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Ukraine’s telecom market revenue hit by loss of Crimea 02 Apr 2015

Ukraine’s national telecom infrastructure is being modernised through considerable investment in both the mobile and fixed-broadband sectors. The political tension which erupted in late 2013 has been exacerbated by the annexation of Crimea by Russia, and by the continuing secessionist activity in eastern provinces. This has resulted in considerable disruption, rendering it difficult for telcos to maintain network upgrades and services. Telcos once active in Crimea left the peninsular after their licences were made over to Russian firms. The telecom regulator’s assessments of market statistics, including revenue, now exclude data from Crimea and the separately administered city of Sevastopol. Continuing political and military difficulties in the country’s eastern provinces have.

Competition is provided from a number of alternative operators, though the incumbent Ukrtelecom remains the dominant player. The country’s sizeable broadband market enjoys effective cross-platform competition. DSL remains the dominant access platform, though cable is also widely available and there has been considerable investment in FttP and FttB in recent years. LAN and wireless platforms such as WiFi and WiMAX exist on a smaller scale. Digital TV is accessible from the cable and satellite platforms, while DTTV has progressed, though not without controversy in the selection of broadcasters.

The mobile market is dominated by the three network operators MTS Ukraine, VimpelCom’s Kyivstar and Astelit, while the incumbent Ukrtelecom’s subsidiary, trading as TriMob, trails as a fourth player. Although the MVNO market is still in its infancy, and few operators have been licensed thus far, a gap in the low-cost sector may provide the opportunity for them to thrive in coming years. Competition resulting from mobile number portability has also been stymied by the regulator having delayed its introduction.

Mobile broadband services present a significant growth opportunity, and have stimulated investment in LTE and WiMAX technologies. The CDMA operators have stepped into this market: having initially offered fixed-line services they have since moved into the mobile segment, launching mobile broadband services.

A new BuddeComm report provides an overview of Ukraine’s telecom market, including profiles of the major operators, a review of telecom network infrastructure, regulatory measures, and recent network developments. It assesses the broadband and digital media sectors, covering major players and technologies, and offering a wide range of statistics. It also details the mobile market, providing statistics and analyses on industry developments.

For detailed information, table of contents and pricing see: Ukraine - Telecoms, IP Networks and Digital Media

Ghana - Government invests in Eastern and Western Corridor fibre 01 Apr 2015

Ghana’s telecom sector has benefited from it having been one of the first on the continent to be liberalised and deregulated. The privatisation of Ghana Telecom in 1996 was the catalyst for an extraordinary growth in market competition across the mobile, internet and fixed-line sectors. The company has been part of the Vodafone Group since 2008. Other international players which have invested in Ghana’s telecom market include Bharti Airtel, MTN and Millicom, all three of which are significant regional players.

The landing of two international submarine fibre optic cables in 2012 and 2013 has significantly increased international bandwidth, leading to significant activity in the broadband sector. In addition, the government’s investment in its Eastern and Western Corridor fibre project has linked businesses and anchor tenants including government offices as well as a number of Community Information Centres, built to help push ICT into rural communities.

Since launching the first cellular mobile network in sub-Saharan Africa in 1992, Ghana has developed one of the continent’s most vibrant mobile markets, with six competing operators including regional heavyweights. While growth in the voice market has slowed with higher penetration, there is enormous potential in coming years for mobile data and mobile broadband. Operators are capitalising on consumer demand for services by upgrading existing 3G infrastructure with LTE.

For detailed information, table of contents and pricing see: Ghana - Telecoms, Mobile and Broadband

Lack of trust is undermining the digital economy 31 Mar 2015

Perhaps one of the biggest threats to our current society is the erosion of trust. It is happening in government, politics and in business. Once people feel their political and business leaders can no longer be trusted they will react in very negative ways. The way that people now talk about politics, social media, copyright, video piracy, and the increasing level of social and economic inequality points to the fact that trust is being severely undermined.

In a world that is becoming increasingly digital trust is rapidly becoming a dominant economic factor.

Trust is more than currency – it cannot be bought. It is a highly prized commodity that must be earned. It is hard to earn and easy to loose. Some key questions that companies and politicians will have to consider are:

  • Do I tell/present the truth?
  • Is what I offer fair to all concerned?
  • Will it build goodwill and better friendships?
  • Will it be beneficial to all concerned?

Recent research in the USA has indicated that 90% of the users don’t trust the companies that are using these big data analytics. Also, interestingly, on the other hand 70% of companies involved in big data analytics are disappointed with the results. So a better system could be a win-win situation for both the demand and the supply side.

Statistics shows customers don’t trust B2B companies
  • 91% agree that consumers have lost control over how personal info is collected and used by companies
  • 55% lie or hide to keep from being known by name online
  • 92% worry about their privacy
Ad & tracking blocking stood at 22.5% in August

Apparently trust levels in Australia are on par with these findings and are even a bit more negative.(Various sources quoted by Doc Searls)

See: Australia - Digital Economy - Privacy and Security issues

Mobile data traffic soars in the Middle East 30 Mar 2015

Mobile penetration levels are high in the Middle East, having passed the 100% milestone in 9 out of 14 countries – the highest rates can be found in the Gulf Cooperation Council (GCC) nations, where penetration rates range between 170% and 200% (except Iraq, which is still below 100% mobile penetration).

The saturated market is creating an environment where it is increasingly harder for operators to grow mobile voice revenue. In addition, the rise of Over-The-Top (OTT) service providers and introduction of MVNOs in some markets is creating increased competition for existing operators. To address these challenges, operators are trying different strategies such as moving into fixed services, expanding into other countries, improving mobile packages or focusing on mobile broadband services. In 2014, the region was the fastest growing globally in terms of mobile data traffic, and strong growth rates are expected to continue in the coming years.

While the region has matured in terms of mobile subscriber penetration, this tech-savvy population has been quick to embrace smart phones, creating one of the hottest markets for smart phone growth worldwide.

Looking at some of the countries individually, we can see that while Bahrain possesses the smallest market in the Middle East, its telecoms industry is arguably one the most developed. Early to introduce liberalisation, it is one of the most open markets in the region, underpinned by a relatively well-developed regulatory environment.

Iran’s telecoms market is the second largest in the Middle East (after Turkey), given the size of its population. Mobile services are widely available from six mobile network operators, three of which offer services on a national basis. Since the start of competition, Iran has seen a huge growth in mobile subscriber numbers and vast improvements in its mobile market, which was previously characterised by a severe level of unmet demand for services. Penetration levels indicate room for continued revenue growth.

Mobile services have been a big success story in post-war Iraq, with mobile operators emerging as the star performers in the telecoms sector, given the speed at which their networks could be deployed. The market has grown rapidly, partly due to the lack of fixed-line service. Mobile data services are becoming an increasingly important source of new revenue given the maturing mobile voice market. With smart phone becoming more affordable and mobile data networks in place, the focus is shifting to mobile internet offerings.

Israel possesses an extremely competitive market served by five mobile network operators as well as by a number of Mobile Virtual Network Operators (MVNOs). Strong competition has led operators to focus on costs, resulting in a number of infrastructure sharing agreements. Factors that have helped drive competition include full mobile number portability and regulatory barriers that prevent operators from linking sales of handsets to services, or offering discounts to customers that commit to longer periods.

An important showcase of the Middle East’s emerging ICT sector, Jordan boasts a burgeoning technology start-up industry and a modern liberalised telecoms market. All three mobile network operators have launched 3G/HSPA networks, driving rapid growth in mobile broadband subscriptions, and Zain, one of the region’s leading mobile players, launched the country’s first LTE network in February 2015. However, the country’s operating context is being challenged by the conflict in neighbouring Syria.

Kuwait possesses a competitive mobile market shared by three mobile network operators. With voice penetration reaching saturation levels, mobile broadband offers the best revenue growth opportunity for mobile operators, supported by the launch of 3G/HSPA/LTE networks.

Lebanon holds a unique position in the Middle East’s telecoms industry given the continued high level of government ownership. While most fixed line incumbents in the region are government owned, Lebanese government ownership extends to the country’s two mobile operators. Several unsuccessful privatisation attempts have been made, with auction dates scheduled and then postponed. The fact is, market liberalisation and privatisation are contentious issues, as revenue from the telecoms industry contributes to a significant proportion of the government’s budget.

Oman’s mobile market continues to be the most dynamic in the region, served by two mobile network operators and two MVNOs. Between them, the two MVNOs have managed to gain more than 10% of the market. With the mobile voice market reaching saturation, the focus has shifted to the mobile broadband market, underpinned by the launch of HSPA and LTE networks. One of the impacts of the increased proliferation of mobile internet and smartphones has been the falling number of SMS/MMS messages sent.

Qatar’s mobile penetration was already well beyond the 100% mark even before the start of competition when Ooredoo was the only provider of services. Vodafone Qatar launched services commercially in July 2009, managing to gain a quarter of the market measured by subscribers. Both operators have also launched mobile broadband services over HSPA and LTE networks. Adoption of such services provides a new revenue growth opportunity as the mobile voice market comes under increased competition.

The Saudi Arabian mobile market is fiercely competitive, with services offered by four mobile network operators, and it may become even more competitive as the regulator has announced plans to allow MVNOs to enter the market. With mobile SIM card penetration reaching levels indicative of maturity, future revenue growth will centre on mobile broadband services and applications, made possible by deployment of HSPA and LTE networks.

Syria’s mobile market is served by a duopoly comprised of two operators. Both have been impacted by the ongoing civil war, with base stations taken out of commission. Mobile data services are becoming an increasingly important source of new revenue as the mobile voice market begins to mature.

Turkey’s mobile market is one of the largest in the region due to its sizable population, which is characterised as young, increasingly urbanised, and technically literate. Healthy infrastructure-based competition exists between three mobile network operators with GSM/HSPA networks. LTE technology has been trialled by the operators, but it has yet to be launched commercially. The market potential of LTE is considerable, considering that mobile broadband has emerged as the most popular broadband platform in Turkey, overtaking ADSL.

The mobile market in the UAE is served by a duopoly, but mobile penetration was high even prior to the launch of competing services – a fact attributed to the country’s significantly sized and fluid expatriate population. Often, consumers own more than one SIM card to take advantage of various promotional offers. Up until late 2013 when Mobile Number Portability (MNP) was finally implemented, multi-SIM ownership was further exacerbated by the lack of MNP. Both operators have deployed sophisticated HSPA+ and LTE networks.

Yemen’s mobile networks were shut down a number of times due to war or security problems until being reconnected in early 1998. The market is served by three GSM and one CDMA operator. Current penetration levels indicate there is much room for growth, with prepaid services accounting for the majority of subscriptions.

For detailed information, table of contents and pricing see: Middle East – Mobile Voice and Mobile Operators Market

The autonomous car 28 Mar 2015

A striking element of the Mobile World Exhibition in Barcelona was the number of cars on display. All major car manufacturers were either directly represented or were part of ITC companies’ displays.

So what was this all about? It was all about the autonomous car. The reality of a fully driverless car, as it is often hyped by the media, is much further away. For the foreseeable future there will still be a driver behind the wheel, but over the next 20 years he or she will be doing less and less.

The autonomous car better facilitates the evolution process towards that driverless car that will appear in the distant future.

Today’s cars have made a start in that direction, and these applications will be developed further. Volvo aims to use technologies that make possible zero death from car accidents caused by drivers – over 90% of car accidents are due to mistakes made by the driver.

Example of currently available driver support packs
·         Collision Warning with Full Auto Brake ·         Pedestrian and Cyclist Detection ·         Adaptive Cruise Control and Distance Alert ·         Queue Assist ·         Lane Departure Warning ·         Driver Alert Control with Active High Beam ·         Road Sign Information Display ·         Blind Spot Information System

(Source Volvo Cars)

In Barcelona the CEO of the Renault-Nissan Alliance, Carlos Ghosn, indicated that the way the industry would move forward would be, for example, for autonomous driving to be applied first in traffic jams. The driver could switch over to autonomous control and the car would manage itself. The driver could work, make calls, check emails, etc. This would become possible from 2016-2018 on.

Once lane-changing becomes relioable freeway driving could become autonomous. From a technology point of view that would become possible from 2018-2020 onward. City driving would follow much later.

It is also interesting to note what sort of research the industry is involved in to inform itself and enable it to innovate. They cooperate with NASA in relation to driving on Mars and are using Mumbai as a place to investigate what is involved in city driving. Other innovative tests have been documented in the case of Google’s driverless car; for example encountering a lady in a wheelchair circling around on the road chasing ducks away

Another element of autonomous driving, in the sense of actual driverless driving, might be long-haul truck transport. In Europe, especially on the German autobahns, trucks drive behind each other like elephants, in rows stretching for tens of kilometres. This is surely an area where true driverless cars can be considered.

However perhaps a far more pivotal element in what will happen here will be user perception, user acceptance, other social issues, government policies and regulations. Interaction with bicycles and pedestrians is something that is currently being addressed by the car manufacturers. So, while technology will make progress, social acceptance might take significantly more time.

The most realistic expectation for true autonomous driving on a mass market scale is not expected for at least another ten years or so. In the meantime, however, more technology will enter the car year by year.

Other issues that were addressed in these discussions were the need for ultra-reliable communication connections. 5G was promoted as a key technology for the car industry. But traffic decisions need to be made in split seconds, with similar response times. This will have consequences for network quality and communications traffic priority, and as such would have an effect on net neutrality policies.

Nevertheless developments in autonomous driving are unstoppable and, while it is uncertain how the market will develop and which direction it will take, one thing is certain – it is happening.

One only has to look at the traffic problems that are choking up the cities, costing the economy billions of dollars and causing enormous harm to the environment and people’s lifestyle expectations, to understand that we can’t continue here in a simple linear way. If we think we have a problem now, with one billion cars on the road, think about the year 2030 when that number will have doubled. As well as this, the cities where most of these cars are driving have limited space, especially within the existing road infrastructure. Something will have to be done about that and autonomous driving will most certainly have a role to play there.

Those who are open to testing these new developments will be at the forefront and in that respect it is interesting to look at developments in electric vehicles. In the USA 50% of EV sales are coming from one city, Austin. This is simply because of the local regulatory and policy facilities that exist there, and this shows that government leadership is paramount.

The combination of EV and autonomous driving is certainly going to revolutionise, not just cars, but transport and traffic in general.

The market is enormous and as it will be more and more driven by technology it doesn’t come as a surprise that both Google and Apple have set an eye on this market; and, while they won’t take over the car industry, they will keep the industry on its toes.

Paul Budde

See also BuddeComm Intelligence Report - Smart Transport, Smart Vehicles and Drones

Hollywood studios get access to telco regulation 27 Mar 2015

In the end, despite his previously strong stand on the issue, the Minister for Communication has given in to the Hollywood studios and introduced some of the most draconian copyright laws in the western world.

This is a powerful and heavily concentrated industry – some six companies dominate 90% (three companies 70%) of the US content market. They are all global companies and so they also dominate the content market in many of the developed economies – particularly those in the Anglo-Saxon countries, including of course Australia.

It is obvious to all that the content industry is going through massive changes, forced upon them by digital technologies. The old business model is based on the distribution of content to mass markets, but people increasingly want to be treated as individual customers. Furthermore, their distribution model is based on pushing as much – mostly unwanted – content as possible down the throats of customers who in general only want a fraction of it.

As the Hollywood studios are losing the battle in the content market they have moved on and are now using their massive lobbying power to move the battle from trying to protect their obsolete content business model to one that will allow them to control the distribution of that model.

The internet is giving the people the choice to select the services they want, but in one way or another internet access depends on the telecommunication networks through which users get access to content.

While people like Malcolm Turnbull have argued that it was up to these content providers to start changing their business models, the minister has now caved in to the moguls and extended the powers of the Hollywood studies to the telco industry.

He is proposing to give the Hollywood studios a legal opportunity to do so by getting legislation put in place that will give these companies the power to use telecoms legislation to block sites that don’t follow their content business model. The proposed legislation will force users to continue to buy the bundles that these companies want to force down their throats, rather than letting the market work in forcing these companies to change their business model to one which would give customers more choice, flexibility, and make it more affordable to buy content. Furthermore these bundles are geographically organised, giving these companies further divide-and-conquer control depending on where customers are situated, forcing them to buy different packages at different subscription rates.

The studios decide what you can and cannot watch. Proposals in front of American regulators are aimed at more concentration in the industry, making these companies even more powerful in deciding who gets what, and at what price; competition is rapidly dwindling here, as governments are failing to protect their citizens and instead are supporting these moguls. The situation will only deteriorate further (typically, those being offered Down Under at significantly higher prices).

Once again, we are talking about only a handful of overseas players who will effectively be able to use this new legislation; very powerful and very rich companies who will now be given the power to ruthlessly pursue their very narrow business interests, which don’t align with the interest of the users.

Don’t get me wrong – I have no issue with copyright and I am not in favour of piracy. I am arguing against the business models that they use to sell their content. These no longer suit our modern society. By giving in to their demand, the government is now giving these few powerful content companies the tools to protect their obsolete business models. It is providing the Hollywood Studios with the full force of the law, while meekly asking them to please also consider looking at their business models – yes, as if.

The government will be unable to protect these companies forever. As those business models are flawed they will eventually collapse; however, the sad thing is that in the meantime the government will not just allow, but will also support, these companies in punishing the Australian people if they refuse to use the business models that are forced upon them.

The fact that the subscription-based Netflix in the USA is so successful clearly shows that customers are prepared to pay for content if they get choice and flexibility, and if the price is right for them. Unfortunately Netflix can’t repeat this success story in Australia because most of the premium content that is available to them in the American market is not available to them because of the exclusive content deals that are in place in this country with News Limited (Foxtel).

Rather than proposing legislation that protects the incumbents, government should support business models that create diversity, provide opportunities for smaller companies and support business models that would empower local businesses. Rather than giving in to the Hollywood studios it should listen to the Australian people, as these are the people who vote for them and to whom they are accountable.

Paul Budde

See also:  Australia - Digital Economy - Privacy and Security issues

Broadband changing telco business model from retail to wholesale 27 Mar 2015

Pushed into action by the reality of the digital economy, we now see many industry and government sectors taking a far more active role in utilising ICTs in their retail offerings to their customers.

Be it retailers, banks, entertainment companies, car manufacturers, home appliance vendors and many others, they are using ICTs to enhance their products and services as a tool in their competition for the customers dollar.

What this means is that while ICT companies are critical in these developments they are more and more pushed into a wholesale relationship with the companies that want to include ICT offerings in their product. The business model of the telcos however is still to ‘own the customer’ and they have great problems moving from a retail model to a wholesale model, nevertheless this is going to happen more and more.

We have already seen Optus and Vodafone moving into wholesale models for IoT and M2M developments and Telstra has indicated that it is also working on a wholesale product for its 4G services. The fact that it has taken them so long is a clear indication how difficult it is for the telcos to embrace these new models.

The push factor from the rest of the industry is clearly licking in. Interestingly in this case is for example that Apple traditionally has been launching their iPhones through the retail activities of the telcos, however, their smart watch will be marketed directly to the customers. Expect more and more of these developments to happen as the digital tools are becoming more strategic to those other sectors and the fact that the telecoms elements in the new digital services a becoming more seamless from a customers point of view.

In the end the telco element of these digital services will no longer be sold separately but will become fully integrated in the end product. This means that telecoms access will in many instances become ‘free’ as in the sense that the business models of the providers of the end service will absorb these costs.

It will be interesting to see how the telcos will react to these new developments.

Paul Budde See also:

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