Latest Analyses, blogs and news
Honduran mobile market developments further threaten the incumbent telco 11 Mar 2014
One of the peculiarities of the Honduran telecom market is that until 1995 the incumbent, Hondutel, was in charge of regulating the sector. It remains a semi-autonomous government agency, though privatisation plans have been dragging on for years. The company has undergone several corruption investigations, while periodic sweeps of its management represent continuing attempts to find a solution to its ongoing woes.
These centre on revenue falling far lower than anticipated, resulting in deficits so substantial that the company can barely pay the government the dividend owed to it. Poor financial returns are blamed on lower fixed-line revenue as customers terminate their fixed-line services and adopt mobile services from rival telcos. This development can itself largely be attributed to longstanding underinvestment in the company’s fixed infrastructure. In late 2013 Hondutel announced that it expected to report losses of around HNL900 million for the year, suggesting that a range of attempts to save it from bankruptcy continue to fail, and that the government’s financial contributions are keeping it afloat but are not resulting in the turnaround so desperately needed.
Further difficulties may arise following developments in the mobile sector. The recent multi-spectrum auction saw Claro and Tigo secure concessions, while one block was set aside for the troubled Hondutel for use after the company completes its planned privatisation. This process may take some considerable time: the company remains unattractive to investors, a fact understood by the spectrum reserve which was aimed at making the company more likely to survive as a going concern.
Under the terms of their licences, operators must provide full 2G geographic coverage and 25% 3G coverage within three years. LTE coverage must reach 15% of the country, essentially representing the ten largest cities, by the end of 2016.
Given the scale of the competing operators - Claro, backed by América Móvil, and Tigo, the local arm of Millicom which also has operations in El Salvador, Guatemala, Bolivia, Colombia and Paraguay, as well as in seven markets in Africa - the concern must be that Hondutel will be the player which fails to reach its required coverage. This would invariably result in customer churn to its rivals, so reducing further its ability to remain a competitor in this crucial market. It would also further diminish its attractiveness to outside investors.
In the mobile segment, Hondutel had earlier looked to partner with a strategic investor in a bid to become more competitive and to upgrade its network, so enabling it to expand beyond voice and SMS services. Despite an international tender to find such a partner, which would manage its new mobile subsidiary Ehmovitel, nothing came of it.
The second threat to Hondutel arises from mobile number portability, implemented from April 2014. MNP has had a long gestation, being studied by the regulator since 2008. The Number Portability Act was approved in mid-2013 and a company was chosen to manage the facility at the end of the year. MNP is designed to encourage competition among providers by facilitating the process by which customers can move between them. It favours players which are efficient and cost-effective for customers, and which - above all - demonstrate that they have capable networks. Wherever the market may be, poor coverage and dropped calls consistently lead to customer losses. Some operators can recover from this by investing themselves out of trouble. It is in this regard that Hondutel faces diminishing returns unless a radical overhaul can be achieved, quickly, and this time with lasting results.
For more detail see Honduras - Telecoms, Mobile and Broadband
The Middle East is a tech-savvy region ripe for embracing new digital media developments 11 Mar 2014
The Middle Eastern society as a whole; is an enthusiastic adopter of technology, digital media, online entertainment and social media. Jordan in particular has emerged as a regional tech start-up hub due to an ICT focused education system, low start up costs and business-friendly government. Its growing reputation is increasingly attracting international capital eager to tap into the region’s underserved growing online market.
Turkey also possesses a significant telecommunications market region due to its large population, which is characterised as young, increasingly urbanised and technically literate. Its developing economy has been shaped by the EU accession process.
Many countries now recognise the potential of applying ICT to improve both social and economic development. Kuwait, for example, has taken steps to develop a digital economy with the development of national level policies for e-health and e-government as well as a number of services now available online. Saudi Arabia received praise in 2013 from the World Bank which acknowledged the kingdom’s efforts in implementing business reforms such as electronic filing and new payment systems.
Despite ongoing conflict in Syria; e-government services are available, with a national e-government policy in place to guide developments. To support e-health development, public funding has been made available for ICT equipment, software, pilot projects, skills training and scholarships. E-health initiatives in Syria also extend to the mobile sector (m-health), with m-health initiatives undertaken.
Despite the growing Internet user base across the Middle East; the lack of adequate delivery infrastructure has been cited as an impediment to digital media development, although this is improving.
Internet usage in Iran, for example, is growing due to improved accessibility brought about by competition and government initiatives. Broadband penetration in Iran is improving given the growing number of competing ISPs, made possible through a licensing scheme. Recognising the potential of applying ICT to improve both social and economic development, Iran has taken steps to develop a digital economy. However this has been contradicted by Iran’s systematic and ongoing efforts to censor the Internet, with an initiative underway to deploy a “National Internet”.
Recognising the productivity benefits of fast broadband access, governments in the Middle East have endeavoured to either create regulatory conditions conducive to broadband investment or directly engaged in deploying national broadband networks.
Broadband in Oman for example represents the majority of the countries Internet connections and competition is predominantly infrastructure based.
In Israel, broadband speeds are increasing as Bezeq and HOT expand coverage of fibre access networks while the recent launch of additional submarine cables which offer ISPs an opportunity to reduce their own costs.
Broadband availability is also improving in Lebanon, with access available via DSL, fibre, WiMAX, WiFi, iBurst and 3G/LTE platforms. Despite the challenges of relatively poor infrastructure, Lebanon is home to a growing technology sector, complete with local start-up incubators, designed to provide seed funding and mentoring to technology entrepreneurs.
Broadband Internet in Iraq is available through a variety of platforms, including ADSL, satellite, WiMAX, CDMA and mobile broadband. Internet cafes are a popular Internet access method given low PC ownership.
National Broadband Network (NBN) development is underway in some markets with Qatar being one example of a country embarking on developing a national fibre-based access network, known as QNBN. Bahrain also recognises the socioeconomic advantages of a connected society and has deployed its own National Broadband Network (NBN), using infrastructure from the national Electricity and Water utility company and promising speeds of up to 1Gb/s.
Despite the Middle East having some issues to overcome such as political unrest, lack of infrastructure and poverty in some markets; there is much to be positive about in this emerging tech-savvy region. Progress towards establishing better fixed and mobile infrastructure will only continue to fuel the growing demand for digital media and entertainment services, such as online video and IPTV.
In particular, the UAE may well attract international interest in the future from OTT video service providers due to its established and growing broadband population and substantial purchasing power of a tech savvy population. Domestic incumbent Etisalat has already positioned itself in this market with its multi-screen OTT TV and VoD service called eLife.
For detailed information, table of contents and pricing see:
Middle East – Digital Media, Broadband and Internet Market and Forecasts
Netherlands - Further market consolidation indicative of improved services and lower customer costs into 2014 10 Mar 2014
The mature Dutch telecom market has one of the most progressive broadband sectors in the world, with effective cross-platform competition stimulated by numerous fibre deployments. There is also strong competition in the mobile sector, and a progressive digital TV platform with the services of the dominant cable companies being complemented by KPN’s Digitenne and IPTV offerings.
With the broadband penetration rate among the highest in the world, the Netherlands benefits from comprehensive DSL and cable networks and a government-stimulated emphasis on fibre network roll-outs. The acquisition by Liberty Global of the remaining shares in Ziggo will provide a competitor to KPN with near national reach, stimulating each operator to upgrade their networks to avoid churn and retain their customer base. In this environment, customers can anticipate improved network capabilities in coming years, and competitive pricing for services.
The Dutch TV market benefits from a comprehensive cable network reaching almost all TV homes, together with upgraded DSL networks which provide IPTV services to most households. The country was the first to complete the move to DTTV broadcasting, in late 2006. Its excellent broadband infrastructure also forms the bedrock of popular bundled services offered by KPN and the cable services of Ziggo and UPC Nederland.
The Netherlands has continued to show growth in the mobile market. In common with other advanced European markets, the 3G and 4G sectors are the main drivers for subscriber growth, with much emphasis among operators to extend their LTE footprints nationally.
A new BuddeComm report assesses the key aspects of the Dutch telecom market, providing comprehensive updated data on fixed network services, profiles of the major operators and overviews of the key regulatory issues including interconnection, local loop unbundling, number portability, carrier preselection, and the provisions for competitor access to cable and fibre infrastructure. The report also reviews media convergence and developments in digital, cable and interactive TV as well as services such as VoD, VoIP and IPTV. It provides statistics and analyses on the mobile market, including a review of the key operators and regulatory issues, together with a range of forecasts, and an assessment of emerging mobile data services such as mobile TV, and provides ARPU and 3G 2015.
For detailed information, table of contents and pricing see:
Netherlands - Telecoms IP Networks Digital Media and Forecasts
Poor economic growth undermining telecom investments in Ukraine 10 Mar 2014
Ukraine’s large telecoms market, supported by a population of almost 46 million, is being modernised through considerable investment in both the mobile and fixed-broadband sectors. Competition is improving as alternative operators engage in infrastructure-based competition. Wireless local loop and fibre operators have been most active in this area. Although the incumbent Ukrtelecom remains the dominant player, the regulatory environment is likely to improve further following the sale of Ukrtelecom to the local conglomerate SCM Group. In addition, Ukraine’s telecom market has attracted investors from Turkey and Russia. The political tension which erupted in late 2013 has brought focus to the vulnerability of the national telecom network, as parts of the infrastructure in Russian-dominated Crimea were vandalised in early 2014, leading to network disruption.
The 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.
Ukraine’s mobile market is dominated by three network operators. Together, these retarded the development of the MVNO sector by promoting their own low-cost subsidiaries, though recently they have adopted a business model which has these subsidiaries brought under a single brand, and with less focus on market segmentation. The MVNO market as a result is in its infancy, and few have been licensed thus far. Yet a gap in the low-cost sector may provide the opportunity for MVNOs to thrive in coming years. Greater competition is also anticipated following the mid-2014 introduction of mobile number portability.
Mobile broadband services present the next growth opportunity, given the saturated voice market, though insufficient investment has been made thus far in 4G technologies. Into this market opportunity has stepped Ukraine’s CDMA operators, which initially offered fixed-line services but have since moved into the mobile market, launching mobile broadband services.
This report provides a concise overview of Ukraine’s telecom market, including profiles of the major operators, a review of telecom network infrastructure and emerging network developments. It also offers assesses the broadband and digital media sectors, covering major players, market developments and providing a wide range of statistics. In addition, it examines developments in the mobile market, profiling the key players, technologies and industry developments.
For detailed information, table of contents and pricing see:
Ukraine - Telecoms, IP Networks, Digital Media and Forecasts
White Paper calls for National Telehealth Strategy 07 Mar 2014
The Federal Government has been urged to develop a National Strategy for Telehealth to help rein in the ballooning health budget deficit.
A collaboration of health industry stakeholders – One In Four Lives – released in March 2014 a White Paper, to stimulate discussion and encourage a wide range of health interests to support the adoption of Telehealth on a national basis.
The One In Four Lives group estimates that Telehealth has the ability to slash Australia’s public hospital costs by about $4 billion a year in avoidable hospital presentations related to chronic conditions and improve access to healthcare for the thousands of Australians who wait months to see a doctor.
The name of the new body reflects the fact that almost six million, or one in four Australians, are affected by chronic health conditions.
This is a major burden on the health budget, accounting for 60% of all hospital bed days and an estimated $17 billion annually in public health costs. Also, 62% of rural Australians experiencing shortage of local health professionals; regional patients have access to less than half the Specialists available in major metro areas
The White Paper recognises that the Australian health system is not sustainable in its current form.
Treasury modelling predicts that on current trends health care costs will consume more than 100% of the entire revenue collected by the States by 2046.
One In Four Lives is a collaboration of organisations representing a broad range of the health industry, including AIIA, BT, anywhere healthcare, Philips, and the University of Western Sydney, supported by not-for-profit operators and leading health academics.
A study in the UK found that Telehealth could deliver a 15% reduction in emergency visits, a 20% reduction in emergency admissions, a 14% reduction in both hospital admissions and bed days and a 45% reduction in mortality rates.
One trial for patients using in-home dialysis for renal failure has seen the number of patients presenting to hospital fall by nearly 50%. Rather than travelling to the hospital these patients are able to complete their dialysis at home, with the aid of in-home Telehealth equipment and video conferencing, sometimes saving up to 4 hours a day.
“MBS funded video consultations have improved the lives of the 47,000 patients who have consulted with a specialist in the last two years.”
At its heart Telehealth aims to provide people with access to proven models of healthcare, delivered remotely.
The goal is to intervene before impact – on the patient, their carer or the health system.
By using Telehealth thousands of Australians can be freed from the need to make trips (sometimes over long distances, with carers) to doctors, specialists and hospitals in major centres for consultations and tests and then to return for the results. This improves the likelihood that patients get the right care at the right time, and prevent further deterioration due to a delay in consultation.
For those with chronic conditions, Telehealth can also include remote patient monitoring which provides patients with the knowledge to manage their condition in the comfort of their own home, and allows for early detection of any changes in their condition.
The patient’s vital signs can be captured in accordance with the care plan through blood pressure cuffs, pulse oximeters and other small medical devices that send the readings via Bluetooth to a smartphone or similar device to a central monitoring station.
The monitoring nurse – who is able to manage a workload of up to 250 patients – will be alerted if readings exceed the thresholds set for the individual patients and may request that the patient retake their readings, assess the impact of recent medication, food or exercise intake, or refer the patient to their GP for review.
The White Paper is available online at www.aiia.com.au
Ukraine's economy in dire straits, telecom infrastructure a victim of the political crisis 06 Mar 2014
The Ukrainian economic situation continues to be in the doldrums. Although economic stimulus may yet arise from assistance from Russia, as the Russian government attempts to retain the country within its economic and political orbit, the ongoing political uncertainty may put this financial help in jeopardy. GDP growth struggled to be positive in 2012, and is expected to have been similarly anaemic in 2013. Following downgrades issued by three rating agencies in late 2013, it is highly likely that further rating downgrades will be issued into 2014.
The political crisis has exacerbated the poor performance of the telecom sector, which shows little sign of growth further into the year. Indeed, according to the regulator telecom market revenue grew by only 0.4% in 2013, with the mobile, fixed-line, and internet sectors contributing 94.4% of the total. The regulator noted the continuing deficiencies in broadband connectivity in rural as well as urban areas, with household broadband penetration at only 37%.
As for major operators, Kyivstar reported a 7% fall in revenue in the third quarter of 2013, year-on-year, largely caused by declining mobile revenue as customers switched to lower priced bundled tariff plans – itself an indication of declining spend among consumers. Ukrtelecom reported a 1.6% year-on-year fall in revenue for the first nine months of 2013.
In the current political climate, telecom infrastructure has become a key target for those disposed to disruption. In recent days the incumbent Ukrtelecom reported that vandalism on equipment and fibre-optic lines had cut telephony and internet connectivity to the Crimean peninsular, which took days to restore. This disruption coincided with Russian forces having seized control of airfields and other key installations.
The severing of telecom links created difficulties not only for the residential and business sectors, but also for the emergency services. More recently still, it has been reported that mobile telephony networks in Crimea have been manipulated.
Such is the fundamental importance of telecoms that it is invariably the key component of a nation’s infrastructure which is targeted in times of civil strife.
For more information on Ukraine’s telecom market, see Ukraine - Key Statistics, Telecom Market and Regulatory Overviews and other Ukraine reports
The global mobile industry faces diverse opportunities and challenges in 2014 05 Mar 2014
The ongoing development of wireless services offers the telecoms industry the largest ray of hope for growth in 2014. Mobile subscriptions are expected to surpass the actual world population due to the number of multiple subscriptions held by consumers and the developing markets will continue to offer opportunities for further growth. However the wireless sector is not without its challenges with the rise of Over-The-Top (OTT) service providers the biggest threat to the traditional players going forward.
We already see interesting developments occurring as a result of the OTT players. For example both mobile VoIP apps and mobile Instant Messaging (IM) are OTT services representing a potential threat to mobile operators’ call revenues. Mobile VoIP has been under-development for a number of years and the offerings for these services have improved over time. Other forms of messaging beyond operator SMS are gaining ground as well, particularly free messaging services offered by social networks and free apps such as Whatsapp, for example.
It is expected that in the next couple of years; the mobile operators will lose billions in lost revenue to these new messaging services. Mobile operators do need to take the rise of mobile VoIP and OTT Instant Messaging seriously and consider pricing strategies to combat the threat - as the cheaper alternatives are bound to sway many users towards such service offerings. SMS which traditionally accounted for around 80% of overall messaging revenue is expected to decline and by 2015 will account for only around 60%.
Customer satisfaction is increasingly important for service differentiation between the competing mobile operators and we recognise that retaining customers in this competitive and economic environment is challenging. Bearing in mind that the cost of acquiring customers is expensive; reducing churn rates can offer significant savings to telcos. In addition, lowering roaming charges also encourages goodwill at both a regulatory and consumer level and lessens the chance of bill-shock. To improve the overall customer experience; operators need to focus on utilising the enormous amounts of customer data they have on hand (Big Data) as well as implement real-time analytics.
The popularity of mobile devices including smart phones, touch-screen tablets and the emerging wearable technologies market continues to grow steadily. However despite its phenomenal growth – which will continue for many years to come – the smartphone is set to eventually become a utility product. This will first emerge in the developed markets, where smartphone penetration is the highest. In the developing markets where the smartphone is only in its infancy, cheap models from China and India are set to dominate the markets.
Brazil, Russia, India and China have long been recognized as key markets for opportunities for telecoms – due partially to their large populations and increased globalization. In 2014 the industry is again focusing heavily on the BRIC markets. Over the last year or so, the international telecom community has also shown unprecedented interest in the emerging market of Myanmar (Burma). Major changes have taken place in Myanmar’s telecom sector and the government’s plans to liberalise the market have certainly moved quickly.
BuddeComm’s new report, Global Mobile Communications – The Key Statistics, Trends and Regional Insights, provides important insights into the worldwide mobile communications industry and includes trends, analyses, statistics and unique regional insights for North America, Europe, Latin America, Middle East, Africa and Asia Pacific. The report provides valuable information on the mobile communications industry including key industry statistics at a global and regional level; insights into the activities of the operators and identification of trends and opportunities. It also includes a global overview of handset, smartphone, touchscreen tablets and wearable technology. The report contains unique insights into regional developments written by BuddeComm’s experienced Senior Analysts, including insights into the BRIC markets and a case study on the emerging market of Myanmar. Please note: Mobile broadband is covered in detail in a separate annual publication.
For detailed information, table of contents and pricing see:
Global Mobile Communications - The Key Statistics, Trends and Regional Insights
More from Paul's desk from the BuddeBlog…
More News & Views from the BuddeBlog…