom sector, especially the mobile segment. By 2015 Ooredoo had 300,000 mobile subscribers or around 45% of the total market. At the same time the incumbent Dhiraagu was also continuing to vigorously develop its mobile subscriber base, improving the quality and extending its product range. The market’s attention was shifting to new generation offerings. Both operators had launched 3G and higher services and the take up rate for these new service offerings was particularly strong. There were also moves into 4G/LTE. Not surprisingly, the growth of mobile broadband services has been running hot.

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

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A great city is much more than a smart city

Tuesday, September 29th, 2015

There is an undeniable move to the city, both in the developing world and in the developed economies. In my smart city work I, of course, often talk about the ICT tools that can assist in managing these developments, but what makes working with smart city concepts so interesting is that by looking at them you become involved in so many different aspects of city life. And there are so many different disciplines involved in this.

Perhaps some of the most fascinating ones are architecture and town planning.

So what makes a city attractive?

Certainly there are the economic factors, since jobs and often quality jobs are more readily available in cities. But there is far more. A city – especially one within the developed economies – will have to offer more than that. It needs to be lively and liveable, interesting, to create a wow element and interesting spaces, to excite people. It needs to have interesting architecture, offer romantic escapes, lots of greenery – the list is very long.

This is why cities such as London, New York, Chicago, Portland, Sydney, Rio de Janiero, Amsterdam, Shanghai, to name just a few, are so appealing to people.

On the one hand it is the city centre that attracts, and that consists of a finite space, often with ageing infrastructure. On the other hand, it is the satellite spaces – or cities within cities – like Brooklyn in New York and Westminster in London that are of interest.  These, as well as other cities such as Glasgow, Rotterdam and Newcastle in Australia, have used old and dilapidated industrial areas to create a new smart city environment that contains all the elements mentioned above that are needed to make them attractive. The High Line in New York, Darling Harbour and Barangaroo in Sydney, South Bank in Brisbane and East End in London are all developments that should be mentioned as great examples in this respect; and it will be interesting to see if Parramatta in Sydney will be able to follow these examples, as it is currently undergoing reinvention.

What needs to be avoided, however, is for a city to become merely a place of scattered ‘attractions’. Unfortunately this is what has happened in many of the European cities – cities that originally had a unified character (often within the old city walls) where everything was combined – life, living, business, entertainment, artists, impressive architecture and so on. With the growth of population in the 19th and 20th centuries many of these cities have been ruined due to a lack of understanding of town planning and open spaces,  incorrect use of boulevards, and in the 20th century often appalling and totally unimaginative architecture (think the 1960s and 1970s). As a result there is now a scattering of business activities, monuments, architecture and living areas – no wow elements, no attractive, interesting spaces, and no coherence at all.

The fact that we are missing this unity and excitement is clear when we look at some smaller cities that have been successful in maintaining that (medieval) unity. They are among the most popular to live in and at the same time they are some of the best tourist destinations in the world. So we can learn a lot from the medieval cities if we look at the economic, social and entertainment environment they offered.

Technology can also assist in bringing some of that unity back. With a quadrupling of the population within living memory there can be no return to the cosy medieval city (attractive despite the inevitable filth, extreme poverty, cramped living conditions and so on). Smart transport, smart parking and smart use of spaces are essential factors in renewing that cohesive framework; and the use of fibre-to-home and mobile broadband networks that can deliver e-health, e-education and high quality e-entertainment can help to bring a level of cohesiveness back in the city.

Using the sharing economy in relation to services, jobs, spaces, homes and businesses is another element that can be looked at, especially given the massive changes that have been introduced by the digital, sharing, networking economy. Fewer jobs are now being offered by the large organisations – many more people are becoming involved in self-employment. A creative and smart city is the ideal place for this type of economic growth, bringing that work/living balance back to the city. In this context, the whole notion of ‘labour’ will be revaluated as well.

At the same time the city centres built either in the Middle Ages or one or two hundred years ago now have to cope with a gigantic influx of people who work there, live there, look for entertainment there, or visit as tourists. This requires a much smarter energy, telecoms, water, waste and transport approach. Smartphone apps to communicate with the people, guide them around and provide them with information and services also play a key role in this; it is often said that the smartest city is the one with the smartest apps.

It is good to see that the development of a great city goes hand-in-hand with the development of a smart city.

Paul Budde

See also:

Global Smart Infrastructure – Smart Cities and Smart Communities – Trends and Insights

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The NBN moving towards 2016 – an update on where we are

Tuesday, September 29th, 2015

Between 2009 and 2012, the NBN company designed the architecture for a national FttH network. Legislation and contracts were completed in 2012 and shortly afterwards the rollout started, based on a ‘rolling’ three year plan. The election of the Coalition government in 2013 resulted in a political review. As a result the FttH plan was abandoned and instead a so-called multi-mix technology (MTM) solution was introduced. This will see the continuing use of both the copper and the HFC networks.

However the government had to honour existing contracts that had been signed under the previous government, including the initial three years of the FttH rollout. It is this rollout that is saving the NBN at the moment as it is the only part of the project that is in full swing.

Under the new scheme, FttH will connect 26% of premises by 2020, while a further 44% will be served by FttN and the remaining 30% of it will receive services via existing HFC networks. Using this approach, the government anticipated that 91% of premises connected to fixed-line infrastructure would receive 50Mb/s by 2020.

This means a lot of hard work for the NBN company (their official name changed to NBN in 2015 but for practical reasons we will refer to them as NBN Co) as the rest of the project has hardly started. As we predicted when the government changed the plans for the NBN, this would take, not the six months indicated by the minister, but at least 2-3 years. So in all we have lost at least another two years. During that time the OPEX costs of the company continued, as well as significant extra costs in political reviews, consultancy reports, new designs, pilots and so on – all of these costs eating into a limited budget that, in the case of government funds, will start to run out in 18 months’ time.

On top of that NBN Co also faces a skill shortage, so it has plenty of headaches ahead.

In April 2014 the government formally opted for the NBN to provide a multi-technology mix rather than be predominantly FttH. Under the new scheme, FttH will connect 26% of premises by 2020, while a further 44% will be served by FttN – using the VDSL technology – and the remaining 30% of will receive services via existing HFC networks. Using this approach, the government anticipated that 91% of premises connected to fixed-line infrastructure would receive 50Mb/s by 2020. The capital cost was put at $29.5 billion (US$27.4 billion).

NBN Co was also instructed to focus on serviceable premises as a performance metric, as opposed to the number of premises passed, according to which a large number of premises had been passed by fibre but could not in practice receive services. NBN Co was serving 6,000 brownfield premises per week by mid-2014.

In December 2014 Telstra and Optus signed agreements with NBC Co setting out the terms under which their copper networks will be incorporated within the NBN. When regions are declared ready for service Telstra is obliged to cease advertising new retail and wholesale services, and will have an 18-month period in which its customers will be migrated to the NBN. For Optus, its HFC infrastructure will be retained in areas where it provides the best means to secure broadband for premises in the region.

The number of premises with an active NBN service across all access technologies has increased from 70,100 in June 2013, to 130,700 at the end of 2013; 156,000 in June 2014; and 870,000 by April 2015. NBN Co planned to connect over 3.1 million premises by September 2016.

The third element of the NBN is the HFC network. A bit of background here …..

The main cable network operators Telstra and Optus have upgraded their cable networks with DOCSIS 3.0 technology in recent years, and so provide data at up to 100Mb/s across much of their networks. This investment has helped to enable them to meet consumer demand for faster broadband services. However these upgrades are interim measures: in Europe, HFC networks commonly deliver data at 200MB/s or higher, and there is considerable scope for Australian players to make additional upgrades. The rollout of the NBN under the December 2013 strategic review has placed a greater emphasis on existing hybrid fibre coax plant being part of the national broadband plan. In December 2014 the revised NBN agreement saw Telstra’s HFC network and elements of Optus’s HFC infrastructure deployed as part of the NBN, thus reducing the overall cost of the NBN rollout, which aims to reach some 3.6 million premises by June 2016. In April 2015 NBN Co revealed plans to trial new HFC technologies in several suburbs of northern NSW and southern Queensland by mid-year, with a potential to incorporate DOCSIS 3.1 technology within the NBN’s multi-technology mix from 2017.

The other main cable player is TransACT, operating a hybrid fibre coax network in Ballarat, Geelong and Mildura. Since the acquisition of TransACT by iiNet in late 2011, these networks have been integrated in the latter company’s overall infrastructure plans.

At the beginning of 2015 there are 966,000 cable broadband subscribers, accounting for less than 8% of the total broadband market in Australia. However, most of these subscribers are high-end users providing relatively high ARPU for the cablecos.

When Australia began the discussion on its broadband future back in 2005 a key reason to warrant national attention and national investment was that Australia had dropped to around the 25th position on the international level that measured national broadband services. In particular suburban, regional and rural broadband was very poor. Telstra had a stranglehold on the market and there was little indication that this situation would change any time soon without government intervention.

When the NBN was launched in 2009 one of the goals was to get the country into the top ten of the international ladder. Now, in 2015, we have dropped to the 42nd position. This drop is mainly due to the ongoing delays in the rollout of the project, because of the partisan political situation in the country. With the rest of the world now moving clearly towards FttH Australia is set to linger on at the bottom of the international ladder for many years to come. Yes, the situation will most certainly improve, but there is no chance of the country ending up in the top ten in the near future.

Does this matter? We would say yes, as internationally high-speed broadband is seen as an important economic development. It is essential in order to increase productivity, to become more competitive and to develop new high-value jobs. Given the digital disruption that is taking place because of technological changes, we need to make sure that the Australian society and economy is ready and able to transform into one that facilitates the new sharing and networking economy models.

After the mining boom it is clear that Australia needs to diversify and that our very poor level of productivity needs to be improved, and the digital economy is key in that. If we want to be competitive in our Asian and globalised markets we need to lift our digital profile among our trading partners, and the NBN is key in that. We shouldn’t stop at the already out-of-date multi-mix technologies – these should be extended as soon as possible to a fully-blown FttH network, in line with what other developed nations are building.

For detailed information, table of contents and pricing see: Australia – The National Broadband Network – Moving into 2016

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Why we need gigabit networks

Monday, September 28th, 2015

There is currently a great deal of debate regarding the need for gigabit networks. There are still a lot of voices, often led by conservative political and media people, who argue that hardly anyone needs such networks. Unfortunately for them, however, their arguments are totally flawed. And who are they, anyway, to set the tone for such new infrastructure.

 Isn’t necessity the mother of invention? We didn’t need bikes, typewriters, cars, faxes, copiers, PCs or smartphones until we (or our ancestors) saw them and said, ‘Gotta have that’. Surely it is better to anticipate progress than to deny it, and an infrastructure based on FttH is one of those safe bets.

The problem is that broadband speed is absolutely the wrong debate. The quality of the broadband network has very little to do with speed. I am sure that some of you are yawning as I repeat the elements that comprise a quality national broadband network: high capacity, high reliability, low latency, ubiquity, user affordability to services such as e-health, e-education and entertainment, security and privacy. You will see that in the above list, speed is conspicuous by its absence.

However, if we do want to talk speeds it is important to remember the following:

  • downstream speeds = entertainment
  • upstream speeds = economic development

Yet I have seldom heard those conservative voice allude to this interpretation of a broadband network.

If we follow the logic of the FttH deniers there would be no need to build 4-lane freeways, as nobody drives 200km on them, even though it is something that would easily be possible.

Similarly we don’t build broadband networks for speed; we build them for capacity, safety, reliability, etc. Have you ever heard a road engineer or the Minister for Transport talk about road speeds when they develop their road infrastructure plans? Certainly it would be one of the considerations, but it is of such little importance that it is never the subject of debate, at least never to the extent that politicians debate broadband speeds.

Or, according to that same logic, why build cars with a capacity of 240km/hour? I will never ever drive that fast, but when I need to overtake I very much appreciate a bit of extra speed.

A final example – if you look at the amps panel in your house it is most unlikely that you would ever reach that level of usage, but having that extra capacity supplies a degree of electricity quality and reliability that will come in handy during those ‘5%’ situations when you actually do need a high level of capacity.

So, back to broadband network …… very few people, if any, will ever make continual use of gigabit networks. However it is very handy if you do need extremely high-speed access – in that 5% of cases. And it will also be appreciated in times of high traffic, in the same way that we appreciate 4-lane freeways during peak hour traffic.

As only fibre networks will be able to deliver such a quality yet conservative politicians and their media seldom talk about the need for such networks. But it is being talked about in places where broadband is not such a politicised issue, and several cities in the USA are building gigabit networks for that purpose. These will truly be the smart cities of the future. Interestingly we now also see incumbent telcos building such networks in Asia, Europe and North America.

Finally, I am certainly not arguing that all of this should be made to users free of charge. What I am saying is that we need to build the infrastructure in such a way that these qualities are available. In some cases this will be for the benefit of the country (economy, healthcare, education, etc). In other circumstances it would simply be a commercial consideration – if you want high capacity you must be prepared to pay for it. And there is a market for that. As one of my colleagues Andrew Odlyzko noted: ‘The primary purpose of infrastructure is to satisfy human impatience’.

Since human impatience has no limits, nor does the size of the objects we might like to transmit, there is no absolute limit on the speeds that are likely to be wanted.

Doc Searls added to this: ‘Impatience concerns time. We are born with an unknown sum of it, and have to spend it all before we die.’

Paul Budde

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