BuddeBlog

Impacting on the telecom markets of Greece, Bulgaria and Romania is EU-mandated competition, decreasing prices and leading to the introduction of new services by both competing operators and incumbents alike. This report offers an informative insight into the Balkans (East) region, covering regulatory developments, major players in the fixed-line, broadband, convergence and mobile markets, the development of new product offerings for the aforementioned markets, as well as presenting a wide variety of industry related statistics in addition to broadband penetration forecasts to the year 2018. 

Key Developments

• Customer churn levels and the level of competition is expected to increase in Romania in 2009 following the introduction of number portability for both fixed and mobile markets in October 2008. Competition in both Bulgaria and Romania will improve in the future as each country’s respective regulator completes market analyses during 2009 - 2010 and impose obligations on SMP operators (i.e. incumbents) to improve competition, particularly in fixed-line markets.
• Healthy infrastructure-based competition exists in the broadband markets of Bulgaria and Romania due to well established cable TV providers as well as a large number of informal LANs. Within Greece the actions of the regulator has improved the wholesale market, with wholesale accounting for over 40% of total DSL connections, the overarching technology platform for broadband access in Greece. The state of the wholesale DSL market in Bulgaria and Romania is expected to pick up once regulators complete market analyses during 2009 - 2010 and oblige incumbents to offer network access.
• IPTV take up is on the rise in all three countries, as incumbents and telecom operators acquire additional content and improve service offerings. In Bulgaria and Romania cable operators are fighting back by launching triple play offerings.
• Mobile operators have once again focused on mobile data, leveraging now widely-available EDGE/WCDMA/HSDPA networks to launch aggressively priced mobile broadband access with prepaid data bundles. With mobile voice markets at saturation, the underdeveloped mobile broadband market is the new revenue growth opportunity and hence competitive battleground for mobile operators, with competition expected to put downward pressure on tariffs in 2009 and beyond. This in turn will negatively impact other wireless broadband providers, particularly the WiMAX service providers, given the market power of the mobile operators and the reach of their networks. 

For more info on BuddeComm’s latest Annual Publication ‘2008 Europe - Telecoms, Mobile and Broadband in Balkans (East)‘ which profiles the region’s three largest countries.

Last week I was involved in an interesting but disheartening incident - one that further highlights the problems we are facing with Telstra in Australia. 

Tomorrow I will be chairing Day One of the Broadband World conference, organised by terrapin. This event included a panel session entitled ‘Can open access regulation truly work in Australia without retail separation?’ in which Telstra had agreed to participate. 

At the last moment, however, Telstra asked the conference organisers to withdraw two people from the panel, saying they wouldn’t participate otherwise. It was also very interesting to see that they even came up with the names of the people they would like as replacements. 

To avoid embarrassing the people involved I won’t mention any of the names. 

Quite apart from the fact that such a request is shocking, and constitutes a complete disregard of the freedom of speech, there were also commercial factors involved as Telstra’s participation in such an event is important; this did put real pressure on terrapinn. As the Chairman I tried to negotiate an outcome that would be acceptable to everyone, but Telstra refused to even discuss the matter. 

The conference organisers attempted another compromise but Telstra refused that also and withdrew itself from the conference. 

I would like to publicly thank and congratulate terrapin for maintaining its independent position in this unfortunate matter. That is a courageous thing to do. We are all aware of the market power wielded by Telstra, and it is shameful that they misuse that power in circumstances such as this. 

I find the whole situation rather bizarre. If I have definite or passionate views about issues I welcome the opportunity to argue my case with my peers. I would never be afraid to do this. 

But, on the other hand, I would be more cautious if I was not certain that my perspective was the correct one. In the present situation it seems to me that by adopting such a negative position Telstra has revealed that it doesn’t really believe in its own viewpoint. 

This further highlights what I have been saying for the last three years - Telstra is not interested in a genuine debate on open access, separation and so on. It is good at shouting and abusing anybody who doesn’t toe its line but that’s where their ‘discussion’ finishes. 

It is easy to accuse others of being unbalanced and biased but if you never sit down with those people then I don’t believe you have any right to abuse or ridicule them. That is another example of Telstra blatantly misusing its market power. It can spend millions on PR and spinning to insult and ridicule people, knowing full well that the victims are not in a financial position to adequately respond. 

As I have stated previously I can see Telstra’s point in relation to maximising profits and hanging onto its monopoly - so why not just be open and address the financial issues that arise from this. I do understand their position on this, and I can see that it is a serious problem that needs to be looked at. 

I am also a keen advocate of getting Telstra involved in the NBN. From the very first day I have very publicly stated that we can’t build an NBN without Telstra - that the incumbent needs to be engaged. This is also what has been behind the Minister’s reasoning when he embarked on the rather difficult tendering path. However, Telstra’s response has consistently been: you do it my way or otherwise we’re not going to be involved. 

One thing is for sure there will be lively debate tomorrow at the terrapin conference on the NBN. One of our most respected telecoms experts in the country David Havyatt has agreed to take up the position at the conference to present the Telstra case, I am certain that he will do this genuinely and will do this well. The rest of the industry is certainly not afraid of having the debate. So I invite you all to be there tomorrow! 

For more info see: http://www.terrapinn.com/2008/broadbw/ 

Paul Budde 

See also:

• Australia - National Broadband Plan
• Australia - National Broadband Plans from Telstra, Terria & others
• Australia - National Broadband Plan Analysis RFP
• Australia - National Broadband Plan - Analysis late 2008

E-commerce is now an important part of the economy, particularly in the developed markets. While e-commerce is still in its infancy in many emerging markets, this is set to change in the coming years especially in China. In 2008 China now has the highest number of Internet users in the world, overtaking the USA. E-commerce growth in the USA remains strong however, with China also offering significant opportunities for those operating in the e-commerce space. 

Worldwide the number of Internet users has now reached around 1.4 billion and billions will be spent by consumers during 2008 on online retail. While the economic slowdown will most likely curb e-commerce growth somewhat over the next couple of years, particularly spending on online advertising, there is evidence that so far the online retail market has remained steady due mostly to the lower prices offered via online shopping.  

Internet banking has slowly become more popular around the world, with 30% or more of Internet users utilising such services in some markets. However many online banking websites have at least one potential design weakness that could leave users vulnerable to cyber attacks. Improved bank security measures over the last couple of years, such as the introduction of home chip and pin devices is helping to combat this issue. 

In the next few years the total entertainment and publishing industry (including offline and online) is expected to be worth more than $2 trillion - driven in particular by a wave of growth in online video games, gambling, music, social networking/UGC, and online video. In recent times sales of digital music, mostly via the Internet, have increased by more that 30%; in contrast sales of CD and DVDs continue to decline. Online video consumption is also beginning to produce promising results and advertisers have begun to seriously take note. Pay-to-own downloading is particularly popular and new business models in this area are expected to emerge over the next few years. Travel and adult content services are also popular with more growth expected ahead.  

Mobile commerce is potentially important for a wide range of industries, including telecommunications, IT, finance, retail and the media, as well as for end-users. It will work best in those areas where it can emphasise the core virtue of mobile networks - convenience. However while there are good applications, the technologies and business models to date have not been well suited to mass market applications. The regulatory environment has also held this market up. This is beginning to change as banks and merchants collaborate with mobile operators. Applications around contactless cards using Near Field Communications are also being developed around the world. Focus has also turned to the developing markets, where mobile phones are being viewed as an opportunity to reach the masses that would not otherwise use m-payment or m-banking services. M-commerce is booming in the emerging markets (India, Kenya, Nigeria, Philippines, Brazil) where for millions of people mobile banking is the only way of banking available and affordable to them. 

This annual report provides an insight and analyses into the trends and developments taking place in the m-commerce and e-commerce sectors. The report provides analyses of the trends and issues impacting upon the growth of e-commerce, including e-banking, e-payments and online advertising sectors. Analyses of the developments taking place in mobile commerce are also provided, along with information on m-payment and m-banking. Statistics and forecasts for both the e-commerce and m-commerce markets are provided. The report also includes valuable insights and statistics on the developments taking place on a regional level including North America, Latin America, Europe, Middle East, Africa and Asia Pacific. 

Key highlights:

• By 2012 it is expected that more than 1 trillion will be spent online by B2C consumers. B2B spending will exceed this considerably.
• E-payment solutions are an important part of e-commerce transactions; however security issues continue to tarnish the industry.
• Asia Pacific leads the world in terms of using mobile phones for m-payments, accounting for around 85% of customers worldwide.
• BuddeComm estimates revenue from mobile content and services (excluding SMS), accounts for around 7-10% of total mobile revenues worldwide. SMS remains popular and accounts for a further 10% of total mobile data revenues.
• Online advertising growth is set to continue for the next few years, but will slow slightly in the wake of the US financial crisis. It is expected that online advertising will eventually account for around 20% of all advertising spend in some markets.
• Search services are central to almost everything that users do online, and this places leading search companies such as Google and Yahoo at an advantage. In the emerging Chinese market, Baidu and Alibaba also have a good foothold.
• Google is still the most popular website property worldwide; however individual countries and regions show unique differences with many local sites remaining popular. Other web properties proving popular across multiple markets include Yahoo, Microsoft and Wikipedia sites, Apple Inc, eBay and Amazon. 

Comparison of popular websites in different markets - 2008

(Source: BuddeComm based on various industry sources, 2008)

Note: This is not a ranked list. 

For more info see: 2008 Global Digital Economny - M-Commerce, E-Commerce & E-Payments