On an economic level, the country should benefit from the ambitious scheme to expand the Canal and double its tonnage capacity by 2014/15. This will deliver revenue from canal users (mainly cargo from China and the US) but it will also boost tourism. Other factors expected to improve the economy include the US-Panama Trade Promotion Agreement, approved by the US Congress in late 2011, and efforts by the government to remove the country’s status as a tax havens, for which the government has signed a number of double taxation treaties with other nations since 2011.

This improving economic background will have a filtering effect on Panama’s telecoms infrastructure. Fixed-line teledensity is about 16%, below average for Latin America and the Caribbean, and below what should be expected based on the country’s relatively high economic indicators. Since market liberalisation, the number of fixed lines has been increasing, albeit slowly, thanks to alternative operators using fibre-coaxial or fixed-wireless networks.

The mobile market, on the other hand, has been flourishing, with penetration about 30% higher than the regional average. This disparity is bound to intensify even more in the coming years, as the mobile market has become far more competitive since the arrival of Digicel and Claro, and competition has been further encouraged by the recent introduction of MNP.

According to a 2012 study by the OECD, fixed broadband has a significant economic impact in Panama, with indirect contributions to the economy adding 0.44% to GDP annually from 2000 to 2010. Thus the indirect effects of fixed broadband, accounting for GDP growth, contributed 9.6% of all economic growth. Since 2005 this contribution increased to 0.8% of GDP, representing 11.3% of all economic growth. As a proportion, the telecoms sector was worth about 3% of GDP in 2011, a figure expected to remain stable to 2015. In terms of tax contribution, the sector has contributed more to revenue since 2008 when an additional tax was imposed, raising the total tax level from 5% to 12%.

Given the relatively low fixed-line broadband penetration, the immediate and most cost-effective solution is the further development of mobile broadband. Few people currently rely on cards and dongles, instead having mobile phones which giving access to the internet via 3G/HSPA. Mobile broadband penetration is now only about 5%, but this is expected to reach 45% by 2016, largely due to the flexibility of mobile broadband and its being favoured in rural areas where fixed-line infrastructure is inadequate.

To this end the MNO Claro has expanded its HSPA+ operations since 2011, reaching a number of provincial capitals and major towns. Cable & Wireless (C&W) and Digicel have also introduced HSPA+ in the country. All of these regional operators can tap into their experiences in other markets, where business models have been tried and tested.

Henry Lancaster,
Senior Analyst

For more analysis on Panama’s telecoms market, see the updated report Panama – Telecoms, Mobile, Broadband and Forecasts.

The case studies, which cover the Former Yugoslav Republic of Macedonia, Panama, the Philippines, and Romania, look at the effect of broadband connectivity on economic growth and access to basic services like education and health. They offer regulatory guidance and best practices, showcasing success stories and lessons learned.

Romania and TFYR Macedonia both provide strong examples of how adopting pro-ICT policies, establishing effective regulatory frameworks and developing strategic private and public partnerships can play a key role in boosting broadband access, affordability and demand.

A nation with a strong commitment to connectivity as a driver of national growth, TFYR Macedonia already boasts an impressive broadband penetration rate of 32%. Internet access in schools and Wi-Fi-based public Internet access points have been rolled out throughout the country, including remote areas. Schools now offer one Web-enabled computer for every 1.45 children, while university students and academics can freely access knowledge and research resources via the academic network MARnet.

Meanwhile, near-neighbour Romania ranks among the top countries in the world for broadband speed, and scores well for affordability too. The average cost of a baseline monthly broadband subscription represents less than 5% of average monthly income – well within the global targets established by the Broadband Commission last October. Public access is promoted through initiatives like ‘Biblionet’, which was launched in 2009 and which provides free library-based access through some 795 public libraries equipped with 3,318 computers.

Case studies on Panama and the Philippines, meanwhile, explore the impact of broadband on the economy and on job creation. Both studies evaluate the development of e-applications in the areas of education, public health, media and government services – all of which can help further stimulate broadband adoption.

In Panama, fixed broadband is having a significant economic impact. Analysis of a structural econometric model for the period 2000-2010 indicates that fixed broadband now contributes an annual 0.44% of GDP, with the indirect effects of fixed broadband use estimated to have contributed almost 9.6% of total national economic growth. Accelerating take-up means that this impact has now almost doubled to reach 0.82% of annual GDP, and contributed 11.3% of all economic growth over the decade.

In the Philippines’ case study, analysis over the same 10-year period indicates that mobile broadband adoption has contributed an annual 0.32% to GDP, representing 6.9% of total GDP growth for the economy over the past decade. Given the acceleration of mobile broadband penetration since 2005, this impact has also now almost doubled, reaching 0.61% of GDP, representing 7.3% of total economic growth over the decade.

Download the full set of case studies at: www.broadbandcommission.org/work/documents/case-studies.aspx

See also: Global – BuddeComms International Broadband and Trans-sector Activities

In common with Baltic countries and some among the former Soviet client states of Eastern Europe, Romania was quick to grasp the internet as a vehicle for modernisation and development, particularly for e-commerce and related sectors. That the process has been uneven in the case of Romania is largely down to poor fixed-line infrastructure inherited from the 1980s. Currently, up to two-thirds of rural households in the country have no or poor internet access, and some 50% have no computer. Nationally, up to 10% of Romanians have no internet access, although some surveys have put the figure at between 20% and 25%. Lack of infrastructure in rural areas has exacerbated the gap between Romania and the more developed European countries, placing Romania at the bottom of the EU ranking of overall internet usage.

In the main cities and towns there is effective broadband availability and cross-platform competition (DSL, cable and mobile). In rural areas where fixed infrastructure is immature or non-existent mobile networks often provide the only coverage.

To address this broadband connectivity, the government since 2009 has pursued a programme to deliver broadband nationally by 2015. Given that it has identified up to 3,600 broadband ‘white spaces’, much of this undertaking will be done through mobile broadband.

Broadband market development is mainly guided by the government’s Broadband Strategy 2009-2015, part funded by the EU but orchestrated by the government and with significant input from broadband players. For the government, universal broadband is a key vehicle towards a wider use of tele-education and e-health, and greater participation in e-commerce. Since computer use is relatively low (by European standards) other programmes have provided thousands of computers as well as broadband access in public libraries, council chambers and the like. According to a recent OECD report, collectively a range of initiatives aimed at realising these goals will need an investment of about €1.25 billion.

Henry Lancaster,
Senior Analyst

For more analysis on Romania’s broadband and telecoms markets, see the updated reports Romania – Digital Media and Broadband Market Insights, Statistics and Forecasts and Romania – Key Statistics, Telecom Market and Regulatory Overviews.

The new government will face the same fiscal difficulties of its predecessors: preliminary results for 2011 government accounts recently published showed that both revenue and expenditure exceeded initial Ministry of Finance estimates. With expenditure anticipated to be some ISK57.3 billion more than revenue, the equivalent of almost 3% of GDP, the government’s ability to invest in telecoms infrastructure (following its ‘Iceland, the e-nation’ programme to develop the ICT sector, particularly in health, education, government procurement, telecommuting and teleconferencing) will be dampened.

For the telecoms sector, the economic crisis led to a dramatic reduction in investment in 2009, though this was soon followed by a slight recovery which is expected to persist into 2013. The main investor propping up this slow revival is the incumbent Síminn, despite the company’s 18% fall in revenue in 2011, year-on-year. The sale of three subsidiaries in recent months, as well as cut-backs and adopted efficiency measures, has made its losses less severe than it otherwise would have been given its extensive exposure to banks.

Despite these financial challenges, the company aims to invest almost ISK3 billion by the end of 2013 to complete the next phase of its Ljósnet FttH network. When finished, the network will cover about 89,000 households. Ahead of government broadband targets, some 75% all households will have access to up to 100Mb/s services.

By any measure, this has been an impressive outcome for a beleaguered company and nation. With this fibre infrastructure in place, Iceland will be among the first in Europe to exploit the possibilities of further savings and efficiencies which can be derived from trans-sector policies affecting many socio-economic sectors.

Henry Lancaster,
Senior Analyst

For more analysis on Iceland’s telecom markets, see the updated report Iceland – Telecoms, IP Networks, Digital Media and Forecasts.

Argentina has one of the most developed fixed broadband markets in Latin America. At around 12%, penetration is – on a par with Chile’s and Uruguay’s – among the highest in the region. Nevertheless, this is still a long way behind Europe, where average broadband penetration is upwards of 25%. Although broadband plans in Argentina are among the fastest and least expensive in Latin America, service quality needs improving; mean download speed is less than half the world average, placing Argentina 90^th in the world – but only 4^th in Latin America after Chile, Brazil, and Mexico.

Fixed broadband demand is expected to continue rising, particularly in areas outside of Buenos Aires. In fact, while narrowband is more evenly dispersed throughout the nation, broadband (especially cable modem) is still heavily concentrated around the capital city.

The main fixed broadband technologies used in Argentina are ADSLandcable modem. Fixed wireless and satellite broadband account for about 1% of the market, while FttH is just starting, and there has been some development in BPL and Smart Grids. ADSL is the broadband market leader, having overtaken cable modem.

In 2009/10, mobile broadband emerged as a popular means of accessing the internet in Argentina. Based on the National Statistics Institute (INDEC), there were 8.2 million broadband subscribers in Argentina in September 2011, of which about half were mobile.

A national connectivity plan, dubbed ‘Argentina Conectada’, involves the deployment of broadband services and free-to-air digital TV to underserved parts of the country.

The plan, launched by the government in October 2010, would require an investment of AR$8 million (about US$2 million) and would be implemented over five years. State-owned satellite company Arsat is responsible for selecting the most cost-effective infrastructure for the project.

The aim of ‘Argentina Conectada’ is to promote digital inclusion and ensure that all Argentineans have access to high-speed internet. The government said it intended to make broadband available throughout the national territory and hoped that by 2015 there would be more than 10 million homes with some kind of connection or access.

Argentina – internet and broadband statistics – 2010 – 2012

(Source: BuddeComm based on industry data)

Note ¹: broadband stats for 2011 are also an estimate

Note: Internet users are those accessing the internet from school, university, or work, as well as from individual household or business accounts. Subscribers are individuals who pay for internet access accounts.

See also:

Argentina – Broadband and Broadcasting Market – Overview, Statistics and Forecasts

Argentina – Mobile Market – Overview, Statistics and Forecasts

The industry is working to establish shared access networks – would it not be nice if they did this everywhere, all the time? They are also working very closely with British Olympic Association, London Transport, the broadcasters and content providers.

Mobile coverage will be the biggest shared infrastructure in the world. There are already 80 million mobile devices in theUK, and to this will be added the millions of devices from overseas visitors and athletes. There will be more people taking photos and videos and sending them around the world. And, of course, the same applies to the thousands of professional photographers and journalists attending the Games. The mobile operators have indicated that there may be periods of ‘controlled service’, particularly in relation to mobile broadband.

There will be two dimensions to this network – one for officials and athletes, and one for the general public. The network will go live on 1 June and will cater for a range of related and other events:

• Olympic Torch Relay, 27 May-27 July;
• Diamond Jubilee, 2 June-5 June;
• Euro 2012, 8 June-1 July (IPTV);
• Farnborough Airshow;
• Olympic Games, starting on 25 July.

Over 1,000 BT workers have been assigned to the communications activities surrounding the Games.

Next-generation access network rollouts have been accelerated and core network bandwidth has been increased to facilitate the backbone network, as well as increased fibre access to all facilities, venues, etc.

Extra capacity is needed for the BBC iPlayer service, which will drive up telecoms traffic, with each of 24 HD Olympic TV channels using 3Mb/s. Organisations are being made aware of the fact that corporate networks could be flooded if people are watching in the office. This will also apply to international links, as overseas viewers could flood these as well although there are some constraints on the availability of iPlayer overseas.

If an incident occurs that goes viral on YouTube, this could also swamp networks. There have been warnings that the lack of a national high-speed broadband network could see network meltdowns in such circumstances.

It is anticipated that many public websites can expect as much as five times their normal traffic; organisations should be aware of this and take the necessary measures to cope with it.

Another interesting contingency is that call centres are employing extra staff, as it is expected that enquiry call on-hold time will be longer due to foreign languages. Other increases are expected on retailers’ card terminals and ATM usage.

Because of increased security awareness, there are elaborate security plans in place – to protect not only the people but also all infrastructures, including the existing telecoms infrastructure around the country. Security plans are also taking into account other ‘unpredictables’ that can lead to disturbances, such as unforecasted gatherings, cyber attacks, and large increases in free rich content over the networks.

There is a Resilience and Response Group (EC-RRG) operating the National Emergency Alert for Telecommunications (NEAT) coordination points. There are contingency scenarios for engineers, suppliers, colleagues unable to reach their place of work and so on. They also have proactive procedures in place to reduce risks such as internet congestion, the impact from increased home working, monitoring video-streaming, terrorist/public order incidents.

Some statistics on the Games:

• 5.3 million visitors are expected with half a million extra on Day 8.
• On 9 days there will be more than 1million extra journeys on public transport.
• Greenwichpopulation will be 25% higher on Day 3.
• At the end of an event, 10,000-20,000 people will be exiting the same places, creating bottlenecks.

During the games, there will be major disruption for London-based workers – there is a four-step approach:

• reduce journey requirements by avoiding planned utility works;
• retime appointments to avoid clashes with busiest times;
• reroute transport and logistics as access roads will be closed;
• review transport types and use alternatives.

For its part, the regulator Ofcom has devised a Spectrum Plan for the Games, which will see the temporary re-allocation of spectrum from public bodies to cater for bandwidth demands. Spectrum from among three separate bands will come from the Ministry of Defence (MOD), the Civil Aviation Authority (CAA) and the Maritime and Coastguard Agency (MCA), while holdings in the 2.5-2.6GHz band have been reserved for the duration of the Games. Ofcom has also conserved spectrum allocated for private mobile radio (PMR), as also spectrum available for DTTV in the 800MHz band which has not yet been sold off. Ofcom is needing all the spare frequencies it can find to cope with the 350 wireless microphones, 75 HD video streams and 780 talkback channels it expects are needed.

It is also expected that there will be greater work and school absenteeism due to large screen displays that are established right around the country. And businesses are adopting greater flexitime procedures and providing facilities in the workplace.

Organisations have also been advised, where possible, to move staff to Disaster Recovery sites and work from there during the Games, but they have also been warned to check their Disaster Recovery contracts as this may not be accepted as a justified reason for invoking Disaster Recovery. Other suggestions include checking standby generator fuel, batteries, firewall resilience, etc. Teleworking is promoted, with companies advised to plan and test the use of technology remotely by home workers.

Paul Budde

For more information, see the following reports:
United Kingdom – Broadband – Fixed Network Insights, Statistics and Forecasts;
United Kingdom – Key Statistics, Telecom Market and Regulatory Overviews.

This heralds fundamental changes to the way telecoms infrastructure operates – something that so far is not well understood by many operators around the world, simply because of their monopolistic way of thinking.  Because of the Australian government’s decision to establish a nationwide utilities-based wholesale-only NGN infrastructure the telcos inAustraliaare no longer constrained by business models based on the delivery of the infrastructure.

Following its fundamental change of direction Telstra swiftly announced investments in cloud computing and it has now launched its first OTT (Over-the-Top) model – using Facebook to let customers prepay their mobile subscriptions. It is the first telco in the world to do this.  It is, in fact, using Facebook as a service provider (telco), which is, of course, an enormous variation on its traditional business model. It faced up to the reality that it could not catch up with the OTT players and is now joining them – very smart indeed.

It also recognised that, like it or not, a massive displacement is taking place, from old voice and messaging services to OTT-based models.

The unshackling of the old model gives Telstra the chance to start exploring totally new business models based on OTT. Nobody knows where this will lead, but it most certainly is one of the key avenues towards the new telco future.

Embracing the OTT model also opens the way for telcos to start offering certain services internationally; with the OTT model the world becomes their marketplace. Many of the OTT services already have an international character and there will obviously be fewer players who will be able to take on a significant role in the global market. It is not too late for telcos to move in this direction, but if the 30 years of telco history – stopping innovation and competition in order to protect their monopoly – is any indication, the majority will fail to take up this opportunity.

With more mobile operators providing these OTT prepaid services around the globe (something Apple is going to facilitate in its next iPhone), enabling people to use prepaid services within an international competitive model – just imagine what this is going to do to the business model of mobile operators!

Once telcos start to understand the business opportunities in the OTT model it will also become much clearer to them how important the quality of the network is in the delivery of those OTT services. And this could create a better business model for them to start looking far more seriously at FttH upgrades, perhaps together with other OTT suppliers.

Look at Google, which is building an FttH network inKansas City. It most certainly understands the need for an FttH network to secure its future.

Telstra and Google are two of the small number of leading companies that are pointing to the new telco future. They are setting an example for others around the world.

Paul Budde

The country was one of the first in the region to reform its telecommunications landscape, immediately after a long civil war ended in 1992. The mobile sub-sector has experienced excellent growth rates following the introduction of competition in 2003 between Vodacom Mozambique and mCel, the incumbent mobile subsidiary of the national telco, TDM.

However, market penetration is still well below the African average. The launch of Movitel as the third mobile network in early 2012 is expected to deliver a boost to subscriber growth in the sector but also drive the average revenue per user (ARPU) lower again which had already stabilised following the introduction of mobile broadband services and higher tariffs.

The government is intent on introducing competition to the fixed-line sector as well, but it is hesitating to privatise TDM. All other services are open to competition, subject to licensing by the industry regulator, INCM.

Internet usage in the country has been hampered by the inadequate fixed-line infrastructure and the high cost of international bandwidth, but this market sector is now accelerating following the introduction of various kinds of broadband services including ADSL, cable modems, WiMAX and 3G mobile, and the landing of two international submarine fibre optic cables in the country (Seacom and EASSy). The lower cost of bandwidth has already led to drastic reductions in broadband retail prices. Further improvements can be expected from the ongoing rollout of a national fibre backbone network and plans for an alternative fibre infrastructure.

Market highlights:

• Third mobile network has launched;
• Mobile market forecasts for 2013 and 2016;
• Estimates for mobile, fixed-line and internet market to end-2012;
• Profiles of major players in all market sectors;
• National fibre rollout;
• Alternative fibre infrastructure planned;
• Pricing comparison of all major broadband services (ADSL, cable TV, WiMAX, EV-DO, 3G mobile);
• Analysis of broadband price changes due to international fibre.

Estimated market penetration rates in Mozambique’s telecoms sector – end 2012

(Source: BuddeComm based on various sources)

For detailed information, table of contents and pricing see: Mozambique – Telecoms, Mobile, Broadband and Forecasts

]]> http://www.buddeblog.com.au/frompaulsdesk/internet-bandwidth-prices-in-mozambique-continue-to-fall/feed/ 0 http://www.buddeblog.com.au/frompaulsdesk/internet-bandwidth-prices-in-mozambique-continue-to-fall/ http://feedproxy.google.com/~r/BuddeBlog/~3/DBPrtcifM4U/ http://www.buddeblog.com.au/frompaulsdesk/canadian-telcos-fast-tracking-ftth-to-combat-cable-operators/#comments Thu, 10 May 2012 08:33:49 +0000 Henry Lancaster, Senior Analyst Europe, BuddeComm http://www.buddeblog.com.au/?p=62143 Continue reading →]]> There are a number of stimuli which are pushing Canada’s burgeoning FttH market, and the government and telcos alike have made significant steps to improve the reach and capacity of broadband infrastructure. These measures will show real benefits for consumers in coming years.

From the government’s side, its Economic Action Plan, launched in 2009 as a response to the global financial crisis, included a pledge to provide $225 million over three years towards its Broadband Canada Program, geared to extending broadband coverage to underserved communities. The initiative called for the government to pay up to 50% of costs incurred by operators upgrading broadband in rural areas. By the end of 2012, the program’s 86 or so projects are expected to have delivered broadband to about 214,000 households.

The government also recently proposed reducing barriers to foreign investment in the telecoms sector, enabling foreign companies to hold more than 46.7% stakes in local telcos. As the experiences of the Netherlands’ KPN, Austria’s MNO Orange and Ireland’s Eircom have recently shown, a fresh injection of capital from unexpected quarters – in these cases South America and East Asia – may help to resuscitate flagging telecom markets in the developed West.

Despite these efforts, much more needs to be done in the government’s overall appreciation of broadband as an essential infrastructure. Certainly it has invested in e-health initiatives in recent years, following recommendations from agencies such as the Information Highway Advisory Council. This has resulted in some of the more advanced e-health systems in the world. Yet the government does need to grasp that government-initiated trans-sector policies in Canada are also required to push the development of other key services. In this respect, a fibred national network would be a key infrastructure asset allowing businesses, institutions, utilities to thrive from new business models.

From the telcos’ side, operators have been stimulated to invest in FttH through the successes of cablecos which have systematically upgraded their networks with DOCSIS3.0 technology. As a result, many cablecos are commonly offering 100Mb/s services or, to a limited extent, 200Mb/s services. DSL cannot hope to compete, and so to prevent customer churn in areas where cablecos also operate, telcos are been forced to step up their game with FttH.

This development has been a long time in coming – while fibre to businesses in metro areas has been common for some time, deployment elsewhere is still in its early stages, with only a limited number of residential communities being connected to networks. And so operators are fast-tracking FttH deployments: Bell Aliant plans to upgrade a third of its footprint by 2014 and to continue so until 90% is connected. Bell Canada and TELUS are expected to have at least 50% of their network upgraded, while SaskTel has an FttH program to 2019.

The momentum is palpable, and for the government’s economic recovery program the years to the end of the decade are more promising.

Henry Lancaster,
Senior Analyst

For more analysis on Canada’ telecom market, see the updated reports:
Canada – Broadband Market – Insights, Statistics and Forecasts;
Canada – Telecoms, Broadband and Wireless – Statistics, Insights and Analysis;
Canada – Wireless Communications – Insights, Statistics and Forecasts.

Argentina obtained the right to the 81ºW orbital slotin 1998. This position is of considerable strategic importance because it reaches the whole ofLatin America. In 2006, the government established Arsat, a national satellite company created for the purpose of launching and operating a satellite in the 81ºW orbit.

Arsat is a wholly state-owned company, although there are plans to open it up eventually to private investment. The government, however, intends to keep a sizeable stake, to ensure that Arsat always operates according to the interests of the Argentine nation. In early 2007,Argentinapassed a bill exempting Arsat from having to pay national taxes. The satellites used by Arsat must be manufactured inArgentina, by state-owned nuclear technology developer INVAP.

INVAP began construction work on Arsat-1 in early 2007 with Astrium and Thales Alenia Space as equipment suppliers. Arianespace was contracted in June 2010 to launch the satellite into orbit. Arsat-1 will be fitted with twelve 36 MHz, eight 54 MHz, and four 72 MHz transponders, all in Ku band. It will offer a wide range of telecommunications, data transmission, telephone, and television services across all ofArgentina,Chile,Uruguay, andParaguay. Launch is to take place by mid-2013.

Arsat signed a new contract with Arianespace in March 2011, this time for the launch of Arsat-2 by the second half of 2013. Arsat-2 will be fitted with 26 Ku-band and 10 C-band equivalent transponders. It will offer a wide range of telecommunications, data transmission, internet, and television services across theAmericasfromArgentinatoCanada.

See also: Argentina – Fixed-Line Market and Infrastructure – Overview, Statistics and Forecasts