No smart energy policy for Australia

March 21st, 2017, by

My involvement in the Australian energy market started in 2001 when I brought the energy companies together in Sydney. At that time we were looking at utilising their infrastructure to assist the ailing competition in the telecommunications market that was dominated by Telstra, which at that point was unwilling to introduce residential broadband services to Australian users.

Within the alliance, called Utilitel, a range of telecoms-related businesses were initiated at that time.

But the big change came during 2006-2007 when climate change became the hot political topic of the day. Energy companies realised that in order to respond to this ecological disaster they would have to change their operations, as 30% of national carbon emission was directly linked to their operations.

The first action undertaken by what would become Smart Grid Australia was to petition energy ministers in COAG, urging them to use the smart grid, rather than smart meters, as a strategy. We used the analogy of promoting cars without having the appropriate roads. But our advice fell on deaf ears and the resulting disastrous rollout of smart meters in Victoria was a clear indication that a holistic national smart energy policy would be needed before embarking on any details.

At the same time there was internal resistance to such an approach. After all, saving energy would mean less income for energy companies. Perhaps the best example of this came from Basil Scarsella, at that time the CEO of ETSA, the energy distribution company in South Australia. I sat on a panel with him at the ENA Energy Australian conference in 2007.

There I participated on behalf of Smart Grid Australia, arguing for smart grids. Basil made it very clear that ETSA would not do anything without clear government policies and regulations. ETSA (now SA Power Network) is a privatised energy company majority-owned by Hong Kong-based Cheung Kong Infrastructure Holdings. Basil made it very clear that without a national policy his company would not invest in any significant new energy investments beyond their normal run of the business.

Things started to look up with the government announcing an Energy Trading System, as this was seen by countries around the globe as the best basic policy system for the future (and this is still the case).

Climate change, together with government leadership, meant that the energy companies’ communications interests changed from external opportunities for their network – such as public telecommunication services – to an internal strategy on how communications could assist them in modernising their infrastructure in order to become far more energy-efficient. Organisations such as Ausgrid (at the time Energy Australia) had indicated that a full-blown smart energy operation could deliver energy efficiencies between 30% and 40%.

The government of the day picked this up and in 2009 made $100 million available for what became known as the Smart Grid Smart City Project. A further $200 million was added to the project by direct and indirect private investment. The project included smart grids, micro-grids, integration of renewable and the deployment of an electric vehicles infrastructure. The geographic area covered Sydney, Newcastle and the Upper Hunter region (Scone).

The project would run for three years and would become the blueprint for a national approach to smart grids. The project was seen as one of the most significant smart grid projects in the world and gained international attention, especially as part of the project was that the data gathered would be made available nationally and internationally (this has happened and many organisations from around the world have received that information from the Australian government).

What, however, became very destructive was that while the federal government at that time launched its new policies the federal opposition undermined it by mischievously calling it a carbon tax system. Ever since then a bi-partisan political energy solution has eluded the country.

This was based, not on the national interest, but on party politics.

What also hasn’t helped the situation was the sometimes rather militant position taken by many people and organisations involved in the green movement. It is simply not possible in the short and medium term to replace all of our energy needs with renewables. This was used politically by the more conservative forces in politics to oppose anything renewable – resulting, for example, with leading national politicians bringing coal into Parliament to undermine renewable energy policies. Similar unhelpful actions were taken by senior politicians ridiculing wind energy. As a result we still don’t have a long term energy policy that let’s say over a period of 20-30 years would transform the Australian energy market to one mainly based on renewable resources.

In this already convoluted environment another disastrous policy was taken.

For more than a decade natural gas had been seen as another cleaner energy solution, and Australia is one of the largest producers of natural gas. But in its infinite wisdom the Australian government issued gas mining licences allowing the producers to export nearly all of that gas, with only a small proportion to be made available for Australia. Changing this policy now (as mentioned by the Prime Minister) will mean that Australia will have to buy back its own gas at prices significantly higher than customers in Asia are paying for it.

Despite constant warnings the organisation in charge of national energy management, NEM, together with the Australian Energy Regulator, have largely been asleep at the wheel. The NEM has belatedly mentioned that Australia is facing a national energy crisis as there will not be enough energy available for the running of the country. Where were these organisations a decade ago, to add their weight to the development of sound national policies?

Even now political disarray continues, with the Prime Minister plucking yet another rabbit out of the hat – an upgrade of the Snowy Mountain Hydro System. Something that came totally out of the blue, with no consultation with the country, the industry or the energy experts. Another ill-considered development in a non-existing national energy policy that is simply aimed at quick political scores rather than addressing the long-term national interest.

Paul Budde

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Iran to see arrival of MVNOs amid other reforms to telecoms sector

March 20th, 2017, by

Mobile services are widely available in Iran with services on offer from three major mobile network operators which are able to offer services on a national basis. These include MCI, MTN Irancell and Rightel. In March 2017 competition in the mobile sector was set to increase further with the country’s largest ISP, Shatel Group, reportedly given permission to begin offering full MVNO services in Iran. It would operate under the brand name Shatel Mobile. HiWeb, which signed a partnership deal with Vodafone Group in October 2016, was also awarded a license from the CRA to offer SIM cards under a local brand name.

Mobile data services are available but account for a small proportion of total revenue. This is expected to increase over time as mobile data services increasingly underpin future revenue growth, made possible by the launch of 3G/HSPA and 4G LTE services. Recently WiMAX services in Iran were replaced with TDD-LTE services by two operators, Irancell and ISP MobinNet.

Iran is currently implementing its 6th Development Plan which runs between 2016 – 2021 and contains a number of measures to transform the telecoms sector. For example, the development plan aims to increase Internet bandwidth; encourage foreign and private investment in the telecoms sector as well as make structural changes to the telecoms incumbent, Telecommunication Company of Iran (TCI).

Internet usage is growing due to improved accessibility brought about by competition and government initiatives designed to improve ICT accessibility. Iran has been developing its own National intranet that will host only approved Islamic content. Known as the National Information Network (NIN); it went live e in August 2016 and will offer speeds of up to 10 Tb/s as part of an upgrade underway in 2017. The NIN is designed to complement the Internet and operates on Iran’s fibre network.

The lifting of economic sanctions in early 2016 was expected to facilitate a big boost to Iran’s economy. However, in 2017 it became apparent that the economic transformation of Iran is occurring at a slower pace than expected, with industry analysts commenting that Iran needs to reduce its reliance on oil and strengthen other industry sectors.

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

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Greece’s telcos secure multi-million Euro loans to build out NGNs

March 17th, 2017, by

Greece’s telecoms market has undergone some very tough economic conditions in recent years, leading to lower sector revenue and investment. Operators across the board have seen gross profits tumble, and the continuing economic turmoil will make market conditions particularly tough during the next few years. The dominant player remains the incumbent telco Cosmote (OTE). The company has experienced significant challenges, but is supported by the organisational ability and financial clout of its parent Deutsche Telekom. Despite market liberalisation, Cosmote continues to dominate all sectors in the market.

The telecom regulator EETT has shown increasing success in promoting competition, with local loop unbundling well utilised to deliver competing fixed-line services. Promoting competition has become one of the EC’s conditions for Greece’s financial bailouts. In February 2017 access for competitors was extended to Cosmote vectoring VDSL infrastructure.

The main broadband operators have recently secured loans to enable them to build fibre-based next generation networks and so reach European broadband targets by 2020. The slowly increasing consumer take up of broadband services and a steady deployment of faster VDSL infrastructure has in turn encouraged the development of a range of IP services including streaming videostreaming.

Greece’s well-developed mobile market is dominated by the three mobile network operators Wind Hellas, Vodafone Greece and Cosmote. Tariffs have fallen in recent years as a result of competition and regulatory mandated reductions in MTRs. Operators have invested in LTE infrastructure and technologies including carrier aggregation to provide networks capable of meeting customer demand for data services. This in turn is helping the operators to grow revenue and offset declining revenue from voice and SMS services. Wind Hellas and Vodafone have a mobile network sharing deal in place, and have also partnered to develop a large-scale fibre-based fixed-line NGN.

This report introduces the key aspects of the Greek fixed-line telecoms, wholesale and IT markets, outlining the regulatory environment, assessing the major players and providing relevant operational data and financial statistics on both the operators and the market. The report also reviews the mobile market, covering regulatory and market developments as well as financial and operating statistics for the key players. In addition the report analyses the fixed and wireless broadband markets, providing an assessment of developments relating to vectoring VDSL and fibre networks as well as subscriber forecasts to 2022.

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

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South Korea Continues as a Fixed Broadband World Leader

March 16th, 2017, by

South Korea has one of the world’s most active telecommunications and Information Technology (IT) markets backed by strong support from the government. As well as the commitment of the government, the sector is boosted by an innovative private sector and a technologically savvy population. Spending on ICT and high-technology equipment helped lead a transformation of the economy. The government aims to transform the country into a knowledge-based information society in a ‘smart-age’.

By 2017, KT was still the largest telephone and fixed-line company. With declining revenues from its fixed-line services, the company has forged ahead with IPTV and LTE. Competition with LG U+ and SK Broadband had intensified on many fronts ranging from IPTV to VoIP.

South Korea’s mobile market has slow growth over the last few years due to a highly mature market. Organic growth by the three main mobile operators, together with the multitude of niche MVNOs will result in further growth to 2018 however growth rates will taper off further over the next few years as the market further matures. Market penetration reached 117% in 2016 and is predicted to reach between 119% and 122% by 2021 driven by the uptake of both 4G and 5G services. The split in mobile operator market share has remained relatively constant over the last two decades. LG Telecom however has made a marginal increase in market share over that time.

The mobile broadband market is highly mature in South Korea. Penetration has increased moderately over the past five years from 105% in 2012 to 111% in 2016. Prepaid voice services have not been particularly prevalent in South Korea, with the subscription model dominating the mobile market. South Korea has the world’s highest number of broadband services per capita. Korea’s policy emphasis has been to establish an Ultra Broadband convergence Network (UBcN) with 1Gb/s speeds on fixed lines and 10Mb/s on wireless.

Since breaking through the 10 million subscriber mark in 2002, subscriber growth has steadily increased, reaching over 20 million fixed broadband subscribers by 2016. Market penetration is predicted to continue to grow moderately over the next five years reaching over 50% by 2021, with a market penetration of 41%. Growth is being driven by an expected increase in converged solutions being offered such as IPTV and Smart Home services. Much will depend on the continuing strength of the economy in South Korea.

Internet use is widespread in South Korea with surveys even including children as young as three years of age. The internet has permeated all aspects of society and has made a significant contribution to education even at pre-school level. Internet penetration reached 91% by 2016.

The widespread adoption of the Internet in South Korea coupled with the continued pace of development has resulted in an exciting digital economy. This report also looks at various aspects of the digital economy in South Korea that support the drive to converged services. It includes information on e-commerce users, e-banking and e-government. It also contains information on internet usage patterns.

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

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Russia’s mobile operators gear up for 5G services by 2018

March 15th, 2017, by

The Russian telecom market is the largest in Europe, supported by a population of about 143.5 million. The country’s ongoing economic woes, partly resulting from difficulties associated with a range of sanctions related to the annexation of Ukraine, have impacted growth in the telecom sector.

The market is dominated by the western regions where the main cities and economic centres are concentrated. All sectors have been liberalised, with competition most prevalent in Moscow and St Petersburg. The former holding company for Russia’s incumbent telecom operators, Svyazinvest, has emerged as Rostelecom, with most regional players absorbed into the operator. Rostelecom subsequently merged its mobile business with Tele2 Russia, which launched mobile services in the important Moscow market in October 2015.

Telcos continue to deploy and modernise fixed-line network infrastructure to offer improved broadband services as well as a range of IP-delivered content. The government is investing billions of Rubles in a 200,000km telecom network which will provide a broadband service of at least 10Mb/s to thousands of underserved villages. Rostelecom has been contracted to undertake and manage the work.

Russia has also emerged as one of Europe’s fastest growing markets for fibre-based broadband, with Rostelecom’s own fibre broadband access network covering more than 33 million premises. By the end of 2016 some 60% of the company’s broadband subscribers were on its fibre infrastructure.

The number of mobile subscriptions has passed 230 million, while SIM card penetration is high, at around 162% by early 2017. Several mobile network operators are active, although the market is dominated by four major operators (MTS, VimpelCom, Tele2 Russia/Rostelecom and MegaFon). These have expanded their footprints widely through the acquisition of smaller regional service providers. Tele2 Russia has undergone several changes of ownership in recent years, becoming a significant player following its merger with Rostelecom. Competition in the key markets of Moscow and St Petersburg is fierce, due to the size of the cities’ populations and the higher concentration of wealth there. Tele2 Russia launched services in Moscow in late 2015 and has steadily gained market share.

The extensive deployment of LTE infrastructure is supporting growth opportunities through mobile broadband and data services, which make up a growing proportion of overall mobile revenue. Investments in carrier aggregation and LTE-A technologies have further boosted network capabilities, while operators have also have strategies in place to prepare for 5G. Trials of 5G-based services are expected to be undertaken during the 2018 football World Cup, to be held in Russia.

This report provides an overview of Russia’s fixed-line telecom and IT markets. It includes information on key regulatory developments, data on fixed-line networks, and an assessment of telcos’ financial and operating performance. The report also covers the mobile market, assessing regulatory developments and detailing the strategies of the major operators. It evaluates technologies and areas including mobile data, content and applications. In addition the report provides data and analyses on the fixed-line and wireless broadband market, noting developments in a range of technologies including DSL, cable and FttX and providing subscriber forecasts to 2021.

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

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