BuddeBlog

The Mediterranean and Levant countries of the Middle East’ represent a fascinating region of contrasts and opportunities. Egypt, Israel, Jordan and Turkey have all benefited greatly from comparatively well developed regulatory systems and competitive markets resulting in strong investment in telecommunications. Syria remains steadfastly against liberalisation and competition and consequently has an undeveloped market. Lebanon is poised to choose which course it will take.

In Israel regulatory policies have produced intense competition with several very strong players and a very advanced and highly developed market where telecommunications and media are converging in a digital environment. Household broadband penetration is around 70%, mobile penetration is well over 100% and 3G penetration around 30%. These figures, together with Israel’s flourishing IT and venture capital sectors, indicate fertile ground for digital media developments.

Turkey has a unique position in the region with its links to the European Union. It has a healthy mobile market and growing broadband penetration.

Egypt and Jordan are not rich countries but sensible policies have resulted in relatively open and developed markets. Egypt has emerged as the largest Arab Internet market thanks to the successful implementation of a free Internet strategy. Jordan has mobile penetration of over 80%, probably inflated by non-Jordanian nationals and multi-SIM usage, but still indicative of a highly developed market.

Lebanon is a battle ground between groups that would stifle development in the manner of Syria and those that seek to liberalise the market and bring the benefits of mobile and broadband services to a larger proportion of the population.

Whilst fixed-line, Internet and broadband penetration rates are low in the Arab countries of the region, one must always take into consideration larger household sizes, young populations and a habit of sharing broadband and cable TV subscription amongst neighbours.

Key Highlights

• Number portability and new licences have shaken up the Israeli fixed-line market, with incumbent Bezeq’s share of the market falling to levels around 85% by mid-2008. The report of an advisory commission has recommended key regulatory changes, including creating a wholesale market in all sectors, unbundling local lines and licensing MVNOs.
• The advisory commission has also advocated giving independent content providers a real chance to operate on broadcasting infrastructure. Israel has widespread DBS and cable multi-channel TV and IPTV is also operational.
• Jordan’s thriving mobile market is likely to get even more competitive with the granting of its first MVNO operator licence in mid-2008.
• A second Egyptian fixed-line licence is planned for 2008, together with the expansion of broadband services and wireless networks.
• The licensing and launch of a third network gave Egypt’s mobile market a significant boost to reach 43% penetration by March 2008, up from only 27% in early 2007.
• Following the resolution of its political stalemate in mid-2008, the Lebanese government will decide whether to privatise and liberalise its fixed line and mobile operators. A string of potential buyers is ready to enliven the market and release its untapped potential. An independent regulator has made an impressive start.
• Turkey’s communications market holds much potential given the size of its population, its growing economy and the alignment of its regulatory framework with that of the European Union (EU).

All the latest telecoms developments in the Mediterranean and Levant countries of the Middle East are reported in BuddeComm’s latest Middle East Annual Publication, ‘2008 Telecoms, Mobile and Broadband in Mediterranean and Levant countries of the Middle East.

For more information see new BuddeComm report: 2008 Middle East - Telecoms Mobile & Broadband in The Mediterranean & Levant countries

Tine Lewis - Senior Researcher Middle East

With strong leadership from the government and good support from its telecom service providers, Singapore has continued to maintain its status as both a regional leader and a global player in telecommunications. The island-state certainly generates a positive outlook in its local telecom sector. The country has built a high quality and extremely progressive telecommunications regulatory regime that has, in turn, resulted in a richly competitive market. All restrictions on direct and indirect foreign ownership within Singapore’s telecom sector have been lifted. In such a progressive commercial environment, over 98% of homes have fixed-line telephone connections and about 20% of the population have two telephones at home. In fact, Singapore was one of the first countries in the world to have a 100% digital telephone network.

Although incumbent Singapore Telecommunications (SingTel) continues to play a major role in the country’s telecom sector, liberalisation has seen a host of new operators entering the market, helping to exploit the competitive situation. In the lead up to officially liberalising the market, the government issued five facilities-based and 29 service-based licences. Prompted by the arrival of strong competition in its own backyard, SingTel decided to expand offshore and in what turned out to be a successful strategy the company has established a considerable presence in regional markets, including the ownership of Optus, the second ranked mobile operator in Australia.

Some years back Singapore’s mobile sector was being described as a mature market. This was clearly a premature call. Ignoring the label, the country has continued to grow both its mobile subscriber base (127% penetration by February 2008) and the range of value-added services. Particular interest has been focused on Singapore since the launch of 3G services. Following a period of what could only be described as hesitancy in the market about the potential of 3G and a slow start immediately after launch, there has subsequently been a strong upsurge in demand. No doubt this has been helped by the wider availability of more affordable, high feature handsets. By early 2008, there were 1.8 million 3G subscribers in a country which had a total of 5.8 mobile subscribers. While the 3G numbers represented 31% of the total subscriber base, significantly this was 58% of the total prepaid subscribers.

Singapore has also been especially active of late on the broadband Internet front. While it was the first country in the world to deploy DSL commercially back in November 1997, Singapore initially moved slowly on the large-scale adoption of broadband access. Following a major effort to expand its broadband services, however, the country has become a serious player with almost than 80% of Internet households having broadband access by early 2008. The government is heading up a major effort to make Singapore a clear leader in large scale broadband access. A comprehensive optical fibre-based broadband network is to be part of Singapore’s Next Generation National Infocomm Infrastructure (Next Gen NII) project; the strategy will also include a wireless network. The country is therefore well positioned for the development and adoption of a full range of triple play and NGN services.

Singapore government’s continuing vigorous support for the ICT sector saw the launch in 2006 of a 10-year Infocomm Master Plan, labelled the Intelligent Nation 2015 (iN2015). The country’s sector regulator, the Infocomm Development Authority, announced in April 2008 that S$1 billion (US$725 million) had been allocated by the government to support the building and operating of the proposed National Broadband Network. In the meantime, Singapore’s Wireless@SG initiative had already put in place more than 5,000 public hotspots around the island. It was evident from the level of intense activity that the iN2015 master plan was on track to be fully implemented.

Key highlights:

• Singapore’s overall mobile telephone penetration is now well over the 100% mark (127% in February 2008) and still increasing.
• After what was looking like a tentative start for 3G following its launch in 2005, Singapore’s next generation market has taken off; the number of 3G subscribers in Singapore was approaching 2 million in early 2008; this already represented 35% of the total mobile subscriber base; 3G services are set to totally dominate the market by 2010.
• Around 80% of Singapore’s households have some form of high-speed broadband Internet access; this was expected to reach close to 100% by 2010.
• The Singapore Government has initiated a huge project to build the Next Gen NII, an island-wide broadband network, at an estimated cost of US$1.2 billion. Importantly, the project was being structured in a fashion that would ensure an ‘open system’ with access being available to all operators.
• At the same time, in a complementary strategy the government launched its Wireless@SG project, aimed at covering most of Singapore island with free wireless Internet access; by early 2008 coverage had been extended to most of the country.
• Fixed-line telephone services remain remarkably resilient in Singapore with over 99% of households connected to the fixed network.

Peter Evans - Senior Researcher Asia

For more information see the new BuddeComm Report: 2008 Asia - Telecoms, Mobile and Broadband in Brunei Darussalam and Singapore

Even the most advanced IT systems cannot grow and expand forever.

In the years to 2010, the Internet enters its fourth decade and is reaching two important limits which are inherent in the current architecture. Firstly, the exhaustion of previously unused IPv4 address space, and secondly a set of inter-related scaling problems in the BGP (Border Gateway Protocol) routing system which drive up the cost of the core routers used by every ISP and large end-user network - such as those of corporations and universities.

These problems contribute to the cost of Internet access for all users - at home and in business. The Internet’s Routing Scaling Problem threatens the stability of the global routing system. Together with the closely related IPv4 address exhaustion problem, the two form the Internet’s unfolding Routing and Addressing Crisis.

This crisis leads to increasingly high barriers to the entry of new ISPs and prevents millions of end-user networks from obtaining the Provider Independent address space they need to multihome their networks and avoid “provider lock-in” - by being able to choose a new ISP without having to change the IP addresses of all the computers and other devices on their networks.

At a time when many users and investors expect Internet costs to continue their historical downwards trajectory while capacity and user numbers continue to grow, we examine the problems facing the Internet, the likely solutions and the likely costs and limitations of these solutions.

A new BuddeComm biennial report in Handbook format - 2008 Technology - Internet - Volume 5 - Routing and Addressing Crisis - introduces managers and technical specialists to and important and controversial set of technical and policy challenges. The BuddeComm Handbooks provide an overview and functional understanding of important technologies which are otherwise hard to grasp without one-on-one training or lengthy study of voluminous engineering-oriented material.

The routing scaling problem and the closely related IPv4 address depletion problem directly affect every ISP’s costs, the capacity of the Internet to accommodate new networks, and the ability of end-user computers to have their own unique address. These problems are rarely discussed outside the IETF and IRTF (Internet Engineering and Research Task Forces). Until these problems are resolved, competition policy, reliability and cost problems will escalate, especially with the accelerating adoption of Internet communications in developing countries.

It is widely recognised that fresh IPv4 address space will become difficult or impossible to obtain around 2010, and that it is impractical for most users to adopt IPv6 - the second version of the TCP/IP protocols and addressing system with its essentially boundless 128 bit address space.

We review the needs of end-users and discuss in detail the scaling problems of individual routers and the BGP routing system as a whole. We then consider the role the current architecture plays in the relatively low rates of utilisation of IPV4 address space. While IPv4’s 3.7 billion addresses are a fundamental constraint, we consider how a new routing and addressing architecture could enable efficient use of these addresses than is possible with today’s techniques.

We discuss the major proposals for improving the BGP protocol and the current routing system. However, these are marginal improvements and are not a solution to the major challenge of providing an ever-growing number of end-user organisations with portable address space, multihoming - using two or more ISPs to create a robust, reliable Internet connection - and Traffic Engineering, the ability to manage incoming packet flows over multiple links.  A new architecture is required so these goals can be achieved, for potentially millions of businesses and other organisations, without further burdening the BGP routing system.

Since the Internet’s inception, these have been achieved by directly using the BGP routing system so that each of the Internet’s 200k+ Default-Free Zone routers has to make a separate “best path” decision for each network’s division of the address space. There are currently 250k divisions and this number is doubling approximately every four years.

We discuss the constraints on a new architectural solution, including complete backwards compatibility for computers in networks which have not adopted the new architecture, and the requirement that there be no changes to the operating systems or application programs of user’s desktop PCs, servers and mobile devices.

We explain and compare the four current proposals for achieving these goals: LISP-NERD, LISP-CONS, APT and Ivip. These are all overlay systems, operating at the IP packet level. These involve upgrades to some routers but are intended to relieve the burden on the BGP system. These proposals are ‘Locator / Identifier Separation’ protocols, involving Ingress and Egress Tunnel Routers, with some broad similarities and important differences.

Finally, we consider some pervasive difficulties which are likely to result from any one of these new architectural approaches, including the longer headers of tunneled packets, the resulting inefficiencies for short packets (such as VoIP packets) and problems with maximum packet length and fragmentation for longer ones.

This report is intended for technical specialists and managers who require insight into the future of Internet communications in the three to fifteen year timeframe. This is the only report extant on this important topic and is intended to support readers by providing fundamental understanding of the most important principles, in order to enable them to better plan their own product and service development, investment and regulatory activities.

For more info see:

• 2008 Technology - Internet - Volume 3 - IP Techniques
• 2008 Technology - Internet - Volume 4 - IPv6
• 2008 Technology - Internet - Volume 5 - Routing & Addressing Crisis