Phil Harpur - Senior Analyst South, Central & South East Asia

Phil Harpur - Senior Analyst South, Central & South East Asia

Posts by Phil:

Australia progressing as a major APAC data centre hub

BuddeComm describes ‘big data’ as looking at intelligent outcomes that can be achieved from data collaboration. The most critical issue here is strategic management, rather than technology. Big data has become a vital tool as competition is forcing many companies to transform their organisations from a company-centric approach to a customer-centric one.

The fact that this development is being driven by data-rich organisations such as Google, Apple, Amazon, Facebook, eBay and many others operating in the digital economy is an indication that data management is a critical factor here. In other words, if you don’t have your company’s data systems and structures organised in a customer-centric way you won’t be able to deliver a good customer experience.

Connected information management, however, can go much further. There are many other players involved in the broader ecosystem, and by sharing and combining relevant data sets and then analysing those large data sets we can find new correlations that can be used to spot business trends, assess customer behaviour, prevent diseases, combat crime and so on.

Key emerging trends for 2018 in data analytics include: embedded analytics, artificial intelligence (AI), behavioural analytics and predictive analytics.

The arrival of cloud computing, Big Data, M2M and Internet of Things (IoT) allowed for a large range of new services and applications in the data centre market, especially aimed at small and medium organisations.

These developments have given an enormous boost to the data centre market, with investments totalling $5 billion over the 2011-2017 period.

The Government continues to increase in maturity in their understanding of cloud technologies, how to use cloud to the best of their advantage, and how to optimize their existing infrastructure. Spending in the cloud government segment is expected to rise over the next few years as the government pushes its cloud-first agenda.

Australia has progressed to now be one of the four major sub-markets for data centres in Asia alongside Singapore, Hong Kong and Japan. Greater diversity however has led to the fact that it is now harder to serve the entire region from one location. The Asia-Pacific region is currently undergoing very strong wholesale colocation growth driven by large-scale global cloud providers including Amazon Web Service (AWS), Google, Microsoft and IBM as they expand aggressively in major hubs.

Sydney has emerged as the cloud connection capital of the Asia Pacific region, home to the most number of direct connections to public cloud services.

Growth of data centres is largely driven by the shift to cloud computing, as companies of all sizes scoped out new ways to boost efficiency, foster innovation and find a competitive edge.

The ‘Internet of Things’ (referring more to personal devices such as wearables and smartphones) and M2M (referring to a more industrial use based on sensors) are going to be real game-changers. They will transform every single sector of society and the economy and it will be out of this environment that new businesses – and indeed new industries – will be born. LTE and later on 5G will take a leadership role in the development of M2M but the NBN is also a key infrastructure element as more and applications will require high quality video. These developments are closely linked to big data, data analytics, cloud computing and data centres and these elements all play a fundamental role in the success of this new infrastructure.

Demand in IoT is expected to be driven by three vertical industries: automotive, utility and security applications.

High growth sectors to 2021, are likely to include smart home technologies, airport facilities automation, electric vehicle charging and in-store contextual marketing.

For detailed information, table of contents and pricing see: Australia – Data Analytics, IoT, Cyber Crime and Data Centres


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China moves towards a 5G future

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. Fixed line penetration has dropped significantly over the past five years. This trend is predicted to continue over the next five years to 2022 driven by the growing adoption of mobile broadband.

China’s telecommunications development has generally been driven by investments from government-allied entities. However, the Chinese government has chosen a minimal intervention approach in broadband development.

Although some government funding is spent on universal service, a major strategy of the Chinese government has been to create a competitive market structure by restructuring the telecommunications sector.

China possesses the largest broadband subscriber base in the world, with the majority of users accessing the Internet through mobile devices. Broadband makes up the majority of fixed Internet connections given dial-up comprises less than 2% of total fixed Internet connections.

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.

The government’s Broadband China Plan aims to provide nationwide broadband access with speeds of at least 50 Mbps in urban areas and 12 Mbps in rural areas by 2020. Fibre-to-the-home (FTTH) coverage is close to 90% in cities in most provinces. Moderate fixed broadband growth is predicted over the next five years to 2022. Fibre broadband adoption will continue to dominate the market.

China’s online audience is growing wealthier due to 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.

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. 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.

Mobile broadband has seen very strong growth in China over the past five years. Slower growth is predicted for the next five years to 2022 in a fast maturing market. China has emerged as one of the most aggressive countries promoting 5G. The major Chinese internet companies will lead the way in introducing advanced consumer services based on 4K and 8K videos, as well as augmented and virtual reality technologies, on the new 5G networks.

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

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Fibre broadband adoption gains momentum in Singapore

Singapore has developed the status of a world leader in telecommunications through the building of a high quality and extremely progressive regulatory environment for the local telecommunications sector that has, in turn, generated a highly competitive market.

Growth in number of fixed lines in Singapore has remained relatively stable over the period from 2012 to 2017. Growth in telecom services in Singapore is now dominated by the mobile segment. Penetration of fixed lines is expected to remain stable or drop slightly, in the period from 2018 to 2020.

In its efforts to maintain Singapore’s status as an ICT market leader, the government launched its plan for a nationwide fibre-based broadband network: the Next Generation Broadband Network (NGNBN). The roll out and deployment of this national network has effectively been completed and there is rapid take-up of fibre-based services.

Singapore has been working to shape itself into what it says will be the world’s first ‘Smart Nation’ where data and analytics play a critical role in its society and economy. Smart Nation is Singapore’s vision to tap into the potential of technology to improve the lives of citizens and create greater opportunities for business.

Singapore’s mobile market has displayed slow growth over the last few years due to a highly mature market with penetration reaching 149% by 2017. However the market over the next five years to 2022 is unlikely to grow much further.

The ‘mix’ of mobile services is rapidly changing, with 2G having almost disappeared, 3G numbers declining and Long Term Evolution (LTE) / 4G service offerings continuing to expand rapidly.

Competition is now heating up in Singapore’s mobile market with a fourth provider Australian telco TPG Telecom set to launch services shortly. TPG Telecom has recently won the right to become the city-state’s fourth mobile network operator (MNO), defeating MyRepublic, another operator that has been trying to enter the local market over the past few years. This is likely to see increased pressure on SingTel, Starhub and M1, potentially triggering another price war which is likely to lower ARPUs over the next two years to 2019.

The launch of third generation (4G) services by all three operators and the subsequent development of this platform has been a transformational move for Singapore’s mobile market and has seen the adoption of new generation services steadily increase. The eventual launch of 5G services will further this transformation.

Singapore boasts an elaborate inter network, with around 100% of internet households having broadband access. The government has continued to maintain a strong commitment to making broadband access widely available to the population and at the same time lifting the overall quality of the access.

Wireless broadband has seen strong growth over the past few years driven by the migration to the NGNBN. By 2018 wireless broadband penetration is predicted to reach over 200%.

Optical fibre broadband also has seen strong growth as customers migrate to the NGNBN’s optical fibre network. xDSL on the other hand has seen a decrease in usage and cable modem broadband also has been experiencing declining subscriber numbers.

Slow growth in the fixed broadband market is predicted over the next five years in a mature and saturated market. Market penetration is predicted to increase moderately by 2022.

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

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Australian National Broadband Network rollout finally gains momentum

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. Australia’s broadband sector is making improved progress in its migration to a multi-technology the NBN.

Growth in the overall number of broadband subscribers is expected to continue to slow further into 2018, with most growth coming from the mobile wireless and fibre broadband markets, due to increased uptake by the NBN in these two segments.

The DSL sector is expected to shrink as customers are migrated to the NBN in areas where services become available, while subscribers on HFC infrastructure will continue to be provided by existing cable within the NBN’s multi-technology mix.

Internationally, the adoption of broadband ranks Australia below many other developed countries, however it has seen a moderate increase over the past two years due to the continued rollout of the NBN.

Consolidation within the broadband market, with some key acquisitions having taken place among fixed broadband service providers, will provide greater reach and scale for operators in coming years.

By 2016 FTTH still dominated the NBN statistics with 75% of all NBN subscribers using this technology. However, this will change rapidly over coming years as the FTTH roll out comes to an end (with the exception of greenfield connections). The nbn announced in December 2016 it was ready to deploy its “multi-technology mix” (MTM), offering a mix of FTTH, FTTB and FTTN in new housing estates. By 2017 FTTN and HFC began to dominate the NBN scene and by 2017 it was closer to 50% of all activated services that were FTTH / FTTN.

The nbn revealed plans to begin deploying “skinny fibre” (thinner fibre cables) in new housing estates from 2017/2018.

The deployment of FTTH in greenfield estates is a fast-growing industry, supported by an updated regulatory regime and pricing models. Recent legislation provides the framework for all new major housing sites to be supplied with FTTH infrastructure, or to be made ready (pit and pipe) for such deployment. The nbn has in place measures aimed at improving competition, minimising costs, and providing a level playing field for participants in this sector. Controversially, developers and home owners will be charged for the infrastructure costs in new housing developments.

The current NBN plan provides a multi-technology mix rather than be predominantly FTTH. Under the new scheme, FTTH will connect 20% of premises by 2020, while a further 38% will be served by FTTN – using the VDSL technology – and another 34% of will receive services via existing HFC networks. Using this approach, the government anticipated that 91% of premises connected to fixed-line infrastructure would receive 50Mb/s by 2020. The capital cost was put at $29.5 billion (US$27.4 billion).

The roll out of FTTN didn’t start until late 2015 and by April 2017 the service has 676,000 subscribers. However, this number is set to increase rapidly over coming years.

In 2016 nbn announced it would entirely abandon its plan to use the Optus Hybrid Fibre Coaxial (HFC) network to deliver high-speed broadband. It is now confident it can deploy the Fibre-to-the-curb (FTTC), technology in areas where it makes better sense from a customer experience, deployment efficiency and cost perspective, rather than upgrading the old network. The nbn will however still be using Telstra’s more extensive HFC network as planned and is still aiming for an HFC footprint of between 2.5 and 3.2 million premises by 2020.

The HFC networks of Telstra and Optus’s are being deployed as part of the NBN, so reducing the overall cost of the project’s rollout. However, the nbn’s Corporate Plan for 2017 envisages greater use of FTTC in HFC areas, given the mounting cost of connecting premises with HFC.

In international terms, the capabilities of HFC in Australia remain comparatively low, and there is considerable scope for improvement. In Europe, HFC networks commonly deliver data at up to 360MB/s, while some networks (such as Vodafone’s in Germany) deliver data at 400Mb/s.

The nbn is expected to operate services based on the DOCSIS3.1 during 2018, capable of delivering data at 1Gb/s. It is also actively looking at other cable networking advances such as full-duplex DOCSIS technology, which is capable of 10Gbps symmetrical speeds.

The nbn has confirmed FTTC, would be deployed to a potential footprint of up to 700,000 premises across the country. The expanded FTTC footprint fills the void left by the nbn’s decision not to use the Optus HFC cable assets, although it will still be using Telstra’s more extensive HFC network as planned. The nbn is however still aiming for an HFC footprint of between 2.5 and 3.2 million premises by 2020, using the Telstra assets.

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

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Mobile broadband penetration in Armenia to reach over 50%

The Armenian telecom market continues to attempt to put an effective national telecommunications service in place. With its relatively small population and low GDP per capita, it does not offer a hugely lucrative market opportunity. However, the government and the operators have been systematically building telecom networks and offering services.

The number of fixed lines Armenia levelled off by 2012 and started a slow decline in the period from 2013 to 2017, driven by strong growth in the mobile broadband segment.

The fixed broadband has grown strongly over past decade from a small base but still remains low by international comparisons. There has been a steady increase in penetration has increased from 2008 to 2016. Further strong growth is predicted over the next five years to 2021.

After a run of strong growth in mobile subscribers in particular, the market in Armenia experienced a major slowdown triggered by the Global Financial Crisis (GFC) in 2009. There has been some strong overall recovery since then, although growth has been somewhat erratic. By 2017 there had been considerable improvement in both the economy and the country’s telecom market.

Mobile broadband subscribers have grown strongly over the past five years supported by widespread rollouts of 4G infrastructure and the release of a growing range of mobile broadband packages by the major mobile operators.

Growth has been relatively flat in the mobile market over the past five years with penetration actually declining slight over the past two years. Mobile subscriber growth is expected to remain fairly flat over the next five years to 2021. The Orange Group signed an agreement with Ucom to sell 100% of its mobile subsidiary Orange Armenia. The sale to Ucom effectively created a new converged player able to offer a range of fixed and mobile services.

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

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