Archive for October, 2016

Queen Máxima and smart financing

Monday, October 31st, 2016

This week Queen Máxima of the Netherlands is in Australia, attending the Dutch-Australian Smart City Summit that I am organising in Sydney.

There is an interesting link between Her Majesty and the smart communities movement ……

Since 2009 Queen Máxima has been the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. In this function she is a leading global voice, advancing universal access to affordable, effective and safe financial services. She emphasises that financial inclusion accelerates progress toward numerous development and economic goals, including poverty alleviation, job creation, food security, gender equality, and equitable growth.

Collaborating closely with global and national partners, she raises awareness, encourages leadership, works to break down barriers, and supports action to expand financial inclusion. She draws on her first-hand experiences gained through country visits and conversations with low-income families, small business owners, policymakers and others, to identify which financial services and policies can really make a difference for lives, livelihoods, and communities.

Queen Máxima regularly consults with and convenes diverse stakeholders – linking government leaders, finance and banking authorities, mobile and tech companies, agriculture experts, development partners, and others – helping people and institutions learn from each other and form new collaborative relationships.

As honorary patron of the G20’s Global Partnership for Financial Inclusion since 2011, she works with governments and other partners to advance the G20 Financial Inclusion Plan. Within the UN system she encourages the development of programs to share best practices about how financial inclusion complements and advances their missions. She also serves as a Global Agenda Trustee for the World Economic Forum’s Global Challenge Initiative on the Future of the Global Financial System.

Queen Máxima actively supports financial inclusion in her own country, particularly in the areas of financial literacy and education. She is a member of the Netherlands Committee for Entrepreneurship and Finance and honorary chair of the Dutch Money Wise Platform.

Looked at from a smart community perspective her work is about assisting people, and small businesses in particular, to become smarter. People in the developing world still have a long way to go, but they do have advantages, as they don’t have ageing legacy systems and their associated silo structures – and they can therefore sometimes leap-frog such developments. In relation to my work for the UN Broadband Commission for Digital Development I have encountered lots of interest from Asia, Africa and Latin America in using smart community developments to create social and economic benefits.

And in relation to smart micro-financing in particular I believe that we in the developed world can learn from what is happening in Africa, Asia and Latin America. I wouldn’t be at all surprised if some of the companies that get assistance through the work of Queen Máxima and her team become exporters of new applications to us in the developed economies.

In general, the financing of smart community projects is also one of the bottlenecks in developed economies like Australia and the Netherlands, and we do have to come up with smarter ways on how to finance these developments.

Paul Budde

For more info on the work of Queen Máxima  click here.

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Malawi introduces converged licensing regime

Monday, October 31st, 2016

Malawi is one of the world’s least developed and poorest countries, beset in recent years by declining GDP growth, high inflation, and a rapidly depreciating currency. To add to these difficulties the country has one of the highest HIV rates in the world. Telcos have been affected by currency devaluation, which has delayed their ability to fund network upgrades. In addition, the government in mid-2013 instituted a tax on internet services, the additional cost of services being passed on to consumers.

Mobile penetration remains very low in comparison to the African average. This allows for considerable opportunities for further growth. The market remains a duopoly between Bharti Airtel (formerly Zain) and Telecom Networks Malawi (TNM), given the failure of G-Mobile and Celcom Malawi to launch services. However, there is expectation that Lacell Private will launch services (under the Smart Mobile brand) by the end of 2016. This could provide the required impetus to the market, and lead to a welcome fall in end-user prices.

To encourage additional market competition, the government has followed in the footsteps of several of its neighbours and introduced a converged licensing regime which allows the two fixed-line operators, Malawi Telecommunications (MTL) and Access Communications (ACL) to enter the mobile market as well. The converged licensing regime was revised and came into force in September 2016.

The internet sector is reasonably competitive with about 50 licensed ISPs, though the limited availability and high cost of international bandwidth has held back growth and kept broadband access prices among the highest in the region. DSL services are available, and several ISPs continue to extend their WiMAX wireless broadband footprints. The two incumbent mobile networks have launched third generation (3G) mobile services based on UMTS/HSPA technology, while Telekom Networks Malawi (TNM) has invested in LTE infrastructure.

A national fibre backbone is being implemented, and the country recently gained access to international submarine fibre optic cables for the first time when a transit link via neighbouring countries was completed. Provided a suitable regulatory regime is put in place, this will bring down the cost of international bandwidth and deliver a boost to the broadband market.

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

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Vodacom Lesotho launches m-health service using M-Pesa

Friday, October 28th, 2016

Telecom services in Lesotho are managed by a privatised national operator, Econet Telecom Lesotho (ETL). There is effective competition in the mobile sector between South Africa-based Vodacom and ETL, though mobile market penetration remains below the regional average.

Fixed-line teledensity is also low, but the fixed network has gained value since DSL services were launched in 2007. In parallel, ETL has rolled out a CDMA2000 fixed-wireless network, upgraded with EV-DO technology, to provide fixed-line and wireless broadband services. In addition, the company has introduced a fixed-mobile convergence product based on its GSM network and capitalising on its multi-platform capabilities.

Vodacom was the first operator to introduce mobile broadband services in the country, based on HSPA technology. In parallel, the company has rolled out a WiMAX network. Several other internet service providers have rolled out their own wireless infrastructure. In late 2014 Vodacom also launched commercial services based on LTE technology.

Although landlocked, Lesotho has benefited from connectivity to the several submarine fibre optic cables which land on African east and west coasts. These quadrupled international bandwidth in 2012, and contributed to lower end-user prices.

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

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Dutch-Australian Smart City Summit to forge long-term relationships

Thursday, October 27th, 2016

The Australian Smart Communities Association (ASCA) has partnered with the Dutch Government to co-host the Dutch-Australian Smart City Summit to be held in Sydney on 3 November.

Her Majesty Queen Maxima of the Netherlands will visit the summit and attend a ceremony where several Australian cities will join the Dutch led Global Smart City and Community Coalition (GSC3).

Dutch Minister of Economic Affairs Henk Kamp will speak at the event about Dutch Smart City policy. The Minister leads an accompanying trade mission from 31 October to 4 November, which includes a smart city delegation visiting Adelaide, Canberra, Newcastle, Lake Macquarie, Sydney, Ipswich and Sunshine Coast.

The Dutch Government is interested in establishing long term relationships between Dutch and Australian smart cities, businesses and research organisations. With five MoUs being signed during the week-long visit a platform will be laid for such long-term collaboration.

This (fully booked) event will give the 110 Australian delegates an update on the smart city developments in the Netherlands. The City of Amsterdam is consistently in the global top 10 of smart cities, but also Eindhoven, The Hague and Rotterdam are well advanced in their smart city programs.

During the summit Australia’s Assistant Minister to the Prime Minister Senator the Hon James McGrath and Dutch Minister of Economic Affairs Henk Kamp will present the smart city policies of their respective governments.

Lucy Turnbull, chair of the Greater Sydney Committee, will also present and chair a panel discussion between representatives from Australian and Dutch cities.

The Smart City Summit is part of the celebration of the landing of Dirk Hartog on the West Australian Coast 400 years ago. For this occasion, the Dutch King and Queen are making an official State Visit to Australia from 31 October to 4 November.

Paul Budde

See also:  GSC3

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Enormous Market Consolidation Continues in the 2nd Tier Market

Thursday, October 27th, 2016

Developments in this market have been dominated by industry consolidation, a process that is set to continue over coming years. Moving towards a structurally separated regulatory environment with a NBN at the horizon, size really does matter. The second tier market continues to grow strongly, in particular from Vocus and TPG, both of which continue to grow through increased scale via mergers and acquisitions. The market reached approaching $5 billion in 2016 with an annual growth rate of over 10% Growth is anticipated to subside over the next year due to market consolidation and a maturing market.

The Vocus / Merger with M2 creates Australia’s fourth-largest telecommunications company and the third-largest in New Zealand. It sees a welcome strengthening of the competitive environment in Australia. The telecoms market has developed more and more into a utilities market, and in such markets size matters. It will allow the combined entity to be more efficient and more effective.

While the TPG/iiNet merger brought two similar companies together, and as such potentially reduced the number of players in the market, the Vocus/M2 combination brings two different companies together – one operating in the business market and one operating in the retail market. This will allow the companies to share resources and attract better deals from the various ICT (wholesale) providers they do business with.

TPG Telecom (iiNet)

TPG Telecom Limited provides telecoms and multimedia services in the Australian marketplace. In August 2015 TPG acquired local ISP iiNet. TPG is now Australia’s second-biggest provider of fixed-line broadband in Australia with over 1.7 million customers. Services including voice, internet and data solutions are provided to a customer base ranging from the consumer market through to small and medium enterprises, corporate and government sectors. The company also owns a cloud-hosting company and the PIPE network infrastructure that includes the third largest domestic dark-fibre operation and the submarine cable network to Guam, Asia and the United States.

The company is delivering an extensive FttB service to apartment buildings in capital cities, offering broadband at 100Mb/s at a price which undercuts existing offers from rival ISPs. TPG has also secured spectrum in the 2.5GHz band to bolster its wireless broadband capabilities, and has committed to investing in additional capacity on the subsea cable linking to New Zealand and the US West Coast.

The company has the largest data network and voice network after Telstra, the largest fully converged voice, video and data IP-based access network in regional Australia, and the largest voice-enabled IP network. The company’s capabilities and reach were enhanced following its $450 million acquisition of AAPT’s wholesale and business services from Telecom New Zealand, completed in February 2014.

In 2015 TPG created a new retail arm to sell its wholesale fibre-to-the-basement product to residential customers. TPG is also active in New Zealand where it is eying potential acquisitions, both Vodafone New Zealand and 2 Degrees have been rumoured to be on the company’s hit list. Also late 2016 TPG made a surprise move TPG to become a fourth player in the Singapore mobile market.

Vocus (M2)

Vocus is an Australian based telecommunications provider with offices in Australia and New Zealand. Its services include co-location, internet, voice, fibre and ethernet services. Vocus merged with M2 Communications in 2016 and acquired Amcom in 2015, a second-tier telecommunications carrier providing fibre, cloud services, IP voice solutions, broadband, data centre, and internet services to corporate and government.Vocus’ core business centres around its carrier-grade fibre network. Services include dark fibre access, data centre services, IP Transit, Ethernet, wholesale DSL, wholesale voice and internet peering.

The Vocus / Merger with M2 creates Australia’s fourth-largest telecommunications company and the third-largest in New Zealand. It sees a welcome strengthening of the competitive environment in Australia. The telecoms market has developed more and more into a utilities market, and in such markets size matters. It will allow the combined entity to be more efficient and more effective. The financial results of the telcos now all depend on who is the most cost-effective. They are both entrepreneurial companies and so they will be able to bring innovative new products and services to the market at attractive prices. Vocus’ acquisition of Nextgen Networks in June 2016, will seriously lift its position as an infrastructure based telco. The acquisition is the next and perhaps final part of a the company’s strategic plan that has also seen his firm expand geographically with the previous acquisition of Amcom and FX Networks, and diversify into the consumer space via its merger with M2.

While the TPG/iiNet merger brought two similar companies together, and as such potentially reduced the number of players in the market, the Vocus/M2 combination brings two different companies together – one operating in the business market and one operating in the retail market. This will allow the companies to share resources and attract better deals from the various ICT (wholesale) providers they do business with.

Nextgen Networks

Nextgen Networks (Nextgen) is a licensed telecommunications carrier and the company specialises in data services for carriers, service providers, government and corporations. The company was also awarded an RSP license for the NBN Co trial areas. Nextgen owns and operates one of Australia’s largest national fibre networks, of over 19,000km of fibre rings. It also operates data centre assets in all capital cities. A majority share of Leighton Holdings’ telecom assets was sold in mid-2013 to a Canadian pension fund, and was subsequently rebranded as Nextgen Group Holdings.The fibre network runs between the country’s principal capital cities of Brisbane, Sydney, Melbourne, Adelaide, Perth and Darwin and has links to nodes in regional cities and centres. The company has an extensive national Virtual Private LAN Service switched data network, the first such in Australia. The VPLS network allowed the company to become a full data service provider to the broader Australian market.

Nextgen has rolled out around 6,000km of a fibre backhaul link to Darwin, which it manages on behalf of NBN Co as part of the Regional Backbone Blackspots Program. The Perth-Singapore submarine cable, being managed by Nextgen’s subsidiary ASC International, secured landing permits in early 2014, so enabling the operator to proceed with the construction phase. In June 2016 Vocus Communications confirmed the $807 million acquisition of Nextgen.

Macquarie Telecom

Macquarie Telecom is an integrated telco providing a full range of hosting, data, voice and mobile services to the business and government market. It also offers a range of cloud services including security, storage, backup-as-a-service and virtual hosting / data centre services.  Established in 1992, Macquarie Telecom was one of the first telecommunication providers of the deregulated era and successfully publicly listed on the Australian Securities Exchange in late 1999. Macquarie’s two key target markets are Australian mid-size corporates and the government sector.  A third data centre, in Canberra bolstered the company’s hosting and cloud-based services, which remain the main focus of its strategy for growth. Macquarie Telecom sold its Intellicentre 2 datacentre to Keppel DC, a Singapore real estate investment trust. In 2016 Macquarie Telecom created three new brands: Macquarie Telecom, focused on mid-large sized business customers; Macquarie Cloud Services, focussed on tech businesses and Digi SaaS customers; and Macquarie Government, focussed on cyber security and cloud for Government customers.

For detailed information, table of contents and pricing see: Australia – Telco Company Profiles – 2nd Tier

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