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Australia: Telstra’s AGM November 14, 2006

Posted by Jasper in General.
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A Telstra shareholder was physically thrown out of the telco’s annual general meeting (AGM) today as he disrupted the opening remarks of chairman Don McGauchie. The shareholder, Kenneth Ivory of Brisbane, stood up in the meeting and threw a handful of papers at the feet of McGauchie. McGauchie asked Ivory to leave and when he did not, Ivory was physically removed from the meeting by security guards. This of course was all over the news. See one news spot here. Clearly Ivory is a loon, but funny how Telstra always seem get the oddest media coverage, e.g. when Sol and friends were drenched by fire sprinklers on two separate concurrent occasions.

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Body of Knowledge November 14, 2006

Posted by Jasper in General, Regulation.
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I recently became aware of a website developed by the Public Utility Research Center (PURC) at the University of Florida, in collaboration with the University of Toulouse, the Pontificia Universidad Catolica, the World Bank and a panel of international experts. It is called the Body of Knowledge (BoK) on Utility Regulation. In the about section they state:

The site provides summaries of and links to the more than 300 references, an 80+ page glossary and self-testing features to facilitate learning. The references include publications and decisions by regulatory agencies and other governmental bodies; policy advisories by think tanks, consultants, donor agencies, and others; and research by academics, consultants, and other experts.

I have only looked at a few selected pages so I can’t say if the site is any good, but what I have seen certainly looks interesting.

Bangladesh: GrameenPhone November 7, 2006

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According to press release on the GrameenPhone website they have recently reached 10 million mobile subscribers. The achievement coincides with the 10th anniversary since the company received its operating license in November 1996. The company started the year with 5.5 million subscribers, after having registered a growth of 130 percent in 2005.

Bangladesh is presently one of the top 10 mobile phone growth markets in the Asia-Pacific region with about 16 million mobile phone subscribers. However, the telephone penetration rate still remains low at around 12%.

What I found particularly interesting about the press release was the brief reference to their GrameenPhone Village Phone Program, which provides business opportunities for more than 260,000 Village Phone operators, mostly poor rural women, all around the country. A Bangladeshi woman can obtain a cell phone kit through a micro-credit loan, and then become the operator of a phone service for the rest of her village. The founder of the micro-credit movement Muhammad Yunus, along with his Grameen Bank has of course recently been awarded the Nobel Prize in economics for 2006. Here is the Yunus story. See also this New Yorker article.

GrameenPhone has also recently started an ambitious program to establish 500 Community Information Centers by the end of the current year. These centers provide shared high-speed Internet access and other information-based services in the rural areas through GrameenPhone’s EDGE network. Another recent community service initiative is the HealthLine Service, a 24-hour Medical Call Center manned by Registered Physicians and accessible to all GrameenPhone subscribers.

GrameenPhone is jointly owned by Telenor of Norway (62%) and Grameen Telecom Corporation of Bangladesh (38%).

UPDATE: Economonitor has a post about a forthcoming paper by Shahe Emran, Mahbub Morshed and Joseph Stiglitz that discusses the large interest rates on micorcredit, why it is possible that demand for loans seems to be unrelated to the interest rate charged and why borrowers seem to have little if any interest in medium-sized loans.

It turns out that the main factor to explain these issues is the place of women in society, and especially extreme illiquidity in the market for women’s labour. A little bit of credit acts as a catalyst for women outside the labour market, turning them into economically productive individuals. Once they become economically productive, they can pay back small loans. However, they are not productive enough to pay back medium-sized loans.

In other words, the interest on a micro-loan is not return on capital, but a return on labour. Without a tiny bit of capital, the labour is nascent and cannot be tapped. That is why microcredit works, and why larger loans are much less popular.

Skype revenue and users October 19, 2006

Posted by Jasper in General, VoIP.
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Jim Courtney from Skype Journal reports on revenue statistics for Skype in his post Skype Starts to Build US Traction. This is the first time that I have seen official revenue figures for Skype, so I thought I would reproduce his table:

As US-controlled public company the Securities and Exchange Commission requires the breakout of International from domestic sales. So the numbers may be sourced from the 3rd quarter report from eBay. The figures reveal:

  • Skype has grown to around a US$200 million annual business;
  • Skype’s overall revenue growth is slowing;
  • Increase in users is still strong averaging more than 50% per year; and
  • Growth in US users is currently stronger than (other) international users.

Malaysia: highest 3G call October 10, 2006

Posted by Jasper in General, Mobile.
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As a four time climber of Mount Kinabalu, located in Kinabalu National Park on the Malaysian part of Borneo, I was delighted to read that video calls can be made on the peak thanks to the services provided by Celcom’s 3G coverage. According to Celcom Malaysia this is the highest 3G coverage in the world to date. Mount Kinabalu’s height has been given as 4,095 m or 13,450 ft above sea level.

According to the climbers making the first call, the video transmission quality was fairly good although it could have been better if the weather was good. See The Star for more details.

Australia: T3 Prospectus October 9, 2006

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The T3 prospectus was lodged with the ASX just after midday today. It is available here. It is hugh document. I have only downloaded selected parts of it and only briefly had a look at Suplemental Information, where Telstra paints a grim picture of the regulatory risk facing the company.

Gapminder and developing countries September 25, 2006

Posted by Jasper in General, Mobile.
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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.

US: Broadband auction ends September 19, 2006

Posted by Jasper in broadband, General, Mobile.
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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.

Copper prices September 17, 2006

Posted by Jasper in broadband, General.
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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.

China: Nearly 800m phone users August 28, 2006

Posted by Jasper in General, Mobile.
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[From Pacific Epoch]: China had over 798 million phone users at the end July 2006, Beijing Morning Post reports quoting statistics by the Ministry of Information Industry (MII). There were 366.5 million fixed-line phone users in China and 431.7 million mobile users at the end of the first half of 2006. China added 38.39 million mobile phone users in the first half of 2006. Mobile users sent 238.5 billion SMS during the first half of 2006, up 44.9 percent year-on-year.

Commentary: For every 100 people, that is 28 with a fixed line phone and 33 with a mobile. Not much, but the shear numbers are staggering. Also, adding 38 million mobile phone users in 6 months is an amazing number. It suggests the mobile providers are growing so fast, that China could be looking at half a billion mobile users by early 2007! No doubt China Mobile, the world’s largest mobile network operator (se previous post) will be grabbing most of these users, further entrenching its position on the market.

Denmark: Ready to drop fixed line phones August 22, 2006

Posted by Jasper in General, Mobile.
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A new poll from TNS Gallup for Sonofon shows that Danes are increasingly willing to completely drop their fixed line telephones in favour of mobiles. Fifty six percent responded that they would be willing to switch their fixed line service for mobiles if they knew that was cheaper or just as cheap as using a fixed line telephone. This represents an increase of almost 25% compared to the first opinion poll in June 2005. Willingness to change is even greater amongst the young. As many as 67% of 15-30 year-olds are ready to switch to mobiles instead of their fixed line telephones.

Note the important condtion: the 56% figure is based on mobile calling and usage being as cheap or cheaper than using a landline phone to do the same things. Would be interesting if the survey also considered interactions with broadband demand.

See Sonfon Media release here.

UK: Fixed-line QoS comparison website August 7, 2006

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Last week Ofcom announced the lanching of TopComm designed to provide consumers with a comparison of quality of service levels among fixed-line telecoms providers in the UK was launched. Independent research commissioned by Ofcom has shown that quality of service is consistently identified by consumers as an important factor in deciding whether to switch to another fixed-line provider. Although price and cost continue to be the most important determining factor for consumers choosing between fixed-line providers, this is an interesting and welcome move.

The TopComm service will provide comparable information on:

  • the percentage of orders that are completed on or before the agreed date;
  • faults reported per 100 lines on a quarterly basis;
  • the percentage of faults repaired within the agreed service time; and
  • the percentage of complaints processed within 28 calendar days.

TopComm will also measure the level of billing accuracy by tracking the numbers of complaints that are upheld per 1000 bills issued. Maybe these measurements can be extented in the future to include traffic related elements. This would be particularly interesting given the transition to VoIP services.