Latest Analyses, blogs and news
Swisscom makes progress towards FttP goal for end-2015 28 Feb 2015
Although not a member of the EU, Switzerland’s economic integration has meant that its telecom market deregulation has followed the EU’s liberalisation framework, including recent regulations on international roaming.
Switzerland has Europe’s highest broadband penetration rate. The country benefits from universal DSL infrastructure and an expansive cable broadband network, with effective cross-platform competition. The DSL sector is dominated by Swisscom’s retail offerings, while UPC Cablecom also offers cable broadband in most cities and towns, and its extension of 250Mb/s services since 2014 has spurred Swisscom to intensify its VDSL and FttP network rollouts in a bid to remain competitive. To this end, Swisscom has set aside for fibre networks a significant proportion of its planned CHF8 billion infrastructure investment to 2015.
There has been a government focus on broadband deployment of ‘ultra-fast’ broadband, or that defined as at least 100Mb/s. This depends on the growing footprint of fibre, LTE and DOCSIS technologies. By the 2020, DOCSIS and fibre are expected to deliver 100Mb/s services to at least 80% of the population, while LTE should provide national coverage by that date.
The mobile market has undergone a number of changes in recent years, with the Orange Switzerland being acquired by NJJ Capital in February 2015, Sunrise being acquired by a private equity firm which completed an IPO in early 2015, and with the main cableco UPC Cablecom entering the mobile market as an MVNO, thus being able to provide a quad-play bundle and so compete more effectively with Sunrise and Swisscom. Mobile penetration is on a par with the European average while mobile data use among consumers has increased rapidly in line with the expended reach of technologies including HSPA and LTE. Customer use of mobile data services is helping to offset declining ARPU and lower traffic in the SMS segment as consumers adopt a range of OTT messaging services. The regulator has encouraged operators to share LTE infrastructure, so reducing investment costs, while all MNOs have launched commercial LTE services and have extended LTE-A technologies to increase data throughput. By early 2015 Orange had upgraded much of its LTE infrastructure to LTE-A, offering data at up to 300Mb/s. In addition, spectrum assets held by licenses have been successfully refarmed following the 2012 auction, so consolidating holdings. A further refarming exercise affecting the 2100MHz band is due in 2016.
A new BuddeComm report presents an analysis of Switzerland’s telecom market, including profiles of the main players in the fixed-line, DSL, cable, fibre and wireless sectors. It details technological developments, provides broadband subscriber forecasts to 2020, and examines regulatory issues related to municipal fibre, local loop unbundling, and the provision of broadband as a universal service. The report also assesses the country’s mobile market, including regulatory measures, profiles of the main providers, and analyses on service offerings, developments in mobile TV and emerging technologies.
For detailed information, table of contents and pricing see: Switzerland - Telecoms, IP Networks and Digital Media
Network neutrality promising major changes in the USA 27 Feb 2015
The US broadband market is currently witnessing significant investment activity in fibre deployments, HFC upgrades and mobile broadband network rollouts. Much of the investment in fibre is being undertaken by a significant number of smaller players and municipalities rather than the two key telcos, which are concentrating on a hybrid fibre/copper network. The activities of market players such as Google, Cincinnati Bell and others have encouraged smaller carriers to continue to deploy fibre deeper into their networks.
Broadband services in most regions still lack effective competition, with the AT&T and Verizon managing an effective duopoly in many areas of the country. Municipal activity, often geared at breaking this stranglehold and introducing competition and innovation, continues to be stymied by lobbying pressure from these main telcos, which has led to at least 19 states banning or restricting municipal or state-led infrastructure projects.
There is now a growing consensus, supported by the President in his 2015 State of the Union address, that such restrictions should be lifted. The FCC Chairman also in February 2015 proposed measures which would reclassify broadband as a telecom service rather than a content service, and would extend network neutrality conditions to mobile broadband services. The FCC is also determined to use its authority to override restrictive state laws.
The US mobile subscriber base is approaching 340 million, and although growth has slowed with higher penetration levels, mobile data use remains strong in line with the fast development of LTE networks and the high take-up of smartphones, which now account for about 80% of all handset devices on mobile networks. Data revenue also continues to grow steadily year-on-year, though is subject to considerable price competition among the main players. A potential shift market dynamics can be expected in coming years following the FCC’s recommendation that mobile broadband be subject to network neutrality rules.
A new BuddeComm report provides an overview of the US broadband market, including FttP and other fibre network developments. It details the major fibre deployments and key market statistics and forecasts. The report also provides analyses, key statistics and forecasts on the US mobile market, including telcos’ financial and operating data to Q4 2014, and assessments of their strategies, regulatory policies, and market developments in emerging technologies.
For detailed information, table of contents and pricing see: USA - Telecoms, IP Networks and Digital Media
Is ICT the panacea for global development? 26 Feb 2015
Recently Bill and Melinda Gates published their 2015 letter on poverty, in which they claim that the lives of people in poor countries will improve faster in the next 15 years than at any previous time in history. They stated that breakthroughs in health, education, food, etc, will be driven by innovation and technology.
Now obviously those comments are close to my heart, particularly given my position as an adviser to the UN Broadband Commission. We recently had our 11th meeting of the Broadband Commission in Paris and, of course, many of these issues were discussed there as well.
Obviously it is great to see that we are making progress in many of the areas that Bill and Melinda Gates are talking about and I most certainly admire their passion, and the fantastic work that they are doing. Their contributions will help in making further improvements to the world we live in, and in particular to the poorest people. In one of our recent global analyses we highlighted the progress we have made.
However, an assessment by Professor Chris Blattman – a specialist in the field of poverty – made me think about these issues from a different perspective. I have certainly made statements like this myself – but is it really ICT that is driving these developments?
The reality, however is that the biggest achievements are made in those countries that already are on the rise anyway. Certainly ICT is helping them but perhaps far more importantly over the past 50 years or so it has been possible to create a society where it is possible for ICT developments to be embraced – and indeed to be used as tools to make progress. Over those decades they have slowly but surely been able to build structures that have generated improvements in healthcare, education, agriculture and so on. Once in place, you can build on that.
These developing countries have been able to move on from agriculture into manufacturing and services. Perhaps the best examples can be seen in SE Asia, where enormous social and economic progress has been taking place, with some countries being able to lift themselves out of poverty within two generations. Many people in South Korea, for example, will tell you that their parents and/or grandparents lived in poverty, in their living memory.
It is the countries where civil stability has taken a stronghold that will see the most progress; and ICT will indeed be a key driver there. It will be those countries where poverty will, in fact, decrease further.
But countries without a stable society will not see any of that progress among the majority of their people. They will lack the conditions and institutions that would allow for ICT and other developments to create long-lasting change.
What we see in these countries is that whatever is achieved by ICT, or by other means, disappears after the next war, military coup, extortion, terrorist attack. These are the countries where civil stability has not yet taken hold and where groups such as ISIS, Al Qaeda or corrupt military and politicians have free rein to terrorise the population and prevent any form of civilisation from flourishing.
It would be impossible for ICT to do anything here to lift the population out of poverty. All that can be provided are bandages to stop the heaviest bleeding. These are the stateless countries and failed states where there are no systems in place that allow the people to prevent the next natural disaster – disasters that will only increase with climate change. These are the countries where whatever they have been able to build will be bombed, often through foreign intervention – for whatever reason – and often by well-meaning western countries (Afghanistan, Syria, Libya, Iraq, Pakistan, Palestine).
After the previous UN meeting I wrote an article on the difficulty of addressing the Ebola issue in Liberia, where any form of basic infrastructure simply does not exist. Without that in place ICT and any other development disappears as soon as the foreign assistance disappears after the crisis is over.
It is most unlikely that people living in those countries will see the same progress that are being foreshadowed by Bill and Melinda Gates. With poverty slowly disappearing elsewhere the majority of the poor will live in these stateless societies. If we want to assist them we need to work out how civil stability can be established – firstly to enable systems and structures to evolve. And once they are in place we will also be able to assist further development with the help of ICT.
Australia vs America – what leaders say about broadband speeds 25 Feb 2015
It wasn’t all that long ago that Minister Turnbull took to the whiteboard to explain why we don’t need the level of high-speed broadband that was promised to Australia under the FttP plan. He has since gone quiet on the issue, as he has been able to lock the country into a low-speed broadband solution, without any plan for truly high-speed broadband in the future.
While all other developed economies are now increasing their FttP rollouts, the Minister has basically put a stop to any brownfield FttP rollouts in Australia, beyond those who were fortunate enough to get FttP courtesy of the previous Labor government.
What the Minister has done in essence is establish a national monopoly for FttN and HFC without any obligations to the monopolist (NBN Co) to ensure that, for example, Australia at least stays on par with FttP rollouts around the world. If a commercial entity were to have had the broadband monopoly there would at least be commercial considerations regarding the rollout of FttP. We now have, for political reasons only, a stop on FttP.
In this respect it is interesting to mention a recent speech of the FCC Chairman, Tom Wheeler, on the subject of broadband speeds. He referred to the incumbent broadband providers, who all, in one way or another, argued to the FCC that for regulatory reasons there was no demand for high-speed broadband services – in the hope that the FCC would not change the definition of broadband.
In his speech he mocked the incumbents by referring to their advertising campaigns where they all promote their high-speed broadband services and talk about what their customers could do if they bought these high-speed packages, and what they are forfeiting by staying on their slower speed packages.
In Tom Wheeler we see a leader arguing for the future, while in Australia we have a leader arguing for the past – and for political reasons only, since this Minister is also on record acknowledging that FttP will be the end goal for fixed telecoms networks.
It is all part of the broader issue of political ideology versus what is in the national interest, a political approach that has tarnished many western democracies over the last decade or so. Recently the Minister has been asking for better political dialogue, but he is still slating the previous government for its NBN policy. There has been no political dialogue from his side in relation to the NBN, something that is totally under his control.
PS Best regards from the Netherlands, where I am at present. I am in a provincial town called Almelo, where over the last few weeks the local cable utility has completed the FttP rollout to all of the 25,000 premises.
Ecuador - Claro and Movistar pay $330 million for LTE licenses 24 Feb 2015
Ecuador’s fixed-line teledensity is low for the region. To some extent this has resulted from topographical challenges which have rendered the cost of deploying fixed-line infrastructure in remote and mountainous areas prohibitive. However, there has also been a legacy of underinvestment in telecoms infrastructure as a whole.
In line with the global trend, Ecuadorians have turned to mobile handsets in preference to the traditional fixed-line phone. The country’s telecom market is heavily skewed towards mobility, with seven mobile phones for every fixed line in service. Nevertheless, the ratio between fixed and mobile accounts has remained stable since 2009.
Although Ecuador has seven fixed-line operators and a large number of Internet Service Providers (ISPs), state-owned incumbent CNT dominates the fixed-line and therefore the ADSL market.
The mobile sector is virtually a duopoly between América Móvil’s Conecel (trading as Claro) and Telefónica’s Otecel (trading as Movistar), with CNT (previously Telecsa/Alegro) having a small share of the market.
The government is keen to advance universalisation and improve teledensity, and we can expect CNT to continue its efforts to expand the country’s fixed-line infrastructure. CNT will also continue to capitalise on its ADSL service, which only took off in 2009 and still faces significant unsatisfied demand. A national broadband plan aims to expand and improve internet access for all Ecuadoreans. The fixed broadband market – including both ADSL and cable modem services – should continue to grow by at least 25% annually. The mobile broadband market is also expected to grow strongly in the coming years.
A new Telecom Law has been the subject of national and international controversy, particularly for its treatment of broadcasting. The most controversial points include the redistribution of spectrum and the creation of a regulatory authority in charge of censorship.
For detailed information, table of contents and pricing see: Ecuador - Telecoms, IP Networks, Digital Media and Forecasts
Connected Information Management (CIM) 24 Feb 2015
I recently had an interesting discussion with AMDOCS and IXUP, talking about new developments in the intelligent use of company and customer data in the context of big data in the telecoms industry.
Traditionally the telcos have built company-focussed databases, and these data stacks are often built within silos. Furthermore, there has hardly ever been any strategic crossover with databases from other organisations in the larger supply chain.
New developments in computing are now focusing on big data, what we describe as looking at intelligent outcomes that can be achieved by data collaboration.
The most critical issue here is strategic management rather than technology. However the fact that big data has become a vital tool in competition is forcing many companies to transform their organisations from a company-centric approach to a customer-centric one. Companies have been talking about their focus on ‘customer service’ for decades, but it is only recently – in particular in the larger organisations – that the customers are actually seeing some changes in customer relationship management that benefit them.
While there are plenty of companies that are still getting it wrong we increasingly see companies, especially those involved in the digital economy, that can provide a good customer experience. The fact that these digital companies are driving this trend is an indication that data management is a critical factor here.
In other words, if you don’t have your company data systems and structures organised in a customer-centric way you won’t be able to deliver a good customer experience.
If we look at the telecoms industry there won’t be many people who have not had bad experiences with their providers. They are the organisations with some of the largest call centres and they need these large call centres, not because they receive lots of messages to thank them, but because customers are making calls with problems and complaints. So bad customer experience means extra costs.
One example – someone has a problem, walks into one of the telco shops, only to be told to use the call centre; and then multiple calls before the customer can actually talk to the right person to help them with the issue.
These processes can be streamlined by capturing all customer contacts and providing an integrated platform between the various data systems. If a customer problem could be solved on the initial contact the customer would have a great experience and the company would save itself significant costs.
Connected Information Management, however, can go much further. There are many other players involved in this process. A good example here – the vendors of mobile handsets. They have large advertising campaigns that create interaction with the customer. Furthermore, these vendors train telco retail staff and offer extra information – again this has an effect on customer interaction. By connecting relevant data stacks additional intelligence can be added to the overall system.
We also see telcos operating with marketing partners such as credit card operators, sporting organisations and other organisations with large customer bases. Additional value could be offered to the customer if the various relevant data systems are connected to provide intelligent information that can be used for that purpose.
Obviously this needs to be done on a permission-based or opt-in basis, but if the customer sees the value of it they could take up such an offer. Nevertheless, privacy is an issue here that requires close scrutiny.
It is not a matter of whether organisations should consider using connected information management, but how to do it. It comes back to strategic leadership from the top of the organisation. A holistic approach needs to be taken, cutting across the various silos within and outside the company; once such leadership in place the technology is now available to enable organisations to make their all-important digital business transformations.
Panama’s long-term economic growth susceptible to alternative canal route across Nicaragua 23 Feb 2015
Panama has benefited from maintaining one of the region’s highest GDP growth rates in recent years. The country’s economic prospects remain promising despite a dip in GDP growth anticipated for 2014. Nevertheless, strong growth in recent years has had a positive knock-on effect on the country’s telecom market, which has also grown steadily and attracted considerable investment. In 2014, telecom revenues are expected to have broached $1 billion for the first time, with mobile services and broadband being the fastest growing sectors.
Panama’s fixed-line teledensity is well below average for the region, though it is rising steadily from a relatively low base, largely due to alternative operators making use of cable or fixed-wireless networks.
Competition remains limited in the broadband sector, where the incumbent Cable & Wireless Panamá has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services.
The mobile sector has flourished in recent years, and the popularity of having multiple SIM cards has pushed mobile penetration rates to above 190%, considerably higher than the regional average. The arrival of two new mobile players at the beginning of 2009 resulted in additional competition and steep price reductions which have shaken the market. Digicel Panamá launched operations in 2008, followed by América Móvil’s Claro in 2009. This ended the duopoly long enjoyed by Cable & Wireless Panamá and Telefónica’s Movistar.
Internet penetration has grown in recent years and is expected to do so steadily further into 2014 and into 2015 as a result of consumer demand for services as well as the stimulus of the government’s Internet for All project. In 2010, Panama became one of the first countries in the world to offer free wireless broadband access nationwide. The National Internet Network project does not compete with private broadband providers, because its aim is digital inclusion and not the provision of broadband access.
For detailed information, table of contents and pricing see: Ecuador - Telecoms, IP Networks, Digital Media and Forecasts
More from Paul's desk from the BuddeBlog…
More News & Views from the BuddeBlog…