France’s telecom sector shows strong return to investment

February 13th, 2017, by

France has the third largest telecoms market in Europe after Germany and the UK. The incumbent telco Orange Group is one of the world’s major players with interests in markets across Europe, the Middle East and Africa. The company recently embarked on its five-year ‘Essentials 2020’ program which is focussed on emerging markets as well as on investments in super-fast broadband and LTE infrastructure within its European footprint. Despite market liberalisation, the company still dominates all sectors though increasing competition from a number of major players (notably SFR Group and Iliad) has gradually eroded this lead, prompting it to respond with a range of innovative offers and wide-ranging strategies to meet future customer needs. It is also investing in a national fibre network, largely in response to the activities of smaller players.

In the broadband market subscriber growth has been bolstered by demand for high bandwidth applications, prompting considerable investment in fibre infrastructure among telcos and regional governments. The pro-competitive regulator has also promoted access to Orange’s DSL network and fibre networks for new entrants. In early 2017 the regulator considered a range of measures to improve access to Orange’s networks.

DSL still dominates the broadband market in terms of access lines, though in 2016 the number of DSL lines began to fall for the first time as customers were migrated to fibre infrastructure. Fibre deployments have grown substantially in recent years, with all of the major ISPs concentrating their investments in fibre with a view to promoting 1Gb/s services. Although the cable footprint only reaches about 40% of the population, the dominant cableco SFR Group has upgraded its network to compete with DSL and has itself entered the DSL and fibre markets. By September 2016 SFR had 1.97 million customers served by fibre.

The French mobile phone market is also one of the largest in Europe. The network operators Orange, SFR Group, Bouygues Telecom and Free Mobile have invested in network infrastructure and technologies in recent years. LTE-A providing data at above 300Mb/s had extensive coverage by early 2017, while both Orange and Bouygues Telecom are involved in 5G trials. The regulator has also been supportive, having licensed spectrum in the 2.5GHz and 3.5GHz bands since mid-2016. In early 2017 it opened a consultation with a view to releasing spectrum in these bands for mobile broadband use while retaining a portion of the 3.5G band for 5G in anticipation of that technology coming into commercial use from about 2018. The mobile sector is dominated by four providers, complemented by an increasing number of MVNOs which together had a market share of around 11% of subscribers by early 2017.

This report introduces the key aspects of France’s telecom market, providing updated statistics on the country’s fixed network, an analysis of operator strategies, and a review of the key regulatory issues including the status of number portability, wholesaling and carrier preselection. In addition the report assesses the fixed broadband market, focussing on cable, DSL and the fast-developing FttP/C sectors. It reviews the strategies of the principal providers such as Orange, Iliad and SFR Group, and considers the regulatory status of LLU and access to fibre infrastructure. The report also evaluates the mobile voice and data markets, assessing recent developments related to spectrum licensing and regulatory issues and providing profiles of the major players and MVNOs, including statistics on their operating and financial performance as well as their strategies in an increasingly fierce competitive market.

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

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Italian government awards €1.4 billion contract to extend fibre-based broadband

February 10th, 2017, by

Italy’s large telecom market boasts one of the highest rates for mobile penetration in Europe, while the fibre-optic sector has seen significant development in recent years, both in operator investment and in regulatory measures to widen the availability of superfast broadband services. Broadband uptake is growing steadily as a result of fibre and ADSL2+ infrastructure upgrades, though the country still lags behind benchmark countries for average broadband access speeds. The government is investing €4 billion to provide superfast broadband across the country, with a major contract recently awarded to the utility Enel to roll out fibre in six regions.

The vibrant mobile market has undergone considerable changes since 2016. For some years it was dominated by three operators, TIM, Vodafone Italia and Wind, with the fourth player 3 Italia having steadily made progress with securing customers to its network. The owners of 3 Italia and Wind in mid-2015 agreed to merge their units, a process which gained regulatory clearance in October 2016. The new merged entity, trading as Wind Tre, began offering services in January 2017. As a result of the merger the market gained a new entrant in the form of Iliad, which secured access to spectrum and to Wind Tre’s infrastructure to enable it to offer services while its own network is being developed.

All providers operate LTE networks, and significant investments in network upgrades have led to considerable growth in mobile data and high-end applications. Telecom Italia has also trialled LTE broadcast technology and is cooperating with Huawei and Ericsson to develop a platform for 5G services.

This report analyses the key aspects of the Italian telecom market, providing the latest data and statistics on the country and the fixed network services sector. It also reviews the key regulatory issues including number portability and local loop unbundling. In addition, the report assesses the broadband market, including the burgeoning fibre sector, regulatory measures aimed at increasing the availability of services, and the status of government infrastructure in the sector. It also provides broadband forecasts to 2021. The report reviews the mobile market, including statistics, key regulatory issues, an assessment of mobile data services and an evaluation of the market following the merger of Wind and 3 Italia and the market entry of Iliad.

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

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ASEAN plans to establish a single telecommunications market for region

February 9th, 2017, by

The 15th ASEAN Telecommunications and Information Technology Ministers Meeting, held in Vietnam in November 2015, endorsed the ASEAN ICT Masterplan 2020, in a move that is designed to see ASEAN develop a sharper focus on ICT and its social and commercial capabilities. Apart from seeking to drive a transformation to the digital economy and developing the human capacity necessary for this transition, the plan specifically targets “facilitating the emergence of a single integrated market that is attractive to investment, talent and participation.”

The member states of ASEAN are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

One of the five expected outcomes of the masterplan is ‘Multiple ICT Opportunities across a Single Regional Market.’ This rather broad initiative is expanded somewhat in the plan by the statement: ‘Proactively support the ongoing liberalisation of the ASEAN market for products and services.’ The plan then describes an action point as in the following table:

Action Point Description Target/Project
Nurture the Free Flow of ICT Products and Services in ASEAN Develop a robust digital economy by nurturing a conducive environment for the free flow of ICT products and services 1. Identify priority ICT standards so as to facilitate alignment of ICT technical standards across ASEAN Member States (AMS).

2. Conduct a study on the potential for an ASEAN single telecommunications market, including studying the various components and aspects of a single telecom market and indicating the ‘readiness’ across ASEAN Member States (AMS).

 

The ASEAN Secretariat in cooperation with the Australian Government is working to move forward on a number of key action points in the plan. Operating under the ASEAN Australia Development Cooperation Program – Phase II (AADCP II), it has already initiated the required study into establishing a single ASEAN telecommunications market.

In taking this initiative, the AACDP noted that a single integrated market is required ‘for the telecommunications industry in ASEAN to survive the major shift towards data-heavy and always-connected services demand.’ It added that ‘[the single market] will encourage the industry to reinvent its business model, supporting a move away from vertical bundling of services towards contract-based relationships and horizontal consolidation of operators, including resource sharing amongst service providers. This is driven by the need to achieve better economy of scale as well as to reduce capital expenditures and operational costs, which will result in lowering the costs for consumers. Good economy of scale would also attract more investment, especially for new technology in the sector.’

The interest, of course, is in exactly what shape this single market might take.

See also:

Malaysia – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses;

Singapore – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses;

Indonesia – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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The state of telecoms competition in Australia

February 8th, 2017, by

After the rowdy 1990s and early 00s the dust did settle a bit on the competition problems that continued during that period – more than 20 Inquiries, many court cases and ongoing regulatory corrections.

The situation settled down somewhat with the arrival of a new CEO at Telstra, David Thodey in 2006. Subsequent changes to the telecoms market, along the structural separation of Telstra, also saw a more mature approach towards competition in the telecoms market.

However, it is still essential that we remain vigilant on this issue; while on the surface things have calmed down to a certain extent there are still ongoing concerns regarding the health of telecoms competition in Australia.

A key element here is the fact that, despite all the positive changes, Telstra remains the dominant player in the market. It received a substantial cash injection, worth more than $11 billion, through the deals with the government regarding the NBN. This gives the company the financial freedom to basically do anything it wants, and it has done so extensively – new IT infrastructure, mobile networks, Wi-Fi. Telstra is one of strongest financial telcos in the world.

But the reality is that the NBN didn’t proceed along the lines that were envisaged after new legislation was put in place in 2009 and 2010. With the Coalition government coming into power in 2013 most of that was undone and the present government’s version of the NBN relies heavily on the old network. As a result Telstra, being the company with the insight into and knowledge of that network, became even more powerful.

Furthermore it remained one of the most vertically-integrated telcos in the world (dominant in the fixed market, the mobile market and pay TV).

While, to its credit, Telstra has certainly become a far more responsible player in the market, offering great products and services and significantly improved customer services, the reality is that it remains the dominant player in the market. Its overall market shares still hover around the 60% and it is still taking 80%+ of the profits in the telecoms market.

Because of this – and certainly not because of unprofessional behaviour as was the case in the 1990s – we still need a regulatory regime that takes this reality into account.

A key element of that are the so-called ‘competition notices’. This provides the regulator with a powerful tool to ensure that Telstra stays within the rules, and if it doesn’t the regulator can slap a million dollar a day fine on the company for every day it defies an ACCC claim that it is acting anti-competitively. This is big money, even for a powerful company like Telstra, and it has helped greatly on the couple of occasions competition notices were issued. Basically what the result was that it brought Telstra to the negotiation table, solutions were found which were acceptable to both parties, and Telstra didn’t have to pay the fine.

The government is now proposing to revoke this regulatory tool, which would be the wrong thing to do in a market where Telstra is still so dominant. This is quite remarkable, since the only company to support this development is Telstra, while the rest of the industry is dead against it.

Why would the government want to do this?  If everybody plays a fair game within the competitive arena, Telstra doesn’t have to fear these notices, as in general it has proved itself to be willing to come to the negotiation table, and if not its competitors (each of them with much smaller market shares in the Australian market in relation to Telstra) have a powerful tool that allows them to get Telstra to the table if a serious competition issue arises.

It is important to foster competition in the Australian telecoms market and the competition notices have proved to be very effective in achieving this. With a faltering NBN ahead Telstra will undoubtedly be the major winner in the end game of the NBN, which will only make it more dominant, and so it is much better to keep the tools handy that allow the regulator to ensure that viable competition will remain a key feature of the Australian telecoms market.

Paul Budde

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The sharing economy movement matures and e-commerce continues to thrive

February 8th, 2017, by

The “sharing economy” movement is maturing and citizens and corporations alike have accepted that popular business models like Uber and Airbnb seem here to stay. This has caused the traditional industries with vested interests in these markets to make adjustments to their own business models and competition strategies with the sharing economy in mind. This had often resulted in the margins in the initial stages of the sharing economy to have either shrunk or stayed the same.

E-commerce and m-commerce in general continue to rise and rise around the world. Other trends closely linked to this such as e-health and e-government initiatives also continue to gather pace. However, there is a divide occurring with some of the poorest nations around the world still unable to access suitable digital infrastructure to access such services.

Based on the growth of internet and mobile users alone, it is hardly any wonder that e-commerce and m-commerce are thriving. Online spending is proving resilient and even buoyant in most markets. The Asia Pacific region, in particular, is considered a key area for future growth.

In 2017 mobile commerce is expected to grow faster than e-commerce. Some of the large markets expected to see a high growth in m-commerce include China, Japan, India, South Korea, Taiwan, Malaysia and the United Kingdom.

Most governments around the world are now well aware of the importance of implementing digital services and solutions such as online services, cloud computing and m-government. The benefits of many of these developments include cutting costs and improving processes and information flow with the primary aim to improve customer service for citizens. Cloud computing has been well received by many government organisations and BuddeComm sees governments around the world continue to deploy cloud platforms and indeed increase spending in this area.

BuddeComm believes the Public Service should be a key driver in creating an innovative digital economy. Some of the public sectors are facing massive cost increases – take healthcare, for instance – that are economically unsustainable. Therefore, governments around the world have a huge role to play in building an innovative culture that could be an example for the rest of the economy and at the same time be an enormous boost to it.

This report explores the maturing global digital sharing economy movement as well as the e-commerce, e-education, e-health and e-government sectors. It provides examples, analyses and statistics.

For detailed information, table of contents and pricing see: Global Digital and Sharing Economy – The E-commerce and M-Commerce Transformation

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