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    Nigerian regulator hoping telecoms accounts for up to 25% of GDP by 2025 26 Aug 2016

    Nigeria has one of the largest telecom markets in Africa, supported by the second largest economy on the continent after South Africa. Given the potential for further growth, the sector attracts considerable foreign investment. Far reaching liberalisation in recent years has led to hundreds of companies, many of them small and localised, providing varied telecom and value-added services in an effectively regulated market.

    The mobile sector has benefited from market competition and the wider deployment of LTE services during the last two years, which has supported operator revenue and encouraged the adoption of mobile broadband among subscribers. Other than the key mobile network operators, there are a number of additional players operating under a unified licensing regime.

    After a decade of failed privatisation attempts, the incumbent national telco Nitel and its mobile arm M-Tel went into liquidation, with the NATCOM Consortium acquiring the telco in March 2015 for some $252 million.

    Nigeria has the most competitive fixed-line market in Africa, featuring a second national operator (Globacom) and over 80 other companies licensed to provide fixed-telephony services. The alternative carriers combined now provide around 85% of all fixed connections while the ailing incumbent.

    Several microwave and fibre-based national backbone networks are being rolled out by various companies. Nitel’s monopoly on international fibre bandwidth via the SAT-3/WASC submarine cable system ended in 2009 when Globacom’s Glo-1 cable landed in the country. Additional submarine cables which have landed subsequently, supported by improved domestic fibre infrastructure, have delivered a further boost to the country’s developing broadband sector by improving bandwidth and reducing prices for end-users.

    The broadband sector has seen considerable consolidation among players, from over 400 ISPs in 2012 to around 90 by mid-2016. Most internet connections are via mobile networks, principally GSM and 3G and more recently LTE, though there are a number of WiMAX operators which have found niche markets.

    Supported by the expansion of national fibre backbone networks, platforms such as e-commerce, online banking and e-payments, e-health, e-learning and e-government are evolving rapidly. The government has continued with its plan to increase broadband penetration to 36% by 2018 and to enable over 80% of the population to be able to receive mobile broadband via 3G and LTE technologies.

    Nigeria has Africa’s largest mobile market, with about 150 million subscribers and a penetration rate of 107%. The rapid growth in the number of subscribers led to problems with network congestion and quality of service, prompting the telecom regulator to impose fines and sanctions on the network operators. These operators have responded by investing billions of dollars in base stations and fibre optic transmission infrastructure to support the ever increasing demand for bandwidth.

    Efforts are also being made to encourage network sharing and to outsource the management of tower infrastructure to third parties. There remains considerable growth potential in rural areas where the provision of network infrastructure and operations is expensive, and consequently where mobile penetration is lower. Competition of voice pricing has encouraged operators to develop new revenue streams from mobile broadband and data services, including m-payments and m-banking.

    Although the market is one of the most competitive in Africa, the industry regulator between 2013 and early 2016 applied a price floor on voice and data tariffs in a bid to prevent the dominant operators from squeezing competitors. Following years of delay, Mobile Number Portability (MNP) was finally introduced in 2013, and this has stimulated market competitiveness. The terrorist group Boko Haram has created difficulties for network provision and maintenance in the northern states, a difficulty which neither the government nor operators are properly positioned to address.

    For detailed information, table of contents and pricing see: Nigeria - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses


    NBN making progress but dark clouds ahead 25 Aug 2016

    By late 2016 – seven years after the launch of the NBN – over two million premises were able to connect to the NBN. So far three-quarters have access to FttH (fibre to the home), the remainder to wireless and satellite networks. The revised rollout of the so-called MTM (multi-technology mix) based on FttN and HFC) only began in earnest in 2016. The NBN company has now fine-tuned its rollout strategy and is set to extend the network by 40,000 premises a week; but from here on FttH will play only a minor role, mainly in greenfield installations.

    After the Coalition government won the 2016 federal election any debate about changes to the underlying infrastructure faded away, as the rollout of the MTM is now too far advanced. However the NBN company has indicated that it does have a roadmap towards providing fibre deeper into the residential network. Fttdp (fibre to the distribution point) is one of the key technologies they are investigating.

    Around the same time the industry started to seriously question the regulatory environment around the NBN. The smaller players are in danger of being squeezed out of the market through complex and expensive NBN wholesale offerings. These same arrangements also mean that the end-users are not receiving the benefits of high-speed broadband in an affordable form. The ACCC reacted to this by launching a fresh competition study, the results of which will become available in 2017.

    As a result of unattractive wholesale arrangements and a second-rate NBN several telcos are eager to skip the MTM-based infrastructure and deploy their own fibre networks. In this way competition is arriving in multi-dwelling units (MDUs) in various cities, this despite the fact that competition is heavily restricted through government regulations. Advances in wireless technology – especially in comparison with what a second-rate NBN can deliver – has seen an explosion in new players entering this market. Furthermore future developments in mobile technologies (LTE and 5G) will lead to more competition with the NBN, as more and more users will opt for better and more affordable high-speed broadband services through these alternative services.

    All of these developments are putting a cloud over the financial future of the NBN company. Government funding runs out in 2017, and with another $20 billion likely to be needed to finish the job it is questionable whether private investors will be interested in funding this shortfall.

    Apart from another two-year delay in the roll-out of the NBN – due to the political changes to the NBN since 2013 and a more than doubling of the costs – significant uncertainties still remain about some of the technical and operational issues of the MTM. There are a great number of unknowns in this process and overseas FttN (fibre to the node) experience shows that it is not all plain sailing. In many cases large-scale replacement of old copper infrastructure will be required. At the same time rolling out fibre has become significantly cheaper, especially when done by new companies, as is the case in the USA, France, the Netherlands and a number of other players in Northern and Eastern Europe. Most countries now skip their FttN and HFC rollouts and go straight into FttH.

    While in mid-2015 the government revived some of the digital economy strategies that were put in place between 2009 and 2013, there is still no holistic approach to services such as e-health and e-education. Interestingly we see cities developing their own strategies around the concept of smart cities. When the government announced its innovation policy it did not even mention the important role the NBN can play in that context. Cities, however, do understand the importance of such infrastructure for their economic and social developments.

    These broader developments in the digital, sharing and interconnected economy will be further accelerated by a range of other industry sectors such as cloud computing, M2M and big data. The over-the-top (OTT) players are also becoming increasingly prominent in the telecoms industry and this will start to blur some of the borders between infrastructure, IT and applications.

    The NBN will have to become the predominant national digital infrastructure for all of these developments, as a utilities-based network it will also need to provide its services to those other sectors. With these sectors involved we will see the industry developing specific new business models around infrastructure, ICT and retail. Streaming video and other media and entertainment applications are already playing an important role in the drive for high-speed broadband demand. The question here is whether the current MTM configuration of the NBN will be able to deliver the capacity, reliability, redundancy and security for such services in a ubiquitous way to all Australians. Most experts agree that only a full-fibre network can deliver that level of infrastructure robustness.

    The report covers detailed information on the rollout of FttH, FttB, FttN, Fttdp, HFC, wireless and satellite infrastructure, as well as statistics on subscribers, revenues and a range of other parameters. It also provides a range of analyses and insights, plus an overview of the policies and regulations that apply to the NBN and the effect that these have on competition in the telecommunications wholesale and retail markets.

    For detailed information, table of contents and pricing see: Australia – The National Broadband Network – Moving into 2017


    Myanmar remains poised for the entry of a Fourth Mobile Operator 24 Aug 2016

    The big change in Myanmar’s telecom sector has been the entry of two foreign operators in the local mobile market, joining the former monopoly operator, Myanmar Post and Telecommunications (MPT). Buoyed by the success of the arrival of Qatar’s Ooredoo and Norway’s Telenor. A license for a fourth mobile licence is scheduled to be awarded during 2016. The joint venture will be 51% owned by the SPV, whilst the foreign partner will hold the remaining 49%.

    Much work remains to be done however, with Myanmar being the last underdeveloped telecommunication markets in Asia. Despite the fresh new focus on mobile services and the exploding growth in that sector, by 2016 only a few people had access to a fixed telephone line.

    Although the first internet connections were established back in 2000, internet services in Myanmar still remain slow and unstable. The fixed broadband market remains highly underdeveloped, mainly due to the dominance of the mobile platform and an unwillingness by operators to invest in fixed broadband infrastructure. Penetration stood at just 0.5% in 2016 and is predicted to increase at a slow rate during the five years to 2021.

    Fixed line telephone penetration remains very low at just under 1% and has been gradually declining since 2014 due to the dominance and maturity of the mobile market. Penetration decreased from 1.00% in 2013 to 0.96% in 2016.

    Mynanmar’s mobile market has experienced very strong growth from 2013 to 2016. Penetration has risen from 7% in 2013 to 85% by 2016, by which time the market reached 46 million subscribers. Further strong growth is also predicted over the next five years to 2021. By 2018 the market is expected to reach mobile penetration of over 90%.

    Mobile broadband has experienced very strong growth, driven by high rapid growth in the mobile sector. Penetration has increased from 15% in 2014, to 26% in 2015 and 35% in 2016. Strong growth is predicted over the next five years however at a slower rate.

    International internet bandwidth continues to grow strongly reaching 43,400 Mb/s in 2015 and 53,000Mb/s in 2016.

    In April 2016 Vietnamese military-owned group Viette lannounced its plans for its operations in Myanmar in securing the nation’s fourth mobile licence. It expects to spend USD1.5 billion on the construction of a 3G network using the 900MHz and 2100MHz bands, with coverage due to reach 95% of the population within three years. It will also introduce 1800MHz LTE services if the government opts to license the additional spectrum.

    For detailed information, table of contents and pricing see: Myanmar (Burma) - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses


    Austrian MVNOs double their market share of subscribers in a year 23 Aug 2016

    Austria’s telecom market is dominated by the incumbent Telekom Austria and the cableco UPC Austria. There is good competition in the fixed-line broadband and mobile sectors, largely due to effective regulatory measures. América Móvil has a controlling interest in Telekom Austria, though in mid-2016 it reduced its stake in the incumbent in line with commitments made when it first bought into the operator in 2014.

    Austria’s highly competitive mobile market continues to benefit from new entrants in the MVNO sector. The market has already undergone recent changes, with 3 Austria having acquired the network and assets of Orange Austria, a move which led a consolidation among three network operators: 3 Austria, T-Mobile Austria and Telekom Austria’s own unit A1. The number of MVNOs has increased steadily, and by early 2016 the collectively had a 3.6% share of the market. Though this is relatively small, it was double the market share of a year earlier. Part of this growth in the MVNO sector is due to regulatory concessions by which 3 Austria, as part of its Orange take-over, was obliged to provide a third of its network capacity to support up to 16 MVNOs. The operators’ LTE networks have benefited from measures which have allowed operators to refarm existing 2G and 3G spectrum for LTE, while spectrum in the 700MHz has also been set aside for mobile broadband use once this band is released from broadcasters.

    The Austrian fixed-line broadband market continues to be dominated by the DSL sector, which rapidly overtook cable as the preferred access method. UPC Austria is the leading cable operator, while Telekom Austria retains a leading share of the DSL market. The operator has invested in vectoring VDSL and technologies in a bid to deliver fast broadband services in urban areas with less investment than is required via FttP. However, there has been a shift in investment towards fibre, with the incumbent having invested €400 million during 2015 to improve its networks, and with the government having allocated €1 billion in public funding to upgrade infrastructure nationally.

    For detailed information, table of contents and pricing see: Austria - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses


    International attention brings telecoms benefits to the Republic of Marshall Islands 23 Aug 2016

    The Marshall Islands was identified by the World Bank as being one the least connected communities in the world in 2013. It was subsequently awarded funding from the World Bank to improve Internet and mobile services. A number of other organisations have also providing financial assistance in recent years with the US government, the United Nations, the International Telecommunication Union (ITU), International Telecommunication Satellite Organisation (ITSO), and Kacific Broadband Satellites being examples of some of the organisations offering funding and donations to improve various conditions for the country.

    In 2013 the World Bank provided US$3 million in funding to be used to improve mobile and internet services. The World Bank hoped to encourage the telecoms market to be opened up to competition in order to improve access and bring services prices down. It also hoped to improve regulatory and legal frameworks which would be more conducive to telecoms progress as well as develop incentives to attract private investment, as seen in other South Pacific countries.

    In 2014, the ITU, on behalf of the United Nations, was working with Kacific Broadband Satellite to develop satellite capacity in the Pacific islands. Kacific agreed to donate a one-year supply of 50Mb/s of dedicated bandwidth for eleven Pacific Island nations, including the Marshall Islands, as well as 40 terminals. The ITU and ITSO were also providing significant funding for this project.

    In 2016 the Marshall Islands is facing severe drought which is heavily impacting upon overall progress. However, as a result of the telecoms infrastructure improvements made in recent years, the Marshall Islands can now claim a mobile penetration of more than 30% and a significant rise in Internet users at around 19%.

    For detailed information, table of contents and pricing see: Marshall Islands - Telecoms, Mobile and Broadband - Statistics and Analyses


    Telecoms sector in Syria showing resilience despite challenging environment 22 Aug 2016

    The years of civil unrest in Syria have taken their toll on Syria’s telecommunications infrastructure and while the capital Damascus has survived reasonably well, it is the outskirts, rural and remote areas which have felt the brunt of the destruction. The majority of the population (70%) live in poverty, according to reports, and employment is as high as 50%. It is the essential services which are often targeted by opposing forces in these volatile environments, with facilities such as hospitals, education institutes, power stations and telecommunications infrastructure being damaged or destroyed.

    The operators themselves face additional issues surrounding security concerns, power outages, staff retention and access to diesel. Despite this challenging environment however, there are some glimpses of hope with both mobile operators reporting rising in revenue in 2015, with much of this attributed to growth in mobile data services. With 3G/HSDPA networks in place, the focus for mobile data has firmly shifted to mobile broadband offerings.

    Overall the telecoms sector is growing in Syria, albeit slowly and in varying degrees depending on the geographic area. Generally speaking, Syria has a reasonably high mobile penetration of over 60%, with many Syrians owning cheap or second hand smart phones. Mobile broadband penetration coverage sits at 60-70%. Going forward, opportunities exist in the growing mobile broadband sector, especially once the civil unrest subsides. Fixed broadband is still an emerging area that will also benefit greatly once the country stabilises.

    For detailed information, table of contents and pricing see: Syria - Telecoms, Mobile and Broadband - Statistics and Analyses


    QUESS and Quantum Communications 19 Aug 2016

    In mid August China launched “QUESS” (Quantum Experiments at Space Scale), a new type of satellite that it hopes will be capable of “quantum communications” which is supposed to be hack-proof, through the use of “quantum entanglement”. This allows the operator to ensure that no one else is listening to your communications by reliably distributing keys that are then used for encryption in order to be absolutely sure that there is no one in the middle intercepting that information.

    According the Chinese scientists involved in the project, quantum encryption is secure against any kind of computing power because information encoded in a quantum particle is destroyed as soon as it is measured. (According to Tibor Molnar a scientist at the University of Sydney), the only way to ‘observe’ a photon is to have it interact with (a) an electron, or (b) an electromagnetic field. Either of these interactions will cause the photon to “decohere” – i.e., interfere with it in a way that will be apparent to the intended recipient.

    Gregoir Ribordy, co-founder of Geneva-based quantum cryptography firm ID Quantique, likened it to sending a message written on a soap bubble. “If someone tries to intercept it when it’s being transmitted, by touching it, they make it burst.”

    Quantum physicists have recently advanced the use of photons to communicate securely over short distances - 50-150 km - on earth. The satellite, if successful, would vastly expand the range of unhackable communication.

    To test whether quantum communications can take place at a global scale, the Chinese team will attempt to beam a quantum cryptographic key through space from Beijing to Vienna.

    This topic was also discussed by a group of my international colleagues (USA, UK, Netherlands) and this is a summary of that discussion.

    Two of them assisted in explaining what this is all about, one worked on the first quantum key distribution network and one of the world’s best quantum computing teams is situated close to where he works.

    The two explained the differences between the various quantum technologies.

    • Quantum communications – sending information encoded in single photons (or equivalent) such that one can determine eavesdropping. Most useful for key exchange though has other uses.  Sometimes called quantum key distribution networks.
    • Quantum cryptography – work to devise cryptographic algorithms that are not affected by the creation of quantum computers. (Generally "quantum cryptography" has tended to mean what is now called – in the context of the Chinese satellite – "quantum communications"). Post-quantum cryptography is the search for algorithms not rendered useless by quantum computation.
    • Quantum computing – a computer that harnesses quantum physics such that certain types of computation can be done more efficiently. There are still some doubts as to whether this is feasible.  (Less so then before, but some say that it might be like nuclear fusion, not forbidden by physical laws, but hard to implement.) And, like fusion, if it could be made practical, certain types of cryptosystems (in particular, the RSA cryptosystem, but also the elliptic curve systems that have become widespread) would have to be abandoned. RSA encryption relies on the practical difficulty of factorising very large numbers, a task which is imagined to be very much easier (or at least faster) with quantum computers. But we do have substitute classical crypto systems that could be used that, as far as we know, are hard to break.

    A few other colleagues discussed the concept of “quantum entanglement”. As he explained intuitively you’d think this would work and provide a means of faster-than-light communication. However, it turns out that though the two particles are quantum entangled, you can’t actually convey any information between the two measurement points. Tibor added to this that even Quantum Key Distribution requires two-channel communication: one of “entangled photons” (which may be described as super-luminal), and another classical channel (which is definitely sub-luminal) advising which measurements of those photons are significant.

    To take a example, if you measure two quantum entangled photons and find the first photon is “spin up”, the second photon will always be “spin down” and vice-versa. Some clever statistics - the so-called “Bell Inequality” and its further elaboration, the “CHSH Inequality” -  tells you they weren’t in this state to start with, it’s only the act of measuring that forces the first photon into this state, then instantly the second photon will be in the opposite state. Or so it seems: there are other interpretations, e.g., Quantum Bayesianism, but the effect is the same. I won’t go into details here, it’s a fairly long and difficult to get your head around the explanation as to how we know they weren’t in a particular state to start with. The mathematics (and in this example, intuition) also tell you that no information is conveyed from one location to the other by the measurement alone.

    The discussion also addressed the implications of this development. One of the experts commented: “This has zero practical significance”.  Classical crypto is occasionally attacked, but the progress against the basic mathematical algorithms is seldom dramatic.  Tibor added that it will become much more significant/dramatic when/if quantum computing becomes a reality, for then the most commonly used ‘classical’ cryptography techniques will no longer be secure. Practically all of the zillions of attacks that we hear about are at higher levels, implementation, protocols, ... and, of course, human users (phishing, whaling). So the question could indeed be: why struggle to intercept/decrypt a message when you can just read the Post-It Note stuck on the sender’s screen?

    Paul Budde (standing on the shoulders of giants)

    See also our Global Infrastructure Reports

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