Wednesday, December 31, 2008

Update on FTTH

Here is the year's final update to my FTTH and BB database.

Short selection of notable news:
  • Many initiatives in the US for pushing BB penetration (sheet #8).
  • FTTN + VDSL: the Australian saga and a German plan from DT and Vodafone (sheet #4).
  • Several steps toward deeper separation (Italy, Australia, Poland; sheet #12).
  • New FTTH deployments plans, including Saudi Arabia, Nigeria, Andorra and several US networks, including Lafayette).
  • New Zealand: FTTH and FTTN (sheets #1 and 4).

Tuesday, December 30, 2008

Off-topic: consultants could make good sell-side analysts

STL recently put forward a popular view of telecoms as a defensive sector in today's financial and economic turmoil. Still, they feel things could change:
The audience at our November event seemed comforted by the appeal which the capital markets currently find in telecom as a defensive sector. However, we also stressed that this is likely to be a fleeting phase, as underlying concerns about the industry’s ability to generate sustainable value will return.
I do not wish to contest STL's views on telco transformation, but I feel something is missing in this (vastly simplified) summary: probably every industry sector faces challenges, some even bigger than those plaguing telecoms. Obviously, financials come to mind, but healthcare, IT, oil & gas and automobiles have a few issues to sort out as well. Personally, I wouldn't be comfortable predicting which sector is set to outperform the others next year.

Somehow, this ties nicely into Kai's (not entirely serious) call for government support of the telco sector, a while ago. Apparently, he was disgruntled over the amount of funds available to bail out financials and the automobile sector that haven't been able to regulate themselves. Why shouldn't FTTH operators get government support as well?

What follows from combining these two posts is that consultants and researchers (instead of Kai's FTTH operators) should step in and replace the sell-side analysts that have lost their jobs over the past few months (by adding investment recommendations to their industry knowledge). Of course, there is some work to be done, but the very fundamental changes of the financial industry could provide industry experts and consultants with a unique opportunity to venture into a new area and serve a new set of customers. They could be much better equipped to serve the buy-side than the average financial analyst. To loosely quote a buddy of mine (who still has his Wall Street sales job):
To say that stocks are cheap, based on current P/E ratios, shows an appalling lack of historic perspective that plagues the sell-side. Low P/E ratios probably imply that earnings projections are still way too high. It should be commonly known: C-level execs are the very last people to update their views to altered market conditions; only to be followed by sell-side analysts.

Friday, December 12, 2008

FTTH: Axia NetMedia, separation, FTTN and SLU

Three important developments this week in FTTH:
  • Axia NetMedia (discussed before) detailed its plans for Australian NBN. If they have it their way, they will build FTTP, not FTTN.
  • The same firm bids on the active layer of the Singapore network (NGNBBN), with Cisco. It's somewhat puzzling to see Axia bid alone (on the Australian NBN, but naturally they need partners), with SingTel (on the NGNBBN passive layer), or against SingTel but with Cisco (here). Maybe there's room to band together before contracts are signed.
  • Swisscom has the revolutionary idea of laying 4 fibers to each home in its FTTH plans. It will use one itself, leaving room for three competitors to engage in infrastructure-based competition.

Plus: a worthwile interview. with TransACT's former CTO Paul Brooks. Question: "Telstra said it is 'impossible' to build or maintain a network if structural separation is enforced, is this true?" Answer: "No, of course not. They might not enjoy the same levels of cross-subsidisation they currently access regarding basic network infrastructure costs and high value-add retail products, but that's an economic argument, not an argument about whether it is possible or not. (...) If the wholesale arm actually had incentive to make things easy for their customers, then the business case for the separated retail arms becomes even stronger."

Plus: an Australian opposes sub-loop unbundling (SLU), but a New Zealander points to the reality of it, albeit it in FTTN + VDSL deployments.

Update on 3-D

Two more snippets:

EU objecting to functional seperation of Telecom Italia?

This is how subtle it gets: AGCOM (the Italian) NRA proposes functional separation of Telecom Italia. Great, isn't it? Only the second time in Europe, after BT/Openreach/EAB. TI would create a network company Open Access, and an independent board to oversee things.
But wait. This time it's the EU that objects. Basically, it fears the terms will be too friendly for Telecom Italia.

"The network is our core business." So far, only SingTel and Bharti Airtel (and a more recent story here) have been as enlightened as to step away from this old-style telco thinking.
Telecom Italia would have all the reasons of the world: it has a heavy debt load, and taking separation even one step further (structural separation) would allow it to attract third-party funding to roll out FTTH.

Wednesday, December 10, 2008

Off-topic: A Life in Inventions - Tribute to Elliott Carter

A major milestone is hit on December 11: Elliott Carter turns 100 years old - and still composes frantically. Obviously it takes some bending and turning to make this relevant for us at Communications Breakdown. Let's put it this way: being 100 years old and in the forefront of whatever it is you are doing, is quite some lesson to anybody - not least to the incumbent telcos of the world.

Congratulations, Mr. Carter!

There's also a nice Wikipedia way into substantiating the relevance of the past 100 years, both from the perspective of modern classical music and from the world of telecommunications:
  • 1908: Elliot Carter was born. Nathan Stubblefield invented his precursor of the wireless telephone.
  • 1924: Carter first met Charles Ives.
  • 1925: Carter first met Edgard Varese. Invention: TV by Francis Jenkins.
  • 1941: Carter composes The Defense of Corinth. Invention: the computer by Konrad Zuse.
  • 1946: Carter writes his Piano Sonata. Invention: Mobile Telephone Service at AT&T.
  • 1947: Carter writes The Minotaur. Invention: the transistor by William Shockley et al.
  • 1948: Carter's Cello Sonata sees the light. Claude Shannon publishes his Mathematical Theory of Communication.
  • 1952: Invention of optical fiber by Narinder Singh Kapany.
  • 1955: Carter composes his Variations for Orchestra. Invention: video phone by Gregorio Zara.
  • 1958: The world's first communications satellite by Kenneth Masterman-Smith.
  • 1964: Carter's Piano Concerto. Invention: packet switching by Paul Baran et al.
  • 1969: Carter composes his Concerto for Orchestra. Invention: Arpanet at the USDD.
  • 1971: Carter completes his Third String Quartet. Invention: e-mail by Ray Tomlinson.
  • 1973: Invention of ethernet by Bob Metcalfe et al and the PC at Xerox PARC.
  • 1977: Invention of the mobile phone at Bell Labs.
  • 1980: Carter's Night Fantasies. Invention: the CD at Philips and Sony.
  • 1983: Carter's Triple Duo. Invention: the Internet (TCP/IP) by Robert Kahn et al.
  • 1988: Carter's Remembrance for Orchestra. Invention: ADSL at Bellcore (now Telcordia).
  • 1990: Invention of the WWW by Tim Berners-Lee.
  • 1993: Invention of GPS at the USDD.
  • 1995: Carter writes his Fifth String Quartet. Invention of the DVD at Philips et al.
  • 1997: Carter writes his opera What Next? Invention of DOCSIS at CableLabs.
  • 2001: Carter's Cello Concerto. Invention: the iPod at Apple.

Brisbane to leapfrog the Australia NBN

This is very ironic; while all of Australia is debating the six proposals to build a National Broadband Network (based on FTTN), the city of Brisbane (1.9m pops, 918 km^2) has ordered a study into the feasibility of constructing its own FTTH network. The city targets 0.1-1.0 Gb/s to every home and business, that is: True Broadband.

This is supposed to generate 15k jobs and add AUD 5bn to the local economy. Doing a little back-of-the-envelop calculus, the latter figure looks like around 6% of Brisbane's GDP. Not bad!

Sunday, December 07, 2008

Update on 3-D

New developments in 3-D, one of the pillars of FTTH:
  • Telefonica trials 3D TV over its Sao Paulo FTTH network. Cooperates with Philips for TV sets.
  • Football game broadcast in 3-D across the US. The NFL cooperates with Thomson and Real D.
  • Jeffrey Katzenberg, at DreamWorks involved with the TinTin movies, expects it will take a while before people will be prepared to make another big cash outlay for a 3-D set, now that flat-screen TVs (which are not '3-D ready') have become widespread.

Should Philips contribute to the cost of the electric grid?

There are never enough people to debunk the crap coming out of some people . Take a look at Scott Cleland 'study' for '' (conclusion: "Google uses 21 times more internet bandwidth than it pays for"). Google itself responded very aptly, and fortunately there's always the eloquent

Google pays a lot to put its content in the cloud. Consumers pay a lot for the use of the last mile. These are two entirely different things. It is the task of ISP's to collect money from end-users for the bandwidth they 'consume'. Here lies the rub: the Internet only took off when always-on internet access was introduced for a flat fee. That's when telcos and cablecos lost their pricing power. But it just doesn't make any sense to turn to the other end of the value-chain and try to collect money from Google.

It's like saying that Philips Electronics should contribute to the cost of the electric grid, because they make so many apparatuses that use electricity.

It's the business model that's broken. Telcos and cablecos should not ask people to degrade themselves producing these crappy studies. Instead, they should try to fix their business model. A lot of consultants are out there to help them.

Wednesday, December 03, 2008

KPN and OPTA are negotiating a deal

My son takes swimming lessons, and I discovered there is something distinctly fishy about it. It has all to do with perverse incentives: the teachers have no interest in making him go through the course in the shortest possible time. That would only endanger their jobs.

No, this story will not lead to the GFC (global financial crisis), but to telecoms regulators. They too are perversely incentivised. They have no interest in deregulation, because it will make them lose their jobs.

I had an interesting email conversation with a highly valued reader on the upcoming regulation (tariff proposal December 19) of the planned KPN/Reggefiber FTTH network. Turns out, political issues and sensitivities are all over the current negotiations between KPN, Reggefiber, OPTA (the Dutch NRA) and NMa (the Dutch competition commission). I have no such sensitivities at all - for that I beg your forgiveness.

Here are the wants & needs of the main parties involved:

  • First, it wants the joint venture with Reggefiber (Reggefiber FttH, AKA Glashart) approved by NMa. This is expected before the end of the year.
  • It starts off with a minority interest for KPN, in order to get the whole thing unregulated, or at worst, under NMa's jurisdiction.
  • In due course however, KPN wants to exercise its call option to turn its stake into a majority shareholding.
  • They want to fiber up the country. Multiple sources tell me that KPN suffers a slight (read: severe) form of panic over competition from the Dutch cablecos (Warburg/Cinven's Ziggo and Liberty Global's UPC, mainly), which have near nationwide coverage. FTTH is just one way to stop the bleeding. Beefing up the TV activities is another. Also, they are heavily lobbying for open access to cable networks - which is not going to help (cablecos cannot resell voice on the KPN network, and KPN cannot resell TV on the cable networks; they are supposed to invest in infrastructure and launch their own copycat service, in order to create intermodal competition - this is OPTA policy).
  • It wants to stay in business. Losing regulation of the FTTH market would put it out of business for a large part.
  • It wants to remain independent, not be part of NMa, a political topic.
  • Instead, it wants to merge with the Commissariaat voor de Media, the Dutch media authority, to form an Ofcom or FCC of sorts (but without the spectrum jurisdiction, which resides at yet another agency, the Agentschap Telecom).
  • On its part, OPTA cannot afford to block progress and Keynes style investments. We are talkings billions of euros here, and a big impact on the economy.
There are also cross-sensitivities:
  • OPTA can hurt KPN by delaying its decision making. Not a very complicated task for a government agency. See above: KPN wants to move fast in order to stop the bleeding.
  • KPN can put OPTA partly out of business by staying under the radar (by having a minority interest in the joint venture). The minority interest would imply that the entire access network wouldn't be regulated anymore. This would have huge Europe-wide consequences, which is why the proposed Reggefiber deal is tracked in every telco boardroom and NRA agency in Europe.
So, what do you get when you put all these wonderful ingredients together? Answer: a politically negotiated deal:
  • OPTA assigns Reggefiber FttH SMP (significant market power), which is legally highly contestable, in order to be able to regulate it.
  • KPN accepts this, in order to get NMa approval (for which OPTA gives input, which in itself is legally contestable too). KPN also wants OPTA to copy/paste the Reggefiber business model to arrive at the proposed wholesale prices and caps.
  • The call option plays a crucial role. It implies that GNA (Amsterdam) and AFC (Almere) may remain outside the joint venture, because KPN/Reggefiber only has a minority stake.
One last word. In case you were wondering how OPTA came up with the EUR 2,50 additition to Reggefiber's line rental price to arrive at the proposed wholesale caps: there was no financial modelling involved. Just politics.

Teliris: take a look at telepresence

Benoit had an exciting experience of being in a telepresence conference. The equipment was put together by Cisco, probably the market leader. Interestingly, I got in touch with a competitor, back in October: Teliris. The company is privately held (Fidelity Investments holds a stake), but its site is quite informative. Also, the CEO Marc Trachtenberg has a blog ("Before you even think it – NOOOOO Cisco did NOT start the telepresence industry. A company called Teliris did (...).")
To add to Benoit's story: I posted before on the telepresence market and put together a number of market players, taken from this article. Besides Teliris and Cisco they are mainly Tandberg, Polycom, LifeSize and Telanetix.

The people at Teliris threw some interesting info at me:
  • Over the past three months (that would be Q3) meetings increased by 20-25% (Teliris also manages the service, so they have insight into these data).
  • The average use of the system at Teliris' customers is an impressive 125 hr/mo, or 6 hr/day (for comparison: the average use of videoconferencing is 10.5 hr/mo).
  • Check out this 8 minute YouTube video (embedded above) done by Marc and available on his blog too (the last minute or so is the coolest!). He demos the Teliris InterACT TouchTable ("no, this is not the Microsoft surface table"). Really amazing to see how he pushes a document across the ocean.

Toward sharing a single infrastructure

Our fifth poll has ended: how many infrastructures do we need for proper intermodal competition? The question was meant to be taken really in a very general sense, but focusing on access networks.
Possible answers went simply from 1 to 5 (or more). Here are the results, which are as interesting as you want them to be:
  1. 48%
  2. 8%
  3. 24%
  4. 4%
  5. or more: 16%

If we go by the winner (48% voting for a single infrastructure), the conclusion could be: we only need one FTTH network; and let's start unbundling those mobile networks too! Obviously, we need some rules to make a monopoly work, however.

Thursday, November 27, 2008

KPN versus Telstra: driving volumes versus prices

KPN's FTTH proposal and Telstra's NBN bid couldn't be further apart. It's open access thinking (driving utility rates and thus volumes) versus denying that telecoms is a volume business (charge as much as possible for the service). Of course, it's also FTTH versus FTTN.

Let's hope the Australian contenders (Optus/Terria, Acacia, Axia NetMedia) will be able to put aside their differences and join together. After all, they are all open access aficionados as well.

Telstra is looking to charge 30 AUD/mo for a 1 Mb/s connection. How does that compare to KPN? We will have to make some assumptions. Take a look at the layered network:
  • Passive: to be regulated. Wholesale prices: 12-15 EUR/line/mo (capped at 14.50-17.50 EUR/line/mo, and subject to CPI corrections), excluding VAT. This all derives from the current Reggefiber pricing.
  • Active layer: no regulation, but price discrimination is not allowed.
  • Services: digging around at OnsNet Nuenen, OnsNet Eindhoven and GNA (Amsterdam) should provide an idea of where retail prices may end up, since they are each munifiber projects with Reggefiber involved. A triple play costs anywhere between 45 and 125 EUR/mo. A wide margin, but the high-end is somewhat of an outlier. KPN so far has more expensive triple play packages available: 65 EUR/mo, which includes a 30/3 Mb/s connection, and all the way up to a very asymmetrical 60/6 Mb/s service for 110 EUR/mo. This grants KPN some room to drop its prices once the service is launched nationwide.

It looks like triple play retail pricing will be in the 45-65 EUR/mo range, with KPN probably using its brand to charge tariffs at the upper end. Still a great deal compared to Telstra's very expensive single play.

Sunday, November 23, 2008

Wither FTTH regulation?

Last week, KPN's FTTH plans were leaked - possibly to test investor appetite for large-scale FTTH investments. Officially, they are testing demand and will decide 09H2 to go either FTTH or FTTC. Whatever is the case, the coming week will be eventful. Not only does it have Australia's NBN deadline, OPTA (the Dutch NRA) will publish a proposal on rulemaking regarding FTTH Monday night (at 7 PM).

It will be very interesting to see how they plan to regulate this huge effort, that could entail re-monopolisation of the market if it is not regulated well enough.

We have been in favour of structural (ownership) separation to deal with the two basic issues at stake: competition and investment. However, KPN has been able to stave off any threat like that by offering open access to rivals. It was also helped by the fact that competitors' commitment to the Dutch market has always been a bit uncertain.

Now James picked up on one of the basic reasons to go to structural separation: attract outside funding.
KPN will have 41% of the Glashart joint venture, but Reggefiber's 59% should not suggest that it will shoulder the majority of the investments because it simply can't. Enter third parties ...
If KPN is allowed to spin-off network assets into the joint venture, it will start to look more and more like the Singapore way.

If Telstra is structurally separated, there is no more Telstra ...

Conventional wisdom is: an incumbent building a NGN equals re-monopolisation; it therefore must offer open access to rivals. But if it has to offer open access, it has no way of earning a decent return on NGN investments.

So much for conventional wisdom.

Just a few days left for the National Broadband Network (NBN) RfP deadline (November 26) and Telstra is rattling its guns. No structural separation, or else we won't bid. It looks like Telstra wants to have monopoly-style rights, or else it is afraid it will not be able earn a decent return.

Let's poke some holes.
  • If Telstra is structurally separated, THERE IS NO MORE TELSTRA (which is something that must be a worrying idea to Mr. Trujillo). I'm quite sure the Netco that will arise from the ashes will be more than happy to take a AUD 4.7bn grant to expand its network.
  • Open access is for the good of everybody. The more the merrier. More service providers means: more services, more marketing dollars, more take-up, higher utility rates.
  • It would not be good news if Telstra's existing network assets were excluded from the NGN. There would be excessive network duplication.
  • They really need to take the plan a little bit further and aim for FTTH instead of FTTN.
The solution is quite simple - on the drawing board, at least. Put all those network assets and available funds together (Telstra, Terria, Acacia, Axia NetMedia); invite third-party investors in (telecoms stocks are hot these days); bring in government funds (Keynes-style).

Put differently: if Telstra refuses to bid if it is structurally separated, then the only way to make sure that Telstra's network assets are included in the NBN is to first structurally separate the company.

Thursday, November 20, 2008

FTTH depends on regulation

The word is out, but no big surprise for our readers: KPN and privately held Reggefiber will build out FTTH nationwide in the Netherlands, spending EUR 6-7bn over 5-7 years. Vincent Dekker gets the credits for digging in. KPN and Reggefiber are planning a joint venture Glashart (originally Reggefiber FttH), with KPN taking a 41% stake + option to a majority.

Just a few comments/clarifications:

1. Conditions:
  • NMa (competition authority) approval: without it, there's obviously no deal. Also, the combo would risk to be regulated at the retail level. That's a no-go too. Approval seems to be close.
  • OPTA (the NRA) regulation: due Monday, open for a brief two week consultation. KPN and Reggefiber will realise they have to play nice, or else risk to be structurally separated.
2. Numbers:
  • Capex: 1000 EUR/home seems reasonable for 'just' the passive network. No more DSLAMs, no VDSL2 - that saves a lot too.
  • Timeframe: current run rate is 200k homes/annum, with room to move to 600k. That would still require 12 years for the entire 7.2m homes. I suppose they will target 75% or so, and see about the rest later (wireless?).
More next week.

Friday, November 14, 2008

Axia NetMedia: take a look

Axia NetMedia reported Q3 results. They are leading the OpenNet consortium (with SingTel and a number of local firms) that won the NetCo business (passive fiber network) for the Singapore FTTH network (NGNBBN, if you will).

Axia takes care of planning, designing and operating open access broadband networks. It's a pretty small company, but it has some reasonable growth, positive earnings, no long-term debt and a pile of cash.

Some interesting points from the release:
  • Axia is also qualified to respond to the second RfP, to build the active layer (OpCo). The network is supposed to be full open access and vertically/structurally separated. I suppose the government deal with these conditions by limiting anybody to a maximum of 30% consortium share. Submissions are due December, the winner will be selected during 09Q1.
  • Axia also intends to bid for the NBN in Australia. Responses are due November 26 and the government has 8 weeks to select the winner. Axia expects to respond during 09Q2.
  • Axia has 4 proposals oustanding in France. Decisions are expected by the end of this year.

Thursday, November 13, 2008

FTTH is coming to New Zealand

Good times are coming to New Zealand. The National Party won last weekend's elections, so now the NZD 1.5bn plan to bring FTTH to 75% within 6 years is becoming a reality. The government will help to put together PPPs (public/private partnerships) to build an open access multi-layered network, in order to have maximum competition and "avoid excessive duplication of infrastructure". The government will launch a tender and Telecom NZ will participate.
To quote National's spokesman (and possibly the new Minister of ICT in John Key's cabinet) Maurice Williamson:
"... the government builds a road and everyone has the right to drive on it. Fibre optic is the road system of the 21st century".

Communication 2.x

How long has it been since a great new Web 2.0 service was launched - or bought for a crazy amount of money? Has innovation come to a grinding halt?

Take a look at Twitter or LinkedIn; seem like the latets fads, but they have been around for quite some time (Twitter mid 2006, LinkedIn launched May 2003).

Anyway, innovation is still happening. Here is some (getting them to work isn't always easy):
  • Mjoy. Free SMS to any fixed or wireless phone. Ads will appear on the mobile portal, not in any message.
  • Dial2Do. Launched April 2008 in the US and comes to 18 more countries today. Sign up, dial a 'local' number and speak. Dial2do will translate your message into an email, a Twitter message, an SMS, and more.
  • Gmail voice and video chat. Goes without comment.
  • YouMail. Personalised voicemail greetings, and more.
  • Yotify. A little like Google alerts. Create targeted 'scouts' that'll send you hourly/daily email updates from specific sites.

Wednesday, November 05, 2008

The battle of the ISPs

Yesterday at my new employer an interesting newsbit was commented on by one of my colleagues (it's in Dutch, so sink your teeth in it, or alternatively try to get through this Google translation). Quite interesting, how ISPs have the opportunity to distinguish themselves from the rest by providing higher quality IP video streams. Of course, the question remains if ISPs have sufficient pricing power (industry sources tell me ISPs typically pay 3 c/month/channel/subscriber for most digital channels, but as much as 37 cents for the catch-up channel Uitzendinggemist).

Whatever the case is, there seems to be yet another opportunity for Daily Media (the PC-to-TV set-top box company, full coverage here). Working with national TV and joining forces with Daily Media, ISPs could be distributors of the Daily Media box and make everybody happy in the process.

Paul Budde for President

The battle over Australia's National Broadband Network, including an AUD 4.7bn subsidy, is drawing to a close - and it's not getting any prettier. Telstra wants to bid, but threatens not to, should the government structurally separate the company. The main opponent is the Terria consortium, which has had a few defections recently and seems to have trouble (I wonder why) getting it's financing in order.
Yesterday, at the Broadband World 2008 conference in Sydney, Telstra played hardliner once again by not taking part in a panel, apparently for the simple reason that Paul Budde was there too - and as chairman, mind you. Budde is a firm believer in structural separation, which sort of (does it?) explain Telstra's actions. I have to give credit to Paul, not just for his views, but for taking an Obama-esque stance at the conference. Writes iTnews:
Budde implored delegates not to ignore or ridicule Telstra in the remaining part of the process. "It's not in our interest to ignore Telstra," he said. "Telstra will still be a critical part of telecommunications in Australia. We all need to sit down and address the seriousness of the issues brought about by the NBN and the ways to go forward." Hear hear Budde!

Sunday, November 02, 2008

Update: FTTH and new job

Tomorrow I will start my new job at Telecompaper. It will be very exciting to board a mothership outside the financial services industry.
It remains to be seen what will happen to this blog. Posting may be more irregular, but one thing will not change: independence.

Also, it's a good time to publish my updated and expanded FTTH & Broadband database. Do take some time to flip through it. I hope it helps.
It has 11 different sheets, which I think are pretty self-explanatory.

Thursday, October 30, 2008

SMS: more innovations

We have reported before on innovative SMS services. Here are some recent additions:
  • SMS with Attachments: a text message is sent, after which the phone rings and a multimedia message is played. Launched by China Unicom and China Mobile (technology from NMS Communications, built by ChannelSoft).
  • Voice over SMS: short audio messages. To be launched by both Comium (in Liberia and Sierra Leone; technology from Apliman Technologies) and Comcel (in Haiti, technology from Kirusa).
  • Ads over SMS: pushing location-based ads. Launched by StarHub in Singapore.
  • Payments over SMS: Launched by Rabo Mobiel (a Dutch MVNO on the KPN network).

The end of BPL?

In case you were wondering what ever happened to BPL, check out this piece on Ars Technica.

One of the early real-life deployments was in Manassas (Virginia), but now the city has taken over the network, with a good chance of reducing it to a Advanced Metering Infrastructure (AMI) system. Earlier this year, a Dallas network run by Current Communications (which attracted funding from Google) and DirecTV, was sold to the city's utility.

It looks like BPL has no chance between the entrenched DSL/cable networks, and the inevitable rise of FTTH. (But then of course there is UETS ...)

Poll #5: clarification (?)

Perhaps my latetst poll needs some more explanation (apart from what we did in this post).
First of all, the question (how many infrastructures do we need?) relates to access networks, be it fixed or mobile.
Next, it requires a sort of high-level view of competition. OPTA says "two is not enough", referring to a telco/cableco duopoly. So then, how many networks will suffice? Or will just one do (and share it, to avoid capital destruction).
To round off: to support the case for four: Swisscom decided to roll out FTTH with four strands of fiber to each home (see slide 3 in this presentation), for easier competitor access (now of course things get complicated: is this one network, or four?).

Pick your gut feeling!

Tuesday, October 28, 2008

Do incumbents need protection?

"Europe's leading telecoms operators have called for a softening of regulation across the sector, to encourage investment in next generation infrastructure in the face of the credit crunch", reports "Aggravated by the ongoing financial crisis, slowing investment trends could lead to a further delay in the deployment of high speed broadband access networks, further affecting Europe's competitiveness. (..) If regulatory policy continues to constantly focus on pushing prices down, ever more capital will be withdrawn from the industry. The most recent example is the move to cut mobile termination rates in the EU at an even lower level than costs. If this trend continues, it risks pushing the ICT sector into an economic downturn further deepening the recession of our global economy."

Poor incumbents (united in ETNO)! So now they want protection, not only from us, but from their competitors as well. After all, wasn't regulation invented to lower prices, enhance service levels and increase choice? So now they relaunch their extortionist speak: we will lower investment levels.

Last time I checked, however
  • the European telecoms markets were still heavily skewed toward the incumbents. BIPT, the Belgian NRA is ordered by the EC to see to it that Belgacom lowers its fixed line voice rates; and VATM showed (slide 15) that Deutsche Telekom still controls 78% of the German fixed-line market.
  • the EC was pushing for mobile termination rates to come down from irrationally exuberant levels, but still above cost (1-2 c/min), if things go as Arcep proposes (to about double that amount in 2010).
  • NGN investments are supposed to help stimulate GDP growth.
But there was some sense in the story as well: ETNO calls for symmetric obligations for duct access. In other words, not just the incumbent, but altnets too should allow access to ducts. Nothing wrong with that, of course. Perhaps ETNO is even hinting at taking this 'symmetry' one step further: access to cable ducts.
Who knows.

Monday, October 27, 2008

UETS: beyond BPL and service bundling

The power guys just won't give up. It has been terribly quiet on the PLC/BPL front: Dallas is scaling back, and progress is only being made in developing nations (Ecuador, India, Brasil), or so it seems.
But now (well, the patent was filed in 2005) we have UETS (Universal Ethernet Telecommunications Service), as per Jose Morales Barroso's paper in the IEC Ocober newsletter. A interesting read!

To be sure, this is neither BPL nor 'just' a new business model (marketing a bundle of broadband and power, as Bill St. Arnaud proposes). This is much more profound integration. Let's wait and see how it develops.

1. UETS in general terms: the Intelligent Grid
  • "The total integration in only one shared physical infrastructure (e.g., towers, poles, conduits, wires), with copper cables for electric power and fiber optics for telecom, would be an exceptional improvement. The information and communications systems need the electricity, and the electric power grid of the future needs the information andcommunications technologies (ICT). Hence, the advantages of integrating them in a single infrastructure are very, very clear."
  • "A baseline technology, the Universal Ethernet Telecommunications Service (UETS), is proposed for converged services delivery over a single 'intelligent grid', a central role in meeting the world’s growing electric power demands and broadband adoption."

2. Whence UETS: to save energy
  • "The telecom technologies that form the Internet waste a huge amount of electric power, and that amount grows exponentially with the number of users and their transmission speed. At the same time, clients and servers increase in size and performance, consequently increasing the consumption. In the United States only, all electronics expend no less than 250 TWh per year, equaling more than 180 million tons of CO2, roughly equivalent to 35 million cars. (...) The practice of leaving PCs and workstations 'always on' consumes yearly 19.8 billion kilowatt-hours in the United States, enough energy to power 1.9 million homes. Individuals, institutions, and companies can help minimize wasted electricity, save money, and reduce CO2 emissions by as much as taking 18 million cars off the road!"
  • "... the net efficiency for the entire electricity path: from the grid to the final information process is smaller than 0.6 percent, and from power sources is less than 0.2 percent. This means that each watt employed for the information process needs more than 500 watts from primary energy!"
  • "We live in a kind of illusion, thinking about diverse 'achievements' (e.g., social, technological, political) when the crude reality is very different: we are consuming, in an outrageous and unjustifiable way, the planet’s resources and, at the same time, destroying
    our environment. We cannot have endless growth in consumption, wealth, goods of all types, or anything in a limited system as planet Earth: it is unsustainable."
  • "Connecting renewable and cleaner small-scale local power generators distributed throughout the grid will become more economical, taking stress off the grid, improving energy efficiency, reducing the need for transmission capacity, and providing secure regional power supplies."
  • "(...) an advanced telecom service would move information instead of people or things, drastically reducing the need for transportation."
  • "To manage power demand, the new intelligent meters report moment-to-moment power usage digitally to the utility, through the UETS network, and cycle up and down appliances in response to grid needs and signals. This enables variable pricing, providing economic incentives to shift power use between high- and low-demand periods. Home appliances containing onboard intelligence reduce demand when receiving signals that the grid is under stress or activate appliances when power rates are lower. That can take pressure off overloaded grid infrastructure and power costs."
  • "A very interesting application is the connection of hybrid electric cars to the electric network - a product known as plug-in hybrid electric vehicles (PHEVs) - and making them an integral part of the grid, a concept known as vehicle-to-grid (V2G). (...) Smart management systems could provide additional reliability using the storage capacity of the PHEV by reversing the power flow from the battery to the grid during peak periods, using the battery’s stored energy to provide power back to the grid in order to meet peak demand, rather than adding new generating capacity. It is even possible to start the combustion engine 'in a stopped car' in critical moments of consumption to supply energy during blackouts or complement the conventional generation."
  • "Telework (...) means the death of distance. Work is not a place; teleworkers drive information, not cars, to work, saving lives in traffic accidents; reducing transportation, fuel consumption, and pollution; increasing work/home life balance; and reducing stress."

3. Comparison: simpler, better

  • Instead of a more traditional form of layering (physical, data, transmission, presentation, applications, etc.) UETS collapses the internet into 3 layers: 802.3, the IEEE standard for ethernet is the primary medium (PHY/PMD); 802.3 and 802.2 for the next one (MAC and LLC); and finally internet applications. The technology involves Banyan networking for interconnection. Further explanation of the protocols is here.
  • The technology is ethernet-based. Switches replace routers. "... evolution from 'computer networks' to the 'computer on net.' When the network is as fast as the computer’s internal links, the machine becomes a special purpose appliance across the Net."
  • "... opens up possibilities for micro-grids that supply DC power instead of AC, a tremendous energy and cost saver since digital equipment, which typically runs on DC, contains expensive, energy-wasting power conversion equipment. DC–powered systems waste less electric power, generate less heat, enable more electronic equipment density, and can cut power losses by 50 percent."
  • "This system is the proposal for the convergence of computers, Internet, broadband, mobility, and telephone networks into something extremely simple, much faster, and less costly, with more capabilities and integrated services over a shared, unique network infrastructure."
  • "The bandwidth offered is symmetrical, up to 10 Gb/s today and 100 Gb/s in the near future."

BBC 2008 and a new poll

Broadband Cities 2008 was a great opportunity to catch up with my fellow Fibre Ring bloggers: Costas (our host), Benoit (who did a great job on FTTH open access and services) and Stefano (via Skype). Costas provided this link to access the presentations.
Several towns, districts and countries presented either their broadband (Malta, Trikala) or their FTTH plans (Almere, UTOPIA, Seltjarnarnes).
We had some pretty good discussions with people such as Paul Larsen (UTOPIA), Thomas Martin (Cisco), Bart Nieuwenhuis (Exser, to be launched December 18) and Vassiliki Apostolopoulou (Telecompare). They covered quite a wide spectrum of FTTH related topics:

1. Network
  • Technology, topology, protocols, standards
  • Benefits
  • Comparison to DOCSIS
  • Cost (opex, capex)
  • Digital divide
  • In-building wiring, network sharing
2. Wholesale services
  • Layers
  • Open access
  • Regulation, separation
  • Dark fiber, bitstream access, unbundling, wholesale broadband access, IP access
3. Retail services
  • Usage v. availability, Nielsen's Law
  • Net neutrality
  • VAS: internet access, IPTV, VoIP, e-learning, e-health, gaming, video conferencing, surveillance (Ericsson's Crister Mattsson quoted the case of Sweden, where he identified 242 services types (slide 22), and Stockholm, where 155 service providers are active (slide 17 of this presentation, earlier this year in Greece as well)).
Benoit's presentation centered on this prerequisite: the customer should be serviceable by many different service providers (BSPs) at the same time. His solution: opening up the IP layer for wholesale services.
But then you can ask the question: don't all these BSPs want a choice of wholesale operator? And so the question goes down all the way to the physical layer.
Which brings me to my new Poll: How many infrastructures do we need?
It's the perennial question, and nobody really seems to have the answer. Now, the answer probably doesn't exist, but I would very much like to see how people feel about this question in a very general sense. Let me provide some food for thought:

The case for 1:
  • It's a dumb pipe anyway.
  • It's expensive as it is (FTTH), so let's just build one and share it. Once operator X puts a network in place in any town, the chance for operator Y to replicate it is near zero.
  • Even in mobile are operators starting to share more and more of their infrastructure.
The case for 2:
  • For those of you who think that the US is a healthily competitive market: this is a telco/cableco duopoly. Put differently: intermodal competition (truly infrastructure-based) is what regulators should aim for. There is no long-term point in intramodal competition (such as LLU).
The case for 3:
  • OPTA's slogan (the Dutch NRA) is: 'Two is not enough.' In other words, the telco/cableco duopoly doesn't work. Adding compulsory open access to the telco network (LLU etc.) leaves the market asymmetric, so now OPTA is aiming for cable open access as well. But is intramodal competition truly a form of infrastructure-based competion, or is it in fact more of an enhanced form of services-based competition?
  • In Germany, investors have been speculating about the options for the #3 (E-Plus) and #4 (O2) operators to merge, in order to create a viable competitor against T-Mo and Voda. Many other mobile markets, including the Netherlands, have three players.
  • SingTel is opposed to structural separation on the grounds that there would be enough intermodel competition: telco, cableco, 4G.
The case for 4:
  • The British mobile market had four players for a long time, until 3 UK launched. However, many remain skeptical about Hutchison's chances in the long run.
  • The US mobile market has four more or less nationwide operators: AT&T Mobility, Verizon Wireless, Sprint Nextel and T-Mobile USA. In addition, there is a choice of one or more regional operators, but it looks like these will be absorbed by the national players in the long run.
  • ARCEP, the French NRA, is very keen on issuing a #4 mobile license in order to increase competition levels. The same goes for Portugal, Albania, Hungary, Bulgaria, Slovakia and South Africa.
The case for 5 or more:
  • In rare cases are regulators trying to get as many as 5, 6 or even 7 mobile operators to build out networks (Burundi, Ghana, Sierra Leone).

Wednesday, October 22, 2008

Incufiber: presentation in Greece

Tomorrow I will be joining the Broadband Cities 2008 conference in Greece. Here you have the presentation, but it will only make sense if you come to Greece (Trikala, Thursday at 11:30 local time). Or invite me to come for a 20 minute talk.

Monday, October 20, 2008

Kabel-X: pull out your coax

The Austrian company Kabel-X has landed in the US. It now targets MSO that wish to replace coax with fiber in FTTP deployments. Before, they targeted telcos with its proprietary technology: replacing the inside of conduits without digging.

Health needs ICT

McKinsey talks about the growth of the healthcare market (article here, free registration). It has exceeded GDP growth by 2 pp for 50 years. This underscores the importance of bringing ICT to that market. See my earlier article on KPN Healthcare.

Will Telstra bid if it is structurally separated? Betcha!

Our fourth poll has ended, but to no obvious conclusion. A ridiculously small sample was heavily skewed toward structural separation (65%), but functional separation wasn't completely off the table (35%). Operational separation (5%) and accounting seperation (which you couldn't even vote for!) are excluded going forward.

The topic gets a lot of press these days, mostly in New Zealand, Australia and Italy. Check out this Arcep document for an introduction to separation.

Here is why we believe in structural separation.
  • In a world of intramodal competition on the telco network (and intermodal competition between copper and coax) there will never be full equivalence between all players (incumbent, unbundlers, resellers, etc.). As much as PTT's want symmetry between telco and cableco competition (i.e. open access to cable networks), they should also allow for symmetry on the copper network. There will never be true symmetry if one service provider also owns the network, and the others don't. No matter what they say, the incumbent will always be at an advantage.
  • Look at it from a synergy point of view. The incumbent reaps all the synergy benefits stemming from owning both the network and a service provider. These advantages should be equal and shared. And hence, all incumbents cry foul when confronted with the threat of being structurally separated. But that's the whole point, brothers and sisters: the regulator should focus on simply making PTT's smaller and creating long-term competition from viable altnets.
  • KPN has successfully staved off structural separation. On the one hand, this is due to its full portfolio of wholesale services and a certain co-opetitive stance toward resellers. On the other hand, the world is facing next-generation access investments (i.e. FTTH), which are not only expensive (to be carried by a company the size of the incumbent only) but also create huge regulatory uncertainty. In the Netherlands, hardly anybody is left to consider serious and long-term competition (apart from cable). Orange Broadband is now owned by T-Mobile and put up for sale; bbned and its sisters can hardly be taken seriously because parent company Telecom Italia has a lot on its mind; and Tele2 seems to be withdrawing from western Europe altogether.
  • Only when structurally separated can the telco appeal to the right investment communities: the dividend aficionados can buy the network, retail minded investors can focus on service providers (higher risk/return profile), etc. Also, only in this way can the network attract subsidies or create public/private partnerships. In a way Telstra acknowledges this: if it is structurally separated, it will not bid for the National Broadband Network contract and subsidy (AUD 4.7bn). But once separated, the network company will surely bid for the contract; I will eat my hat if it doens't!
We have looked very hard and closely at all the arguments against structural separation, but none really seems to make sense. Yes, it will be quite disruptive. And it will costs a few pennies. But to say that it would take away any incentive to invest just isn't very 21st century thinking. Finally, to say that you want to own the network (to generate the cash and allow you to pay fat dividends) is not very clever in light of the above (we want equivalence and symmetry, right?).

To round off, we want to share some fun related to the topic - unless it brings you to tears, of course.
Telecom Italia is one of those companies that may face structural separation and it will come as no surprise that Tiscali is all in favor. FastWeb takes a different position: they think it's a bad idea! Functional separation would suffice. But wait a second: isn't FastWeb 82% owned by Swisscom, another PTT?
With hindsight, that calls for a round of applause for Optus (the Australian subsidiary of SingTel). It openly called for structural separation of Telstra, even if it's parent company was fighting the same fate in Singapore. Or is it the other way around: was SingTel being a hypocrit?

Friday, October 10, 2008

Daily Media: A Closer Look

Here is my second review of the Daily Media set-top box, United Content Distributors' main product. You can choose between reading the story below, clicking here to view the Google Docs original, or mail me for a PDF version.

Keep reading, if you want to know why I personally think this box, traditionally regarded as an element belonging to the fixed-line telecom world, should perhaps appeal to ... mobile operators most of all!

(Full disclosure: I have no personal interest in this company or product.)

Daily Media: A Closer Look

Last week I paid a visit to the UCD headquarters in Wijk en Aalburg, a small town in rural Holland. UCD, United Content Distributors, is the company behind the Daily Media set-top box (view our complete coverage here). It was very enlightning, all the more because 'yet another box' is a hard sell, not least because of the difficulty of explaining how and what it is in the first place.
The current state of the economy is not really helpful right now, but I am impressed by the capabilities of this box, its ease of use and its revolutionary business model. So, here is follow-up review, expanding on my first one. I really hope it will grab some attention, because I am convinced it can be a great tool for both users and potential partners with a strategy reaching beyond today's turmoil.

Personally, I am most intrigued by the possibility of UCD teaming up with a mobile operator. No quad play mumbo jumbo, but a move away from commodity access services. Anyway, here are my findings from my conversations with executives of the company. Read on!

1. What is Daily Media?

The shortest way of describing the box is to say that it is a media center for place-shifting internet (broadband) content from the PC to the TV. But there is much more to it. It would be served better by putting it this way: On the input side, the box combines broadcast TV with broadband internet content. In the process, it adds interactivity, targeted personalized advertising (please, no in-program stuff), a payment system and several (non-core) add-ons. It is controlled by a 'multi-apparatus' remote control and menus on the TV screen. It doesn't have a hard disk, but all sorts of hardware can very easily be connected (there are many output slots), including your hifi.
As to the broadband content: this consists of standard video stuff (like YouTube), and also includes pay-per-view VOD content from multiple sources and a range of narrowcasting channels (such as Rabo TV provided by AAA-rated Rabobank). Importantly, the highly popular VOD content Uitzendinggemist (catch-up TV, comparable to BBC iPlayer or Hulu), provided by Netherlands Public Broadcasting, is freely accessible as well as access (pay-per-view) to live (incl. sports) events. Further, broadband TV channels make up a total of some 500 available channels.

You can think of it as an hourglass, with Daily Media sitting in the center (thanks for making this picture, Thomas!):

2. How to bring it to market?

How does one get a box like Daily Media into the homes of millions of consumers, i.e. the target of the Wijk en Aalburg-based company? Not an easy task. It appears that UCD has made a number of smart decisions in paving the way for successful mass distribution:

  • The box is free to consumers.

  • From a content point of view, it really adds 'happiness' to the consumer's life. More content, no more trips to the video rental store, being able to pay-per-program instead of paying yearly subscriptions, etc.

  • It really is a plug & play tool and the menus are straightforward.

So far so good. I expect consumers will be quite happy to receive and utilize the Daily Media media center. However, that shifts the problem (i.e. the cost of the box) to any potential partner. Remember, UCD is the platform provider and others will have to carry the financial burden (the production cost for the box is approx. EUR 150).

I believe UCD has produced a great product that should enable many potential partners to find the budget for this strategic tool.

  • It is a great marketing tool for partners, especially for companies who have subscribers and feel the need for a churn-reducing or loyalty-stimulating tool. Markets are opening up to competion, which makes the availability of Daily Media very convenient. Think about it: there are a lot of companies out there who have subscribers, members or even just loyal customers: (health) insurance companies, utility companies, video stores, pizza delivery chains, car drivers associations (such as ANWB in the Netherlands, AA in the UK, or ADAC in Germany), newspaper and magazine publishers. Or even gas stations, grocery stores and other retailers (who all have their own loyalty programs). In the Netherlands, public broadcasting companies can be added to the list because they actually have members.

  • It allows existing video providers to enhance their product offering. UCD very carefully avoids becoming a competitor to your local cableco, satco, IPTV or DTT operator in case of retransmission (this story also contains an instructional video for hooking up your PC to your TV, but then of course you miss out on all the Daily Media fun).

  • It allows new entrants to add video to their existing bundle of services. I haven't mentioned mobile operators so far, but think of the trouble they are going through in becoming a LLU operator and trying to enter the IPTV market (such as Orange UK). Forget about all that. Broadband and broadcast TV are commodities, right? So why not leave that up to the consumer and position yourself at the next higher level in the value chain: inside the box, where you will get the chance to access a whole range of new revenue streams.

  • It allows content providers to establish a more or less direct relationship with consumers. This is possibly the most eye-popping characteristic of the box. The value chain is collapsed considerably and the payment system (a virtual wallet) allows consumers to directly access your content.

3. How is Daily Media different from other boxes?

The one feature that distinguishes Daily Media from competitors such as Sony, Apple, Sezmi, My Broadband TV and others is its business model: the box is free to consumers and UCD will only take a cut from the content it adds. It's a platform for sharing with all sorts of partners. It offers a payment system (through co-branded Visa-card provider LaSer Financial Services, which also brings potential partners to the table, most notably several 'tier 1' retailers in the Netherlands). Further, it uses a multi-server model; certain content is streamed from UCD's own datacenter, and most of the “partnered content” is streamed from their own servers.

4. What's new?

Several things were added to the Daily Media story, since my first review. In this sense, it reminds me of Sling Media and its Sling Box, which maintained a good level of innovation after the first product launch (see this story: "We need more companies like Sling Media.").

  • Preferred available bandwidth for a proper viewing experience is 1.5 Mb/s (previously 540 kb/s).

  • They built in a DTT tuner (just like I suggested, making the box a good fit for KPN's Digitenne offering, whose growth is leveling off (see results October 22) and could use another stimulus).

  • Several pilots have started (at OZB, the Rotterdam munifiber network; at Kabel Krimpen, a small MSO; and at a Van der Valk branch, a nationwide hotel group).

  • UCD has signed an agreement with LaSer (see above) to distribute multiple thousands of boxes, starting in the coming months. A similar agreement was reached with Holland’s largest video rental chain ERG to distribute (sell) Daily Media via their nationwide network of video stores (such as Videoland and Moviemax)

5. What's next?

Of course, lots of developments are in the “cooker” over in Wijk en Aalburg:

  • Premium (pay-per-view and subscription) broadband channels. I understand that UCD is aiming for very generous revenue sharing deals in this area.

  • A search engine, in combination with an EPG, for personalized media recommendations, built into the TV menus for an easier way of finding channels.

  • A virtual DVR, storing content on web-based servers, since the box has no hard disk (that rings a Cablevision bell).

  • Video calling.

  • Expanding the offering of games (including premium games).

  • Several add-ons, including a 'butler service' (already available on the internet: and Daily Care (which aims to be a 'switchboard', connecting all players in the national healthcare market).

  • Real-time energy metering through an on-screen display. Consumers can keep direct track of the actual level of energy consumption, at any given moment. Wouldn't that be a neat tool for your utility company, as they intend to make us consumers more and more energy conscious?

6. And more?

Daily Media is an intriguing product. I can see several other applications.

  • Hardware v. software. Daily Media is a hardware platform, but I can't see why it couldn't be a software platform. Such a transition could simplify the 'Invasion of the Living Room', even more than including a DTT tuner (see above). After all, bundling the platform into an existing set-top box would allow Daily Media to sail into the living room on the back of an existing cableco/boxco relationship. ActiveVideo Networks, seems to be just that, and forged a deal with Time Warner Cable to enter Hawaii.

  • Femtocell. If UCD succeeds in partnering with a mobile operator, the next step I would expect is the inclusion of a femtocell in the hardware. Femtocells offload traffic to the subscriber's broadband connection. Why not do some more piggybacking on the provider of the dumb pipe?

Tuesday, October 07, 2008

Turning point or Kiss of death?

For those of you already having enough of all the financial turmoil, take a look at the world of science instead. There's a bunch of Nobel laureates out there, and this snippet particularly caught my eye: Springer, the German scientific publisher with a few half-hearted open access publishing trials to its name, is buying BioMed Central, a pioneer of open access publishing.

Obviously, OA in a science publishing context has very little to do with open access to telecommunications networks, but there is an interesting parallel here. It's kind of like KPN buying - well, what should I fill in here?
What's more: it remains to be seen if the move is a step toward OA, or a way to bury OA alive. It wouldn't be the first time to see interesting start-ups be swallowed whole and never be heard of again ...

Monday, October 06, 2008

Update on separation, FTTH and 3-D

Here's a short update on some of the hottest topics around:
  • Separation. First of all, the Telecom New Zealand AGM rejected the election of the 'two Marks', put forward by Elliott International, to the board. They were in favor of structural separation, whereas Telecom right now focuses on operational separation and FTTN. A disappointing day, leaving the share price at a 16-year low ... However, good news related to functionally separated BT. The Register reports that it is considering outsourcing Openreach, putting the unit at an even longer arm's length. With Ben Verwaayen's departure to Alcatel-Lucent, it will come as no surprise that his new company could be a candidate for taking care of the job ... Finally, in Australia some people seem to be getting closer to structural separation as well, such as senator Minchin.
  • FTTH. Julio Linares, COO of Telefonica, spoke at Broadband World Forum Europe. Here are some quotes from Total Telecom: "We will have to measure content in zetabytes. It is difficult to identify future services, but ultra-broadband will facilitate more video, high-definition and 3D content, and more. Consumers are going to need more bandwidth. Demand for bandwidth on fixed and mobile networks will multiply at least by five in the next three years. To support this zetabyte era, we are going to need new infrastructure, we are going to need networks. We need new technology, but technology is not going to be the constraint. Investment is the constraint. To build fixed broadband across Europe, we need to invest €250 billion, but at present the industry is averaging investment of €50 billion per year. It will take 20 years to build just the fixed part of the new infrastructure. Do you think we can afford it? (...) of course, no. (...) We need to speed up. At this time of economic crisis, it is very important to take into account the weight of our industry on the whole economy."
  • 3-D. Philips has demonstrated 3-D VoD ('2D-plus-depth') at the IBC conference last month, branded WOWvx. It doesn't require special glasses, it's what they call an 'autostereoscopic display', basically consisting of an LCD display plus a lot of lenses covering the pixels. Both Deutsche Telekom and Orange have trialed the system. Even more recently, Philips showed its new Quad Full TV (thanks dear readers!), basically using the same technology but with everything brought together in a prototype TV.

Tuesday, September 30, 2008

Singapore and Malaysia: worlds apart

Singapore and Malaysia are walking two very well distinguished roads toward NGA (next-generation access) - and Singapore proves vastly superior, we believe. Not only do they aim for nationwide FTTH (OK, that would be a little easier than in Malaysia), the network will also be structurally separated and hence providing full open access. Malaysia on the other hand opts for an extended regulatory holiday for Telekom Malaysia: until 2015! In the process, it will create a huge digital divide.

To freshen up your mind, here are the specs (comments welcome to add more).

  • Name: Next Generation National Broadband Network.
  • FTTP, but apparently no decision on active (P2P) or passive (PON) yet.
  • Targets: 1 Gb/s, reaching 60% by 2010 and 95% by 2012; universal service obligation from 2013.
  • Passive layer (NetCo): to be built by OpenNet, a consortium of SingTel (30%), Axia (30%), Singapore Press (25%) and Singapore Power Telemedia (15%); maximum state subsidy SGD 750m. Wholesale prices: 15 SGD/mo for residentials, 50 SGD/mo for businesses, no connection fee. Furthermore, SingTel will be allowed/forced to spin-off ducts and other infrastructure into an AssetCo. OpenNet will lease those assets from AssetCo.
  • Active layer (OpCo): winner to be announced 09Q1 (bidders: BT, DT, SingTel, Axia, StarHub, MobileOne, City Telecom); maximum state subsidy SGD 250m.
  • Service layer (RSPs): to be announced.
  • Name: High Speed Broadband (HSBB) Project.
  • For high-density areas only. Target: 1.3m homes passed by 2012.
  • State to subsidise around 20% of the total cost ($3.3bn), Telekom Malaysia to be the rest.
  • No open access (regulatory holiday) until September 15, 2015.
  • More details 09Q1.

Consumer 3.D

Here's another development from video land, underpinning the need for more bandwidth: a 3-D camera from Fujifilm. For now a prototype, but it will be aimed at consumers, and will generate both stills and clips.

Video is not 'just' YouTube or IPTV. There is lots more to it, such as 3-D. Hence, what we are starting to see now is 1 Gb/s networks, whereas formerly 100 Mb/s used to be the benchmark. And that, dear reader, can only be done using FTTH.

Wednesday, September 24, 2008

New Poll: Structural separation?

My third poll (How to solve the broadband incentive problem) has ended, and here are the results:
  1. Usage-based metering: 9%
  2. Service-based tiers: 18%
  3. More bandwidth (FTTH): 31%
  4. Allow throttling: 15%
  5. Accept that access is a dumb pipe business: 53%
  6. Bundle access with other services: 25%
I suppose answers 1-4 are remedies of sorts, with FTTH fortunately by far the most popular. Answer 6 has surpisingly few proponents, or put differently: surprisingly many people still feel that access is good business (answer 5), despite the fact that it is quite 'dumb' (in other words: a utility service).

Of course, one could easily vote for all 6 answers since none of them excludes another, as a valued reader remarked.

Now, do take the new poll (see right).