I am in China at the moment in Shenzhen to be precise. I took the ferry from Hong Kong, an experience in itself. The wow factor still applies. It is incredibly impressive to see this country moving forward so fast. Tomorrow I will be travelling to Shanghai, attending an analyst’s presentation organised by Ericsson. Later in the week I will be travelling to Beijing visiting some of the telcos and presenting to a group of our customers. I am very exited by this and I will give you a full report on my return.
Paul Budde
2. The arrival of WiMAX
Spectacular developments are currently happening around Australia and indeed around the world. With the Intel/Unwired/Austar developments a credible force is now entering the market. At the WiMAX Roundtable we will explore the business opportunities that will flow from here. Ad to this the Regional Infrastructure Fund and we are in for a real wireless bonanza in Australia. Material on the fundamental promises and problems will be presented at this event together with an overview of the key market opportunities. The first of them started to emerge earlier this year. The market must be considered in the context of fixed broadband alternatives, which are typically dominated by Telstra via xDSL and cable connections. However, other developments are already appearing on the horizon with the arrival of high-speed Wireless Personal Area Networks (WPANs).
A number of different technologies will be discussed, including WiMAX and EVDO and the major market players in each sector. In this respect the regulatory issues that are emerging highlight the differences between the incumbent and emerging wireless broadband players. The real future of wireless broadband, however, will lie well beyond the current markets of broadband and mobile data.
Thanks to new technologies, Service Providers are increasingly exploring the unlicensed spectrum bands (eg the 2.4GHz spectrum) for applications such as high-speed wireless broadband, LAN and WLL services for data. This report considers and analyses one variant of the technology: IEEE 802.11. All major WIFI projects are described.
WiMAX is positioning itself as an alternative broadband customer access technology. The longer it takes for incumbents to roll out true broadband networks (10Mb/s-plus) the more chance wireless broadband has of securing a position in this market. In the end it will depend on whether the technology case and the business case for WiMAX will stand up against alternative offerings from fixed and other mobile systems. The future of WiMAX however might be more in the area of WPAN.
The merger of Bluetooth and UWB reveals the future direction of WPANs. WiMAX will be the beginning of this development. Once UWB becomes established as a commercially acceptable and economically viable product WiMAX networks will begin to move to UWB. This will result in an AI (artificial intelligence) network infrastructure, linked to personal devices, with high storage capacity and parallel processing. Data will move freely around this wireless grid, which, of course, will also be linked into the fixed network.
For more info on the WiMAX Roundtable of September 21st here
3. New strategic direction continues for Primus
In a move away from its traditional resale operations, the company announced in July 2004 the deployment of its own DSL network. At an estimated cost of $30-$40 million, 300 telephone exchanges were scheduled to be equipped with Digital Subscriber Line Access Multiplexer (DSLAMs) over the next three years.
By August 2005 Primus had completed 101 of 160 planned DSL nodes with a further 36 in progress and by this time 15,000 customers had been transferred to Primus DSLAMs rising to 60,000 by the end of 2006. This scale clearly indicates it will build on its success in the residential market.
Primus will use its own dedicated DSL network infrastructure to offer standard voice telephony and broadband Internet services to residential customers, as well triple play telephony, broadband and data services to business customers.
Its DSL customer base rose 27% for the quarter to 95,000. The company expects that growth will level off to reach a total of 120,000 DSL subs by the end of 2005. The majority of new broadband customers sign a two-year contract and approximately 75% of them also take a bundled local and long distance voice package. Primus claims that residential customers taking a bundled solution generate approximately $85 per month in revenue.
The company’s progress has been less dramatic in other new markets such as VoIP and wireless. While it new Lingo had attracted 60,000 customers by July 2005, Primus says it needs at least 200,000 to break even.
Apart from Primus, there are a dozen or so potential DSLAM infrastructure players, half of them are currently emerging as nationwide wholesale operators, installing their own networks, capable of seriously challenging Telstra in the provision of broadband services. Optus is the largest, followed by Powertel. The next tier includes Primus, along with SP Telemedia and iiNet who launched their own DSLAM infrastructure in 2005, as well as a several other regional ISPs. All are currently building their distribution channels to resell their high-speed, high-capacity access services to end-users. ADSL2+ became available in 2005.
Under the current pricing regime these players are restricted to the corporate and SME market, leaving the residential market largely to Telstra. Despite Telstra’s anti-competitive behaviour they still dominate the DSL retail market. However, the price changes in late 2004 did bring some of the resellers closer to the residential market.
Primus’s move into triple play is a good one but also a necessary one. Their legacy voice and dial-up Internet business is shrinking at twice the growth rate of DSL and it is essential that the company pursues new revenue streams. It is still early days for triple-play scenarios and the company is now at the front of these new developments which will allow them to built expertise in the early phase of this development. With the company’s previous successes in the market there is a good chance that they will maintain their leading position in the country. However the company will be under pressure to perform as their parent US operations continue to perform poorly and may aim to rationalize overseas operations.
4. Wireless BB USA hotting up
Although cable companies and wireline telcos dominate the US broadband market and cellular phones the voice market, developments in fixed wireless access and digital voice technology are changing the communications landscape. See Paul’s Desk (free)
5. The US$5 Report for this week 5.1 Australia - Mobile Communications - Industry Trends and Analysis 2005 - 2006
(This report will remain at US$5 until the 12/09/05)
This report examines the Australian mobile communications market, identifying a number of important trends on both the demand and side supply side. The killer application on mobile remains voice. Mobile data is slowly finding some niche markets, but without better business models not much will happen here. 3G will give operators the network efficiencies to become more competitive both in voice and data services. The report also analyses the current activities of the major players – Telstra, Optus, Vodafone and Hutchison. Fixed Mobile Convergence (FMC) is another development that showed signs of speeding up in 2005.
6. Appalling new regulations
I am completely on Telstra’s side on this one.
The new regulations relating to Telstra’s presence in the bush are outrageous and ridiculous. They will also place an enormous burden on the regulator, who will have to try and make Telstra comply, regardless of the outcome of the current investigation.
The new rules aren’t going to help anybody.
Telstra has no intention of moving away from regional Australia. Well over 50% of their assets are there, so why would they?
This cumbersome set of regulations is completely unnecessary and won’t achieve anything. In this particular case a gentleman’s agreement would have been more than sufficient.
The new initiatives regarding the regional infrastructure fund are a much better incentive for Telstra and others to invest in new infrastructure and new services. Once again, it’s all old-world stuff – what a wasted amount of time, energy and valuable resources will now be spent on regional bureaucracy instead of on regional services.
Furthermore, this will prevent competitive innovation. By entrenching Telstra in this way there will be no opportunity for competitors to move into regional Australia.
The only possible positive outcome is if Telstra begins to take the initiative in discussions around operational separation, in order to avoid more of this totally unworkable paperwork.
See also:
Government Policies Australia
Regulatory Environment
7. Annual telecoms reports – 18th edition
We are very pleased with your reaction to our reports. Please feel free to request any of the reports on a 7-day free approval basis. The 2005/2006 edition of our annual reports on the Australian Telecommunications Industry includes:
Released in August 2005
PDF(SUL)*
Telecoms Industry – Overview and Statistics
$995
Market & Industry Analyses – Moving into 2006
$795
Residential, Business, Government and Regional Markets
$795
Telco Company Profiles - Telstra and Optus
$495
Telco Company Profiles - 2nd Tier Companies
$495
NGN, VoIP, IP and Internet
$795
Broadband Powerlines and Utilities Markets
$795
Mobile Communications – from 2G to 3G
$795
Mobile Data and Content Markets
$795
Broadband Market – DSL and cable modems
$795
Wireless Broadband market - the arrival of WiMAX
$795
Released in May 2005
Triple Play: IP, Broadband and Digital TV
$795
Broadcasting and Pay TV Market
$795
* SUL refers to Single-User Licence PDF editions of these publications, multi user pricing available upon request.
PS
I have put all the synopses of these reports into one pdf file, which has become an interesting research document in itself - free for you to download here.
8. WiMAX moving towards mobility – Roundtable 21st September
WiMAX launched itself as a potential alternative to fixed broadband services. There are still opportunities to challenge fixed networks in niche markets and regional markets; the government’s regional fund is certainly going to boost these developments.
The next big opportunity is to develop a 4G solution, combining mobile technologies and wireless technologies to address markets such as wireless data, telemetry, RFID and a range of other new services that will emerge around this 4G concept.
We predict that 3G, i-Mode and EVDO are just stepping stones to a deployment of WiMax in late 2007.
This will create a totally new infrastructure well beyond the current fixed and mobile limitations. Together with new developments in consumer electronic devices, increased storage and parallel processing, the wireless broadband network will become the core of a new phenomenon which I call the AI (artificial intelligent) network brain. I will explain this further at the Roundtable
Agenda
Cost:
$350 per person (excluding GST) - this includes morning/afternoon coffee and lunch
See Also... New articles in E-Newsletters Asia Telecoms & Broadband - Asia - Telecoms, Mobile and Broadband in Brunei - High-Speed Downlink Packet Access (HSDPA) 3.5G mobile Service to come to South Korea - Telecoms, Mobile and Broadband in Bhutan
Europe Telecoms & Broadband - Eastern & Western Europe - Deutsche Telekom in fibre frenzy - Sweden ahead of the pack with VDSL2 - BT’s surprise broadband failings
USA & Canada Telecoms & Broadband - USA & Canada - US Market is losing its competitive dynamics - Bridging the digital divide across the US - PPPTADA system
International (Global Issues) International - Content & e-services - PPPTADA system - Ringtones and royalties - Instant messaging
International - Broadband - Deutsche Telekom in fibre frenzy - Sweden ahead of the pack with VDSL2 - BPL - alternative for regional markets
International Telecoms - Strategies and Marketing - iTV 35 years on - The future role of telcos - Global Telecoms Analyses and Forecasts for 2006 and Beyond
Updated Research Reports Asia Japan - Mobile Market - 3G & Mobile Data Though NTT DoCoMo offered the world’s first Third Generation (3G) mobile phone service in late 2001, KDDI has become the dominant force in the 3G market in Japan. Nevertheless, NTT’s FOMA service began making impressive strides in 2004 and into 2005. Vodafone K.K.
Japan - Mobile Market - Overview & Statistics By July 2005, there were over 88 million mobile subscribers in Japan. Though the 2G mobile telephone sector in Japan has entered a maturing market phase, the overall Japanese mobile market is in a dynamic period of activity, given the popularity of 3G services. This report presents an overview of the mobile market in Japan, along with a discussion of Japanese mobile technologies, including Personal Digital Cellular (PDC), Code Division Multiple Access (CDMA) and Personal Handy Service (PHS).
Japan - Convergence - Triple Play & Digital TV Japan is an early adopter of triple play models, which provide TV, broadband Internet and voice telephony as packaged services from a single provider. Anyone interested in triple play services should become familiar with the progress and plans Japan is making. This report provides an overview of media convergence in Japan, with special attention paid to the broadband TV, cable TV, satellite TV and terrestrial TV markets.
Europe Belarus - Telecoms Market Overview & Statistics This report provides an overview of the Belarus telecom sector, accompanied by relevant statistics and brief profiles of the main operators. Internet use rates are low compared to other Eastern European countries and broadband services are available. The market is characterised by a fixed-line sector with a regionally high teledensity rate and a fast growing, competitive mobile sector, comprised of two GSM operators, one CDMA operator and a third GSM operator about to launch services.
Moldova - Telecoms Market Overview & Statistics This report provides an overview of the telecom sector in Moldava, the poorest country in Europe. The telecommunication market reflects the economic situation. Both fixed-line and mobile teledensity are very low, as is Internet and broadband penetration but all have recorded solid growth.
Belgium - Mobile Market - Overview & Statistics Belgium’s mobile market is characterised by the clear triopoly of the incumbent’s mobile division, Proximus, and two established new entrants, which together controlled about half of the market in 2005. Although developed, the market has room to grow, and only one 3G operator has launched services. This report profiles Belgian’s mobile market in 2005, providing the latest statistics on the main players, as well as the most recent developments on UMTS/3G roll-outs.
USA & Canada Canada - Key Statistics, Telecom Market & Regulatory Overviews The Canadian telecom services environment developed in stages, from a closed monopoly environment until the early nineties, to a mostly open, competitive environment in 2005. Canada’s telecommunications sector is among the most advanced in the world. Intense competition has led to service innovation, falling prices and significant industry restructuring.
Canada - Broadband Market Overview & Statistics Canada has one of the best-developed national broadband infrastructures in the world, using a range of network architectures and technologies. It has achieved the highest overall broadband penetration of the Group of Seven industrialised countries. At the end of 2004, Canada was placed tenth in the world for DSL broadband subscribers.
Canada - Infrastructure - FttH, NGNs and IP Telecom infrastructure has undergone massive modernisation projects driven by increased competition, liberalisation of telecom policy and government initiatives aimed at extending broadband reach. In 2005, 85% of Canadians were living in communities served by high-speed Internet access. Whilst growing steadily, VoIP is still in its infancy in Canada.
International (Global Issues) Global - Broadcasting - Satellite Markets Television is still the star performer of the satellite technology. Despite many other satellite trials (mobile, Internet) it is TV that brings in the revenues. Its opportunities are in niche markets, some of which can be quite large.
Global - Broadcasting - Interactive TV - Overview and Analysis The earliest interactive TV initiatives date back to the late 1970s. Nothing much happened however, despite a short revival of the idea around 1995 when the US industry was looking at video-on-demand services (discussed in a separate report). The major problem was the inadequate capacity of their cable TV networks.
Global - Broadcasting - Digital Terrestrial TV Digital Terrestrial TV has been on the agenda since the mid 1980s. While significant progress has been made in cable- and satellite-TV, terrestrial systems are still lagging behind. There is no global standard, and especially the developments in the USA are not very promising.
PAUL BUDDE Communication Pty Ltd, T/As BuddeComm 5385 George Downes Drive BUCKETTY NSW 2250B, Ph 02 49 988 144 (international x 61 2 4998 8144) Fx 02 49 988 247 (international x 61 2 4998 8247) mailto:[email protected]. http://www.budde.com.au BuddeComm operates the largest, continually updated, telecommunications research service on the Net If you would prefer not to receive our emails contact BuddeComm to have your address removed.
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