Archive for November, 2015

Uganda regulator losing patience with Uganda Telecom mismanagement

Monday, November 30th, 2015

In recent years reforms have transformed Uganda’s economy, establishing consistent growth which is anticipated to remain above 6% into 2016. Reforms within the telecom sector have also established one of the most competitive markets in the region. The entry of MTN as the second national operator to compete with Uganda Telecom in all telecom sectors revolutionised the availability and quality of services. To a large extent the incumbent has been left behind, as it suffers from high debt, insufficient assets, poor quality of service, and an inefficient management culture which has led to the appointment of three Managing Directors in as many years.

A simplified and converged licensing regime has significantly reduced barriers to market entry and increased competition, but this has also led to price wars. Fixed-line infrastructure remains poor, with low penetration, and in consequence fixed-line broadband penetration is also low. As a result, consumers have flocked to mobile infrastructure to provide voice and broadband services.

With seven mobile networks, Uganda’s mobile market is overcrowded. Some market movement during the last two years has resulted in consolidation, while Orange exited the market in mid-2014 when it sold its assets to Africell holding. The cost of international bandwidth has fallen dramatically following the landing of international submarine fibre optic cables on the African east coast, to which landlocked Uganda is now connected via a national fibre backbone extending to its borders with neighbouring countries. This has helped reduce the previously exorbitant cost of broadband and provided the necessary backhaul to carry the growing traffic which has resulted from the widening reach of LTE networks.

Uganda was one of the first countries in sub-Saharan Africa to be connected to the internet. Being landlocked, the country depended entirely on satellites for its international connectivity until 2009 when several international submarine fibre optic cables landed on the African east coast. Uganda is now connected via a national fibre backbone extending to its borders, implemented by Uganda Telecom and MTN Uganda. Since the initial connections to fibre cables in 2009 prices for international bandwidth have fallen to a fraction of their original cost, but retail pricing of broadband services is still relatively expensive, especially when considering purchasing power parity. However, wireless and mobile technologies such as WiMAX, EV-DO and LTE are now putting the internet within reach of a much greater proportion of the population than traditional fixed-line DSL services have in the past. These improvements in infrastructure are revolutionising the market and enabling converged voice, data and digital media services.

For detailed information, table of contents and pricing see: Uganda – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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The NBN – as predicted, more delays and cost blowouts

Friday, November 27th, 2015

Borrowing the words Malcolm Turnbull used in one of his articles (on federalism) during his tenure as a journalist. ‘….. it is often embarrassing to be right, but I blush not over my correct analysis in April…’.

This came to my mind when I saw yet another cost blowout on the multi-technology mix (MTM) NBN. This time it is the poor condition of the Optus HFC network.

This leads to my own ‘I told you so’ blogs that I wrote on the quality of both the copper and the HFC networks, which I predicted would lead to cost blowouts and deployment delays. Specifically in relation to the HFC I mentioned that both the Optus and Telstra networks were developed in the early and mid-1990s, and abandoned soon after that as being non-viable broadband infrastructure for the future. Optus had wanted to use this infrastructure to make a quantum leap into broadband, but Telstra successfully overbuilt the Optus network and in the process killed Optus’s business model. Since this was Telstra’s aim its job was done and it paid very little attention to its HFC network for the next 15 years; and Optus’s HFC strategy was gravely wounded in the battle and its HFC service only limped on from there.

As evidence of the above, during that long period the number of broadband users connected to HFC did not grow at all. I argued that it would be expensive to now bring these two unloved networks into the modern era, and linked to that I questioned the cost benefit of such an exercise, since HFC networks would eventually have to be replaced by FttH networks.

In his book, Born to Rule, the unauthorised biography of Malcolm Turnbull, Paddy Manning also mentioned a piece Malcolm wrote on Gough Whitlam in which he stated that ‘the PM was surrounding himself with yes-men’. It seems to me that Malcolm fell into the very same trap when he became Minister for Communication and surrounded himself with those ‘yes-men’ who went along with anything he said. At one conference he even singled me out – together with Dr Mark Gregory – as people the press should not turn to for commentary on the NBN.

While I can understand the political situation the Minister was in at the time, if he had truly had the interest of the nation in mind he could have formulated policies that would have retained the FttH as the end goal of the NBN – he has mentioned to me on several occasions that he agrees with this. To my surprise, however, he stubbornly followed his ideas regarding a multi-technology mix.

I do believe that at the time he genuinely thought that this would be cheaper and quicker, and the yes-sayers surrounding him would have reinforced this view. It is a real pity he did not invite some of the nay-sayers to these discussions.

The MTM, with its own delays and cost blowouts, will haunt the PM over coming years as the NBN faces problem after problem, most of them directly related to the MTM policy change that he initiated in 2013. He will be held responsible. As I have mentioned before, there were certainly also serious problems with the FttH NBN, but these could have been fixed along the lines I, along with others, suggested, without creating the massive disruptions resulting in the current cost blowouts and delays.

Just to avoid any confusion about political bias – in his function as PM I believe that Malcolm Turnbull so far rates among the best leaders that this country has ever had. He is a breath of fresh air, who is bringing intellect and maturity to the many debates that we as a country must have. So he can count me in as one of his supporters. However our views differ greatly on policy relating to the NBN policies.

Paul Budde

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Wholesale access to the NBN promising benefits for Australia’s telcos

Friday, November 27th, 2015

Despite pressures on pricing, revenue is expected to show continued growth for fiscal 2016. M&A activity during 2015 has seen telcos such as TPG begin to realise the benefits of scale, propelling them to the main stage in terms of broadband market share. Positive growth is also anticipated from wholesale access to the NBN, with broadband providers such as Optus planning to provide services to up to eight million premises, or double the company’s existing footprint.

Optus recovered from revenue the decline reported in FY2014 to record a 6.7% increase in FY2015. VHA, which has been dogged by steep revenue declines for a number of years on the back of customer disaffection with service offerings, reported a 2.9% increase in revenue for the first half of 2015, supported by a 2.1% increase in its retail and MVNO subscriber base. The operator’s investments are clearly beginning to deliver rewards, resulting in a change in customer sentiments as it addresses popular concerns over poor network quality and stability.

Dominance of the triopoly players undermined by consolidation among second-tiers

Telstra continues to dominate the overall Australian telecom market, holding about 62% market share by revenue. Yet the company’s share in some sectors, such as broadband, has been falling steadily. TPG has been propelled to the fore in the provision of broadband following its acquisition of iiNet in late 2015. Telstra advantage in being the first telco to deploy LTE has also diminished as Optus and Vodafone now nearly match population coverage. Operator fortunes are now less in attracting new customers as in retaining existing ones, which is being achieved by more generous data caps and the reliability of network infrastructure. Just as Optus and Vodafone have begun to emerge from several difficult financial quarters, second-tier players including Macquarie Telecom, M2 Telecom and TPG (having recently acquired iiNet) continue to report strong revenue growth.

NBN slowly developing structure

Australia’s broadband sector is migrating to a multi-technology NBN, though with a considerable emphasis on fibre access. This has left room for further growth in the DSL and cable sectors, both of which are benefiting from the deployment of new technologies. The DSL sector is showing resilience as operators make greater use of VDSL and extend trials of G.fast technology, which can deliver far greater data capacity on legacy copper infrastructure. Much of the HFC network operated by Telstra and Optus, which for long suffered from underinvestment, is now being incorporated within the NBN, and with commercial DOCSIS3.1 technology likely to be deployed in 2017 investment in cable is again underway.

Wholesale measures to deliver improved network access

The pace of the NBN roll out also quickened during the second half of 2015. Recent proposals for FttP, FttB and copper-based services to come under Superfast Broadband Access Service (SBAS) regulations should benefit customers in rural areas.

NBN incorporating new technologies

While the NBN is not proceeding with the best-in-service FttP architecture, instead having adopted a multi-technology mix incorporating copper plant, there are some promising developments being undertaken by NBN Co and Telstra. Alongside DOCSIS3.1 trials, G.fast is being trialled with a view to incorporating the technology within the mix. Trials in Melbourne have achieved data rates of up to 600Mb/s, though the short loops remain a challenge for wide deployments.

Spectrum review to benefit rural customers

To address the shortage of spectrum, the ACMA has reallocated available spectrum in several bands for LTE use. In June 2015 the government formally announced that spectrum in the 1725–1785MHz and 1820–1880MHz ranges in regional Australia would be reallocated through new licences. The auction for licences is aimed at improving LTE services in regional Australia.

Mobile broadband subscribers shifting to LTE and the future 5G

In Australia, the number of mobile subscribers reached about 31.4 million at the end of 2015, giving a penetration of around 133%. There were just over six million mobile broadband subscriptions in June 2015, representing about 20% of the total. About a quarter of mobile broadband subscribers are now on LTE networks, a proportion which will grow rapidly into 2016 and beyond. LTE remains a relatively nascent technology, with regular improvements entering the market aimed at optimising network capabilities. While much investment remains in LTE, there is also a surge in interest in 5G, designed less to manage traffic as to connect billions of devices. By 2017 Telstra plans to begin closing down its 2G infrastructure, which now accounts for only about 1% of total network traffic. By 2025 it is expected that Australian MNOs will begin the process of closing down 3G infrastructure as well, leaving investments concentrated on LTE and 5G.

For detailed information, table of contents and pricing see: Australia – Telecoms Industry – Statistical Overviews

 

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World Smart City Awards recognise pioneering efforts

Thursday, November 26th, 2015

The 5th annual Smart City Expo was this year held in Barcelona in November and traditionally brings together representatives from hundreds of cities around the world. In 2015 there were 500 cities, 450 exhibits and 400 speakers involved in the event. As part of the expo an awards ceremony is held to identify the leading Smart City pioneering efforts around the world. Three particular countries were singled out won the 2015 World Smart City Awards:

  • Best City – Peterborough, United Kingdom: is one of five urban labs in which the projects of the UK Future City are being deployed and it was chosen due to its implementation of circular economy strategies and citizens participation.
  • Best Project – Shijiazhuang, China: The Hebei Digital Education Centre was recognised for its use of Big Data analysis and cloud technology in modernising and improving its education provision.
  • Best Innovative Idea – Colombia: The Regional Development Financing innovation, also known as Findeter is developing sustainable infrastructure across Colombia.

India’s Ministry of Urban Development Government was also given an Honorary Award.

For further information and other finalists, see: [http://www.smartcityexpo.com/en/awards-2015].

Kylie Wansink, Senior Analyst, BuddeComm – Global and Middle East Markets

For related information, see separate reports:

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Colombia launches phase two of Digital Connections Project

Wednesday, November 25th, 2015

Colombia’s telecom infrastructure is reasonably well developed in urban areas, where service availability is relatively high for Latin America, though facilities remain poor in smaller centres and rural areas. The government has endeavoured to address this with a number of public programs, and has facilitated the entry of operators to the mobile market in a bid to improve competition and extend the availability of mobile broadband services nationally.

The fastest growing sector is in mobile broadband based on LTE infrastructure, as well as fixed broadband in the cable and fibre markets. Fixed-line teledensity in Colombia is well below the Latin American average. There are numerous providers operating municipally, regionally or nationally but the number of lines in service continues to fall steadily, with customers abandoning traditional phones in favour of mobile handsets. This trend is likely to continue into 2016 and 2017 as consumers take advantage of the improved data offerings from upgraded mobile networks and as upgraded broadband infrastructure delivers VoIP to a wider customer base.

Colombia’s broadband penetration is relatively high for the region, though growth in the sector has been hampered by poor fixed-line infrastructure in many departments. Government efforts to improve services in the more deprived areas have had considerable success, leading to far higher growth in the number of broadband subscriptions among the lower socio-economic groups in recent years.

DSL is the leading broadband technology, though cable broadband has grown at a faster rate and by mid-2015 the platform was on a par with DSL in terms of the number of connections. The resurgence of cable modem is largely due to the growing popularity of bundled services which upgraded cable infrastructure can support.

Colombia’s mobile penetration is also relatively high for the region. While market growth has slowed, it retains significant potential, particularly in the mobile broadband sector where penetration is still low. Recent investments in mobile infrastructure has resulted in dramatic growth in the number of LTE-based mobile broadband connections, while during 2015 the number of 3G-based connections began to fall for the first time.

This report provides an overview of Colombia’s telecom infrastructure and regulatory environment, together with profiles of the major fixed-line operators and a range of market statistics and analyses. It also covers trends in the mobile market, including key market statistics and an assessment of the strategies of major mobile operators as well as the main MVNOs. In addition the report reviews the broadband and pay TV markets, including by relevant statistics and forecasts to 2020.

For detailed information, table of contents and pricing see: Colombia – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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