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The overall telecoms services revenue reached over $40 billion in 2016, a growth of 2.0% for the 12 months to June 2016. The overall market is predicted to grow more strongly in 2017. The strongest growth is coming from the second tier providers, which grew at over 10% during that time period. The market incumbent Telstra still dominates the local telco landscape with well over 50% market share, however this market share is gradually declining.
Prices for fixed-line and mobile voice services are being driven down by competition among operators, and by consumer reluctance to tolerate price increases, which engenders higher churn to other providers. Thus opportunities to drive revenue growth through higher consumer and business spend in the short term are limited to mobile data services. The capabilities and geographic reach of these services has improved markedly within the last few years. Telstra and Optus aim to provide 98% population coverage with networks based on Long-term Evolution (LTE) technologies by the end of 2016.
Telstra is Australia’s largest telecommunications provider offering a full range of telecom services throughout Australia. The company provides basic access services to most homes and businesses, local and long-distance telephone call services, and mobile and internet services. Wholesale services are also provided to ISPs and RSPs while advertising and subscription television services are provided through subsidiary companies. Several strategic investments undertaken have strengthened Telstra’s position in the e-health services market. In total, over three years to June 2017 Telstra expects to have invest more than $5 billion into Telstra’s mobile network. Telstra will start rapidly deploying the next generation of LTE technology including voice over LTE, LTE broadcast and the next stage of LTE advanced delivering peak network speeds of up to 600 Mb/s.Telstra continues to expand into emerging technology areas such as e-Health. Telstra has recently completed 15 acquisitions and partnerships in electronic prescriptions, remote diagnostics, secure health record keeping and telematics. In August 2016 Telstra committed to invest up to an extra $3 billion over three years on major customer-focused investments in its networks of the future and digitisation. Telstra’s capex to sales ratio in each of the next three financial years would increase to approximately 18 per cent, the highest since 2008-09 as Telstra was building up its 3G network. The investment program would be progressively confirmed during FY17 to FY19.
Telstra’s score card is one of the best in the world among incumbent telecommunications companies. It is not only financial strong, it is also well-positioned to increase its business in the emerging digital, sharing and networking economy. It is successfully transforming itself into a full services ICT company. The traditional telecoms market is still out there, and it still brings in large volumes of cash, but the new telecoms business is happening outside those traditional products and services. Back in 2010 we predicted that the overall telecoms market in Australia would double in size by 2020, to around $80 billion; and that almost all of that doubling will come from other products and services; the traditional telecoms element will largely remain the same.So if a telco company were not to change its strategy it might still be part of the original pie, but it would miss out on the new pie. Telstra is one of the few incumbent telcos that has been able to successfully maintain its share in the traditional market while at the same time laying the foundations for its participation in that new and larger pie. And it is now starting to reap the benefits of that transformation.
Optus provides a range of communications services that include mobile, national and long-distance services, local and international telephony, business network services, internet and satellite services, subscription TV and digital media services. The market position of Optus has not changed all that much over the years. It has been the number two telco in the Australian market since its inception some twenty years ago, with an overall market share hovering around the 20%-25%. Also unchanged is the fact that the majority of its market share is based on its mobile service. While Optus has been strong in the mobile market it has never been able to challenge Telstra, and during the ‘Vodafail’ period Optus has not been able to use that opportunity to significantly increase its market share.
Optus made a surprise move into one of these new markets – streaming entertainment – by purchasing the rights to the British Premium League football games. Its entry into this market received an immediate backlash from the football fans, as they were faced with the high prices Optus indicated it would charge, plus the fact that soccer fans would now need to have two subscriptions to satisfy their football interests – one for the Optus UK league service and one for Foxtel for all the other football games. While there are a lot of interesting new developments in the various telecoms markets Optus operates in, as yet it is unclear if, how, and when the company will participate in these.
Vodafone Australia is in the process of making a remarkable turnaround in its fortunes. There have been several low points in recent years, all stemming from a disastrous meltdown in late 2010 caused by a poorly managed integration of the Vodafone and 3 networks and systems. This resulted in customers haemorrhaging away from the company, a process that was relentless for many quarters in succession. The loss of subscribers in turn resulted in reduced revenue and greater difficulty in developing an effective investment strategy to overcome the company’s problems. This sorry state of affairs also placed increasing strain on the two shareholders, Hutchison and Vodafone Group.
The infrastructure has seen a fundamental overhaul, largely due to the successful refarming of its 850MHz concessions which allowed it to convert 3G to LTE across the country. To some degree this process lessened the disadvantage which Vodafone suffered for not having bid for 700MHz spectrum in 2013, an asset which both Telstra and Optus, as concession holders, have been able to utilise since early 2015 to expand and improve on their LTE services. In a sign of its renewed confidence, however, Vodafone in May 2016 offered to pay the government $594 million for an unsold 2x10MHz block of 700MHz spectrum.
In August 2016 Vodafone Australia began committing major resources to evaluating a potential fixed-line play over NBN. It is also targeting leadership in the next generation of mobile, announcing that it will start running 5G lab trials and demonstrations. Vodafone Australia is also looking to take leadership in the growing Internet of Things space, drawing on the expertise of the Vodafone Group globally.
Tourism has become integral to French Polynesia’s economy but in recent years this important sector has been in decline. In an effort to boost tourism, the Ministry for Tourism has launched a Smart Tourism initiative. This project plans to use digital solutions to improve the tourism experience for visitors to French Polynesia and will include projects such as expanding free wi-fi access, improving the Internet backbone using peer-to-peer mesh networks and offering a virtual reality tour of the islands.
French Polynesia has one of the more advanced telecoms infrastructures for the Pacific islands region. A submarine cable deployed in 2010 vastly changed the telecoms landscape for French Polynesia and the deployment of a further international submarine cable is under discussion in 2016.
French Polynesia is also well connected by satellite. The incumbent, OPT expanded upon its partnership with Intelsat in 2016 and this will see further opportunities developed to meet mobile broadband demand going forward. According to the ITU in 2015 there was 85% mobile broadband coverage in French Polynesia.
For detailed information, table of contents and pricing see: French Polynesia - Telecoms, Mobile and Broadband - Statistics and Analyses
Swaziland was one of the last countries in the world to abolish an almost complete monopoly in all sectors of its telecommunications market. Until 2011 the state-owned posts and telecommunications operator SPTC also acted as the industry regulator and had a stake in the country’s sole mobile network, in an uneasy partnership with South Africa’s MTN. A new independent regulatory authority was established in late 2013 and has since embarked on radical changes to the telecom sector. SPTC temporarily entered the mobile market independently using its CDMA network but was challenged about this by MTN in the courts. Obliged to stop offering its ‘ONE’ mobile service, the operator was provided with a licence to resume mobile services in early 2016. MTN Swaziland in early 2016 was also awarded spectrum in the 1800MHz band to provide LTE services.
Mobile market penetration in Swaziland is well above the average for the region, though subscriber growth has slowed in recent years. Real competition should provide a welcome boost to take the market to the next level.
The internet sector has been open to competition with four licensed Internet Service Providers (ISPs), but prices have remained high and market penetration relatively low. Although DSL services were introduced in 2008, complemented by 3G mobile broadband services in 2011, development of the sector has been hampered by the limited fixed-line infrastructure and a lack of competition in the access and backbone network.
Swaziland is landlocked, and so the country depends on neighbouring countries for international fibre bandwidth. This meant that access pricing were high for many years, though prices have fallen more recently in line with greater bandwidth availability resulting from several new submarine fibre optic cable systems that have reached the region in recent years.
For detailed information, table of contents and pricing see: Swaziland - Telecoms, Mobile and Broadband - Statistics and Analyses
Ethiopia is one of the last countries in Africa allowing its national telco, Ethio Telecom, a monopoly on all telecom services including fixed, mobile, internet and data communications. This monopolistic control has stifled innovation, restricted network expansion and limited the scope of services on offer. A management contract with Orange Group had dramatically improved performance for Ethio Telecom though there remain weaknesses in quality of service. Although the contract was considered a first step towards privatisation and the introduction of competition, the government in 2013 again rejected calls to privatise the incumbent and allow market competition, citing the need for higher profits from the company to subsidise an unrelated railway project.
Although there is considerable investment in telecoms services – some $3.1 billion has been invested in telecom infrastructure and service expansion projects over the last decade – the sector is heavily regulated and the government has complete control over networks, with virtually unlimited access to the call records of all phone users and to logs of internet traffic. Most of the technologies deployed have been provided by ZTE and Huawei, which have often been favoured for offering vendor financing.
Despite major vendor contracts aimed at improving the reach and capabilities of mobile networks, the country’s mobile penetration remains among the lowest in the world. Nevertheless, growth is strong and considerable growth potential remains. Under the auspices of the government’s Growth and Transformation Plan, the country could have some 103 million mobile subscribers by 2020, as well as 56 million internet subscribers.
The country's broadband market is also set to develop further following massive increases in international bandwidth, improvements in national fibre backbone infrastructure and the growing availability of mobile broadband services via 3G and LTE networks. After years of low uptake due to prohibitive pricing, retail prices are now comparable to other more developed markets in the region.
For detailed information, table of contents and pricing see: Ethiopia - Telecoms, Mobile and Broadband - Statistics and Analyses
Supported by a population of more than 88 million, Egypt has one of the largest fixed-line and internet markets in Africa and the Arab region. There is also a large mobile market, with mobile penetration having reached 112% by late 2016. Although there is effective competition in most markets, the licensing regime still requires for development. One key development is the award of unified licences to allow operators to offer services in the fixed-line and mobile sectors. The incumbent telco Telecom Egypt, still majority owned by the State, secured one of the licenses on offer in August 2016 which allows it to offer LTE services. The three mobile network operators initially failed to bid for the remaining three licenses, which would have enabled them to enter the fixed-line market and provide fully convergent service offerings. This prompted the government to consider opening the bidding process to international operators, but shortly afterwards Orange Egypt secured a licence after having renegotiated its terms.
The country’s political crisis following the ‘Arab Spring’ revolution which began in 2011 adversely affected the telecom sector. Although revenue has remained stable, profit margins and capital expenditure have fallen due to a weaker local currency, especially since the beginning of 2013, and international investors have shown considerable caution. The government in recent months has endeavoured to secure billions of dollars in funding to develop technology parks and to extend broadband availability, and in the process to create jobs in ICT and rekindle international investor interest.
Efforts are underway to roll out next-generation networks, offering converged IP-based voice, data and entertainment services. Egypt is well connected by several international submarine fibre optic cables, while it also has an extensive national fibre backbone and some of Africa’s most vibrant FttP deployments.
Although Egypt was among the first countries in the region to launch 3G services, the development of LTE has suffered from delays. Nevertheless, Telecom Egypt in August 2016 received the country’s first unified services licence, which allows it to offer LTE services. A commercial launch is expected in the first quarter of 2017. Competition will be provided by Orange Egypt, while Vodafone Egypt and Etisalat Misr may also secured licences on more favourable terms.
The country’s extensive international bandwidth, together with considerable market competition, has meant that Egypt offers some of the lowest prices for DSL services on the continent. The three mobile network operators also offer mobile internet while each also hold stakes in local ISPs. The launch of LTE services will greatly enhance the capabilities of mobile broadband services in coming years.
This report outlines the major developments in the Egyptian telecom sector, including updated statistics and profiles of the operators, a review of regulatory measures, spectrum assignments and licensing. It also assesses market structure and competition issues, as well as the deployment of emerging technologies.
For detailed information, table of contents and pricing see: Egypt - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses
Although delayed by the long civil war which ended in 1992, Mozambique was one of the first countries in the region to embark upon telecom reform. As a result, some parts of the sector have seen the introduction of measures which have promoted competition, and which promote access to infrastructure. The mobile segment in particular has shown strong growth since the introduction of competition in 2003 between Vodacom Mozambique and mCel, the incumbent mobile subsidiary of the national telco Telecomunicações de Moçambique (TdM). Mobile penetration remains far below the average for the region, and given that the country has relatively low fixed-line penetration there is considerable room for further growth in coming years. This has been stimulated by the launch of commercial services from the third operator Movitel, which is backed by Vietnam’s Viettel.
In recent years the government has drafted legislation aimed at enforcing the registration of SIM cards (with mixed results, though progress was made during 2016) as also the sharing of network infrastructure. These measures are aimed at improving security (in relation to SIM card registration), reducing operational and investment costs, and enabling players to provide converged voice, data and TV services over single networks.
The poor fixed-line infrastructure has largely held back the market for fixed-line internet services, and as a result mobile internet accounts for most connections. The high cost of international bandwidth had long hampered internet use, given the relatively high cost of access, though the landing of two international submarine cables (SEACOM and EASSy) has reduced the cost of bandwidth and so led to drastic reductions in broadband retail prices.
There is some cross-platform competition, with DSL, cable broadband, WiMAX, 3G and limited fibre broadband available. Further improvements can be expected from the ongoing rollout of a national fibre backbone networks by TdM and the mobile operators.
For detailed information, table of contents and pricing see: Mozambique - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses
This time a report from Napoli; an amazing city more authentic Italian than the ‘real’ holidays cities in Italy. It has a very long history it started as a Greek city (Neapolis) around 600BC. During the Middle Ages it was – after Paris - the 2nd largest city in Europe. As of the whole of Southern Italy, it has had a rough time over the last 500 years with lots of foreign occupations and exploitation.It remained one of the poorest cities in Western Europe until well into the 20th century. Modernisation only started to take hold in a substantial way after WWII.
It was the authenticity of Naples that caused us to fall in love with this rough pearl.
Apart from the fact that some 3 million people live around the Vesuvius – an active volcano – the city does face some very serious infrastructure problems. Like so many other cities they are looking at technologies to see if these can assist in addressing those problems in a better way.
Naples City Council approved a resolution in 2014 to establish a Smart City Association Napoli (ANSC). The ANSC has unlimited duration and is a not-for-profit organisation.
Some of the projects undertaken by the ANSC:
The Naples City Council has also approved the Action Plan for Sustainable Energy, a document promoted by the European Commission, which should lead to a 25% decrease in emissions of CO2, compared to 2005, by the end of 2020.
If any western city is in need of smart city solutions it is Naples and the hope is that the political will is there to serious address the many issues the city is facing and that it will be able to effectively and efficiently execute on them; without wasting large amounts of money in the entrenched corruption systems that still exist here.
Chiao from Napoli.
Just a quick note to say thank for your helpful reports. I`ve used them a couple of times over the years and I found your talk at CeBIT, very interesting indeed.
Matt Joyce, IT manager, Medtronic
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