jump to navigation

Europe: International roaming – ATKearney CRAI report September 30, 2006

Posted by Jasper in Mobile, Regulation.
1 comment so far

On 21 September 2006 the GSM Association (GSMA), the global trade association for mobile operators, filed a complaint with the European Ombudsman setting out its concerns about the European Commission’s proposal for regulation of the international roaming market. The GSMA’s complaint relates to three aspects of the regulation and the associated adoption process (see press release):

1) The GSMA believes the European Commission failed to conduct a proper consultation process. While the Commission conducted two public consultations on regulation of the international roaming market, they both failed to follow the Commission’s own procedures for providing clear content and adequate time for responses. Moreover, following these ‘public consultations’, the Commission drastically changed its proposal for regulation without submitting the new proposal to additional public consultation.

2) The GSMA believes the European Commission failed to conduct a proper impact assessment. The published impact assessment, which didn’t follow the Commission’s internal guidelines, is incomplete, contains important methodological flaws and is based on unrealistic assumptions. For example, the Commission concluded that consumers would see a net gain of 3.78 billion euros from the proposed regulation. But a review of the Commission’s impact assessment, prepared for the GSMA by AT Kearney and CRA International (CRAI), found that the impact on consumer welfare would be marginal at best, and could even be negative.

3) The GSMA believes the European Commission’s proposed regulation violates the principles of proportionality, subsidiarity, legitimate expectations and non-discrimination. The holistic nature of the existing regulatory framework restricts the Commission’s ability to adopt an ad hoc regulation on roaming services.

What interests me is the report undertaken for the GSM Association by AT Kearney and CRAI. The report discusses the impact of the European Commission’s plans for international roaming and maintains that the Commission has used the wrong figure for the size of the retail roaming market. According to the report’s authors:

…their corrected welfare modelling indicates that the case for the Commission’s proposed regulation is only marginal at best and could even be negative, rather than significant, as the Commission has estimated.

Let me offer a few comments.

The ATKearney CRAI recommendation centres on a Cost Benefit Analysis (CBA) and on the their own evaluation of that CBA. The CBA is an assessment of a counterfactual scenario (“the future without regulation”) with a factual scenario (“the future with regulation”) – in fact there are two factual scenarios.

In principle, the approach adopted is more complete compared to that of the Commission. It attempts to model detriments to regulation which the Commission appear to have neglected (I have not read the Commission assessment). In this sense it provides a more complete analysis of the market for international roaming and the (net) consequences of regulation. Whether or not there are measurable detriments of the magnitude suggested by the authors is an issue I explore briefly below.

One crucial correction is the Commission’s estimate of the benefits which is based on the GSMA’s estimate of the aggregate EU roaming revenues of about €8.5 billion. However, according the authors the GSMA’s €8.5 billion figure includes revenues from both the retail and wholesale markets and is not an appropriate basis on which to calculate the ultimate saving for consumers. I do not have the data to evaluate the figure, but expect that ATKearney and CRAI are correct as the number has been sourced from their client.

I agree with ATKearney and CRAI that the Commission should take account of announcements by individual operators and any announced industry agreements in the factual scenario. Also I agree that the Commission has adopted some rather suspect elasticity assumptions in some of their scenarios.

The authors introduce two concepts: cost pass-through and the waterbed effect or a rebalancing effect.

Cost pass-through is degree to which reductions in wholesale prices are passed-through to retail prices, while the waterbed effect is the degree to which operators seek to recoup lost profits in the market for international roaming from other services or markets. The waterbed effect might also be called a pass-through rate, i.e. it is the extent to which any given loss in international roaming profits resulting from regulation is translated through into increases in other retail mobile prices. A decrease (increase) in this rate produces a smaller (greater) waterbed effect, and hence a smaller (larger) detriment. Setting the pass-through rate to zero is equivalent to assuming that there is no waterbed effect.

Both assumptions are critical to the author’s analysis, unfortunately very little documentation is provided to substantiate the values used. In particular I would have liked to have seen an analysis of historical cost pass-through. In their Medium case, the authors assume that rebalancing would operate so that 80 per cent of the loss in profits on retail roaming calls would be recovered in mobile subscription charges and mobile outgoing call prices. No evidence is provided to support this value – a value I believe is exaggerated.

The authors criticize the Commission for using an aggregate measure for total welfare for consumers and industry and not considering how the proposal will impact different Member States. However, the authors themselves do not attempt a disaggregated approach. I think it would desirable to disaggregate into at least three or four category of Member State.

Any offsetting effects of their new assumptions are disregarded. For example, as a result their assumed reductions in mobile subscribers there would a corresponding outward shift of the demand for fixed calls.

In addition, makes no attempt to discuss a number of issues that could have major impact the results (although to their defense I assume they adopt the same values as the Commission). For example:

  • Study Period: what is period over which the welfare gains/losses are calculated?
  • Discount rate: The choice of discount rate in a CBA is potentially a very contentious issue. What is the level of the discount rate used to calculated the net present value of net benefits?
  • VAT: VAT should be excluded for estimates of productive surpluses since the VAT is a transfer payment; however, it is not correct in the calculation of allocative surpluses. How is it treated here?
  • Shape of demand curve. Two alternatives are typically used: a linear curve and the constant elasticity of demand curve. Which one is used?

ATKearney CRAI assume that the impact of lower wholesale roaming charges on the profitability of operators maintaining cell sites in areas in which roaming revenues are significant leading to loss of coverage. I disagree. It seems highly implausible that an operator will remove (sunk) cell sites already deployed.

A CBA should be applied rigorously and transparently. The ATKearney CRAI report appears to be an improvement on the Commission’s analysis, but it is overly critical and hence biased towards a non-regulation scenario and does not provide the detail needed for a third party to do a proper evaluation.

Access the AT Kearney CRAI report “Review of the Commission’s Impact Assessment” here and the Executive Summary of the Review here.

Advertisements

Finland: Skype and Fring September 29, 2006

Posted by Jasper in Uncategorized.
2 comments

According to Reuters, Niklas Zennstrom, Skype chief executive and co-founder, was quoted as saying to a Finnish newspaper yesterday that Skype won’t be launching a broadly distributable mobile Skype version any time soon. Skype is working on being able to offer the service to the biggest mobile-phone makers and for the Symbian operating system used by Nokia, among others. So for the time being we will have to contend with the windows version (used in mobile units) and Skype for Pocket PC 2.1 Beta.

Well maybe not. A company called Fring provides software for the Symbian operating system which allows you to use Skype on your Nokia handset! The minimum requirements are:

  • An applicable Nokia 3G Symbian handset (See visual list) with 3G network coverage.
  • A dataplan allowing you to surf the Internet from your handset.

UPDATE: iSkoot also unveiled Friday a software download designed to let cell phone users use VoIP services such as Skype and GoogleTalk. It is 100k Java-based thin client application that operates with a network server. It can be downloaded from the iSkoot site. In addition to Nokia, it supports selected Motorola, Palm and Sony Ericsson handsets.

UK: Launch of quadruple-play September 29, 2006

Posted by Jasper in broadband, Mobile.
add a comment

NTL has announced the launch of the UK’s first quadruple-play package. The service will offer digital TV, mobile services, internet access and fixed-line telephony, for a monthly charge of £40 (US$75.7). According to the NTL media release the quad package includes:

Broadband
• Up to 2Mb with no limits on downloads
• Firewall and anti-virus software included
• Installed by an expert and modem included
Digital TV
• Over 30 channels, including Sky One, UKTV Gold, E4, Film4, ITV2 and LIVINGtv
• On demand access to a huge library of programmes and films – watch what you want, when you want
• Set-top box included and no need for a dish
Home phone
• Unlimited weekend calls to any UK landline
• Highly competitive mobile rates and simple tariffs at other times
• Standard features including 1471 and 1571 voicemail
Mobile
• A Virgin Mobile SIM
• 300 texts and 300 minutes a month, plus free voicemail
• Access to Virgin Mobile Bites entertainment service

The move is the first realisation of the potential of the combined NTL-Virgin partnership. NTL is expected to rebrand the entire company under Richard Branson’s ubiquitous Virgin name next year. It bought Virgin Mobile earlier this year in a deal that made Branson NTL’s largest shareholder.

One of the key hurdles for NTL will be ensure a high-quality customer service with all four options given that the company is still trying to integrate the companies.

Australia: Media attention September 28, 2006

Posted by Jasper in Uncategorized.
add a comment

I have seldom experienced a more hectic and gossip filled news coverage of the telco market than here in Australia during the past week or so. It all started late last week when the government (which holds 51.8% of the stock in Telstra) announced it support for the nomination of Geoff Cousins as a director of Telstra. On the same day CEO of Telstra Sol Mr Trujillo was heavily criticised on SBS’s Dateline program for failing to deliver basic services while acting of chief of US West. This week Sol Trujillo responded that his board could not support Mr Cousins’ appointment. And then the mudslinging started.

Just today the Australian ran a story with the appetizer: TELSTRA chief executive Sol Trujillo paid US management consultants $54 million to work on a strategic plan that ultimately earned him a personal bonus of $1.5 million.

And Crickey was quick to pick up and run with the story:

…According to The Australian, Bain was hired by Trujillo “within days of his taking over as chief executive.” Because Bain has no significant Australian presence, it was forced to fly consultants from Singapore, the US and Europe in business class, and pay for five-star accommodation while they were in Australia. While some companies would have hired local consultants at less expense, according to The Australian, Trujillo allegedly opted for Bain as he had previously worked with its Amsterdam-based partner, Andrew Klein.

Crikey spoke to several consultants who confirmed that local mid-tier consulting firms (including Accenture, Bearing Point, Cap Gemini and IBM) would charge a blended rate of around $4,000 per day per consultant for such a review (for example, a VP will charge around $6,500 per day while an entry level consultant will be around $1,200 per day). Bain, as a leading strategic consultant may be able to charge a slight premium, resulting in a blended rate of perhaps $9,000 per day.

Trujillo appointed Bain in early July 2005, with the strategic review being released to the market on 15 November – meaning that Bain would have worked on the review for around 120 days. At a total cost of $54 million, that means Telstra spent approximately $450,000 per day on consultants alone. One source suggested that around 10 to 20 consultants would be required for such a review, meaning that Trujillo paid his alleged ‘mates’ at Bain around four to five times the amount he could have paid a highly regarded, Melbourne-based consultancy like Accenture.

Telstra shareholders would be justified in wondering why on earth they are paying their CEO millions of dollars in fixed, short-term and ‘sign-on’ bonus payments when within days of being appointed, he just hires an overpriced outsider to do his job.

Could the real story be that the Government got wind of this extravagance, decided enough is enough, and nominated head-kicker Geoffrey Cousins for the board?

Okay, so the numbers provided by Crickey don’t seem to stack up. For example, assuming a daily rate of 11,000 per consultant (2,000 per day to take account of accommodation and travel) we would need 40 consultants to carry out the review within 120 days. Nevertheless, I can’t wait to see what will be in the papers tomorrow.

World: The Broadband pie and WiMax September 26, 2006

Posted by Jasper in broadband.
add a comment

Yesterday’s Seattle Times featured a nice and easy to read story on the promises of WiMax and how it fits into the general scheme of things. Also they provided the following figure which also gives a nice impression of positioning in the market.

2003274767.gif

The article is available here. WiMax is increasingly in the media as plans of deployment are made public and WiMax networks are being deployed. I am guessing 2007 will be the year when WiMax makes a solid break through.

Gapminder and developing countries September 25, 2006

Posted by Jasper in General, Mobile.
add a comment

In his blog Greg Mankiw points to the to the excellent and amusing presentation by Hans Rosling on how the well-being around the world has changed over the past forty years. He uses the program Gapminder which I briefly discussed in a previous post.

He wraps-up his presentation with a depiction of internet penetration plotted against GDP per capita. He shows how the world “is flattening out” as he puts it, because the internet has become more accessible over time in developing countries relative to their growth in GDP per capita.

After watching the presentation I thought I would have a look for any research in that area. I didn’t find anything directly related to the presentation but did find an interesting paper how on investments in mobile communications effects developing countries: The impact of telecoms on economic growth in developing countries by Leonard Waverman, Meloria Meschi, Melvyn Fuss, part of the The Vodafone Policy Paper Series. Waverman et al. examine 38 developing countries for which data was available for the period 1996-2003. They conclude:

Differences in the penetration and diffusion of mobile telephony certainly appear to explain some of the differences in growth rates between developing countries…

… There are increasing returns to the endowment of telecoms capital (as measured by the telecoms penetration rate).

Given the speed with which mobile telecoms have spread in developing nations, it is unlikely that large gaps in penetration will persist for ever. However, differences in the speed of adoption will affect the speed with which poor countries converge to rich countries’ level. Relative poverty still poses serious political problems, such as instability and increased demand for emigration. Our analysis suggests the need for regulatory policies that favour competition and encourage the speediest possible rollout of mobile telephony.

This is in-line with other research that suggests that telecommunications investments play an important role in improving well-being and wealth. To attract outside capital and investment in the mobile sector, devloping countries should open up for competition, implement an enforceable regulatory regime, reduce restrictions on foreign direct investment and (probably the most difficult of all) get rid of corruption.

Australia: Encouraging investment revisited September 22, 2006

Posted by Jasper in Uncategorized.
add a comment

I have previously discussed Telstra’s refusal to investment in FTTN and the breakdown of discussions with the ACCC (See here and here). This morning I had a quick flick through a speech by the ACCC chairman from 22 August.  In it he states:

The foundations of the discussions with Telstra were clearly spelt out from the beginning. On 7 April 2006, a letter was written to Telstra to say that “the ACCC accepts that Telstra should be entitled to recover its actual costs arising from the FTTN upgrade” and that “the ACCC accepts that Telstra faces a significant risk that should be reflected in the cost of capital used to calculate access prices.”

This a wholly appropriate starting point which is consistent with existing regulations. The recovery of actual costs will in this case more or less be equal to TSLRIC, as the FTTN represents a forward-looking investment. Further, incentives to invest will be preserved (disregarding the option argument, see here) when the specific risk characteristics of the investment are reflected in the cost of capital. If Telstra was attempting to depart from this starting point or strike a better deal, then a breakdown of discussions would have been inevitable. 

In his speech, the Chairman also highlights another on-going debate between Telstra and the ACCC on the ability (or lack thereof in the current case) to cross-subsidize between different geographic regions. But as he explains this can hardly be a decisive factor in Telstra’s decision:

In relation to the issue of the level of any cross-subsidy for rural and regional areas, the fibre network plan was originally proposed to be rolled out to the five largest capital cities, but contained no detail for how and when the system would be extended beyond that. Certainly through all the discussions, it was clear that the fibre network plan did not extend to rural and remote Australia, even in the distant future.

Further, the draft determination to reject Telstra’s ULLS undertaking (where it proposes geographically averaged ULLS prices) was published more than a month before the Telstra decision to stop their investment plans.

Zimbabwe: National bandwidth shaping September 21, 2006

Posted by Jasper in Uncategorized.
add a comment

Here is something that you don’t hear everyday.  Internet traffic in Zimbabwe has nearly been cut off due to lack of foreign currency.  The satellite company that provide the country’s internet service has reduced the whole countries bandwidth for internet access until the outstanding debt is paid [from ZDnet]:

Government-owned TelOne, which owns the country’s main satellite Internet link, said satellite firm Intelsat had cut its international bandwidth because it failed to pay the $700,000 fee.”The link is slow because they reduced the megabits on our satellite link until the payment is made,” TelOne spokesman Phill Chingwaru told Reuters on Wednesday.

“We have approached the Reserve Bank of Zimbabwe for foreign currency and they are working on that, but meanwhile there would be delays in browsing because of the partial cut-off.”

The Zimbabwe Internet Service Providers Association (ZISPA) said on its Web site that TelOne’s connection had been severed, causing an “almost collapse” of the Internet in the country. It said ZISPA would lobby the government to help it pay the debt.

Italy: Unica September 20, 2006

Posted by Jasper in broadband, Mobile, VoIP.
add a comment

Amidst the rather chaotic telcom market in Italy, Telecom Italia has (according to Total Telecom) quietly launched a UMA service called Unica. The service simply appeared on the telco’s Web site at the beginning of last week without all the whistles and bells the market had been expecting. Although this is probably not surprising given the sudden change in strategy with the split of fixed and mobile businesses.

The service as been subjected to regulatory scrutiny, which has resulted in the launch of a restricted offer where Telecom Italia only is permitted to sign up 30,000 customers for a six month period.

Unica is available to customers with a Telecom Italia fixed-line service, TIM consumer mobile tariffs and DSL/VoIP product Alice Voce. Unica carries a monthly subscription of €15 (plus €5/month for each additional handset) and customers will also be required to buy the Unica Pack for €369, comprising the Samsung SGH-P200 dual-mode GSM/WiFi handset and an Alice ADSL2+ WiFi modem.

The service enables users to make free calls from the home via the fixed phone or the Samsung handset, using voice over WiFi, and GSM calls away from home. Up to five mobile numbers can be assigned to the same contract.

The offer seems comparable to Home Free in Denmark in price and appears to have the same functionality. Will be interesting to see what the future holds for Unica against the current turmoil.

For more information see Total Telecom and/or Telecom Italia Unica page (in Italien)

US: Broadband auction ends September 19, 2006

Posted by Jasper in broadband, General, Mobile.
add a comment

Federal Communications Commission’s (FCC) auction of advanced wireless services spectrum ended yesterday raising US$13.9 billion (gross). T-Mobile USA was the top bidder, bidding almost US$4.2 billion for 120 licenses. Verizon Wireless agreed to pay US$2.8 billion for 13 licenses, while a consortium, Spectrum Co, that includes cable companies Comcast and Time Warner along with Sprint Nextel agreed to pay almost US$2.4 billion for 137 licenses.  Due to anti-collusion rules, the companies are not permitted to talk about what their plans for the spectrum are until they make a down payment.

From the results it is clear that the country’s largest providers have dominated the auction. So, any hope that new entrants would shake up the market has dwindled. 

Based on various sources (primarily RCR Wireless News and cellular news) I have complied the bidding behaviour from start on till finish. The 28-day-long auction ended after 161 rounds, with 104 of the 168 registered bidders winning at least one license. All but 35 of the total 1,122 licenses up for grabs received bids.  Detailed information on the auction can be found at the FCC. Click here.

And here is the summary…

August 9: T-Mobile USA dominates first round of AWS auction
T-Mobile USA Inc. led the first round of bidding, placing bids for spectrum that would substantially expand its national footprint. The carrier bid for 20 megahertz of spectrum in each of six regions across the country, as well as additional spectrum in markets such as San Francisco, Chicago, Dallas-Ft. Worth and many other markets. T-Mobile USA placed seven of the top 10 highest bids and bid highest for the Great Lakes, Northeast and Western regional licenses. The nation’s fourth-largest carrier also made more than half of the 40 highest bids so far.

August 10: T-Mobile USA continues aggressive play
T-Mobile USA Inc. is dominating the Federal Communications Commission’s spectrum auction after three rounds in terms of sheer dollars, with $226.6 million in bids so far. The carrier is the high bidder on 25 spectrum licenses covering 235 million potential customers.

August 11: NextWave strikes back
NextWave Telecom Inc.-backed AWS Wireless Inc. made three of the highest bids in the sixth round of the advanced wireless services spectrum auction, capturing—at least temporarily—the highly coveted Great Lakes regional 20-megahertz license as well as a 20-MHz license that covers 31 million pops in the Mississippi Valley and another that covers about 50 million pops in the West.

August 14:  $4.1B and counting
Bidding is picking up speed in the FCC’s advanced wireless services spectrum auction, with the total value of provisionally winning bids jumping from more than $2.4 billion late Friday to more than $4.1 billion in the two rounds held so far today.

August 15: Verizon Wireless throws weight around
Verizon Wireless staked a claim to all six of the largest licenses for sale in the advanced wireless services auction, bidding $3.5 billion in round 14 of the auction for 20 megahertz of spectrum covering the entire continental United States.

August 16: Satellite players call it quits
Satellite television providers EchoStar Communications Corp. and DirecTV Group Inc. have pulled out of the advanced wireless service spectrum auction.

August 17: Dolan Family Drops Out Of Auction; Bids Over $11 Billion

After initially placing big bids, the Dolan family (Dolan Family Holdings, based in Woodbury, N.Y) withdrew from the auction without winning any licenses.  The withdrawal came as the total amount of bids placed in the auction reached almost $11.1 billion. There hasn’t been any bidding on the five most expensive licenses for the past six rounds, raising the possibility that the winning bids for those licenses have already been placed. The top five bids by dollar value have been placed by companies controlled by Verizon Wireless, T-Mobile USA, and a group that includes buyout firm Madison Dearborn Partners.

August 18: Dust settles around Verizon and T-Mobile

The battle for the large regional licenses appears to be largely settled at this point, with Verizon Wireless and T-Mobile USA Inc. the big winners.

August 21: Bidding remains robust in smaller licenses

Bidding remained active on the ninth day of the auction, as bidders continued to focus their attention on smaller licenses now that bidding on big regional licenses appears to have ended.

August 21: Bidding remains fierce for metro and small regional

Just as at any yard sale after a long weekend, the big, expensive items are long gone and the persistent shoppers have continued to rummage about for the unappreciated gems that add significant value to their own current holdings.

August 23: Bidding nears $13 billion

The total amount raised is creeping toward $13 billion, although each round is raising less money that the previous. However, bidding is still active on a number of licenses; the number of licenses with new high bids continues to hover near 300. 

August 24: Cable gaining steam

Some of the players who were squeezed out of regional spectrum licenses early in the auction seem to be making up the loss with dozens of smaller geographic licenses.

August 25: Bidding slows as third weeken breaks near 

The Sprint Nextel Corp./cable joint venture appears to be achieving a national footprint without the benefit of costly regional licenses.

August 28: Bidding continues to slow

Bidding has slowed dramatically with an average of about 140 new bids placed in the last few rounds. This compares to 240 bids in recent rounds. The leaders in overall bidding are still in place after round 50, and they stack up like this:

  1. T-Mobile at $3.9 billion
  2. Verizon Wireless at $2.8 billion
  3. SpectrumCo at $2.2 billion
  4. MetroPCS at $1.4 billion
  5. Cingular at $1.2 billion

August 29: FCC attempts to spur auction action

In a sign that the auction is drawing nearer to conclusion, the FCC increased the number of bidding rounds per day from 4 to 6. The auction has garnered nearly $13.6 billion in bids following round 58, though the number of bids per round has fallen by half to around 150 bids per round.

August 30: Battle brewing between smaller bidders

NextWave Telecom Inc. continues to elbow other companies for spectrum, holding 144 high bids on spectrum through its AWS Wireless Inc. bidding subsidiary worth about $121 million at the end of round 61.Dobson Communications Corp., has been dueling with AWS for licenses in Maryland, Kentucky and New York. One of the Kentucky licenses, the Kentucky 4-Spencer license, is currently going for about 18 cents per-MHz-per-pop for a total price of $960,000 and is held by NextWave. Meanwhile, Dobson outbid NextWave for spectrum in Glens Falls, N.Y. with an offer of 6 cents per-MHz-per-pop, or $140,000 total.

August 31: Is the end near?

Bidding continues to slow with only 91 new bids being entered in round 67, though the number of bids was up slightly from the 83 bids placed in rounds 65 and 66. The number of bids per round has been below 100 since round 62.

September 1: NextWave, Dobson remain active as auction breaks for holiday

NextWave Telecom Inc. and Dobson Communications Co. are the two most active bidders remaining.  The bidding continued to wind down on Friday, with an average of 63 new bids per round for the last three rounds of the week. Only 110 of the 168 eligible bidders remain. Bidding will resume on Tuesday after the Labor Day holiday. The auction so far has raised about $13.7 billion, and 1,055 of the 1,122 licenses offered have received bids.

September 5: Jousting continues as bidding winds down

The auction continues to creep toward a close, with just 64 bids in recent rounds. Of the 64 new bids placed in round 77, eight came from Dobson, 14 came from NextWave, and another 14 came from Red Rock. Leap chipped in half a dozen, and the Sprint Nextel-cable JV placed four.

September 6: Verizon Wireless kicks T-Mobile USA out of Hawaii

Dobson dominated round 85 placing nearly half of the new bids in the round. Verizon Wireless also re-entered the fray after watching from the sidelines for much of the bidding. The carrier placed a $4.1 million high bid on a 20-megahertz F-block license covering Hawaii; T-Mobile USA Inc. had previously held the license.

September 7: Verizon Wireless shows renewed interest as bids dwindle

Bidding has slowed to a trickle with thirty or fewer new bids received in the last few rounds. But a few tussles are still ongoing, including Verizon Wireless trying to edge the Sprint Nextel Corp.-cable company joint venture out of spectrum in Louisiana. Verizon Wireless is also still fighting for licenses in Hawaii. The nation’s No. 2 carrier had been sitting on the sidelines during most of the auction after picking up several of the most expensive licenses in early rounds.

September 8: Skirmishes continue in Louisiana, Iowa and Hawaii

Spectrum in Louisiana, Iowa and Hawaii is still attracting competition from bidders large and small. After more than 100 rounds of bidding over 22 days, the FCC has received fewer than 20 bids in each of the last three rounds. But battles are still going on. Analysts expect to see the auction go on for at least another week or two, and possibly continue until the end of the month.

September 11 -15: Bidding continues to slow

After 141 rounds, T-Mobile has provisionally won 119 licenses in major markets like New York City and Chicago with offers of almost US$4.2 billion. The auction grossed almost US$13.9 billion on Thursday, but would net about US$13.7 billion, because of discounts offered to entrepreneurial bidders. Four bids were made in the round 141.

September 18: Bidding slows to a crawl and ends

No new bids in round 161 – Auction ends.

Broadband-in-Gas September 18, 2006

Posted by Jasper in broadband, Technology.
2 comments

Who would have thought of technology that allows the delivery of broadband through gas pipes. California-based Nethercomm is developing the technology. Delivery of services through the gas pipes is made possible using Ultra Wideband (UWB) wireless radio technology. They call it Broadband-in-Gas (BiG).

According to Nethercomm the UWB signal:

…traverses through the underground pathway formed by the natural gas pipeline, turning corners and negotiating obstacles aided by the unique nature of ultra wide transmissions. When “Broadband-in-Gas” (BiG) is fully developed, it will provide twice the connectivity of fiber-optics (40 to 100 Mbps for Broadband-in-Gas versus 20 Mbps for fiber) at essentially the same installed cost per customer as DSL (about a tenth of the installed cost per customer for fiber to the home).

Source: here.  Additional documents are found on the Nethercomm website, including: Nethercomm’s BiG Network and Expanding the value of Fiber-in-Gas through Strategic Partnerships with BiG. Although it will likely be a some years yet before BiG takes flight, if a comparison with power-line technologies is any thing to go by, it is certainly something to watch out for.

Copper prices September 17, 2006

Posted by Jasper in broadband, General.
add a comment

I remember reading an article last year about thieves stealing lamp posts, parking meters and copper wire around the world to sell as scrap metal in China. Just today I came across an article from Reuters Oddly Enough about residents of two villages in eastern France that could not make any phone calls. Criminals had stolen 550 meters of copper cable. According to Reuters theft of the metal has become increasingly common in France as thieves try to cash in on soaring copper prices. The thieves took more than a tonne of copper cables that had been dug out and left exposed awaiting repair work, operator France Telecom said.

Recent data from London Metal Exchange (see http://www.lme.co.uk/copper_graphs.asp) shows that copper levels have probably reached their peak earlier this year.

price_charts.png

Indeed there appears to be an increasing consensus that most metal prices will fall substantially from their current peaks. The question is when, and by how much? The IMF forecasts a substantial fall in copper prices coming down to US$1.50 per pound by around 2010 against the current level of US$3.60.

Maybe telecommunications incumbents should hurry up and pull their old copper cable out of the ground and install some fibre while they can still get a recent deal on copper. Then again maybe the cost of pulling the cables out the ground cannot offset the copper current market price. But if it does, it could tip the balance sheet in favour of accelerated fibre deployment. An unlikely driver of FTTx.

India: World’s fastest growing mobile market September 16, 2006

Posted by Jasper in Mobile.
add a comment

According to the Cellular Operators Association of India, the country added 5.9 million subscribers last month, topping China’s total of 5.2 million. That makes India the world’s fastest-growing mobile market. Not surprisingly, this is putting a strain on quality of service.

About half a dozen major mobile operators and several smaller ones cover less than half of India’s population. Most coverage is centered in big cities. Operators have yet to venture out to many villages to reach the rural population of 660 million. But I suspect they are not in a hurry too, because of a poor and spotty infrastructure and a very limited ability to pay (although sources suggest India has cheap calling rates).

With 123 million subscribers now, similar growth rates in the coming months will easily project the number of subscribers above the 130 million mark by the end of this year. No doubt someone could sell a lot of secondhand handsets from European markets to the Indians.

Developments in least developed countries September 15, 2006

Posted by Jasper in Uncategorized.
add a comment

The ITU has released a report on ICT/Telecommunication development in least developed countries (LDC). The report examines key developments in the information and communication technology (ICT) and telecommunications sector including trends and challenges in the world’s poorest countries in the period 2001 to 2005. It may be downloaded here.

Conclusions and recommendations are the following:

  • Countries are coming together to share the costs of ICT infrastructure. A notable example is the East African Submarine System (EASSy) project (see www.eassy.org), an undersea fibre optic cable that will link the countries of East Africa to the rest of the world. This is the first optic fibre connectivity between Eastern Africa and the global optic fibre network. The following LDCs are involved in the project: Burundi, Congo, Djibouti, Eritrea, Ethiopia, Madagascar, Malawi, Mozambique, Rwanda, Somalia, Sudan and Uganda. 
  • Large ICT manufacturers are designing products and applications specifically tailored to the LDC market. Microsoft is launching a low-cost Windows XP operating system with an African language interface pack. This new starter edition will feature a simplified user interface for easy navigation. Initiatives such as this one also address the issue of local content.
  • Engaging national, subregional, bilateral and multilateral development actors with the aim of mobilizing resources and coordinating ICT development is the way to go.
  • The emergence and rapid deployment of wireless technology will speed up the race towards universal access in the LDC. The future is bright, as increasing political will, motivation to succeed, improved stability and a general bias towards the creation of an information society is to be noted. It is likely that the targets set by the Brussels Programme of Action at the Third United Nations Conference will be met by the majority of the countries before the Fourth United Nations Conference in 2010.

Japan: The mobile sales channel September 13, 2006

Posted by Jasper in Mobile.
add a comment

As always Japan is ahead of the pack on the application of mobile technology. The days when a mobile phone was only used for making calls in Japan are long gone. A recent article from Reuters describes how Japan’s (already US$ 3.5 billion) m-commerce market is ready to turn on the turbo.

Buying items such as accessories and supplements through Web sites via a mobile typifies a growing trend in Japan, where mobile phones serve a multitude of purposes, such as credit cards, portable music players and train tickets.

….

Last year, the number of people using cell phones for Internet access exceeded personal computer users in Japan. According to government data, 80 percent of e-commerce by teen-agers aged 15-19 was done on mobile phones in 2005.

Apart from good supply conditions with retailers like Department store Marui Co. and Seven & I venturing into m-commerce, the Japanese market also has a high penetration of mobile ‘always on’ connections facilitating fast and efficient commercial transactions. Interestingly, the article also suggests that mobile shopping increases with proliferation of flat fee based plans. Impulse shopping accounts for most of the purchases done on mobile phones and impulse shopping usually does not happen unless users have flat fee-based service.