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Over-The-Top services model is a key development for e-commerce sector 20 Oct 2014

Over-The-Top (OTT) is the services model for the future for communications and media services, as well as a whole range of emerging ones, such as e-commerce, m-commerce, e-health, e-education, smart grids and the digital economy in general. While the rise of OTT services has created serious concerns for the traditional telecoms operators - it has also created an environment for innovation and alternative services to grow.

Mobile commerce is one of the hottest sectors right now and the industry is finally coming into its own due to the rise of OTT services and app stores offering more digital channels for e-retailers to reach audiences. The growth of smart phones has also assisted the growth of m-commerce along with improvements in mobile infrastructure in many parts of the world. Players are slowly becoming lured into entering the mobile commerce market by the huge revenue opportunities and the potential for customer acquisition and retention.

The enormous success of smart phones is linked to the apps which are available and commercial models will be increasingly linked to these apps - which will result in further spectacular growth in m-commerce. BuddeComm sees the development of m-wallets and m-payment systems based on Near-Field Communication (NFC) as a key development for the m-commerce sector and beyond.

While a range of niche market applications will become successful; there is currently a lot of confusion and uncertainty regarding which ones will succeed - and who will make money from particular mobile e-commerce applications. Sales of entertainment based mobile apps are very popular and improved infrastructure such as fibre and 4G network rollouts is helping to drive the overall global digital media entertainment market. Incorporating social networks, online video, digital music, gaming apps and online dating; this sector is particularly driven by the uptake in mobile broadband apps and services.

In 2014 it is interesting to observe the developments occurring with the virtual currency Bitcoin. While there are security concerns regarding this growing form of Internet cash; in recent times faith in this crypto currency appears to have strengthened and we saw the emergence of the Bitcoin wallet called Coinbase. Significantly, PayPal announced a partnership with Coinbase in 2014 that would see the currency accepted by sites which offer PayPal through its subsidiary Braintree. Bitcoin is certainly gaining awareness and a perception of legitimacy around the globe.

Omni channel retailing in another emerging trend. New communication and software developments make it increasingly possible for retailers to offer a seamless shopping experience using all the available retail channels such as mobile internet devices, computers, bricks-and-mortar, television, radio, direct mail, catalogues and so on. However the level of sophistication needed to build omni-channel systems makes it difficult for many smaller organisations to keep up with the trend. This will result in a wider gap between those who are able to transform themselves and those who will be left behind. As in many other markets, well-functioning omni-channel systems can easily operate internationally, so national boundaries are becoming less of a barrier for those who want to explore overseas markets.

Given the ongoing industry developments combined with increasingly sophisticated technology advancements; the e-commerce and m-commerce sectors must represent one of the most innovative and rapidly evolving sectors worldwide and the speed that new services, features and companies appear (and disappear) is quite a spectacle to observe.

BuddeComm’s new report, Global Digital Economy – The Rapidly Evolving E-Commerce and M-Commerce Markets, provides important insights into how the telecoms industry transformation and growth of Over-The-Top (OTT) services has both impacted upon the digital economy and the telcos. This unique report includes information and statistics on the global e-commerce, e-payments and m-commerce markets; mobile location based services and apps based on entertainment.  In addition the report provides insights and statistics on the global digital advertising sector which provides a valuable source of revenue to many of those operating in the digital media sector. Insightful regional overviews written by BuddeComm’s Senior Analysts are provided for North America, Europe, Africa, Middle East, Latin America and Asia Pacific.

For detailed information, table of contents and pricing see: Global Digital Economy - The Rapidly Evolving E-Commerce and M-Commerce Markets

Government initiates plans to develop fixed-line telephony competition in Algeria 16 Oct 2014

With a fixed-line penetration of around 8% and mobile penetration close to 100%, Algeria has one of the highest telecom services teledensities in Africa. The country’s relatively well developed infrastructure includes a national fibre backbone and significant FttP deployments.

There remains no effective competition in the fixed-line sector since Lacom (a joint venture between Egypt’s Orascom Telecom and Telecom Egypt) exited the market in 2008. The proposed privatisation of Algerie Telecom has been in abeyance for some time. To stimulate the sector the government in late 2014 proposed reintroducing fixed-line telephony competition.

Solid mobile subscriber growth in recent years has meant that mobile penetration has now broached 100%. Given the intensifying price competition between the three MNOs, Algerie Telecom’s Mobilis, Orascom’s Djezzy, and Wataniya’s Ooredoo, their focus has shifted to raising ARPU and investing in mobile data services based on HSPA and LTE technologies. Following long delays, the regulator in late 2013 finally issued 3G licences, which together with LTE services launched by Mobilis in May 2014 will considerably boost mobile broadband services in coming years.

Although the mobile market has been affected by the recent social and political unrest, and investor confidence has been dented by recent moves from the government to take control of the country’s leading mobile operator, with the advent of 3G licences the MNOs have the chance to transform themselves into converged service providers and to take a share of the broadband market. As such, the country’s mobile market still has enormous potential for growth.

To complement mobile broadband services, Algerie Telecom has invested in DSL and WiMAX network upgrades. The liberalisation of the market for VoIP services has also enabled ISPs to become players in the sector, which is placing greater pressure on fixed-line voice services. Algerie Telecom is also investing in its national fibre infrastructure, and has become a major shareholder in a four-company national fibre project.

A new BuddeComm report reviews Algeria’s fixed-line, broadband and mobile markets, providing analysis and key statistics, profiles of the major players, and scenario forecasts.

For detailed information, table of contents and pricing see: Algeria - Telecoms, Mobile and Broadband - Market Insights and Forecasts

UN Broadband Commission 2.0 14 Oct 2014

Back in late 2009 I had the honour of explaining my views on how broadband can deliver social and economic benefits to countries and their people to Dr Hamadoun Touré the Secretary-General (SG) of the ITU, the UN body looking after global telecoms. He showed a particular interest in the initiative Australia had taken in developing the NBN.

This discussion with the SG led to the establishment in 2010 of the UN Broadband Commission, co-sponsored by UNESCO and the ITU. Dr Touré invited 50 Commissioners from around the world to participate in this initiative, half of them from private industry – CEOs from leading operators, OTTs and ICT vendors, etc, plus ministers of communications, regulators such as FCC, SGs from other UN bodies such as WTO, World Bank and others.

At the end of 2014 Dr Touré will step down as SG of the ITU. The 10th meeting of the Commission in New York in September therefore also signified the end of an era for the Commission and we had a strategic review of its future. Based on its successful activities – more than a dozen reports and an increase in National Broadband Plans from 65 to 142 – as well as the work that still lies ahead of us, it was decided to launch the Broadband Commission 2.0 under the new SG of the ITU Houlin Zhao, once he is officially elected in November.

How to overcome government inertia?

Key issues that will need to be addressed in the next phase include that of national government inertia in regard to policy-making.

We have seen enormous private investment in the developing world over the last decade; there is also great enthusiasm from the people about ICT. However governments are lacking action in those markets not organised by the private market, such as healthcare, education, infrastructure and so on. The ICT industry is perhaps the largest economic and social incubator for innovations and inventions, but so far we have failed to invent new government policies.

While there is widespread acceptance of the need for broadband and its associated ICT developments, such as cloud computing, data centres, M2M, data analytics and so on, there is a significant lack of government policies aimed at utilising the social and economic benefits that can be derived from all this. The only government bodies who seem to be able to grapple with it are the national security agencies, who, especially in recent years, have dived into the ICT opportunities that have become available to them. The Commission would like to see a similar level of enthusiasm and commitment in the adoption of these new technologies by the ministers of healthcare, education, energy, environment, agriculture and so on.

Perhaps the single largest obstacle to digital development has been government finance departments. They are only interested in extracting the greatest possible amount of money from the telco industry through fees, licences and taxation – completely disregarding the national social and economic benefits that can be derived from it.

This needs to be changed, but for that to happen proper processes and systems need to be developed. So far this has been a key missing element in digital development. Perhaps certain institutions need to be developed, and this is something in which the Broadband Commission could play a facilitating role.

This will most likely constitute a large part of the work of the Commission in the future.

Sustainable Developments Goals

Closely linked to this task are issues related to the results of the Commission’s recent dealings with the UN member states, who are now, under the auspices of the UN, formulating the Sustainable Development Goals (SDGs), which, as of 1 January 2016, will follow up on the current Millennium Development Goals (MDGs). One of the reasons the Commission was established was to help in achieving the MDGs by using ICT tools. The Commission understood that this was well appreciated by those involved, so they were disappointed to see a lack of inclusion of ICT tools in the new SDGs. There is a fear that the mistakes made in the past will simply be repeated in the future.

The SDGs are formulated through a process in which the member countries participate. Lobbying for inclusion, therefore, will have to be done through the countries’ representatives. These are often bureaucrats from the departments of Foreign Affairs and Foreign Aid, who have little or no understanding of what ICTs can do for social and economic developments.

So in both situations – unleashing the benefits of broadband and ICTs on a national level, and using ICT tools to better address the SDGs – the leadership of the national governments will be needed, and this has proved to be a real problem. Aside from their departments of communications there are few champions within governments.

Over the last decade we have seen the development of hundreds, if not thousands, of pilots and programs. We do not need any more of these. What we need now is to see the ones we have being incorporated into government policy and upscaled. And sector reform and sector transformation is needed for this – breaking down the silos of resistance and developing more holistic (trans-sector) government policies. There is also an increased pressure from the bottom up – those involved in the pilots and programs – for governments to start moving on the mainly positive outcomes of the projects.

Telcos vs OTTs

Another key issue for the Commission will be to create a better dialogue between the telecoms industry and the internet or OTT companies. At the moment they are at loggerheads. Key elements here are the need to change what have been telecoms regulations into what should be broader ICT government policies aimed at protecting the underlying principles that govern:

  • access to and on the open network;
  • interoperability; and
  • consumer protection.

The term ‘network compact’ was used to describe this new paradigm. The telecoms industry will need to move away from its regulatory micro-management. The old regulations are based on networks that embedded the services as well, while in the new situation the networks do not have embedded services. There is no longer a separate telecoms industry – it needs to be included in ICT. Current regulations and telco licences are still based on supporting the old model and this often results in situations where telcos are lobbying for a ‘fair regulatory advantage’. The World Bank has warned that this has become a real impediment to new investments in the sector, a topic it will address in its annual flagship report to be published in 2015 – focussing on the internet as a tool for development. Issues such as net neutrality, open networks and structural changes need be governed by ICT policies, not by telco regulations.

So, some significant new initiatives will need to be taken in the Broadband Commission 2.0 developments.

Paul Budde

See also;

DRC telecom market - Africell's 3G launch to shake up mobile internet pricing 10 Oct 2014

Largely due to the country’s troubled history, the national telecom system in the DRC remains one of the least developed in the region. The national operator, SCPT, theoretically has monopoly rights under 1970 legislation. However, recognising the need for telecommunications infrastructure, the government is only loosely regulating the sector.

Mobile network operators have taken over as the providers of basic telecom services. By 2001, some 16 private operators had been granted mobile telephony licences and the subscriber base was growing at triple digit rates annually. However, the proliferation of networks also caused frequency spectrum shortages, interference and compatibility problems. As a result, the mobile sector has since consolidated and now has five major players.

Development of the DRC’s internet and broadband market has been held back by the poorly developed national and international infrastructure. However, the country was finally connected to low-cost, high-quality international bandwidth through the WACS submarine fibre optic cable in 2013, and SCPT is rolling out a fibre optic national backbone network with support from China. An alternative terrestrial international fibre connection exists via neighbouring countries. Broadband access is provided by 3G mobile services and wireless networks using WiMAX and EV-DO technology. The country’s first commercial LTE networks are imminent.

The internet market, dominated by mobile access, is set to receive a significant competitive boost when Africell launches its 3G network. The operator has already jolted the mobile market with its low pricing strategy, acquiring more than five million subscribers in the process despite ongoing difficulties in securing interconnection with other mobile networks.

Market highlights:

  • Connection to WACS international fibre optic cable finally completed;
  • National fibre backbone rollout continues;
  • Fifth mobile network thrives despite denial of interconnection;
  • 3.5G mobile broadband services introduced;
  • Airtel Congo and MTN Congo fined for mobile network quality and availability failures;
  • Africell takes Vodacom, Tigo and Airtel to court over their refusal to interconnect networks;
  • Yozma Timeturns pays initial licence fee instalment, proposes mobile services launch;
  • Vodacom reaches dispute settlement with its partner CWN, paving the way for continued investment in the country;
  • Airtel increases investment undertaking for DRC to $550 million, partners with BGFIBank Group to make its Airtel Money service available to bank customers.
  • Regulator criticised by ITU for setting mobile pricing.

Companies covered in this report include:

Vodacom Congo, Bharti Airtel (Zain, Celtel), Millicom (Tigo), Congo Chine Telecom (CCT, Africell (Lintel), Société Congolais des Postes et des Télécommunications (SCPT, OCPT), Tatem Telecom, Gecamines, AfriTel (Starcel), Standard Telecom, Telecel International,, Interconnect (Vodanet), Microcom, Cielux Telecom, Global Broadband Solution (GBS), Afrinet, Congo Korea Telecom, Geolink, ICP Net, Orioncom, Paconet (Pan African Communication Network), RagaNet, Roffe Hi-Tech, Sattel, Société Internet Congolaise (SIC), Sogetel, Liquid Telecom, O3b Networks, Smile Telecom

This updated report provides a comprehensive overview of trends and developments in the DRC's telecommunications market. For detailed information, table of contents and pricing see: Democratic Republic of Congo – Telecoms, Mobile and Broadband – Market Insights and Statistics

Guinea - Sotelgui expected to re-launch telecom services after securing a $350 million loan 10 Oct 2014


Guinea in West Africa has vast mineral resources yet remains one of the poorest countries in the world. With five competing mobile networks, its telecommunications sector has shown triple-digit growth rates for three years in a row following the entry of two world-class international operators, MTN and Orange. The other competitors are Intercel, Cellcom and Lagui, the mobile unit of the national fixed-line operator, Sotelgui.

Following the exit of Telekom Malaysia in 2008, Sotelgui has being prepared for renewed privatisation, creating an attractive opportunity for a strategic investor. Despite the rapid growth in the mobile sector, penetration remains below the African average, while the country’s fixed-line and internet markets are virtually untapped.

Broadband services are still very limited and expensive. The landing of the first international fibre optic submarine cable in 2012, and the setting up of an IXP in mid-2013, will go far to help the nascent broadband market develop by reducing the cost of internet bandwidth and improving the reliability of infrastructure.

The country slipped into a mild recession in 2009, but stable GDP growth of around 5% per year is expected from 2014, possibly reaching up to 20% in 2015 and 2016.

Market highlights: Sotelgui expected to re-launch services having secured $350 million loan to build additional infrastructure; 400 cell towers put up for sale; first international fibre optic submarine cable lands; Mobile Money services launched; third 3G licence awarded in late 2013; government secures a $350 million loan to build a 4,000km fibre backbone network; strong growth in SMS traffic; MTN signs management contract with Huawei Technologies; Cellcom Guinea launches 3G+ services; Guineanet selects Altai to provide its WiFi hotspot platform.

Companies covered in this report: Société des Télécommunications de Guinée (Sotelgui), MTN (Areeba, Investcom), Orange (France Telecom, Spacetel), Intercel (Télécel Guinea), Cellcom Guinee, MiriNet (Afribone), ETI, Universal Communication (DiscoveryTel), Ristel, Afripa Telecom, Alternet Systems, Broad Telecom, Soguicis, Thucatel, Telekom Malaysia.

This updated report provides a comprehensive overview of trends and developments in Guinea’s telecommunications market. For detailed information, table of contents and pricing see: Guinea - Telecoms, Mobile and Broadband - Market Insights and Statistics

Benin - Moov's 3G launch supporting the operator’s m-commerce services 08 Oct 2014

Although the telecom market in Benin continues to face considerable hurdles given the country’s poor fixed-line infrastructure, recent developments suggest that the sector will be transformed in coming years. Much of this transformation is due to improved international internet connectivity and the rapidly rising bandwidth available. This is encouraging the deployment of more widely available and cheaper services than hitherto. Encouraged by these developments, operators have continued to invest in mobile services which in turn are supporting a range of mobile data applications including m-commerce.

Overall, improved telecoms infrastructure has the potential to transform many areas of the country’s economy, bringing a greater proportion of the population into the orbit of internet commerce and connectivity.

The third submarine cable system, which came online in 2012, has substantially reduced the cost of international bandwidth. The fixed-line monopoly operator Benin Telecoms has also expanded its fixed-wireless and DSL-based broadband services in recent years, extending its national fibre backbone and international fibre connections. Long-established plans to privatise the company have thus far come to nought, though the government is developing its strategy to sell of the company’s assets, including the mobile services unit Libercom which will be spun off as a new entity with separate assets.

The mobile telephony sector enjoys effective competition between Libercom, South Africa’s MTN, Etisalat’s Moov, Globacom’s Glo Mobile, and Bell Benin. Competition among these players pushed market penetration above 100% by mid-2014.

Although fixed-line internet services have been available in Benin since 1995, access is limited a small proportion of the population. Fixed-line internet represents less that 10% of all accesses, with most connections being made via the mobile networks.

The country’s first licence for 3G and 4G mobile broadband services was awarded in early 2012. In May 2013 the government launched a tender for ‘Universal Service Licenses’. In the following month licenses were awarded to MTN and Etisalat’s Moov. The licences are technology neutral, enabling the operators to offer services based on 3G, LTE and mobile WiMAX technologies.

The vast majority of mobile subscribers are prepaid, with contract subscribers representing only about 0.4% of the total subscriber base.

Key developments: Orange enters talks to acquire Libercom; Etisalat Moov launches 3G services, introduces its ‘Flous’ m-commerce service; Bill & Melinda Gates Foundation donate funds to a mobile vaccine registry program; mobile internet connections soar; regulator is renamed as the Autorité de Regulation des Communications et de la Poste (ARCEP); report includes telcos’ operating data to Q2 2014; regulator’s market data to March 2014; recent market developments. Companies covered in this report: MTN, Moov (Telecel), Libercom, BBCom (Bell Benin), Glo Mobile (Globacom), Benin Telecoms (OPT), Kanakoo (BeninNet), Isocel, EIT, FirstNet, Arts Bobo, Sobiex Informatique, Global Trading Agency, Afripa Telecom, Thuraya, Nitel, Suburban Telecom, CEB. This updated report provides a comprehensive overview of trends and developments in Benin’s telecommunications market. For detailed information, table of contents and pricing see: Benin - Telecoms, Mobile and Broadband - Market Insights and Statistics

As Sri Lanka’s mobile market passes 100% subscriber penetration, operators launch 4G services 06 Oct 2014

With the end of the civil war in 2009 Sri Lanka entered what is referred to as a ‘post-conflict’ phase. There were positive signs of a general improvement in the country’s social and economic well-being by 2013/2014. And, although still facing challenges, the telecom sector in particular was starting to enter a new development phase.

Over the past few years the Sri Lankan economy has rebounded from the difficult state it was experiencing back in 2009. The country had been hit by a balance of payments crisis in that year and needed a US$2.6 billion IMF loan to bail it out. Since then, however, the US$65 billion economy has been reporting strong economic growth – more than 7% GDP growth in 2013 - and the unemployment rate had hit a record low. The IMF forecast annual growth of 6%-7% in the short term.

The generally improving market environment has seen the country’s telecom sector well positioned for continuing vigorous growth. The already modern and progressive telecommunications sector is certainly high on the list of priorities for further expansion and development. This also fits well with the government’s wider agenda for national development. The government has been promoting such initiatives as the e-Sri Lanka project. It has also established the National Broadband Consultative Committee (NBCC), a special committee appointed to accelerate and promote the availability of affordable high speed broadband internet in the country.

A good start has been made on expansion and provision of infrastructure that is capable of providing a sophisticated level of telecommunications service to the population throughout the whole country. Extending infrastructure into the North and Eastern provinces, those parts of the country most affected by the long-running war has been given high priority. It is well recognised that the growth and development of any country’s telecom sector is necessary to provide, among other things, an impetus for national economic activity. Nevertheless, much still needs to be done to complete the build-out of the necessary national infrastructure.

After a five-year period of strong growth the fixed-line subscriber market flattened out and then entered into a decline. Considerable uncertainty hangs over this segment of the telecom market. The widespread application of the Wireless Local Loop (WLL) platform was for some time a positive element in this struggling sector. However, even the WLL subscriber numbers are now in decline. There is also large concentration of fixed services in the capital Colombo (penetration of 35%) which makes the national figure look better than it is.

In the meantime, the country’s mobile telephone services have continued on a positive growth path. (The subscriber numbers appeared to have experienced a ‘correction’ in the first half of 2013 with the full year delivering zero growth.) As an effective and efficient alternative to the fixed-line networks, the mobile phone quickly became a popular and essential service. The Sri Lankan mobile market was still growing at an annual rate of around 50% in 2009 in as it headed towards the 60% penetration mark. However, since then subscriber growth has moderated to less than 10% per annum. The country’s four competing mobile operators – Dialog Axiata, Mobitel, Etisalat Sri Lanka and Hutchison Lanka – have been joined by a fifth operator, Bharti Airtel Lanka, adding vigour to an already highly competitive market. (A move by Mobitel to acquire Hutchison Lanka in 2013/2014 had not proceeded as it could not gain regulatory approval.) In 2013, first Dialog and then Mobitel launched Fourth Generation (4G) LTE services in a move that effectively lifted the countries standing as a telecom market in the region.

The development of the internet remains of particular concern for Sri Lanka. In a country whose population is increasingly undeniably internet savvy and the government rhetoric positively supporting the nation going online, the estimated user penetration remained relatively low coming into 2014. Despite signs of an enthusiastic user market, coverage and accessibility have continued to be limited and the sophistication of the available services generally low. The level of broadband access has been of particular concern. By 2013/2014, however, fixed broadband internet services were being supplemented by a rapidly expanding mobile broadband segment.

For detailed information, table of contents and pricing see: Sri Lanka - Telecoms, Mobile, Broadband and Forecasts

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