WCA November 2010

Telecom news

In addition to price competition, ✆ ✆ broadband speeds are still very much an important factor for consumers when choosing their package, with many operators believed to be upgrading their existing networks in order to provide higher speeds. For example, Jazztel, one of the leading broadband operators in Spain, has launched an Internet service offering up to 30 Mbps based on new VDSL2 technology. Similarly, the cable operator ZON in Portugal covered 2.8 million homes with Eurodocsis 3.0. In the Asia-Pacific region, China ✆ ✆ represents approximately 59% of total APAC broadband revenues. Yet, with a penetration rate of just 28%, the Chinese broadband market still has enough room to grow. Chinese broadband operators are ✆ ✆ described as gearing up to expand coverage of FTTx (fibre-to-the-x: the “last-mile” connectivity method which replaces metal with fibre). Chinese fibre broadband sub- scribers will total almost 34 million at the end of 2015, with a CAGR (compound annual growth rate) of 26.6% between 2010 and 2015. telecom-related businesses The number of Internet users in the principal emerging markets is set to nearly double by 2015, according to a 1 st September report that foresees 1.2 billion Internet users in China, India, Brazil, Russia and Indonesia within five years. The report, by the Boston Consulting Group, suggests that the late-comers – up from about 610 million in 2009 – will enjoy certain advantages. Without having gone through a long preliminary phase of technological development, these emerging-market countries are able to usher their Web users straight to mobile devices. But businesses, while heartened by the prospect of huge numbers of new clients, are likely to feel the strain of keeping pace with vaulting expectations as well as with rapidly evolving technologies. Anticipated tremendous growth in emerging-market Internet usage would pose challenges for

No fewer than five undersea cables connecting Africa with Europe and India were under construction or will have become operational in 2010. They represent an investment of more than $2.5 billion and could boost African data capacity to more than 16 terabits a second in 2012 from almost none in 2000. As noted by Cornelis Groesbeek, a Johannesburg-based independent tele- communications consultant who spoke with Bloomberg News , the new band- width may reduce broadband prices by as much as 90%, making it difficult for companies such as France Telecom SA and Cable & Wireless Worldwide Plc, of Britain, to realise a return on their African cable investments. Operators including Vodafone Group Plc, also British, and South Africa’s MTN Group Ltd may also find themselves in competition with companies offering some of the world’s lowest rates – as little as $2.91 a month for voice service in Tanzania. It will be recalled that excess capacity has brought down cable companies before this. A notable example was the contribution of bandwidth glut on transatlantic networks to the 2002 bankruptcy of Global Crossing Ltd, then the fourth-largest corporate failure in US history. (“African Undersea Cable Glut May Spell Price War for Operators,” 4 th August) Bloomberg reporters Matthew Campbell and Nicky Smith mentioned a factor that may protect the African-based operators from an Atlantic-type debacle: more phone operators, as distinguished from solely cable companies, are investing in infrastructure, “seeking to make money from services they can offer through the pipes.” These operators are banking on growth in Africa, where broadband penetration is reliably estimated at just 3.2 per cent. “The Atlantic operators were aggressively selling in the wholesale market, and that was their main business,” Bloomberg was told by Richard Elliott, the managing director of Apollo Submarine Cable System Limited, a British operator of two transatlantic fibre optic cables. “Many of the investors in African cables have significant other businesses.” Bloomberg ✆ ✆ cited as an example the East African Submarine Cable System that went live on 16 th July. EASSy is owned by 16 investors, all phone operators, including MTN and India’s Bharti Airtel Ltd, and Glo-1, an $800 million link from Britain to Lagos now going into service, is financed by the Nigerian phone company Globacom Ltd. With five new undersea cable linkages, will Africa go from having too little Internet capacity to having too much?

Fixed broadband subscribership is up in Europe, up further in Asia The number of subscribers to fixed-line broadband services globally reached just under 449 million by the end of the second quarter of 2010, up 10% from a year before, according to the New York-based market research firm ABI Research. “The key fixed broadband subscriber growth was found in the Asia-Pacific region, adding approximately three million subscribers in the second quarter of 2010,” Jason Blackwell, digital home practice director at ABI, said from Singapore on the release of the report. (“Fixed Broad- band Subscriber Numbers Approach 449 Million in 2Q 2010,” 19 th August).

Despite continued economic un- certainties in the European telecoms market, fixed broadband growth in the region was found to be positive in the first six months of the year, although slower than in 2009, especially in saturated markets such as the Netherlands, Germany and Switzerland. “In mature European markets, opera- tors are resorting to bundled pack- ages including TV, fixed telephone, and broadband service in order to maintain ARPU (average revenue per user),” said Khin Sandi Lynn, a research associate at ABI Research. “Overall European fixed broadband subscriber numbers surpassed 126.4 million at the end of 2Q 2010.” Other noteworthy items in the report include:

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Wire & Cable ASIA – November/December 2010