Archive for June, 2016

Australia’s NBN preps for G.fast and DOCSIS3.1 services in 2017

Thursday, June 30th, 2016

Growth in the Australian fixed broadband market has slowed in line with higher penetration rates. Within the market there is a dynamic shift among customers to fibre networks, as this infrastructure is being built out by nbn (NBN Co), the company responsible for the national broadband deployment. While fibre has become by far the fastest growing sector, and DSL is beginning to slide as customers are migrated to the NBN, there is continuing solid growth in the cable broadband sector. This will be supported in coming years when nbn begins to offer commercial services based on the DOCSIS3.1 standard from mid-2017.

Although progress is improving, the fact that the NBN has been a tool for political brinkmanship over the years has cost the country dearly in time and wasted opportunities. Australia ranks relatively low in the global rankings for fixed-line broadband speeds, and during 2015 it fell in a number of tables covering these metrics. Rather than rolling out a first class infrastructure throughout the country, based on FttP, a second rate multi-technology mix has been adopted which incorporates copper infrastructure and assigns fibre to a minority of connections. By contrast, most developed countries have far further advanced their fibre projects, and are fast-tracking infrastructure developments to keep pace with customer demand for high-end IP-delivered services as well as to develop their international competitiveness and digital economies.

The deployment of FttP in greenfield estates is a fast-growing industry, supported by an updated regulatory regime and pricing models. By early June 2016 there were 268,290 greenfield sites passed, of which 162,670 were activated, as well as 1.481 million brownfield sites serviceable, of which 723,440 were activated. As a measure of the speed of deployment reached (compared to the doldrums of 2011), some 31,690 additional lots or premises were passed or covered by the NBN during the last week of May 2016, of which about 25,980 were in brownfield areas and 2,750 in greenfield sites.

The multi-technology NBN has left room for further development in the DSL and cable sectors, both of which are benefiting from the deployment of new technologies. nbn has trialled G.fast technology and expects to provide services based on this upgrade during 2017. HFC is also gaining a new lease of life, with nbn also preparing to trial DOCSIS3.1 technology with a view to commercialising services by mid-2017.

As well as these technological developments, consolidation within the broadband market will provide greater reach and scale for operators in coming years.

A new BuddeComm report reviews a range of statistics and trends in the Australian broadband market, providing market share for the principal providers and including data from a range of recent surveys by government departments including the Australian Bureau of Statistics and the ACMA. The report also analyses the drivers behind internet adoption within the Australian residential and business sectors, and notes the gradual shift from PC-dominated connectivity to one more geared to smartphones and other devices as mobility becomes a more central consideration for consumers and businesses alike. In addition, the report analyses the situation with respect to greenfield fibre deployments. It provides an overview of fibre operators, as well as statistics on the FttP market and a review of developments related to DSL and HFC infrastructure as also satellite broadband via the SkyMuster fleet.

For detailed information, table of contents and pricing see: Australia – Fixed Broadband Market – Insights, Statistics and Analyses

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DRC’s mobile market consolidation with sale of Tigo Congo to Orange

Wednesday, June 29th, 2016

Following a 30-year dictatorship between 1967 and 1997, the Democratic Republic of Congo (formerly Zaire) has suffered from several wars and considerable social upheaval. There remain violent conflicts in the eastern part of the country, exacerbated by considerable corruption within the government as well as by ethnic tensions resulting from disputes among and within bordering countries which have spilled over in the DRC itself. These circumstances have made it difficult for the government to extend its control effectively in these regions.

The economy is heavily dependent on revenue from the mining sector though much economic activity occurs informally and is not reflected in GDP data. The global economic crisis reduced GDP growth to around 3% in 2009, but it has returned to above 8%. It is expected to remain stable at that level for the next two to three years, largely supported by mining, though the accuracy of monitored economic growth is questionable.

Largely due to the country’s troubled history, the national telecom system remains one of the least developed in the region. The national operator, SCPT, theoretically has monopoly rights under 1970 legislation. However, recognising the need for telecommunications infrastructure, the government is only loosely regulating the sector. SCPT has little capital to invest, and so much of the investment in infrastructure is from donor countries or from the efforts of foreign (particularly Chinese) companies and banks.

Mobile network operators are the principal providers of basic telecom services. By 2001, some 16 private operators had been granted mobile telephony licences and the subscriber base grew rapidly. The proliferation of networks, and the poor monitoring of also spectrum assets, caused frequent problems with spectrum shortages, interference and compatibility issues. As a result, the mobile sector has since consolidated. In the latest round of consolidation, Orange Congo completed its acquisition of Tigo Congo in April 2016, which greatly increased its market share. In late 2015 Yozma Timeturns eventually launched services, having been awarded a mobile licence in 2009.

Development of the DRC’s internet and broadband market has been held back by the poorly developed national and international infrastructure. However, the country was finally connected to low-cost, high-quality international bandwidth through the WACS submarine fibre optic cable in 2013, and SCPT is rolling out a fibre optic national backbone network with support from China. International bandwidth is still limited, and as a result internet pricing is high and backhaul capacity (for both fixed and mobile internet services) is low. An alternative terrestrial international fibre connection exists via neighbouring countries. Broadband access is provided by 3G mobile services and wireless networks using WiMAX and EV-DO technology. The country’s first commercial LTE networks are imminent. Mobile operators are keen to develop mobile data services, capitalising on the growth of smartphones usage, but in mid-2016 their attempts to dramatically increase mobile internet pricing was criticised by the regulator.

For detailed information, table of contents and pricing see: Democratic Republic of Congo – Telecoms, Mobile and Broadband – Statistics and Analyses

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China Continues to Evolve as a World Leader in the Digital Media Sector

Tuesday, June 28th, 2016

The Chinese telecom market is the largest in the world in terms of subscribers and is undergoing transition. Mobile subscriptions outnumber fixed voice connections and voice is giving way to data as the primary revenue generator. China’s telecom market is served by three operators; China Telecom, China Unicom and China Mobile. All three are integrated providers of telecom services although China Mobile is the largest in the crucial mobile market.

China’s fixed-line market is in decline due to voice mobile substitution although the two main fixed-line operators of China Telecom and China Unicom have aggressively deployed and marketed fibre broadband to increase the value of maintaining a fixed-line.

In 2016 the Ministry of Industry and Information Technology (MIIT) issued a fourth basic telecommunications licence to state-backed China Broadcasting Network (CBN) enables CBN and its subsidiary China Cable Television Network to provide domestic internet data transmission and telecom infrastructure services.

Although China boasts the largest mobile market in the world, there is still much room for growth given the relatively recent focus on large scale LTE investment. China’s mobile market is served by mobile network operators China Telecom, China Mobile and China Unicom which operate a variety of technology platforms that reflect the commercial preferences of operators and the industry development policies of the government.

Entering 2016 all three mobile network operators are focused on deploying LTE networks and monetizing such investments by enticing end users to upgrade to higher ARPU LTE products such as mobile broadband. The number of mobile subscribers passed the 1.3 billion subscriber mark, with penetration surpassing 100%. China Mobile continues to dominate the mobile industry with 63% market share.

Mobile subscriber growth is expected to be very slow due to a saturated and mature market. Operators will continue to focus on increasing ARPU in light of diminishing opportunities to acquire new subscribers and the need for operators to maximise monetization of LTE investments.

Operators are also investing in technologies design to maximise the user experience such as Rich Communication Service (RCS), Voice over LTE (VoLTE) and Near Field Communications (NFC).

China possesses the largest broadband subscriber base in the world, with the majority of users accessing the Internet through mobile devices. Catering to this demand are China’s three telcos: China Telecom, China Unicom and China Mobile. Broadband makes up the majority of fixed Internet connections given dial-up comprises less than 2% of total fixed Internet connections.

Despite high broadband penetration China possesses one of the slowest broadband speeds globally although this should change following network architecture improvements such as the October 2015 completion of a two year project to increase the number of nationwide Internet traffic hubs from three to ten.

Unlike the US market, where cable internet access plays a prominent role in developing the fixed broadband market, DSL was the initial driving force behind fixed broadband growth in China, followed later by EPON fibre and now GPON fibre.

HFC makes up a tiny proportion of total broadband connections as despite the fact that China also possesses the largest cable TV subscriber base in the world, cable TV operators were late in upgrading cable TV networks with the necessary infrastructure, missing a significant slice of the country’s rapidly expanding fixed broadband market.

In mid 2016 the Chinese government unveiled plans to invest additional funds in developing broadband networks. The move will be boost growth of China’s e-commerce giants such as Alibaba, Suning and JD, as these providers shift their focus their strategy to more rural areas. The government’s Broadband China Plan.

With the world’s largest online population, China’s digital economy has grown rapidly to cater to the needs of the online masses. Much of the initial growth in China’s digital economy was underpinned by the online demand for information, media and commerce, giving rise to China’s three domestic digital economy giants; Baidu (search), Alibaba (e-commerce) and Tencent (social media). Traditional media players largely struggled to keep pace with the migration of audiences to online media, while China’s telcos missed the opportunity to develop into digital giants as they focus on deploying fixed and mobile broadband networks.

Also evolving within China’s digital economy to meet the needs of China’s online audience are the banking and financial services industry, public administration services, health services and education services.

China’s digital economy will continue to grow as only half of China’s 1.4 billion people are online. This online audience is growing wealthier due to China’s consistent macroeconomic growth and demographic trends such as ongoing urbanisation. As a consequence China’s online audience is increasingly willing to spend online, a trend encouraged by the government as it seeks to balance the economy away from an overreliance on building infrastructure and exporting goods towards domestic consumption.

The fate of China’s traditional media players is largely secure given that they are government owned and hence seen as an integral part of the government’s desire to control the media. The competition for audience share and hence revenue between privately and state-owned operators reflects the same competitive challenges faced by state-owned operators in other industries in China’s evolving economy.

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

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Fibre access technologies finally capture dominant market share

Monday, June 27th, 2016

Recently there was an important development for the broadband sector with the market share of fibre infrastructure lines finally overtaking DSL technologies as the largest on a global level.

The fixed broadband network is the infrastructure needed to meet the needs, both economic and societal, of the developed markets. In fact in many of these markets, wireless broadband and FttP are developing in a complementary and harmonious way. For the foreseeable future a significant part of regional and rural areas will have to rely on wireless broadband.

Many global leading organisations have now publicly acknowledged the enormous importance of well developed broadband infrastructure for a sustainable future in terms of the economy, society and environment. Despite this recognition, there are still citizens of the undeveloped world who do not have regular access to the Internet.

It is the countries where civil stability has taken a stronghold that we will see the most progress towards building sufficient ICT infrastructure – and it will be these same countries where we will see poverty decrease further. However countries without a stable society will not see any of that progress among the majority of their people. They lack the conditions and institutions that would allow for ICT and other developments to occur and create long-lasting change.

In the developing markets, mobile broadband will be the only way to advance telecoms developments in markets which have little or no fixed infrastructure in place. These networks will not only be used for telecoms – but even more importantly, for economic and social applications such e-commerce, m-payments, e-health, e-education and e-government.

This growing penetration of fibre infrastructure will eventually lead to huge advancements in important sectors such as e-health.  In countries with a clear policy for an advanced broadband infrastructure, such as a National Broadband Network, BuddeComm sees e-health emerging to allow us to enjoy advancements in medical technology at more affordable costs. On truly high-speed broadband networks, e-health is rapidly shaping up as one of the key killer apps.

For detailed information, table of contents and pricing see: Global Fixed Broadband Market – Trends, Statistics and Progress

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Telikom Papua New Guinea prepares for LTE launch

Monday, June 27th, 2016

Network deployment costs are high in PNG due to the relatively low subscriber base, the impervious terrain, and the high proportion of the population living in rural areas. As a result, fixed telecom infrastructure is almost inexistent outside urban centres, leaving most of the population unserviced. With fixed teledensity having seen little change over the past two decades, progress in telecommunications has come primarily from mobile networks, where accessibility has expanded from less than 3% population coverage in 2006 to over 80% by early 2016.

This impressive growth was triggered by the start of mobile competition in 2007. When it entered the market, competing mobile operator Digicel brought mobile services to previously unserviced areas and at the same time slashed prices. The result was a substantial increase in mobile penetration – from 1.6% in 2006 to 49% by early 2016. This remains low by international standards, and though there remains considerable room for growth this could be stymied by the latent difficulties within the market, including the high cost of deploying infrastructure, the relatively low income base among potential subscribers, and the geographical dispersal of the population. As a result of these conditions PNG remains one of the least affordable mobile markets in the Pacific.

Despite the opening of the market to competition, internet access is expensive in PNG and far beyond the means of most of the population. Throughout much of the country, internet access is simply unavailable. Mobile coverage into 2016 is extensive, though most rural areas still have only 2G services.

Nevertheless, mobile broadband is proving far more successful than fixed-line broadband, and both Telikom and Digicel are planning to provide LTE services by the end of 2016. The number of mobile broadband users is expected to continue to grow strongly as these operators expand their 3G and LTE networks in the coming years.

To overcome the country’s communication shortcomings, the government is deploying a National Transmission Network, which is expected to boost bandwidth and encourage market competition. It is managed by the state-owned PNG DataCo, which acts as wholesaler.

Given the underdeveloped telecom services, PNG’s telecom market has enormous growth potential. Despite the challenges, the country offers many investment opportunities. An increasing number of Papuans are embracing the digital age, particularly the younger generation, and mobile phones in particular are becoming a more important source of social interaction.

For detailed information, table of contents and pricing see: Papua New Guinea – Telecoms, Mobile and Broadband – Statistics and Analyses

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