Latest Analyses, blogs and news
Positive global stats – moving on to Sustainable Development Goals 24 Apr 2014
There is always so much bad news focussing on the day-to-day grind. Apparently, as the saying goes, ‘bad news sells’. This is a great pity. So many people are depressed and overwhelmed by the difficulties of the day, and some have a dark view on the future – pointing to climate change, population growth, poverty, the financial crisis and so on.
However, to get a more realistic view of the future we also need to look back and see if there have also been some positive changes.
First of all, if you take the real long-term picture then it is safe to say that since the human race started to emerge some hundred thousand years ago we have moved forward. There have been setbacks – famine, economic collapses of whole civilisations, floods, the Black Death and numerous wars, including large-scale world wars, genocides, and the list goes on. But we have never slipped back. Developments may have stagnated for a while but the trend over all of those hundred thousand years has, in general, been a positive one.
So maybe we should be reassured by this when facing the future. Of course, all of the current global problems we are facing could create a setback, stagnation, problems for specific regions; but the overall trend will most likely be positive.
At the recent meeting of the UN Broadband Commission in Dublin some interesting UN statistics were presented:
- In 2011 there were 700 million fewer people living in extreme poverty than in 1990 – this despite the increase in population.
- However one in eight still goes hungry.
- There are 57 million primary school children deprived of education, down from 102 million in 1990 – 50% of those receiving no education are in Sub-Sahara Africa.
- There are still 123 million people who don’t receive basic education and 61% of these are girls.
- Employed women – only 40% are outside agriculture and only 20% are in leadership positions.
- Since 1990 the child mortality rate has dropped by 47%.
- In 2012 6.6 million children died under the age of six.
- There are 8 million people still living and working thanks to HIV treatment.
- Tuberculosis treatment saved 20 million lives
- Global emissions have increased by 47% since 1990, 77% up in the developed world and 31% up in the developing world.
- By 2019 92% of the world population will be covered by mobile communications and 85% by mobile broadband.
These stats were discussed in relation to the UN Millennium Development Goals (MDGs), which flagged to be completed by 2015. Obviously that won’t happen and therefore this work will be continued, albeit in a new format, and the plan is to launch as a follow-up the Sustainability Developments Goals (SDGs) in that same year.
Obviously the world is not without problems. There is still poverty, hunger, lack of health and education, mistreatment of girls and women, wars and so on. But the commitment of people all round the world plus the work that has been done within the UN MDGs has most certainly made a dent in all of this; and the positive results achieved by the MDGs is leading to the development of these new SDGs, in the knowledge that this program also will assist in addressing the truly big problems the world is facing.
The Broadband Commission is contributing here by ensuring that the social and economic benefits of broadband, and ICT in general, are better recognised and embedded in the SDGs, as major tools that can be used to address the underlying problems the goals are aimed at addressing. The alternative to this – the more traditional approaches to solve those problems - is very costly.
In the economy we already can see the positive results when companies use these tools to improve the productivity and competitiveness. These tools are essential in providing access to services, connecting people, communities, and service providers, and in assisting in the economic and social transformational processes that are essential to create greater sustainability for people and communities, to help in their social and economic aspirations and the environments in which they live.
While most people accept the importance of ICT and broadband, many have great difficulty in actually applying these tools in their work and for that reason they are too often simply placed in the too-hard basket. There is an essential role for the Broadband Commission – to inform and educate the UN decision-makers, as well as the governments involved who are formulating the policies, to ensure that the use of these tools is maximised so as to achieve the outcomes of these goals; and for that reason they will need to be embedded in all of the SDGs.
Embracing the new modern tools will enable the people working on the ground implementing the SDGs to tackle the issues at hand in a different way – to break through old bureaucratic silos, traditions and work practices. Among some of the NGOs there is also the notion that their projects should be directed straight to water, health and education rather than to ICT. But they do not necessarily realise that ICT can assist in all of this. This requires further information and education from the ICT providers, especially directed towards the leadership of these organisations. Changes on this level will have to be initiated from the top.
I was recently in an office in Perth where the people had sponsored a water well in Africa. The problem in the past had been that once the pump fails the water stops. This well now has a smart meter connected and the people in Sydney can actually get a video picture and real-time information about the installation and can act to prevent failure or address these problems when they occur. This is exactly the kind of situation where new tools can assist, and improve, projects that have been in place for decades. It also, of course, brings the problem right back into the developed world (the office in Perth) resulting in a much more inclusive partnership, shared responsibilities and new opportunities for cooperation.
However at the top, it remains a difficult task to get the bureaucracy to embrace new tools, and also to transform themselves to better face the future. We don’t just need smarter tools – we also need smart people who are able to maximise the social and economic benefits that these tools can deliver.
Broadband and ICT can be the horizontal layer that can assist in all of this. As I have often said, broadband cannot put an end to world hunger, but without broadband and ICT hunger and all of the other issues cannot begin to be resolved/tackled.
As an adviser to the Commission I am proud to be involved in these projects and hopefully we can also share our Australian views at the G20 in Brisbane later this year, led by Australia, the Broadband Commission organises its own side event here to focus on the importance of ICT in addressing many of the social and economic issues.
US and UK sign a healthcare IT MoU 23 Apr 2014
As far as we are aware this is the first such arrangement, and it shows the importance of starting to think globally when looking at developments in today’s digital world.
The US and the UK have agreed to work together on harmonising quality indicators, releasing and using health data, including the Blue Button initiative, and on the interoperability of electronic patient record systems. Part of this healthcare initiative in America is the so-called Blue Button Connector. It is the very first open data source delivered through an open API that makes transparent the health data that is increasingly available to the public. It is believed that this will help to fuel the creation of new products and services.
In January 2014 the NHS England and the Health and Social Care Information Centre signed a healthcare IT memorandum of understanding with the US Department for Health and Social Services.
The first of the four workstreams of the MoU is the sharing of quality indicators. The first two quality indicators being looked at are for depression symptoms, and knee and hip operations.
The second workstream looks at liberating health data and putting it to work.
The third workstream involves the Blue Button initiative which aims to allow US patients to download a standardised version of their medical records.
The last workstream is around the adoption of electronic health records – the UK is advanced in its use of IT in primary care, but the US has worked hard to achieve an 80% adoption of electronic health records, used on a daily basis in its acute care hospitals.
Another step is getting all the systems to talk to one another, which can be difficult in a market where participants are not encouraged, and where there is no incentive, to interact or cooperate.
One of the goals of the MoU is that, say by 2020, any patient from the UK or the USA will be able to walk into any care facility, hit a couple of keyboard buttons and have access to their relevant records for that particular visit.
Global Digital Economy - E-Health and M-Health - Initiatives, Pilots and Projects
Global Digital Economy - E-Health and M-Health - Insights, Stats and Analysis
TPG highlights the fragile NBN environment 22 Apr 2014
BuddeComm has supported structural separation since we first started to write about it around 2002. Since that time it has become the bedrock of the new Australian telecoms environment. Furthermore, we have been saying for even longer (since the roll out of the HFC networks in the 1990s) that national infrastructure-based competition will not work. Both of these views have now been accepted and are reflected in the government telecom policies from 2009/2010.
Understandably, these issues are very hard for conservative politicians and their supporters to come to terms with. They want to see less government intervention and more market-led developments. BuddeComm shares these views, but at the same time we are realistic enough to see that those principles have their limitations. For more than two decades governments have supported market-led policies in the telecoms industry and this led to a total domination of the telecoms industry by Telstra, and to a lack of competition and infrastructure-based developments.
These two decades of ineffectiveness have put us in 52nd place on the Ookla world index in relation to the quality of our broadband services. In comparison with other international key indicators Australia’s position should be around 15. While the NBN is most certainly addressing this issue, it will take perhaps a decade to regain our position. A massive project like the NBN needs time to develop and become implemented.
This was one of the major reasons BuddeComm was extremely worried by the Coalition’s early policies of killing off the NBN. Whatever alternative they might think of, it would simply add more delays and Australia would only continue to drop down the list.
Why does this ranking matter? Because it is an indicator of our level of international competitiveness. All countries ranked above us have better chances to create digital productivity and thus have a competitive advantage over Australia.
You cannot unravel the NBN
The fragility of the situation is clearly demonstrated by TPG. In the run-up to the election the Coalition clearly foreshadowed that it would allow infrastructure-based competition, so the company took the lead, and the risk, and simply started to work on its own infrastructure plans. And, from the good old conservative position, good on them.
However, once it was in power, the government realised that its rhetoric didn’t match up with reality and that this level of open market activity would undermine the national interests linked to the NBN.
TPG can be called opportunistic, and can be blamed because it took the risk against clear rational indications that what it was doing was simply cherry-picking and would undermine the NBN. However it should not be held absolutely responsible – it was the government that created this opportunity when it made those pro-infrastructure competition promises.
The fragility of the wholesale-only model
Let us go back to our earlier analyses on the environment that came into existence between 2009 and 2013. The reason for developing a utilities-based wholesale-only model is to create a national network that is both affordable and of high quality. If one looks at market-led models of the development of such wholesale networks, particularly in the USA, it is clear that they have failed because commercial organisations are not able to build economically-viable wholesale models within the current telecoms market structure. The current vertically-integrated structures require integrated profit levels of 30%-40% within short periods of payback time of around three to four years.
Sofar only community wholesale network broadband or utilities-based infrastructure have been able to survive in such an environment and they, in general, indeed deliver lower retail prices for higher quality broadband services compared with prices and services from incumbent operators.
In order to achieve affordability and high quality broadband services it is therefore necessary to look at wholesale-only-based models. The reasons such models fail, if they are provided within the traditional vertically-integrated telecoms marketplace, are that, in order to protect shareholders’ value of their existing telco models and technologies, these telcos will typically thwart and delay any wholesale-only model that provides new levels of competition and innovation that they are unable to compete with. There is no reason to believe that TPG would not follow a similar model for its proposed 500.000 FttB connections, and once they have built this network there is no economically-viable model for any other infrastructure provider to overbuild these connections. While, based on the market-led principle, it will be very difficult for the Liberal government to execute this level of government intervention, the harsh reality is that this is exactly what needs to be done and, in our view, what will be done. TPG will be in one way or another forced to withdraw from this market.
NBN is a finely balanced exercise
It is important to see the two activities – structural separation and wholesale-only infrastructure – as interlinked; if we start to unravel either one the overall model will collapse.
This issue will not stop with TPG. It will also affect the negotiations with Telstra regarding the rollout of FttN infrastructure.
The reason for this level of fragility is that for a national wholesale-only model to work the network owner must obtain sufficient revenue from its retailers to cover all its network costs, including depreciation and periodic upgrades. The retailers, in turn, must collectively earn enough revenue to pay the network owner’s costs plus their own additional costs – including building and equipment, marketing, technical support, customer service, regulatory compliance, and overheads, while still generating a level of profit.
As we are seeing in the case of TPG, if the wholesale-only model is not protected by regulation, other network operators and retail service providers (RSPs) will naturally look for cherry-picking options to get faster and higher profits, which will make it impossible for wholesale-only organisations such as NBN Co to operate an economically-viable national business model.
It is therefore impossible to operate a national wholesale-only network in competition with other national operating telcos.
TPG exposes weaknesses in NBN retail models
NBN Co as the wholesale-only operator is building a model that takes this utility, long-term low-profit approach; the retailers, on the other hand, are pursuing high, short-term profits. As there is little room for differentiation on the network level, RSPs are forced to look at value-added services to successfully compete with each other. This will lead to innovation, new models, and a serious effort to maximise the opportunities of an all-fibre network.
Unfortunately, at the moment the level of innovation coming from these RSPs still remains low, as they also are steeped in the old telecoms models and very few are able to escape their engineering-dominated culture. As we saw with TPG, rather than looking at retail innovations they fell back to basic telco activities, such as building networks. As a result of this lack of retail innovation we see a continuation of poor customer service, misleading advertising, and poor marketing.
So there is an urgent need to extend the RSPs’ model beyond the current level of basic telco providers, and the industry is coming to grips with that as the early rollout of the NBN is exposing more and more retail weaknesses.
It is two minutes to midnight for them because at the same time we see the rise and rise of companies such as Google, Amazon, Apple, Facebook and others, who are much better able to use that infrastructure as a utility input for innovation, new business models and new opportunities. Increasingly high-quality retail services will be developed and delivered by these companies, rather than by the traditional RSPs.
Australia - National Broadband Network - Developments and Analyses 2014
Australia - National Broadband Network - Policies and Regulations
TPG Telecom Limited
Mobile electricity for Nigeria 22 Apr 2014
Over the last few years BuddeComm has been involved in discussions with electricity utilities such as Horizon Energy in remote regional Western Australia (aboriginal communities and mining sites) and mobile operators such as Digicel (who are active in the South Pacific and Caribbean) about how to combine the developments of smart grids and mobility in order to provide a better service for people in remote and regional areas. With the boom in mobile services there are now many more people in the world who don’t have access to electricity than there are people who don’t have a telephone service.
Many people in remote locations sometimes have to walk for many hours to villages and towns that have access to electricity in order to recharge their mobile phones. For that purpose Digicel has installed generators in bright red containers that they placed in areas where they operate their mobile service but where there is no electricity, villagers could recharge their mobile phones at these points.
At the recent UN Broadband Commission meeting in Dublin this exact problem was again highlighted in relation to five schools in Bamako, the capital of Mali. These schools now have access to the internet, but two of them don’t have electricity, so they cannot use their internet connection.
Good news is now coming out of Nigeria, where mobile operator MTN Nigeria and Nova-Lumos, one of the world’s first ‘distributed energy utilities’, are collaborating on a next-generation alternative ‘mobile electricity’ service. The service offered by these companies will provide alternative electricity to mobile customers who are living in rural areas across Nigeria and are not connected to the electricity grid.
The service is supplied via a solar panel and an indoor unit that allows MTN customers to subscribe to alternative electricity on demand using their mobile phone. With this solution customers can replace kerosene, candles and flashlights with modern electricity that can power significant lights, cellphones, fans, PCs or laptops, radios, TVs and other small electronic devices, all at once, every day.
Furthermore, as usage is paid for in small payments only, the same way mobile customers purchase airtime and other mobile services, the companies will be able to offer an innovative and widely-accessible service to all MTN customers.
Nova Lumos, in partnership with MTN Nigeria, received funding from the GSMA's Mobile Enabled Community Services (MECS) Innovation Grant Fund with the support of the UK government. This grant is awarded to organisations developing innovations that improve access to energy and water among underserved communities by leveraging mobile technology and infrastructure. The MECS Innovation Fund has helped to highlight the demand for mobile-enabled services and the role that mobile can play in supporting access to basic utility services across rural and urban markets.
Afghanistan operators rolling out 3G networks potentially delivering big boost for internet access 18 Apr 2014
In what has certainly been a challenging task, Afghanistan has built some positive momentum in its effort to put national telecom infrastructure in place and to offer effective telecom service throughout the country. The process involved in achieving this, however, has not been a smooth one. By end-2001, as a result of the US-led military action, the Taliban had been removed from power and a broad-based transitional government was established. The 2001 war in Afghanistan destroyed telecommunications infrastructure that had already been suffering serious disrepair due to neglect by the pre-war Taliban government. The nation’s network of telephone lines was left barely functioning. There were only 12,000 telephones in the capital city, Kabul, with its population of almost 2 million residents.
By 2003 recovery had commenced. In an important strategic move, the government announced in 2005 that licences were to be issued to allow the private sector to establish independent telephone companies. This initiative was called the Local Fixed Services Plan (LFSP). The main objectives of the LFSP licences were to facilitate faster rollout of services to small towns and rural areas and to provide an investment opportunity for small-medium local investors across the country.
The other major impact on telecommunications in Afghanistan came with the introduction and subsequent expansion of the mobile telephone service. In 2003, growing off a low subscriber base, the country’s mobile network operated exclusively at the time by the Afghan Wireless Communications Company (AWCC), started to attract customers at an extraordinary rate. The launch of a second mobile service, operated by Roshan, boosted the market even further and strong subscriber growth continued through 2004 and into 2005. Coming into 2014 there were four major mobile operators (and one minor one) competing in Afghanistan’s telecom sector; between them they were claiming a total of just over 20 million subscribers, representing an overall mobile penetration of 68%. All four of the major operators were carrying estimated market shares in excess of 20%.
In the meantime, internet penetration remained generally low throughout Afghanistan. With internet access relying heavily on dial-up services and only around 3,500 broadband subscribers in place, the online segment of the market was looking for a boost. The boost had come in the form of 3G mobile licences. The newly launched 3G services being offered by the various operators provided a special opportunity for delivering mobile broadband to Afghanistan’s population.
The political and civil stability of the country remains a big question; it is of course a constant threat to effectiveness of the telecommunications network and the viability of the telecommunications sector. The certainly does appear to be a will to secure the future of telecommunications in Afghanistan.
For detailed information, table of contents and pricing see:
Afghanistan - Telecoms, Mobile, Internet and Forecasts
Puerto Rican LTE thrives while the cable TV sector consolidates 17 Apr 2014
Puerto Rico has one of the highest mobile penetration rates in Latin America, though despite being a US territory it lags well behind the mainland US states in terms of fixed-line and broadband penetration. This is partly due to a continuing economic recession, high unemployment rates (and consequently low disposable income) and poor telecoms investment in a market largely dominated by the incumbent Puerto Rico Telephone Company.
The Puerto Rico Telephone Company’s fixed-line market dominance was augmented following its acquisition by the largest wireless company in Latin America, América Móvil. In contrast, with six network operators, the mobile (cellular/wireless) market has been experiencing more robust competition and growth. Although América Móvil’s Claro recently took the lead from AT&T Mobility in terms of subscriber numbers, AT&T regained the top position by late November following its acquisition of Centennial Communications.
With an emerging VoIP sector and steadily growing broadband market, as well as a healthy satellite TV sector which has caused a decline in the cable TV subscriber base in recent years, the growth and convergence of digital media looks promising for coming years. A new submarine cable, due to come online in 2014, will improve connectivity to the US and neighbouring Latin American and Caribbean countries, while investments by cellular operators in LTE infrastructure will help promote mobile data services, as also extend mobile broadband availability in rural areas.
For detailed information, table of contents and pricing see:
Puerto Rico - Telecoms, IP Networks, Digital Media and Forecasts
Digital Productivity Key to Transformation of Australian Economy 16 Apr 2014
The world in general – and its institutions and businesses in particular – is facing a significant number of challenges …...
There will soon be 9 billion people in the world, and increasingly more of them will participate in the global economy, most likely at less cost. Furthermore, the environment is having difficulty coping with us – whole business sectors are facing digital disruption; healthcare in western economies has an efficiency factor of minus 40% (which, if it goes unchecked, could consume 40% of Australia’s GDP by 2040); people are more empowered – they are moving away from traditional behaviour patterns; and new jobs are in the new economy, not the old one.
Governments and traditionally organised businesses and organisations have great problems with these developments. They are unprepared to embark on the essential economic and social transformations that are needed to face up to the challenges.
In essence, in order to transform they will need to operate much more horizontally and be far more truly customer/people-focussed. And ICT can greatly assist in this. To be able to compete with those organisations that have been successful in creating digital productivity it is often necessary to look at ways to remove 50%, or even more, from current business costs. Cannibalisation of traditional services and revenues is also required, with no certainty of new income from new services to compensate for this.
As a result many businesses are fighting rearguard battles rather than leading the charge, and whole sectors are resisting the transformation process (retail, healthcare, education, energy, government).
Has the internet reached the ‘too big to fail’ stage?
Would an internet failure result in what economists call a ‘too big to fail’ disaster? In other words, will such a collapse be catastrophic for our society and the economy? If the internet fails we cannot go back to the systems that helped us run our lives in the 1950s, when we had only one-third of the population we currently have. We need the right systems to manage our new rapidly changing society and economy.
Very few people fully realise the impact of this population growth in such an incredibly short period. And it is here that the internet plays its most important role – yet technically it was never designed to take on such enormous responsibilities. Resolving the issues surrounding control and governance of the internet is also of fundamental importance to its success in the future. Issues surrounding security and governance are already of concern for emerging sectors like e-health; e-commerce; e-education and e-government.
Among the hottest topics are the issues in relation to the security of the various aspects of the digital economy. Analysts predict that spending on e-security and mobile security will rise sharply and continue to be a key priority.
E-banking and M-banking
E-commerce has become a very important area of focus for internet media players, financial institutions and payment-processing firms alike. Given the speed that new services, features and companies appear (and disappear) the e-commerce and m-commerce sectors must be among the most innovative and rapidly evolving sectors worldwide – quite a spectacle to observe.
Person-to-Person email payment has become a hot topic with Google and Square launching services. Banks are also realising the world is changing and social banking is becoming a key trend; and the internet media companies continue to battle for supremacy in this vibrant market.
Mobile commerce is one of the hottest sectors right now and it is gaining importance for a wide range of industries, including telecommunications, IT, finance, retail and the media, as well as for end-users. It works best in those areas where it can emphasise the core virtue of mobile networks – convenience. The enormous success of smart phones is linked to the apps that are available, and increasingly commercial models will be linked to these apps – which will result in further spectacular growth in m-commerce. BuddeComm sees the development of m-wallets as a major breakthrough for the m-payment sector and beyond – that could indeed be a game changer.
Australians are among the world’s biggest users of online banking. EFT (electronic funds transfer) is very popular in Australia and the BPAY consortium owned by Australia’s Big Four banks is widely used to pay bills. However the more consumer-driven developments, such as m-banking, took longer to emerge. After decades of procrastination, and ultimately pushed by developments from companies such as Apple and Google, the era of m-payments has now taken off in a major way, with all four banks now facing breakneck growth in m-payments. By 2015 it is expected that m-banking will overtake online banking in the number of transactions carried out electronically.
Advertising and Marketing in the Digital Age
Spending on advertising using digital media channels is continuing to grow in market share, despite economic conditions slowing down the growth of overall advertising spending. In 2014 the advertising sector is focused on the future opportunities offered by multi-screen developments. In other words, a cross-marketing approach involving multiple devices including TV, touchscreen tablets, computers, laptops, mobile phones etc. In addition, advertisers and content developers/providers are eyeing off the potential opportunities offered by the Over-the-Top (OTT) content distributed by smart TVs. Digital marketing as a whole remains a growth area, as marketers shift towards these types of advertising methods at the expense of traditional formats.
The increase in online advertising comes as Australian businesses expand their presence online and aim to see local sales win over from sales made offshore.
The increased use of video advertising and video viewing is – at an increasingly more rapid pace - also continuing in 2014, and will grow consistently for the next five years or so, according to industry trends.
Business Market – Trends and Statistics
The digital economy affects everybody, including existing players such as telcos, banks, media wholesalers, services and retail. All businesses will eventually need to adapt to the new environment as new players enter these markets from different angles.
This report highlights information from surveys that indicate how well businesses are prepared for the digital economy; where they participate; their strengths and weaknesses; and the first interesting commercial starting points. It provides statistics in text, tabular and easy-to-read chart formats. It also contains detailed statistics from e-business activity usage surveys taken over the last few years.
This indicates a strong acknowledgement of business benefit, including productivity gains and positive growth. It highlights a near unanimous view that active digital economy participation is important to future business success, in spite of a diversity in adoption, planning and sophistication across the business community.
Across Australia more and more users are now shopping online – they are shopping from the comfort of home, while at work and even using mobile devices to impulse-buy. In fact many online retailers are finding mobile is their fastest-growing sales channel, including eBay and Gumtree.
While online sales have been growing at around 20%-30% annually the overall market share is still below 10% of the overall market in 2014. But spending will only increase further in the online markets over the years to 2020 as users take advantage of the higher speeds that the NBN will provide as it is rolled out.
There are many choices from offshore e-tailers offering low-cost deliveries, with onshore businesses that operate a retail web presence providing service and communication at a local level. Low start-up costs and minimal barriers to entry have seen many enterprises, both bricks and mortar stores and online-only stores, operating successfully in the direct sales to consumers market.
In 2013 there were a number of acquisitions – AussieCommerce’s purchase of group buying Cudo, and Graysonline’s purchase of online department store Oo.com.au are two examples – and consolidation in the Australian online retail sector will continue in 2014.
For detailed information, table of contents and pricing see:
Australia - E-Commerce, Marketing and Advertising
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