Archive for March, 2017

Cyprus’s government aiming for 2017 part-privatisation of Cyta

Friday, March 31st, 2017

Despite the liberalisation of Cyprus’s telecom sector, the market overall continues to be dominated by the incumbent, Cyta. The government has rekindled plans to privatise Cyta, which is still fully-owned by the state, as part of a wider financial bailout package. Although the process has been delayed and amended as a result of political opposition, in January 2017 a new scheme was put forward in which the government would retain a majority stake in the operator and have power of veto over important managerial decisions. This potentially places added uncertainty for bidders, which would not have full control over a company which has failed to invest adequately in its networks in recent years, and which has seen its share of the fixed-voice, broadband and mobile markets dwindle steadily.

Improved regulatory conditions, particularly in relation to network interconnection and access, has given competing operators the confidence to invest in network infrastructure, to make use of unbundled local loops and to launch competing services.

The Cypriot mobile market is served by three mobile network operators. The two established players Cytamobile-Vodafone and MTN Cyprus were joined by a third operator, PrimeTel, in 2015 soon after the company secured mobile spectrum licences. PrimeTel had offered services as an MVNO since 2011. Following the award of LTE-suitable spectrum in the 800MHz and 2600MHz bands in June 2016, the cableco Cablenet, which also offers mobile services as an MVNO, is expected to launch commercial services over its own network later in 2017.

The broadband market in Cyprus is developing steadily following a few years of low growth exacerbated by economic difficulties. DSL remains the dominant access platform, with cable broadband restricted to a single operator, Cablenet. Although Cablenet’s network was for long concentrated in a few key towns, under the management of its majority-owner GO the company has invested in both its fixed-line and mobile networks, and by early 2017 its cable infrastructure covered 45% of the island’s premises. Fibre infrastructure in Cyprus is still comparatively in its infancy, with the incumbent telco Cyta having lacked the resources to invest in a fibre network. However, the anticipated privatisation of the company could also create a separate operator to manage networks resources and attract investors. This could in turn be a catalyst for future progress in the sector.

Alternative DSL operators have taken advantage of regulated wholesale network access, resulting in a steady fall in the incumbent’s broadband market share. Growing broadband usage, supported by government policy, is also shaping Cyprus’s emerging internet society and encouraging developments in e-commerce.

This report provides an overview of Cyprus’s fixed-line telecoms market, outlining the regulatory environment and reviewing updated operational and financial data on the major operators and the market as a whole. The report also covers the broadband and digital media markets, detailing industry developments and providing key statistics on the cable, DSL and fibre sectors as well as on IP-delivered services such as videostreaming. In addition the report assesses the mobile market, covering a range of voice and data services, regulatory developments, and technologies. Cyprus is a divided island with most of the information in this report concerned only with the Greek Cypriot area.

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

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The Philippines Mobile Market Moves Towards 5G

Thursday, March 30th, 2017

Despite competition from new carriers and mobile operators, PLDT has continued to be the Philippines’ dominant fixed-line and mobile provider. And as such has been a large part of the momentum in the country’s telecom market. Nevertheless, PLDT’s role has not gone unchallenged and in recent years Globe Telecom in particular has been pushing hard to overhaul the incumbent. In recent few years, the major operators have also been forced to cope with the pressures of slowing growth in traditional areas of the market and rising investment needs for new growth areas such as consumer broadband.

Broadband is finally building a healthy subscriber base, boosted by the considerable presence of mobile services in the mix of the various broadband platforms delivering internet access. There has also been good progress in the rollout of optical fibre infrastructure. In 2016 the President of the Philippines signed the bill to create the new regulator, the Department of Information and Communications Technology (DICT). The DICT effectively replaces a number of agencies whose functions and responsibilities will be absorbed into the new body. The DICT will develop a national broadband plan to accelerate the deployment of fibre-optic and wireless technologies across the country. In March 2017 the National Broadband Plan (NBP) was formally approved by the Philippines government. PLDT announced it would roll out fibre-to-the-home (FTTH) and is aiming to boost its current homes passed to six million by 2020.

Fixed line penetration in the Philippines has been in decline over the past 10 years. Penetration has declined from 4.6% in 2017 to 3.6% in 2012 and 3.0% in 2016.

A major challenge remained as only a little more than half of all Philippine towns and cities had a basic telephone service.

The mobile subscriber market in the Philippines has displayed strong growth over the past few years in an expanding market. Growth is predicted over the next five years in a maturing and increasingly saturated market. By 2021 mobile subscriber penetration is predicted to reach between over 130%. A key factor in the growth of mobile services is that they have proved to be more effective than fixed-line telephony in adapting to the country’s geographical features.

Mobile ARPU levels have been on a downward trend for a long time in the Philippines as competition in the mobile industry intensified. The operators continue to engage in aggressive price competition in an effort to grab market share.

A feature of the Philippines mobile market has been the near duopoly with Smart together with Globe Telecom maintaining a tight hold on the industry. However Globe Telecom has bridged the gap significantly over the past two years. Globe Telecom has increased its market share significantly over the past few years and now leads the market in terms of market share.

By 2017 both Globe Telecom and PDLT were well underway with the expansion of their 4G networks. Smart Communications has begun switching on faster 4G mobile data services using triple-carrier aggregation LTE-Advanced (LTE-A) technology. As part of Smart’s three-year deployment plan, PLDT Inc. intends to extend LTE coverage to 70% of the population by end-2017 and 95% of cities and municipalities by 2018.

The mobile broadband subscriber market in the Philippines has grown strongly over the past few years. Further strong growth in predicted over the next two years to 2018. The expansion of mobile broadband services is now providing more opportunities for the technology sector.

The Philippines is already preparing for the move from 4G to 5G. PLDT has signed an agreement with Huawei Technologies to gear up for the launch of 5G technology in the country by 2020. Both companies will jointly conduct research and development on 5G in the Philippines.

Broadband users in the Philippines have a number of high-speed internet access options available to them: Digital Subscriber Line (DSL), cable modem, Fixed Wireless Access (FWA), WiMAX and mobile data services. More recently, there has been a major push by market leader PLDT to offer fibre-based services; Globe has been trying to match the PLDT push where it can.

The total broadband market has observed slow to moderate growth over the last five years from a relatively small base of subscribers. Market penetration has increased from 5% in 2011, to 9% in 2014 and 10% in 2016. Moderate growth is predicted over the next five years to 2021. By 2021 broadband market penetration is predicted to reach between over 15%.

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

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Latin America’s focus on mobile broadband showing dividends

Wednesday, March 29th, 2017

Although the Latin American and Caribbean region covers a wide range of countries, the telecoms sector within the region is broadly similar in terms of penetration of services and market maturity. Some countries, in particular Brazil and Venezuela, are struggling with a prolonged economic downturn which has grievously affected the ability of local telcos to fund network investment. On the whole, though, the size of the overall market in the region, and its potential for ongoing growth, continues to attract investment from international telcos and vendors.

The results of these investments can be seen in upgraded networks, particularly in relation to LTE and FttP infrastructure. Improved mobile network capabilities have stimulated the adoption of smartphones among consumers, which in turn has led to increasing mobile data traffic and consequently the ability of network operators to develop revenue growth. In the fixed-line sector, fibre backhaul networks have proliferated, and while FttP adoption remains low it is the fastest growth area in the fixed-line broadband segment. This has partly been stimulated by regulatory efforts to promote the sharing of network components, but also by the take-up among consumer of bundled packages requiring higher bandwidth. The need to future-proof networks to cope with the demands of digital communities has also encouraged telcos and cablecos to invest in G.fast and DOCSIS3.1 technologies, complementing their FttP efforts.

Much of the stimulus for investment in fibre broadband is provided by competitive pressure, as well as encouragement from governments which, like their European and North American counterparts, have instituted plans to build national broadband networks. These are aimed at closing the digital divide between urban and rural areas, and at enabling all citizens to make greater use of the socio-economic benefits provided by access to fast broadband infrastructure.

Although there is a multiplicity of operators in the region, many countries have a core number of key providers, including the local business units of América Móvil and Telefónica, as also Millicom International (operating in six markets), and AT&T, which has expanded in Mexico and operates the largest pay TV company in the region (DirecTV).

For detailed information, table of contents and pricing see: Latin America – Telecoms, Mobile and Broadband Forecasts

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Jordan’s mobile market well serviced by three strong players

Tuesday, March 28th, 2017

Three major mobile network operators offer services across Jordan including Zain, Orange and Umniah, as well as an MVNO, Virgin Mobile MEA. The market is highly competitive with the three major operators all having over 30% market share each, in terms of mobile subscribers.

Mobile broadband is a key growth area for Jordan, with 4G services already on offer. By 2020 4G penetration could reach as much as 70%. Orange Jordan has seen recent growth in subscriber numbers due to the more competitive mobile broadband services it can offer as a result of 4G deployments.

The fixed broadband network is also growing and the government has been working for some time to deploy its national broadband network. Public facilities are being connected, with deployment to the Southern governates expected to be completed by the end of 2017. Work has also begun on the Northern governates.

Jordan is host to a growing number of ICT companies and has emerged as a technology start up hub for the Middle East, made possible due to a focus on ICT education and a regulatory environment conducive to ICT investment.

Jordan’s thriving start up scene has underpinned Jordan’s digital economy, which incorporates e-commerce, e-health, e-education and e-government. Most activity and attention is focused on the e-commerce sector given the commercial opportunities available. Tackling one of the largest impediments to e-commerce development in Jordan and the Middle East in general, the Central Bank of Jordan adopted a strategy for 2013 – 2017 to develop the legal framework for all e-payments systems in Jordan.

Jordan has placed a high priority on improving its government services and by January 2016 the Jordanian government was supplying 100 services electronically, with plans to launch a further 100 e-services during 2016/2017 and another 150 during 2018/2019.

The combination of a future national broadband network along with 4G LTE services and a highly competitive market will spur the overall telecoms sector on in Jordan and it is hoped that revenues for the sector will increase substantially.

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

 

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Rhineland economic model is closest to smart city developments

Monday, March 27th, 2017

It is interesting to compare the major economic models in the western world – the American Anglo-Saxon model, the European Rhineland model and the Scandinavian model.

The Anglo-Saxon model is very much driven by small government, market-driven economic and social policies, and in general has a large focus on shareholders value.

By contrast the other two models operate more in accordance with the so-called triple-bottom-line; a more equal focus on combined economic, social and ecological outcomes. The Scandinavian model goes the furthest with a very high level of government involvement in all sectors of the economy and the society – all the basic  elements of life are fully looked after (education, healthcare, social welfare, childcare, old age pension; but also public transport and other essential infrastructure). Obviously this is reflected in higher taxes, but people in these countries clearly see the value of their socio-economic model as it provides peace of mind throughout their lives. As is clear in the recently published World Happiness Report – the annual UN survey that looks at ‘happy citizens’ – the Scandinavian countries consistently score the highest results, despite their high tax regime. This year Norway is number one, Denmark 2, Iceland 3, Finland 5 and Sweden 9. The latter shares this position with Australia. The USA came out in 19th place.

The Rhineland model is perhaps best described as a socio-democratic adaptation of the capitalist Anglo-Saxon model, with clear hybrid characteristics, for example in countries such as the Netherlands. Both the Rhineland and the Scandinavian model are based on the broader stakeholders value and not just on shareholders value.

While in the current political climate the Australian federal government’s focus is still very much geared towards the Anglo-Saxon model, the story is completely different at a city and community level. When I travelled with the Dutch-led Global Smart City and Community Coalition (GSC3) through Australia earlier this month, I was very surprised that all nine Australian cities we visited voluntarily talked about the need for a triple-bottom-line approach regarding their smart city developments. I had hardly ever come across this language in my discussions with private industry.

Having said that, the tide is turning. Private industry has now been talking with cities for several years regarding their options to assist them in building smart cities with the aim of selling their ‘smart city wares’. In general, many of these companies – especially American-based multinationals – haven’t got very far, since their own business models don’t match the ones that the cities use. Some involved in the most pure form of the Anglo-Saxon model have actually left the market or significantly scaled down their operations in this segment, as their activities didn’t deliver the shareholders value they were after. Their model still largely depends on the next quarter’s results and this doesn’t fit the smart city model, which looks at results over much longer periods.

Cities and communities operate at a very different level. They need to deliver to all of their stakeholders, who in turn are all citizens of their communities, and in doing so they are not profit-driven. Happy citizens mean a well-functioning city in all aspects of life. The abovementioned happiness ratings also correlate with the high-functioning societies of, for example, Scandinavia. The companies that understand the need for a holistic approach to smart cities also recognise the need for business models based on the triple-bottom-line concept. This is not always easy as, while the people involved in smart cities within the companies selling smart city products and services might understand that message, the companies themselves might not yet be geared up for such an approach within their current business models. However in the Australian Smart Communities Association (ASCA) – led by some 150 cities and communities around the country – an industry board has been established of companies that do subscribe to this triple-bottom-line approach, and that are willing to place the wellbeing of the citizen central in their discussions with the cities to develop long-term sustainable business and funding models for the development of smart cities.

Coming back to the GSC3 trip around the country, it was therefore no wonder that the GSC3 approach towards smart cities (more based on the Rhineland economic model) totally resonated with the cities they visited in Australia. International collaboration within this model is therefore a perfect fit for the leading smart cities around the globe, all of whom are already working from that model. At the same time the alliance provides an example for other cities that still have a way to go in their journey towards smart cities.

And the good thing about cities is that they are very happy to share their knowledge, experience and insights with other cities around the world. This enables cities to learn from each other, sharing knowledge and insight, and even working together on smart city projects – each taking care of certain use cases within the project. This not only saves costs but also speeds up the implementation.

This video clip gives a nice insight from an Australian perspective into this international collaboration model.

Paul Budde

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