Archive for October, 2015

UAE, Qatar and Saudi Arabia leaders in FttH deployment in the Middle East

Saturday, October 31st, 2015

The broadband market in the UAE is one of the most advanced both regionally and globally. The UAE boasts the world’s highest penetration of Fibre-to-the-Home (FttH), ahead even of South Korea and Hong Kong. The country has been leading the Global FttH Ranking since 2012; in early 2015, estimated FttH penetration topped 70%. Both incumbent Etisalat and alternative provider du operate FttH networks – du in the Dubai free trade zones and Etisalat in the rest of the country. Besides FttH, other internet technologies available in the UAE include ADSL, cable modem, and mobile broadband.

Qatar embarked on its extensive FttH deployment program in 2012 and an independent operating company, Qatar National Broadband Network Company (QNBN) was appointed to operate the network and offer wholesale broadband capacity to both Ooredoo and Vodafone Qatar.

Saudi Arabia’s ICT market is the biggest in the Middle East in terms of capital value and volume of spending. The future is promising, with both government and businesses keen on keeping up to date with the latest telecom developments. Smart technologies, in particular, offer interesting opportunities for investors. The fixed broadband market is experiencing a major technology shift from ADSL to fibre, with STC expanding FTTH coverage to most urban centres, and another two companies – Go Telecom and Mobily – also offering FTTH services.

Kylie Wansink

Senior Analyst – Global and Middle East Markets

For related information, see separate reports:

United Arab Emirates – Broadband, Internet and Digital Media Market – Overview, Statistics and Forecasts;

Saudi Arabia – Telecoms, Mobile and Broadband;

Qatar – Telecoms, Mobile and Broadband.

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Our hi-tech Prime Minister moving towards smart government

Friday, October 30th, 2015

While I will forever remain critical of the second-rate NBN that we are getting and will continue to lobby for a first-class solution, I also believe that our new Prime Minister Malcolm Turnbull will be a driving force for social and economic transformation through the use of ICT. Putting aside our differing views on the NBN I do believe that, overall, this PM can take Australia forward.

I particularly like his comments on social and economic transformation and his support for smart cities, an area in which I am very heavily involved, as you might recall from my reports on recent meetings in discussion in Tokyo, Amsterdam, Barcelona, Milan and Kuala Lumpur, as well as with several local councils here in Australia.

I most certainly agree with what he is saying and as a matter of fact most of the issues he addresses I have been advocating for the last decade, and it is great to see such high-level support for these visions and strategies. I also believe the NBN will have a key role to play and I am waiting for the PM to acknowledge that. Whatever way you look at it the government is investing tens of billions of dollars in the NBN, so it had better be a keystone in his transformation policies.

It is great to see that he is set to put Australia back on the forward-looking map and this will stimulate organisations both in government and private industry, as well as individual entrepreneurs and business people, to be more innovative and to embark more seriously on the transformation processes that many in government and business will have to face.

There will not be a quick turnaround on many of the negative policies that were launched by the previous PM, but the initial comments and some of the early actions are a good omen. The PM has a massive task ahead but he can count on many allies ready to assist him with that. A smart government will be able to run more effectively and more efficiently and, as we can see in other parts of the digital economy, ‘smarts’ means big cost savings.

A good smart city/smart government example comes from my work with the United Nations. In one of the projects I have been working on with the Inter-American Development Bank (IADB) they recently reported that, through a well defined smart city process that allows citizens to participate in shaping the budget allocations, local tax revenue collection increases. In this way more funds are channelled to citizens’ top priority services, and as a result citizen satisfaction with council services is measurably higher.

So a smart government approach will lead to win-win situations.

Furthermore the IADB concluded that these desirable outcomes are at risk in a silo-based government structure, where there are too many other new civic initiatives competing with the introduction of this holistic process and where implementation of the process may not be adequately supported by training and technical assistance for the staff.

According to the Bank dedicating staff to the support of the process increases the likelihood of success. Contrary to popular thinking, grassroots community organising was not significant in this outcome.  The key factor in success is the robustness of the institutional setting. Without proper structures in place grassroots initiatives will not be able to take hold in any significant way. It looks as though the PM will be addressing issues such as this.

This will put a lot of pressure on him to get such processes underway. A decentralisation process using the assistance of smart cities would be highly recommended, but this will also have to include a transfer of political power towards the cities. For this to be successful city councils will have to be amalgamated into metropolises. Good examples here are Brisbane and the recent amalgamation of Lake Macquarie Council and Newcastle. A bad example is Sydney, where even after the amalgamations there will still be too many local councils involved in that metropolis.

I am revisiting my reports and discussions on smart cities to look at some of the issues that the PM will face moving the country forward.

While I do not suggest that all the PM’s problems will be solved in this way it will be much easier to solve the various financial (tax) and economic problems if they can be addressed from a smart holistic government approach.

Key high-level elements that are critical for a smart government moving forward include:

  • Creating a smart government (take down silos, adopt open government). ICT can help to create more horizontal structures, which are essential in the process of social and economic transformation.
  • Breaking down these silos requires leadership from the top (the PM has already indicated that he wants to get this message across to his colleagues and throughout the government departments).
  • Establishing a stakeholders group of community and industry leaders (business, healthcare, education, community services, transport, energy, telecoms, etc). These people will have to be champions of the cause.
  • Establishing a platform of businesses – they will need to implement the actual smart city services. Opening up more data sets will also increase business participation).
  • Engaging with the people of Australia. This won’t be too difficult for those people who are already digital natives, but it will be far more difficult to get the people on board who are going to be the losers in these transformation processes. Without equally good policies in place that include this section of the population the policies and strategies will still fail.

All of this will take many years to achieve but the PM can put the country on the right track, and hopefully with bipartisan support we can build on this.

With the right policies and strategies in place Australia can indeed look at some of the desirable outcomes the PM has already flagged – such as establishing its own Silicon Valley and attracting investment and new digital economy entrepreneurs and other hi-tech companies to Australia.

Under the leadership of Malcolm Turnbull this now becomes a real possibility – together with the businesses and people of Australia it is most certainly doable. And the smart city will be a major contributing factor in the healthy, productive society and economy of the future.

Paul Budde

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Telecoms in India looks towards a fresh period of growth

Friday, October 30th, 2015

After a major hiccup back in 2012, India’s mobile market had sorted itself out to a large extent by 2015 and subscriber growth looked to be running at a steady 7% per annum. By March 2015 there were 970 million subscribers representing a mobile penetration of 77%. Mobile penetration was likely to reach 100% by 2020.

The overall economic impact of mobile technology in India amounted to approximately US$115 billion in value-added terms in 2014, this representing an economic contribution of around 5.5% of the country’s GDP for the year. Looking forward, mobile broadband was set to grow exponentially throughout India, driving digital inclusion and economic growth for India’s consumers and businesses. Into 2015 4G and other data services were shaping as a key battleground. The entry of a new operator Reliance Jio into the market was expected to see even more intense competition in an already hotly competitive market.

By mid-2015 there was already considerable progress in the roll-out of 4G services:

  • Bharti Airtel was operating a TD-LTE network;
  • Bharti had also launched a trial FDD LTE network in 20 cities;
  • Aircel had launched 4G services;
  • Vodafone was planning to launch 4G in Calcutta, Mumbai and Delhi by December 2015;
  • Reliance Jio was set to introduce its 4G network by the end of 2015;
  • Idea Cellular was reported to be set to launch LTE services in January 2016;
  • BSNL was preparing to launch 4G by March 2016.

On the regulatory front there were positive signs of a market improving on the back of restructuring. Figures from the TRAI showed that Mobile Number Portability (MNP) was working well. The process of auctioning spectrum was also working well – despite criticism that the reserve prices had been set to high. The removal of the cap on foreign investment in the telecom sector was yet another strong signal to the market of the government’s intentions. The telecom market was still waiting on regulatory guidance with respect to mergers and acquisitions, however; this was important for the process of market consolidation to continue.

In the meantime, the fixed-line market, which had grown strongly over a number of years, began experiencing zero and then negative growth. Fixed-line subscriber numbers stood at around 26 million by early 2015. With less than 3% fixed-line penetration, India had nevertheless achieved a remarkable national coverage, with 99% of the population having some form of access to a telephone. The heavy investment in telecoms infrastructure over the last decade or so, plus a number of key regulatory initiatives that have combined to see India’s huge population delivered at least some level of telephone service.

In terms of the internet and online access, there have been a number of efforts by the government to promote broadband internet throughout the country; broadband development had long been languishing, but there was new hope for a serious expansion phase in this segment of the market. By early 2015 there were around 15.5 million fixed broadband subscribers – a lowly penetration (by population) of slightly more than 1%. Meanwhile, mobile broadband was finally having an impact on the market and in the medium term this was expected to lift broadband penetration significantly. By March 2015 there were already more than five mobile broadband subscribers for every fixed broadband subscriber.

Although still facing serious functional and regulatory challenges, there is much that is positive to be found in India’s telecom industry. Sweeping reforms introduced by successive governments over the last decade or so have dramatically changed the nature of telecommunications in the country. A number of factors have been responsible for the amazing growth in India’s telecom sector; apart from the obvious booming economy and the rapid expansion in the country’s middle class, the growth drivers include low tariffs, low handset prices and most notably a highly competitive market created by the government and the regulators.

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

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Empowered customers in smart cities – SGA Summit – 18 November 2015 – in Sydney

Thursday, October 29th, 2015

Customers are now becoming active participants in all aspects of the society and the economy, and this is forcing massive transformations of the parties involved. This was recently highlighted by the new Prime Minister of Australia, Malcolm Turnbull, who also stated that smart cities will be the driving forces behind these changes.

Key sectors that are leading this transformation are energy, telecoms, transport and IT. Together these will be the key infrastructure facilitators for the development of smart cities, smart buildings, smart communities, and indeed smart countries.

New infrastructure systems are emerging via a combination of pull factors – technological change, price, regulatory changes and increased knowledge – as well as push factors, with both empowered people as well as new entrants with different business models entering the market.

Central in all of this are smart people. The customer has become the disrupter, facilitated by new technologies, and the customer side is now the focus of change.

This has an effect on government and businesses alike. Customers are demanding smart cities and smart companies that they want to deal with. Energy and sustainability play a key role in this, but they are no longer stand-alone items – they need to work in with communications and IT developments.

Cities, companies and the society and economy at large will need to transform and show leadership, cut through their silos, create open systems and mould their systems, products and offerings to meet customer needs. By following the customer, this Summit will explore how we can work with them to reshape our smart city and energy future.

While city, state and federal government need to show leadership it is in the industry’s interest to build a platform to take over from here and develop the smart projects that will allow all of the various customer and industry elements to connect and engage in multiparty activities.  Making the customer central to these developments means providing them with the tools and services they are looking for, enabling choice, affordability, simplicity and reliability.

An open and interconnected environment will facilitate growth opportunities for existing and new entrants to drive innovative technologies and business models.  It will allow the $300 billion that has already been committed to be invested in electricity, communications and IT and other infrastructure to be leveraged for the benefit of all stakeholders.

Apart from telecommunications developments like smartphones, home electronics, apps and the internet we are seeing an explosion in PVs and storage, including new advances in battery technology, which will accelerate this disruption by allowing a truly two-sided market. To gain the most from these developments the industry needs a holistic platform that can incorporate transactive energy, virtual power plants, microgrids, EVs, communications developments such as internet of things (IoT) and machine-to-machine (M2M) interactions, as well as the all-important data analytics.

Creating a platform that can accommodate the disruptive customer is one of the key issues that Smart Grid Australia (SGA) will address in its 18 November 2015 Summit at the Novotel Hotel in Sydney, with keynote presentations and discussions with international and national speakers, hands-on roundtables and plenary panel discussions.

For more information see:

Paul Budde  – 02 49988144

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Report from the ISGAN conference in Italy

Thursday, October 29th, 2015

In September ISGAN organised a conference in Lecco, Italy, near the beautiful Lake Como. The key theme was The role of communication as a critical enabler of smart grid systems.

I presented at the conference on the topic Communication as the enabler for integrated services – smart cities. The following are my impressions and observations from that specific perspective.

As a government organisation ISGAN’s focus is on policies, regulations and high-level industry strategies. Several ministers, the EC, as well as regulators and industry representatives, from both the energy and the telecoms industries, presented at the conference.

Supported by massive changes in communication technology the changes in the broader market, often led by consumers, were earmarked at the event as being big game-changers. However, while new opportunities do indeed exist the reality is that for most of the traditional electricity companies it is difficult to realise these. There are several reasons for that and these were discussed at the conference:

  • In most countries, either directly through ownership or indirectly through regulations, governments have a dominant influence on the sector. A lack of political vision and leadership and an inability of regulators to step in are a serious hindrance to settling on the direction of the industry. Political indecisiveness and lack of bipartisanship is perhaps the worst thing that can happen in this situation as it paralyses the industry.
  • But at the same time, based on the industry practices and very long-term investment cycles that have dominated the industry for decades, the industry of today is risk-averse and led by management that in most cases is unable to seize the new opportunities that are becoming available within an increasingly disruptive environment.
  • Furthermore, the transition from the old silo-based energy economy to the new open-ended, interconnected one is very complex, and this transition will be messy. However the industry has no choice but to tackle this and increase its pace of change. This applies both to the industry and to its policy-makers.

Most governments and incumbent industry players around the world are grappling with these issues. Where we do see leadership and innovation is in places where cities are still operating their own electricity networks. There are many great examples in the USA, where over 60 cities are involved in using their electricity networks to build smart cities. This is strongly supported by the communications regulator in America, the FCC. There are also some good initiatives from the local DSO within the Amsterdam Smart City project, who also presented at the conference.

As a consequence, all of the above changes will happen. It is hard to predict exactly how it will work out, but there are several trends and developments already taking place which will have a profound impact on the shaping of the industry. At the conference these were highlighted:

  • Disruptive (often unexpected) developments from outside the industry based on innovations coming from companies – and their customers – operating in the digital/sharing/networking economy can result in rather rapid and massive changes that cannot be controlled by the industry, and most of the time not by governments either.
  • In cases of continual lack of national political leadership this will force the industry to step up its role in new developments. In some cases state and local governments are showing more and better leadership than their national counterparts.
  • Smart energy developments will increasingly be community/city-driven, with developments such as micro-grids, community storage, solar and wind farms, (smart/wi-fi-driven), LED street lighting.

Disruption is happening and the challenge for the industry is to run with it. However in some cases it is hard for the industry to take a leadership role because of current government policies, regulations and its own outdated business models. So changes, innovation, new business models and new value-added business opportunities will arrive from outside the industry. Some of the electricity companies will be able to break through this and participate and thrive in the new digital sharing and networking economy.

That is not to say that there will be a total demise of the traditional electricity industry, but the value chains will be totally different.

It is interesting to draw a parallel with the telecoms industry here. Twenty years ago companies such as Telstra and AT&T (USA) warned their governments that allowing for the ISPs/internet market to develop would lead to a meltdown of the telecoms network. The telcos still exist but in relation to market capitalisation companies such as Google, Apple, Microsoft, Amazon, Facebook, etc are many times larger, with most of the value-added revenue flowing to these companies, while the telcos simply operate the underlying networks.

So what could the consequences be for the industry?

Several scenarios were suggested at the conference in Italy:

  • The industry takes leadership, changes business models and starts developing new products and services for consumers, communities and cities along the lines mentioned above they can drive new innovations and chase the new opportunities.
  • If they don’t take leadership the development of smart buildings, smart homes, smart communities and smart cities will happen anyway and the new opportunities will largely bypass the industry.
  • It is highly unlikely that we will move to a totally decentralised energy environment – so there will remain a significant centralized infrastructure to the industry, in which case given the absence of innovative leadership, the industry will become low value wholesale providers to the new innovators and those developing new energy business models.

In reality the incumbent industry is in many cases facing an uphill battle. Large investments are needed in new business models based on new and innovative technological developments (renewables, batteries, micro-grids, smart cities, etc) while at the same time revenues are declining. The natural tendency is to then cave in, protect the incumbent business, and try to stop changes which undermine their old business model. (Similar to developments that saw the demise of Kodak, Nokia, and many casualties in the music industry, publishers, telcos, book industry, etc).

There is no doubt that in general the industry will survive; however the question is what will their role be and what value will they be offering to their customers and their shareholders (whether private or public).

Paul Budde

See also:-

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