Friday, May 30, 2008

UK - a review of BT Openreach prices

Review of Openreach’s charges

Ofcom today set out a review of the prices that BT Openreach can charge communications providers for its wholesale access telecoms services.

The review is designed to sustain and promote efficient competition in the provision of telecoms services for the benefit of UK citizens and consumers whilst continuing to encourage investment and innovation.

Openreach was created in January 2006 after Ofcom accepted legally-binding Undertakings from BT Group plc, rather than referring the company to the Competition Commission. This resulted in the creation of Openreach as an operationally separate business unit which provides wholesale access telecoms services to all communications providers on an equivalent basis.

When Openreach was created, Ofcom agreed the maximum prices that it could charge for its main services. These charges did not include an annual adjustment for inflation or other cost movements. At the time Ofcom said it would review the charges in the future and today’s publication marks the start of the review.

China - earthquake damage

MII: Telecom's Earthquake Loss Reaches RMB 6.7B

China's telecom industry is facing a loss of approximately RMB 6.72 billion due to the May 12 earthquake in Sichuan province, reports Sina quoting Ministry of Industry and Information (MII) vice director Zhao Zhiguo on May 30. As of 3 PM on May 29, 28,714 mobile base stations and 3,897 telecom bureaus and institutions had been affected by the disaster while 142,078 telecom posts had been destroyed, according to MII data. Telecom companies suffered eight deaths, 69 injuries and 34 disappearances from the earthquake.

OECD - Malware and the Internet economy

Malware: A Security Threat to the Internet Economy

Malware has evolved from occasional “exploits” to a multi-million dollar criminal industry. This report informs policy makers about the evolution and impact of malware, as well as the counter-measures being taken. It concludes with suggestions for greater co-operation across the various international communities addressing malware.

OECD - the economics of malware

Economics of malware: Security decisions, incentives and externalities

While originating in criminal behaviour, the magnitude and impact of the malware phenomenon is also influenced by the decisions and behaviour of legitimate market players. This working paper is based on qualitative empirical research into the incentives of market players when dealing with malware.

North America - wireless market saturation

North American Mobile Market Reaching Saturation

According to report from Frost & Sullivan, the North American mobile communications market is approaching saturation and mobile service providers will need to target the prepaid and credit-challenged segments to continue to increase market share. According to recent market analysis, the research firm says that both wireless and direct-to-consumer data services are key areas for carriers to sustain revenues.

In its report, Frost & Sullivan found that the North American market earned revenues of more than $159 billion in 2007 and estimates the market will only reach $180.6 billion by 2013. The challenge for mobile service operators is to target previously unserved or underserved segments, while sustaining average revenues per user levels.

“The prepaid segment still holds a lot of potential,” said Frost & Sullivan industry analyst Vikrant Gandhi, in a statement. “However, prepaid ARPUs are much lower, and designing and offering next-generation mobile data services to the prepaid segment presents a unique set of challenges.”

The research company said these challenges can be overcome by offering consumer and enterprise mobile data services, converged offerings, mobile advertising and loyalty programs. While targeting new customers, the report stressed the need to maximize revenue from existing customers by providing value through a mix of voice and data services.

In the United States, Frost & Sullivan said it expects a substantial increase in mobile data revenues, introduction and expansion of mobile multimedia and broadcasting services, significant uptake in mobile social networking, adoption of mobile advertising and search, greater use of mobile off-deck services and mobile banking and mobile payments.

Thursday, May 29, 2008

USA - 5GB download cap on mobile Internet

Sprint says 5 GB per month should be enough for most

After last week's news that Sprint confirmed its plans to implement a 5 GB per month overall use cap for its mobile broadband service, the company has seen a flurry of negative comments, and last weekend attempted a clarification.

"The vast majority of our current users (about 99.5%) shouldn't be affected" by the usage cap, reads a statement to BetaNews from Sprint public relations manager Roni Singleton over the weekend. "Whether it's the 300 MB roaming limit or the 5 GB limit on total data usage, that's enough data to meet the regular monthly usage habits of almost all of our customers."

The company will check customers' broadband usage once every three months, and "customers would have to exceed the limit in two out of three consecutive months to face termination," Singleton told us. Starting June 8, customers will be able to monitor their data usage online, so that they are fully aware of the amount of data they've used.

Usage caps will only be placed on consumer and individual accounts, she continued, and not business contract, corporate, government, or public sector accounts. "We're working on additional processes and pricing to appropriately address the needs of heavy roaming and data users among the corporate liable customer group," she added.

A Sprint statement issued last week reads, "The use of voice and data roaming by a small minority of customers is generating a disproportionately large level of operating expense for the company. We are enforcing the existing terms and conditions for phone plans."

Previous Sprint customers should now be receiving messages attached to their phone bill stating the pending data usage caps that go into effect 30 days after receipt of a bill. Starting next month, Sprint employees will begin calling customers to confirm they are aware of the changes made to the mobile broadband plan.

Several blog posts prior to the Sprint announcement inaccurately claimed the cap was designed to force users to get ready for Sprint's WiMAX 4G network launch, currently slated for later this year.

US Adopting Broadband on Par With Most OECD Countries

US Adopting Broadband on Par With Most OECD Countries
see also full report

A new analysis by the Phoenix Center shows that the United States is adopting broadband technology at the same pace as most other industrialized countries, once demographic and economic differences are taken into account. The study demonstrates that 91% of the differences in the broadband adoption rate among industrialized countries are explained by demographic and economic factors such as education, income inequality, and population age and density.

Using broadband data just released by the Organisation for Economic Co-Operation and Development ("OECD"), the study calculates a "Broadband Efficiency Index" ("BEI") to measure the efficiency with which each of the 30 OECD member countries converts its economic and demographic endowments into broadband subscriptions. With very few exceptions, the Phoenix Center finds that broadband subscription in OECD countries is consistent with those endowments - about two thirds of OECD countries have an efficiency rate of 95% or better. Significantly, the United States has an efficiency index of 96.7%, which is slightly higher than Japan (96.3%) and Korea (95.8%). The BEI uses the econometric technique of Stochastic Frontier Analysis to arrive at the results. The study expands on the Phoenix Centers' earlier work.

Australia - Broadband in Tasmania

NBN not enough for business say Tasmanians

The national broadband network (NBN) will not be fast enough for Tasmanian businesses, according to consumer action group Digital Tasmania, and could even mean further delays for the Basslink cable.

Andrew Connor, spokesperson for the group, said that the broadband network's 12Mbps connection won't meet the needs of local companies. "We believe that businesses in a few years, or even now, will want more than that."

Connor said large data consumers, such as ISPs, call centres and educational institutions aren't targeted by the NBN, and are waiting for the Basslink fibre-optic cable to come online. Negotiations over its commercialisation are ongoing, leaving Tasmanian businesses suffering, according to the group.

Digital Tasmania's comments follow a decision by the Tasmanian government to take part in the NBN bid process, with a state-specific proposal. The government has already paid the necessary AU$5 million bond, a government spokesperson told

"The Tasmanian government believes that a specifically tailored solution for Tasmania will best deliver on the Australian Government's broadband objects rather than the state's inclusion as part of a national process and model," wrote the Tasmanian government in a letter to the national broadband network panel of experts in March.

"The Tasmanian problem is quite different to the issues faced in other parts of Australia. In addition to the lack of competitive infrastructure, Tasmania has a unique set of challenges, being an island with a mountainous geography and a small, very dispersed and comparatively disadvantaged population, separated by 200km of water from the markets and telecommunications routes of metropolitan Australia."

While Digital Tasmania welcomes the government's move to address the lack of affordable and fast broadband in Tasmania, it fears that the government's participation will delay the lighting up of Basslink.

According to the group, Basslink has already seen delays because of the government waiting for the outcome of the Broadband Connect infrastructure contract, which was awarded to OPEL.

Digital Tasmania doesn't want to see more delays hit the cable as a result of the NBN.

The NBN deadline is "who knows when" at the moment, Connor said, whereas Basslink has the potential to be lit up before the end of the year.

"The NBN is starting to look a bit shaky," he added.

The Tasmanian Treasurer, Michael Aird said there would be no delays: "The NBN RFP is a separate process and will not impact on the commercial negotiations between Cityspring, Aurora and the Government regarding the Basslink optic fibre."

Aird could not go into detail about the content of its submission due to probity requirements.

Akamai - The state of the Internet

The state of the Internet
see also the report

Starting with the January to March (1st quarter) 2008 time period, Akamai will be publishing a quarterly “State of the Internet” report. This report will include data gathered across Akamai’s global server network about attack traffic and broadband adoption, as well as trends seen in this data over time. It will also aggregate publicly available news and information about notable events seen throughout the quarter, including Denial of Service attacks, Web site hacks, and network events.

During the first quarter, Akamai observed attack traffic originating from 125 unique countries around the world. China and the United States were the two largest attack traffic sources, accounting for some 30% of this traffic in total. Akamai observed attack traffic targeted at 23 unique network ports. Many of the ports that saw the highest levels of attack traffic were targeted by worms, viruses, and bots that spread across the Internet several years ago.

A number of major network “events” occurred during the first quarter that impacted millions of Internet users. Cable cuts in the Mediterranean Sea severed Internet connectivity between the Middle East and Europe, drastically slowing communications. Cogent’s de-peering of Telia impacted Internet communications for selected Internet users in the United States and Europe for a two-week period. A routing change by Pakistan Telecom that spread across the Internet essentially took YouTube, a popular Internet video sharing site, offline for several hours.

Akamai observed that from a global perspective, South Korea had the highest measured levels of “high broadband” (>5 Mbps) connectivity. In the United States, Delaware topped the list, with over 60% of connections to Akamai occurring at 5 Mbps or greater. At the other end of the bandwidth spectrum, Rwanda and the Solomon Islands topped the list of slowest countries, with 95% or more of the connections to Akamai from both countries occurring at below 256 Kbps. In the United States, Washington State and Virginia turned in the highest percentages of sub-256 Kbps connections. However, in contrast to the international measurements, these states only saw 21% and 18% of connections below 256 Kbps respectively.

India - licensing mobile value-added services

Trai favours licensor for mobile VAS providers

Value-added services (VAS) and mobile-content providers may soon come under a licensing regime. Security concerns regarding VAS have come to the forefront in the ongoing debate over security issues surrounding Blackberry services in India.

With the telecom ministry indicating possible rollout of 3G services from next year, the Telecom Regulatory Authority of India (Trai), in a consultation paper released on Wednesday, raised the issue of bringing content providers or aggregators called value-added services providers (VASPs) under the licensing regime.

It has also raised issues regarding licensing obligations for protecting copyrights, including digital rights management, and infringement of other laws.

In the paper, Trai said: "In such cases (the Blackberry case), a licensing and appropriate regulatory regime will provide clarity and the telecom operators need to source the content for value-added services from authorised, licensed or registered content aggregators in India."

At present, an operator has to intimate the licensor and Trai at least 15 days before launching the service. However, there is no licensing framework for content providers or content aggregators who provide these value-added services.

Given the advent of 3G and new generation network (NGN) services in the near future, Trai has invited suggestions from stakeholders by June 30.

All services beyond basic voice calls and fax transmissions come under the category of VAS, also called enhanced services, which include ringtones, caller tunes and SMS services. In India, the estimated revenue from mobile VAS is over 10 to 14 per cent of the total income of mobile telecom service providers. This is expected to cross 30 per cent in the next 5-7 years.

Due to the declining average revenue per user as call rates become cheaper, the service providers are expected to shift their focus from expansion of the subscriber base to VAS, which have the potential to generate huge revenues.

Trai has said that there is a need to adopt new technology for the success of VAS. There is also a need for consolidation and to win the confidence of investors, particularly foreign investors.

VAS, which will be provided through NGN, 3G and broadband wireless access, will require foreign technologies and investment, the regulator has said.

Also, with the coming of new models like the mobile virtual network operator (MVNO), the telecom operators and VASPs would need to look at the best practices in other countries and design a fair revenue-sharing system, it said.

Mobile Internet - Privacy concerns

Regulator warns of mobile Internet privacy concerns

Searching on the Internet via a mobile phone poses higher privacy-related concerns than traditional computer-based queries, according to the Italian authority for the protection of personal data.


Mobile Internet is considered the future of the Web. Yahoo! predicts that in less than ten years, the majority of Internet users are expected to access the net via their mobile handsets (see EurActiv 15/05/08).

Privacy concerns related to the Internet mainly arise from social networking websites and search advertising. The latter is based on user profiles assembled by search engine operators by putting together personal information such as query histories, geographical locations and IP addresses.

The effectiveness of targeting specific consumers makes search advertising more valuable than traditional display ads based on banners aimed at non-specific users.

Using a search engine on a mobile handset makes available a larger amount of personal data, allowing for easier identification and location of a user. Specifically, by matching the information collected by search engines and the particular data collected by Telecom networks, "it is possible to have a very accurate profile of a user, namely in terms of localisation," warned Giovanni Buttarelli, secretary general of the Italian Data Protection Authority, after a meetingexternal in the EU Parliament on privacy and the Internet yesterday (28 May).

He expressed his "concern" over potential new scenarios foreseeable due to mobile Internet and reminded search engine operators that they have to abide by the principles set in an opinion issued by EU Privacy regulators last April. The text invites search engines to ask users' permission to collect private data to be used to offer personalised advertisements on the Internet.

The EU's increasingly cautious stance on Internet privacy may have significant consequences for the thriving targeted ads market, developed by search engines by compiling detailed knowledge of their users.

Search (or targeted) ads represent around 45% of the online advertising market in the EU and 40% in the US, comparing to around 30% in both areas for display ads and lower percentages for email advertising. The entire market for online advertising already has an estimated value of around 25 billion euros worldwide, an impressive figure considering that the first Internet banner only appeared in 1994, according to figures from the Milan-based Bicocca University.

Google is the dominant player by far, controlling the largest market share both for search and display ads. The recent acquisition of DoubleClick further strengthened its position in the online advertising market, yet was considered to comply with competition rules by both EU and US regulators.

European citizens are also becoming more concerned about the use of personal information on the Internet. 82% of European Internet users have little trust in personal data management over the Web, according to a recent Eurobarometer poll.

Another poll issued yesterday indicates that in Italy, France, Germany and the UK, 83% of the people interviewed consider it inappropriate for a company to collect a wide variety of detailed personal information on a user. Another 93% said that this information should not in any case be used for targeted ads.

The poll was carried out from a sample of 150 citizens per country in spring 2008 by ICOMP (Initiative for a Competitive Online Marketplace), an advocacy forum sponsored by Microsoft.

YouTube and OECD - Future of the Internet

OECD and YouTube launch “Future of the Internet” initiative
see also

How can the Internet make the world a better place?” This is the question OECD is asking the public on YouTube, the leading online video community.

YouTube users can share their opinion with the leaders and opinion shapers attending the OECD Ministerial meeting on the “Future of the Internet” in Seoul, Korea on 17-18 June 2008.

“You tell the leaders and opinion shapers in Seoul what you think and they will upload responses to your ideas. Join in. Take part in making a difference,” said OECD Secretary-General Angel Gurría.

The best videos uploaded to will be shown to ministers and VIPs at the event. They will be invited to react and their answers will be uploaded on YouTube during the meeting.

In Seoul, all participants, including government ministers from more than 40 countries and hundreds of global leaders from international government organisations, business, the Internet's technical community and civil society, will be encouraged to submit their own answers at a dedicated YouTube booth on site.

Canada - reshaping mobile markets

Canada auction aims to reshape wireless market

Canada's government launched an auction of wireless spectrum on Tuesday that it hopes will bolster competition and lower prices by allowing new players to break into the cellular phone market.

In a process that Industry Minister Jim Prentice estimates could take up to a month to complete, 24 companies can bid electronically on 292 licenses for chunks of wireless airwaves in different geographical regions across the country.

Of the 105 megahertz (MHz) of spectrum to be auctioned, 40 MHz will be set aside for new players.

That provision is a source of worry for the three big players -- Rogers Communications Inc, Telus Corp and BCE Inc -- which control about 95 percent of the wireless market in terms of revenue.

Canadian cellphone users pay higher prices than their U.S. or European counterparts, Prentice said, largely because there are so few mobile service providers.

A list of qualified bidders, released in April, included newcomers Quebecor Inc, Manitoba Telecom Services (MTS) and Shaw Communications Inc.

But analysts have said they doubt any of the new players have enough money to launch a very aggressive network-building campaign to become serious rivals to the incumbents on a national scale.

Quebecor, for example, is expected to initially target its home province of Quebec. Shaw, a cable and satellite TV company, has cautioned that its participation in the auction doesn't necessarily mean it will build a network at all.

MTS suffered a setback last week when the consortium it had formed to participate in the auction dissolved. The company said it was still qualified to bid but analysts doubt it can expand its network beyond the province of Manitoba.

Prentice, however, said there was no doubt the auction would result in increased competition, and he was hopeful that would pressure prices downward.

"Early indications are that they (the bidders) represent a broad range of capacity from across Canada and ... either individually or collectively they would have the capacity to increase competition and increase choice and lower prices for consumers in Canada," he said at a news conference.

The first two rounds of bidding, managed by Industry Canada, will kick off on Tuesday, based on opening bids provided by the government. There will be several more rounds throughout this week and the winners will likely be announced in late June.

In the first stage of the auction, officials raise the price on each license that received bids by 15 percent after each round. As the auction progresses and bids slow down, the price increase is smaller between rounds.

The results of each round will be published on Industry Canada's website:

Europe - support for South and East Africa

EC Pumps EUR 78 Million Into Africa for Tech Infrastructure

The European Commission has pumped ¬78 million (US$123 million) into the Common Market for Eastern and Southern Africa's (Comesa's) ICT and other infrastructure development.

The funding will support information and communication technology infrastructure development and other projects in the Comesa region, said Sindiso Ngwenya, Comesa assistant secretary general for programs.

The region has 21 member countries, including Zambia, Zimbabwe, Botswana, Kenya and Malawi, with a number of ICT infrastructure development projects under way. The Comtel project, for instance, will connect all 21 countries in the region with the aim of bringing down the high cost of telecommunication. The Comesa infrastructure fund is expected to play a key role in funding of cross-border projects such as the Comtel project, which will also hook the region to the rest of the world.

The Comtel project is a private regional telecommunication company being spearheaded by Comesa, a regional economic bloc based in Lusaka, Zambia. The project also aims to create a regional network and unify pricing for telecommunication services.

The project is being redesigned after member countries through their national telecommunication operators laid their own communication networks, including fiber-optic cables that will later be connected to the Comtel project.

"Besides information and communication technology infrastructures, the funds will also be used to fund electricity projects in the region," Ngwenya said.

handsets - conspicuous consumption

The world's most expensive mobile phones

There is no cellphone more anticipated this year than the next generation of the Apple iPhone. But for some high rollers, the ultimate iPhone is a diamond-encrusted version from London jeweler Amosu. At 20,000 pounds ($39,600), the creation ranks among the world's most expensive phones.

Even a $40,000 iPhone seems tame compared with the 8800 Arte from Austrian designer Peter Aloisson. The luxury Nokia phone is posh to begin with, featuring designer ringtones and wallpapers and an 18-karat white gold finish. Encased in more than 680 pink and white brilliant-cut diamonds--sparing only the screen and slide-out keyboard--the embellished phone is a marvel. And, at 85,000 euros ($134,000), it's also the price of a college education.

Algeria - 3G licence

Algeria seeks bidders for first 3G mobile network

Algeria on Wednesday invited applications to bid for a licence to build and operate its first third generation (3G) mobile phone network.

June 30 is the deadline for foreign or local bidders to show interest, the Regulation Authority of Post and Telecommunications said in a statement on its Web site.

Telecommunications Minister Boudjema Haichour said earlier this year that a French communication company had been selected to advise on the tender and network set-up.

Egypt's Orascom Telecom ORTE.CA is the main player in the north African nation's mobile phone market.

It faces growing competition from Algerian state-owned firm Mobilis and Qatar Telecommunications Co QTEL.QA.

Tuesday, May 27, 2008

Telekom Austria - opposing further regulation of roaming charges">Telekom Austria criticises EU roaming caps

European Union price caps aimed at cutting the cost of using a mobile phone outside a user's home country have not encouraged greater use, Telekom Austria Chief Executive Boris Nemsic said on Monday.

"Our customers did not roam more, even though prices have come down," Nemsic told reporters. Most "roaming" usage still comes from business customers who are not price sensitive, he added.

EU Telecoms Commissioner Viviane Reding pushed through the caps on such call charges, saying prices charged to consumers were outrageous.

The European Parliament and EU states will have to decide if the caps should be extended beyond 2010.

"There is no need for extension for this regulation. After 2010, retail price increases are simply not possible. There is no example in our industry where prices went up," Nemsic said.

Global mobile revenues

Global mobile market revenues to top US$1 trillion in 2012, says Ovum

Analyst and consulting firm Ovum has recently published its latest forecasts for the mobile market, which highlight the changing nature of the world's wireless markets. "Connections are expected to reach 4.99 billion by 2012, with revenues growing to US$1.019 trillion," said Steven Hartley, Ovum Senior Analyst.

Today, emerging markets are the engine of connection growth in the mobile market and the next four years will see that trend continue. "In particular, China and India will be the two single largest markets on the planet by 2012, accounting for 31% of the world's mobile connections," said Hartley. Ovum forecasts penetration to reach 64% in China and 55% in India by 2012, meaning there will still be growth left in the market.

Asia Pacific's growth will also continue to be strong over the coming four years, although the region covers both emerging markets with massive potential (Indonesia with penetration forecast at 67% by 2012) and mature markets with slowing growth (Australia with 122% penetration forecast for 2012).

Looking into the revenues side, in absolute terms the sheer scale of the emerging markets will be the main revenues driver, stated Ovum. However, an ARPU comparison is illustrative of the key challenge facing mobile operators in these markets. "Despite contributing 37% of connections in 2012, the China-India region is forecast to represent just 18% of revenues," added Hartley. Admittedly revenues growth of 96% over the next four years is not to be sniffed at, but it is driven by far lower spending customers.

Therefore, operators in these markets will need to be extremely efficient to ensure absolute margins justify the enormous costs of building and maintaining mobile networks in these markets. Hartley added, "Interestingly, however, operators originating from these maturing regions are likely to play an increasing role on the global stage, as their sheer scale enables them to buy their way into new markets. We expect emerging players such as China Mobile and Bharti to gain an ever-larger foothold in the global landscape."

Global market wireless connections, 2007-2012 (thousands)

Region 2007 2012

China/India 910,569 1,827,105
Asia Pacific 457,146 654,991

South Africa - Mobile entertainment

South Africa: Mobile Entertainment 'To Be the Next Big Hit'

THE next best thing in cellphones is going to be entertainment-based, such as short movies and animation, says Emma Kaye, recently appointed Africa representative of the Mobile Entertainment Forum and CEO of Gate 7.

But she warns against adopting traditional models in SA.

That is because SA offers a unique market to this fast-growing segment of the industry.

The forum's members include some of the biggest entertainment and telephony companies such as Sony BMG, Nokia, Vodafone, Microsoft, Turkcell, Orange and Telefonika. It is the only trade organisation that represents key parties from the mobile entertainment sector, and its aim is to grow the industry.

In SA, cellphone penetration has reached more than 90% of the population, while the percentage with broadband connectivity is only 0,7%.

Kaye says that unlike western countries, cellphone technology in SA is leapfrogging traditional internet entertainment models such as fixed line and broadband. Therefore, new cellphone users going online with their phones cannot be expected to be as familiar with the internet as in other countries.

Because the cellphone is a communication and not a broadcasting tool, the aim should be to create indigenous entertainment and dialogue channels that users can identify with, she says. For example, the themes of the three top entertainment channels in India centre on religion, cricket and Bollywood.

The challenge is to find the characteristics in SA's multicultural society that individuals can identify with and communicate with as entertainment.

She says large corporations are moving swiftly to supply cellphone entertainment channels worldwide, using mostly re-purposed traditional entertainment . But Kaye believes this is being driven by people who do not necessarily know what SA's consumers, half of whom are under the age of 24, really want.

"One size does not fit all. It's like asking newspaper printers to write the newspaper."

China - statistics

China mobile phone user base surpasses 583 million in April

There were 583.51 million subscribers of mobile communication services in China as of the end of April 2008, growing by 1.54% on month and by 19.71% on year, according to statistics published by China's Ministry of Information Industry (MII) on its Chinese-language web site.

The number of subscribers at the end of April accounted for 41.6% of the country's population (user density).

Also at the end of April there were 360.04 million subscribers of fixed telecommunication networks in China, translating into a user density of 27.8%.

In April 2008, mobile phone subscribers in China sent 54.14 billion short messages, averaging 3.12 short messages per phone number a day.

China's Internet-access user base, April 2008

Internet-access mode Number of subscribers at end of April

Dial-up (narrow band) 16.54 million
Dedicated lines 65,034
xDSL 57.71 million (Y/Y 36.92%)
Aggregate 72.94 million (Y/Y 27.37%)

Vodafone - India

Vodafone India revenues jump 50%

British telecom giant Vodafone on Tuesday announced a 14.1 per cent jump in the group's revenues to 35.5 billion pounds with its India business delivering a strong growth of over 50 per cent during the year ended March 31.

The group posted an increase of 14.1 per cent in the revenues with an organic growth of 4.2 per cent in the year ended March 31, 2008, a company statement said.

Vodafone Group's adjusted operating profit increased 5.7 per cent to 10.1 billion pounds, while its earnings before interest, tax, depreciation and amortisation (EBITDA) grew 10.2 per cent to 13.2 billion pounds in 2007-08.

Vodafone has over 260 million proportionate mobile customers worldwide with strong growth during the year in the Eastern Europe, the Middle East, Africa, Asia and the Pacific (EMAPA) region.

In particular, in Vodafone's new business in India, which has been successfully integrated into the group and now has over 44 million customers, with over 50 per cent pro forma revenue growth.

"Our existing emerging market assets continue to perform well. Vodafone Essar in India is delivering very strong growth and performing in line with our acquisition plan. Revenues increased by 50 per cent during the year driven by rapid expansion of the customer base with an average of 1.5 million net additions per month since acquisition," Vodafone CEO Arun Sarin said in a statement.

We have also established an independent tower company with two other operators to drive further strong, cost efficient growth, Sarin added.

Christian Dior

Christian Dior Enters the Mobile Device Market

The luxury fashion brand Christian Dior has announced its entry into the mobile device market. The high-end mobile phone will be built by ModeLabs Group of France and is expected to sell for approximately €3,500. The move to extend into mobile is not new for fashion brands. Armani, Prada and Dolce & Gabbana all have relationships with vendors to sell branded devices. These extensions by well-known brands into the mobile market will continue to be a key trend for the next 18 months, which Gartner highlights in "Market Trends: Reshaping Mobile Device Markets, Worldwide, 2008-2009."

The price point for Christian Dior's mobile device puts it more in line with Nokia's ultrahigh-tier Vertu range of devices, where the price is in thousands of euros - rather than the other fashion-led products, whose prices are in the hundreds of euros. Even with this price point, Christian Dior claimed, in an interview with WSJ, to be looking to sell 10,000 devices a year initially, growing to €200 million of revenue longer term (or approximately 57,140 devices). To achieve this volume, Christian Dior anticipates positioning its device for the emerging markets of Russia and China, rather than purely for mature Western markets.

With more entrants into the mobile device market, consumer choice, even at this ultrahigh end, is set to grow, and competition for established players is set to increase further.

China - 3G and restructuring

3G licenses to follow hot on the heels of industry restructure- ministries

China will issue 3G licenses to China Mobile, China Unicom and China Telecom once the country's telecom industry completes its current restructure, government ministries confirmed on Saturday.

The Ministry of Industry Informatization (MII), National Development and Reform Commission (NDRC) and Ministry of Finance said in a joint statement that the issuance of 3G licenses was a major reason for the restructure, which will give China's telecom industry three network operators, each with nationwide network resources, relatively comparable strength and full service capabilities.

The statement confirmed that China Telecom will acquire China Unicom's CDMA network, including assets and subscribers, as well as China Satcom's basic telecom business, leaving China Satcom to specialize in satellite communications. China Unicom's GSM network will be brought under China Netcom, while China Mobile and China Tietong will merge.

The ministries said the rapid increase in mobile phone users in recent years, and the consequent decrease in fixed-phone users, has caused an imbalance in the market. The industry restructure will bring back a balanced environment for competition within the industry, they said.

China's six telecom operators generated total revenue of RMB 728 billion ($104.9 billion) in 2007, compared to RMB 371.9 billion ($53.59 billion) in 2001, while the national telecom user base has risen from 326 million households in 2001 to 913 million households in 2007.

On Sunday, China Telecom, China Unicom and China Netcom announced they were in discussions regarding the restructure.

China Telecom said that no agreement, including the price of their acquisition of China Unicom's CDMA network, has been reached yet. Wang Xiaochu is still chairman of the board and CEO of China Telecom, though Shang Bing, Miao Jianhua and Yang Xiaowei, former high-level officials from China Unicom, have already moved to China Telecom.

Wang Jianzhou remains president of China Mobile and the vice secretary of the company's Communist Party of China (CPC) Committee, according to China Mobile, while Zhang Chunjiang, the former China Netcom president, has become vice president and the secretary of the CPC Committee.

Former high-level China Netcom official Zhang Xiaotie, and former China Unicom official Li Zhengmao, have also joined China Mobile.

Chang Xiaobing, former CEO of China Unicom, is now leader of China Unicom's restructure preparation committee. All reassignments were effective May 23.

China Mobile, China Telecom, China Unicom and China Netcom maintained today their suspension of A-share and H-share trading, which commenced on Friday due to the restructure.

Europe - Future of the Internet

Future of the Internet

A Compendium of European Projects on ICT Research
Supported by the EU 7th Framework Programme for RTD

Japan - DoCoMo multiple play

DOCOMO to Offer High-Speed Mobile Data/VoIP for Home Broadband Networks

NTT DOCOMO, INC. and its eight regional subsidiaries today announced a service that will enable DOCOMO FOMA™ third-generation handsets to connect to home broadband networks via wireless LAN routers, allowing mobile phone users to enjoy 54 Mbps high-speed packet communication and Voice over Internet Protocol (VoIP), beginning in June.

With Home U™, Japan's first consumer service for fixed-mobile convergence, DOCOMO FOMA phones will be able to download large-volume data, such as video, with the speed and convenience of broadband.

VoIP calls to other Home U users will be free of charge, and to non-Home U users will be 30 percent cheaper than normal FOMA charges.

Initially, the service will be compatible with the N906iL onefone™, a mobile/W-LAN dual handset that will be sold from the same day that the service starts.

The monthly charge for Home U will be 1,029 yen. No signup fee will be required.

Consumer empowerment - OECD

Consumer empowerment in communication services

Improving the ability of consumers to choose between competing suppliers is important for well functioning markets. The report examines how to increase market flexibility for consumers in communication services, and improve access to information.

China - restructuring

China plans three telecom giants

China plans to create three telecom giants as it seeks to bring balance back to an industry where mobile operators have seen the fastest growth by far, the government and state press said on Tuesday.

Under the plan, the world's biggest mobile operator China Mobile will acquire fixed-line operator China Tietong Telecommunications Corp, the information industry ministry said in a statement over the weekend.

China Telecom, an operator of fixed lines, will take over a mobile network of China Unicom, the smaller of the nation's two key mobile phone operators, and most business of smaller player China Satellite Communications Corp.

The remainder of China Unicom will be encouraged to merge with fixed line operator China Netcom, according to the ministry.

The objective of the restructuring is to bring about three competitors of roughly comparable strength, the government statement said.

It is also aimed at redressing the imbalance between rapidly growing mobile phone operations and the fixed line business, which is actually seeing declines in subscriber numbers, it said.

Once the restructuring is finalised, the government will issue three licences for third generation (3G) mobile services.

The arrival of the 3G licences, which allows more various advanced functions such as the use of broadband wireless data via mobile devices, is set to usher in a buying spree of new network equipment, state media reported on Tuesday.

The revamp will probably take five months to complete, the Beijing Youth Daily said, citing a research note by Guotai Jun'an Securities, which has close contact with the operators.

In a sign of how lopsided the market is, official figures showed that by the end of last year China's fixed line users fell by 2.3 million to 365.4 million while mobile phone subscribers surged by 86.2 million to 547.3 million.

China Mobile, the world's biggest mobile network operator by subscriber numbers, raked in 87.1 billion yuan (12.5 billion dollars) in net profits in 2007, twice as much as China Unicom, China Telecom and China Netcom combined.

Vodafone - CEO to leave

Vodafone returns to profit; CEO Sarin to step down

Vodafone Group PLC, the world's biggest mobile phone company by sales, announced the surprise resignation of chief executive Arun Sarin on Tuesday as it posted a return to full-year profitability.

Sarin, who led Vodafone's expansion into emerging markets like India, Turkey and the Czech Republic over his five years in the top job, will be replaced by his deputy, Vittorio Colao.

Sarin, 53, faced disquiet two years ago when nearly 10 percent of Vodafone shareholders voted against his re-election as chief executive. Investors were unhappy about an acquisition-heavy expansion and calls for a spin off its stake in U.S. subsidiary Verizon Wireless.

But Vodafone has since outperformed expectations and revenue growth in emerging markets has jumped. Its global customer base has more than doubled from 120 million to 260 million under the Indian-born Sarin's tenure and the company's share price has risen by about one-third over the same period.

While the timing of the Sarin announcement surprised some, the nomination of Italian-born Colao, 46, as his successor was largely expected.

Shares in the company rose 1 percent to 164.95 pence ($3.25), bolstered by both the smooth succession plan and the strong full-year results.

Vodafone posted a net profit for the year to March 31 of 6.76 billion pounds ($13.25 billion), compared with a net loss of 5.29 billion pounds a year earlier when impairment charges on its Italian and German operations hurt earnings.

Profits were also driven by cost reduction and outsourcing programs in Western Europe.

Revenues increased 14 percent to 35.5 billion pounds ($70.2 billion), from 31.1 billion pounds the year before.

"With full year results and outlook better than anticipated, helped by an FX tailwind, and a new CEO to take the company forward, we would expect earnings upgrades to continue and expect today's announcements to be well received," said Collins Stewart analyst Mark James. "FX" refers to favorable foreign-exchange rates.

Sarin, 53, said he "felt the timing was right to hand over as the company is in a good position strategically."

"I've achieved what I set out to achieve when I took the position," he added in a conference call.

Sarin has been credited with expanding Vodafone's operations in fast-growing emerging markets, such as Eastern Europe and India, through a series of large acquisitions, culminating in last year's 5.7 billion pound purchase of a controlling stake in Hutchison Essar, one of India's biggest mobile-phone groups.

After the shareholder criticism two years ago, the company sold its underperforming Japanese unit for 8.9 billion pounds, which resulted in a 6 billion pound return to investors.

In 2004, the company lost out to Cingular Wireless during the fierce bidding war for AT&T Wireless, then the U.S. third-largest mobile operator, as it tried to expand its presence in the fast-growing U.S. market.

Colao now faces the same challenges as his predecessor, taking the helm of the company at a time when business growth is being challenged by the economic downturn and by rising inflation and food prices in the developing world, where it is targeting expansion.

Sarin said the company would "navigate through" those difficulties. He added that it was interested in possible acquisitions in Africa and Asia, but declined to say any more about potential deals.

Africa - use of ICTs

ICT Access & Usage in South Africa

While the South African ICT sector continues to show significant expansion especially with the improved growth in the economy over the last few years, the findings of a household and individual user survey completed by Research ICT Africa! suggests that policy outcomes geared at the creation of an equitable information society may be sub-optimal.

Saturday, May 24, 2008

Australia - free lap-top computers

'Free' laptops the latest 3G lure

FIRST it was mobiles for nothing, now it's laptops for free, as telcos try to lure customers into their often-expensive 3G mobile data plans.
Telstra is offering a zero-dollar laptop to the value of $700 to business customers signing up for a three-year contract on the telco's Next G mobile data service. But as with $0 phones, there is a catch.

The plan costs $99 a month and includes a one-gigabyte data download allowance a month. Go over that limit and you are in for some hefty excess data charges.

The 1GB limit is the equivalent of downloading about 15 music albums or 1 1/2 full-length movies. After that, charges rise to 25c per extra megabyte, or a whopping $250 per gigabyte.

The free laptop plan is available only for customers with an ABN number.

Telstra business executive director Cathy Aston said it was targeted at smaller business owners, who could struggle with cash flow.

The offer is available through selected retailers including Harvey Norman, ICT Distribution and Techhead Interactive. Customers who want a laptop worth more than $700 must pay the difference.

Competition at the lower end of the laptop market has been accelerating in recent months, as entrants such as the ASUS $499 Eee PC have provided consumers with a functional, low-cost, portable unit.

Telstra 3G data competitors 3Mobile and Vodafone are not planning to launch $0 laptop offerings in the near future.

Optus has been offering a similar deal since August 2006, allowing customers to bundle laptop, mobile broadband and phone, but this deal will expire when the telco sells out of existing laptop stock.

Bharti - deal with MTN abandoned

Bharti Calls off Talks with MTN, Scuttling Plans for Telecom Giant

India's Bharti Airtel Ltd. Saturday called off its merger talks with South African telecommunications major MTN Group Ltd., saying that the deal structure proposed by MTN was "unacceptable."

A successful deal would have created the world's sixth-largest wireless telecommunications concern, bringing together two major mobile players operating in emerging markets in different parts of the world, with a combined market value of nearly $80 billion and more than 130 million customers across Asia, Africa and the Middle East.

"MTN has now presented a completely different structure from what was agreed," Bharti, India's largest telecom company by subscribers, said in a statement. "This new structure envisages Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Bharti Airtel held by the Bharti family and (Singapore Telecommunications Ltd.), in exchange for a controlling stake in MTN."

"This convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity," Bharti said.

Bharti Airtel said May 5 that it was in exploratory talks with MTN and said May 6 that it hadn't made any offer to acquire MTN, neither in whole nor in part.

The talks had come at the invitation of the MTN board to explore the possibility of combining the two telecom giants, Bharti said.

"An in-principle agreement was reached on May 16 and a term sheet was initialed between the two lead bankers. This agreed term sheet was presented to the MTN board" on May 21, Bharti said.

This was followed by the revised MTN proposal.

"Bharti's vision of transforming itself from a homegrown Indian company to a true Indian multinational telecom giant, symbolizing the pride of India, would have been severely compromised, and this was completely unacceptable to Bharti," the Indian company said.

It said the talks continued until late Friday night without a breakthrough, which led to Bharti calling off the negotiations.

Bharti said the price for a possible transaction had also been agreed upon at the start of the talks, adding that it already had letters of funding of up to $60 billion.

It said it is "keen" to expand in the international arena and will continue to look at opportunities that would help to transform itself into a global telecom company.

MTN officials couldn't be immediately reached for comment.

Vietnam - corrupt procurement

Telecom fraud boss jailed for 26 years

A court in the southern province of Dong Nai sentenced on Wednesday a man to 26 years in prison for masterminding a telecom equipment supply scam.

Nguyen Lam Thai, 46, was convicted of fraud and tax evasion by the Dong Nai People’s Court after he and 45 accomplices were tried at a hearing that began on April 9.

Vu Anh, Vu Cong Dai, Vu Ngoc Hoang, Nguyen Vi Thanh, Nguyen Quang Huy, and Pham Van Tien received sentences ranging from five years to seven and a half years for the same charges.

Le Thanh Hung and Dang Thi Thu Ha respectively got five and three years for tax evasion.

Nguyen Hoang Nhan and Le Quang Trung, former chiefs of the Ninh Thuan and Bac Lieu Provincial Post Offices, and Nguyen Tu Dung, former head of the Bac Lieu Post Office’s accounting division, received terms of up to three and a half years for "deliberate violation of the government’s economic management regulations, causing serious consequences."

The former bosses of 24 other post offices in central and southern provinces received suspended sentences.

The court exonerated four former officials of criminal responsibility.

Between 1999 and 2005 Thai’s CIP group won 110 contracts to supply equipment worth more than VND31 billion (US$1.9 million) to 26 post offices.

Through these deals, Thai and his accomplices pocketed VND24.3 billion.

They also "bought" 82 blank value-added tax invoices to fake purchases and evaded more than VND3.2 billion ($200,000) in tax.

China - the industry is reorganised

Telecom industry starts long-awaited reshuffle

The nation's long-awaited streamlining of the telecommunications industry has begun in earnest.

For openers, China Mobile Communications Corp will take over fixed-line operator China Tietong Telecommunications Corp, and the country's regulator yesterday announced a reshuffle of top executives among the largest carriers.

The industry reorganization is expected to make the market more transparent and fair and fasten the process of issuing licences for third-generation, or 3G, services.

After the revamp, China will have three large telecommunications carriers and the country's top two fixed-line phone operators will have mobile networks.

China Mobile, the world's biggest mobile carrier, will have the fixed-line business from China Tietong. China Telecommunications Corp takes over China United Telecommunications Corp's CDMA (code-division multiple access) network, while China Unicom's GSM (global system for mobile communications operations) may be combined with China Netcom.

Wang Jianzhou will remain as president of China Mobile and China Netcom President Zhang Chunjiang will become a vice president at China Mobile.

China Unicom President Shang Bing will become Party Secretary of China Telecom, while China Unicom Chairman Chang Xiaobing will head the Unicom-Netcom entity.

Zuo Xunsheng, chief executive of China Netcom, will be deputy head of Unicom-Netcom, reported, citing unidentified sources.

The involved carriers declined to comment on the issue yesterday and said they will reveal more details later.

The industry reorganization will cut telecommunications cost, avoid duplicated network construction and lift phone penetration nationwide.

It will also fast-track the merger of mobile and fixed-line communications, according to a KGI Securities telecommunications report.

Hong Kong-listed China Unicom, China Telecom and China Netcom surged on the Hong Kong Stock Exchange in the wake of the report before trading was halted at the noon break on Thursday. Shanghai-listed China Unicom also jumped more than 5 percent and trade in the company was suspended in the afternoon.

China is seeking to boost competitiveness at fixed-line operators, whose revenue is slowing as more people choose mobile services, Xi Guohua, vice minister of the Ministry of Industrial and Information, said previously.

"The revamp will change the market structure," said Sandy Shen, a Gartner's analyst based in Shanghai. "China Unicom and China Telecom will benefit from it but China Mobile will continue to dominate the market for a period."

It will take 12 to 18 months for the carriers to finish the reorganization and then China will prepare to roll out 3G services, which allow faster video and Web downloads.

China Mobile, whose profit surpasses the combined gains of the other top three carriers, will keep the advantage even after the industry reorganization, according to KGI.

The mergers will boost the companies' spending on networks, a big plus for telecom equipment makers.

Friday, May 23, 2008

Africa - infrastructure

Africa: Continent Lags Behind in Access to E-Infrastructure

Most African countries are slow in channelling information technology towards economic and social benefits, the latest global e-readiness report shows.

The e-readiness rankings by the Economist Intelligence Unit allow governments to gauge the success of ICT strategies against those of other countries and provide corporates with an overview of the world's most promising investments locations.

In this report, North America was ranked the best garnering 8.72, followed by West Europe 8.16, Asia-pacific 6.34, Central and Eastern Europe 5.54, Latin and Eastern Europe 5.33. East Africa scored 5.14.

Factors guiding the rankings are connectivity, business, legal, social and cultural environment, government policy and consumer trends.

"The rankings illuminate the factors that are driving or inhibiting a country's progress from using ICT to advance economic and social developments," says Peter Korsten, global leader of IBM Institute for Business.

In terms of electronic preparedness, the United States is now the global e-world readiness leader with a score of 8.95 followed by Hong Kong. South Africa is the most prepared in Africa at number 39 out of the 70 ranked states. No East African country features in the list.

Economist Intelligence Unit considers mass access to infrastructure as the foundation of e-readiness.

Regional research firm, Research ICT Africa, attributes the low ranking of African countries to failure to deregulate telecoms markets enough so that competition can bring mobile services down.

The organisation takes specific issues with fixed to mobile interconnection rates, which it claims, are 80-100 per cent higher than global trends. Markets with atronomical rates include Kenya, Benin and even South Africa. Mr Paul Kukubo, the chief executive, ICT Board of Kenya, said the country can borrow the best practices in legal matters from South Africa.

Mr Kukubo adds that data and property regulations are needed to protect local investors and attract foreign ones.

To be at par with the trends of competition, observers say that countries like Kenya need to tackle tax regime, start up financing, and labour costs.

Africa - mobile television

South Africa: Kenya Beats Country to Cell-TV

KENYA has become the third African country to beat SA to the launch of a cellphone TV service, using technologies able to entertain millions of viewers without any degradation in network quality.

Kenya has joined Nigeria and Namibia in offering cellphone TV channels using a system yet to be licensed in SA.

Although users do not care which technology lies behind the service, they do care when calls are dropped or the picture freezes because too many people are sharing the airwaves.

Domestic pay-TV supplier MultiChoice has launched the service though its subsidiary, MultiChoice Kenya, working with cellular operator Safaricom and the Kenya Broadcasting Corporation.

Safaricom subscribers can watch channels including SuperSport Update, BBC, CNN and the Cartoon Network on their cellphones in Nairobi, and it will reach Mombasa later this year.

The system uses a technology called Digital Video Broadcast -- Handheld (DVB-H), rather than the third generation (3G) cellular technologies that carry voice and data calls.

MultiChoice Kenya chairman David Waweru said Kenya was leapfrogging into the digital age by using the latest technology to give consumers the best possible viewing quality.

DVB-H is widely seen as the world's leading cellphone TV standard, using a broadcast network infrastructure and a broadcast frequency spectrum. 3G uses a cellular infrastructure and frequency, where bandwidth constraints mean the network will overload if too many users dial in simultaneously.

In Nigeria, MultiChoice and MTN tested the service in Abuja before an official launch last month. MultiChoice has also made it available in Namibia.

In SA, though, the government is holding back progress. Both MTN and Vodacom already offer cellphone TV using their cellular networks, and both are testing DVB-H with MultiChoice, which has set up 14 transmitters in a trial network.

"In SA we have continuing delays from the communications department in publishing the already long-delayed framework for digital migration policies," said Astrid Ascar, DStv mobile product manager at MultiChoice. The lack of a policy meant the Independent Communications Authority of SA (Icasa) could not issue licences so the cellular operators cannot launch commercial services.

"We are quite impressed by the speed of licensing in other countries and are unaware of any reason why it can't also be a speedy process in SA, but until the policy framework is out we can't get up and running," said Ascar. "Icasa cannot license in a policy vacuum."

Ascar said things would have to move quickly if SA was to have high-quality cellphone TV available for the Confederations Cup soccer tournament next year, an event that global soccer body Fifa would analyse to see how prepared SA was for the 2010 World Cup.

USA - broadband

Special Report: Broadband in America

Web-surfing speeds have leapt as consumers have moved from 28-Kbps dial-up to cable, DSL modems, and fiber. But how ubiquitous is broadband Internet access? And how fast are our connections, really?

More than 60 percent of U.S. homes now have broadband Internet connections. High-speed access has become the rule rather than the exception, and Internet use has permeated our lives. According to Leichtman Research, "The combined total number of broadband subscribers is over 56 million at the end of first quarter 2007." In the past year alone, the top broadband providers added 10 million subscribers.

But a decade of rapid growth may be coming to an end. The end of 2007 marked the third quarter in a row of declining adoption numbers, and many researchers say that the industry may have finally run out of room to grow. UBS research analyst John Hodulik is one of them. He calculates that about 76 percent of eligible homes (that is, homes that have both a PC and access to broadband service) have already signed up, so there's not much potential for further expansion.

In keeping with this summer's Olympic spirit, think of broadband access in the U.S. today as a footrace—and we've barely reached the halfway mark. Several athletes got off to a fast start, but they have been reeled in and a lead pack has been established. The race now slows and becomes more tactical as each runner tries to take the lead, knowing that that initial burst of speed is over. Yet Americans are still looking for the best connection. Will one provider make a power play, offering faster, more reliable access? Read on as we analyze the front-runners.

Antitrust and the global Internet economy

Antitrust Issues Raised by the Emerging Global Internet Economy

Web-based businesses are increasingly the subject of antitrust concerns. Plaintiffs in the United States have sued eBay for tying its online payments service to its transaction service.[1] Multiple jurisdictions in the European Community have claimed that Apple has violated the competition laws by limiting the ability of its music player to play music from competing music stores and limiting the ability of competing music players to play music purchased from its music stores.[2] During 2007, although the U.S. Federal Trade Commission decided not to block Google’s acquisition of DoubleClick after a lengthy investigation, it expressed its intent to “closely watch these markets” involved in online advertising.[3]

Of course, competition policymakers have not just discovered the web. In 1998, shortly after the start of the commercial internet three years earlier, the U.S. Department of Justice and various states filed an antitrust case against Microsoft for engaging in various practices related to web browsers.[4] The European Commission started an investigation of Microsoft’s practices related to media players that stream music over the internet in 2001.[5] However, the Microsoft cases mainly involved the use of the company’s market power in personal computers to influence competition in web-based markets that threatened it. The matters involving Apple, Google, and eBay concern market power in web-based products and services themselves.

The internet economy is likely to raise antitrust concerns—and possible demands for regulation—for years to come. Global gargantuan firms have emerged, which will likely attract scrutiny by competition authorities and by policymakers concerned with competition issues. The companies mentioned above, for example, have shares in putative antitrust markets that rival those held by Microsoft.[6] Apple has more than a 70 percent share of paid music downloads in the European Union,[7] Google has more than an 80 percent share of search queries in Europe,[8] and eBay has more than a 90 percent share of auction site page views in France, Germany, Italy, Spain, and the UK.[9]

Competition authorities and private parties can challenge the practices of these leading firms under the antitrust laws of most jurisdictions. Such challenges are especially likely under European Community law and decisional practice which impose special obligations and significant scrutiny on firms that have market shares as low as 40 percent.[10] Moreover, many web-based firms have complex business models and arrangements. Separating the merely complicated from the nefarious will take courts and competition authorities time to sort out. This Essay describes the economics and technology behind the web-based economy and how these features will influence internet competition policy in the years to come.

Section I provides a birds-eye view of the web-based economy. Although this sector is evolving quickly, its contours are beginning to take shape and we can be reasonably confident that several globally dominant firms will play significant roles. Section II describes the economics of the web-based economy. The key businesses are what economists call “multi-sided platforms” that serve several distinct but interdependent customer groups. Google for example serves people who are searching the web, advertisers who want to reach these users, and application developers who are using Google’s software to develop complementary products. The leading multi-sided platforms for the web are often built on “software platform” technologies that make portions of their code available to software developers who write applications that benefit users of the software platform. Section III considers the competition that arises in the web-based economy. The appearance of dominant firms in key sectors will ensure ongoing scrutiny, and the nature of the economics and technology of these businesses will result in ongoing disputes over their practices.

The web economy poses two major challenges to competition authorities. The law and economics for analyzing the multi-sided platforms that dominate the internet sector is not well developed. At the same time the web-economy is evolving very rapidly and in ways that are sure to result in antitrust complaints and investigations. Competition authorities and courts will need to exercise great care in balancing the protection of consumers from anticompetitive behavior against causing harm from interfering in complex businesses that are both rapidly moving and not fully understood.

Asia-Pacific - the rise of Mobile Wimax

Mobile WiMAX to level Asia-Pacific playing field

While most Asia-Pacific (APAC) countries are still processing spectrum bidding, manufacturers and application vendors are aggressively entering mobile WiMAX markets. As the market for mobile WiMAX expands, manufacturers are targeting new customer segments, and there will be a correspondingly huge opportunity in APAC regions.

"Because mobile WiMAX is aimed at untapped markets, almost all vendors including start-ups could be on equal footing with the larger, more established players," says ABI Research senior analyst Andy Bae. "They will find significant opportunities in APAC."

South Korea, Japan, Taiwan and New Zealand have entered into the mobile WiMAX kickoff phase by completing the spectrum bidding process. Japan's WBP consortium intends to invest huge resources with a clear vision and service structure aimed at providing nationwide mobile WiMAX services.

"Mobile WiMAX is an ideal service format for developing countries in APAC to solve the 'digital gap' in rural areas," Bae continues. "Further, operators in developed countries could deploy data-centric services with a cost-effective investment."

Mobile WiMAX services will differ depending on penetration rates, service requirements, and government regulations.

While deploying commercial WiMAX services, operators such as Korea Telecom are crafting WiBro strategies for terminal types, tariff plans and competition with HSDPA, strategies that might have implications for other regions.

South Korean vendors are starting to roll out WiMAX-equipped consumer digital devices such as game devices and portable media players. Consumer electronics will be the leading sector for shipments due to user demands such as UGC (user generated content).

Save the planet - work at home

Met Office: Home working will help save the planet

Both the Met Office and the Department for the Environment, Food, and Rural Affairs have advised businesses to encourage home working, saying this brings ecological as well as economic benefits.

Speaking at the Workwise UK Conference in London on Wednesday, Dr Richard Betts, head of climate impacts at the Met Office, told that home working could also allow businesses to operate from smaller premises, saving money.

"There are financial incentives and compelling corporate social responsibility incentives," said Betts. "Companies are affected by legislation. When legislation comes in regulating carbon emissions, companies encouraging home working will be ahead of the game."

The government is in the process of drafting legislation to govern carbon emissions. The Climate Change Bill has been in draft since March 2007. One of the aims of the bill is to establish targets for reducing carbon dioxide emissions — including making the UK's Kyoto Agreement targets for a 60 percent reduction by 2050 legally binding.

Betts said letting employees work from home can significantly reduce carbon emissions. "Let's say working from home cuts out a half-hour commute in the car," said Betts. "Day to day that can have a huge impact. Avoiding air travel through teleconferencing can also have a huge impact."

Betts added that it is also in the global public interest to reduce carbon emissions. In a speech giving evidence about climate change being caused primarily by carbon emissions, Betts said greenhouse gas concentrations are increasing, the global average temperature has increased by 0.7°C over the past 100 years, sea levels have risen by 20cm since the beginning of the 19th century, and worldwide snow cover is melting.

"The cost of inaction will be many times greater than the cost of action," said Betts, who added that businesses could also use information about green initiatives to promote their images.

Environment minister Hilary Benn, who was also speaking at the conference, said companies could save commuting time and money by encouraging home working. "Smarter working is all about flexibility," said Benn. "You can cut emissions, reduce congestion, and save resources, time, and money. Fundamentally what we need to do is put a price on carbon."

South Korea - 2nd generation WiBro

SK Telecom to Build 2nd-Gen WiBro Network

SK Telecom announced Thursday that it has succeeded in sending high-definition video using its WiBro technology in real time. Theoretically, WiBro with the improved "Wave 2" functionality can receive data at speeds of up to 37.44 Mbps and send at 10.08 Mbps.

That means a typical 700Mb movie file could be downloaded in a blazing two and a half minutes.

SK Telecom plans to build a Wibro Wave 2 network in Seoul, with an aim to launch service within the second half of this year at a price lower than the original wireless data service.

Singapore - pornography

Singapore bans two porn websites in symbolic move

Singapore has banned access to two pornographic websites in a "symbolic statement" of the country's societal values, its media regulator said on Friday.

The two sites, which the regulator declined to identify but local media named as YouPorn and RedTube, work in a similar fashion to popular video-sharing website YouTube. The two Web sites allow users to add and download sex videos.

"It should be noted that the hardcore pornographic videos posted on these sites are very easily accessible by the young as each video will start streaming for free once a user clicks on the related link," said Jason Hoong, an official from the Media Development Authority (MDA).

The sites, which were banned after the authorities received feedback from the public, are the latest additions to a list of 100 "mass impact objectionable" pornographic websites banned in Singapore.

Singapore, which disallows the possession, distribution and making of pornographic films, defends its action as necessary to protect the young.

Online responses to a local media report on the ban have been unfavorable, with users condemning it as unnecessarily moralistic.

"I will definitely surf the Internet by proxy from now on, to be defiant so as to preserve my rights," wrote one user.

Thursday, May 22, 2008

Airborne telephony

Survey: Airline passengers nix cell phone talking in-flight: But they support Wi-Fi access for e-mail and other quiet functions

Nearly three-fourths of U.S. cell phone users recently surveyed don't want to ride in airplanes with passengers talking on phones.

The results dovetail with what several airlines have apparently decided already as they prepare to roll out wireless in-flight services such as e-mail, text and instant messaging access from user devices. Those services, however, apparently will not include wireless talking.

Bruce Stewart, vice president of Connected Life Americas at Yahoo Inc., which commissioned the survey, said in a statement that the findings show that users want in-flight wireless connections. But they "don't want to be forced to listen to the conversation of the passenger sitting next to them," he said.

The online survey of 2,033 adults was conducted by Harris Interactive Inc. on behalf of Yahoo Mobile between April 29 and May 1. Of those who responded, 1,778 were cell phone owners who have flown on an airplane.

Nationwide, 74% of respondents said cell phone use on airplanes should be restricted to silent features. In western parts of the U.S., that number increased to 83% who wanted no talking.

As for silent features, 60% said they would want to use them. Of that group, 38% said they would use text messaging, 28% said they would access e-mail, and 29% would play games.

The survey also found that if voice capabilities are allowed in-flight, 69% want a designated area of a plane for people to talk. Yahoo has already begun offering mobile applications for consumers, including Yahoo Go 3.0, which provides mail, news and finance content with access to third-party widgets.

Earlier this year, American Airlines Inc. and Southwest Airlines Co. announced testing of in-flight Wi-Fi; both said they would ban voice calls because of passenger concerns. Other airlines testing or planning to launch in-flight Wi-Fi in various forms include Virgin America, JetBlue Airways, Deutsche Lufthansa and Qantas Airways.

Internet - love

Online love is often blind, brief: study

Matches made over the Internet often do not last because people end up choosing unsuitable partners and forming emotional bonds before meeting face-to-face, an Australian university researcher has found.

Women were especially susceptible to finding Mr. Wrong, as they tend to be attracted by witty comments or clever emails, said psychologist Matthew Bambling from the Queensland University of Technology.

"You can never assume things are the way they seem online," Bambling told Reuters on Thursday.

"Just because they can write a clever comment or a witty email, doesn't mean they will be Mr. Right, that's for sure," he said, adding some men use the concept of "netting", sending emails to dozens of women and hoping one might respond.

Bambling said you can find a partner online, but warned those using the Web to find love to be aware of the pitfalls.

"There's definitely a dis-inhibition affect online," he said, with people more likely to exaggerate their good points while hiding anything negative.

"Few guys for example would say 'look, I'm a middle aged alcoholic who's been married five times, pick me'. They're going to present themselves as a good catch."

He said it was easy for people to quickly invest too much emotionally in an online relationship because they don't see the full picture of the person they are emailing.

He said some people can also become addicted to the rush of replies they receive on dating websites, which can lead to future disappointment.

Bambling said people can avoid many of the problems by meeting early in the virtual relationship, rather than by getting to know each other only by email.

He suggests couples arrange to meet over coffee after a few emails, which will help people from building up a fantasy image of their match.

"The main thing to remember is to make real life contact as soon as possible if you are to interested in someone, because then you will know if a relationship is a possibility," he said.

USA - rural fibre

Rural Telcos Bring Fiber-to-the-Boondocks

The Future of Broadband -- While funding options exist, smaller service providers in the United States still find it tough to build broadband services to rival the big guys, as carriers and vendors noted during today's The Future of Broadband conference.

Perhaps the best lesson to be learned is: If you’re going to be a small carrier, make sure you’re a really small carrier.

“A lot of it comes back to being a cooperative,” said Kris Ward, business development manager for ATMC , a tiny carrier based in North Carolina. “We can subsidize it with borrowed money from things like RUS [Rural Utilities Service funding]. A lot of it also comes back to not having to sit in front of a group of shareholders on Wall Street. All we have to do is pay the bill.”

ATMC's cable TV business turned a profit for the first time this past quarter as it finally built a large enough customer base. Without RUS funding, the company wouldn't have been able to wait that long.

Tier 2 and 3 carriers like Windstream Communications Inc. and Embarq Corp. don’t necessarily have that luxury.

“They’re in a bad pinch unless they have areas with high density populations,” said Ward. “Those are the guys that keep getting bought up in M&A because they don’t have the resources of a large carrier and don’t have the financial backing of government funding.”

ATMC delivers cable TV services to about 20,000 customers and DSL services to 15,200. In 22 new-home developments, it's starting to offer fiber-to-the-home (FTTH) using Motorola Inc. equipment. Ward says all of its new developments will be FTTH, but there are no plans to replace older facilities with fiber.

Without funding from RUS or the Universal Services Fund (USF), small to mid-sized carriers become more exposed to the perils of rolling out next-generation services. John McHugh, the technical director of Organization for the Promotion and Advancement of Small Telecommunications Companies (Opastco) -- an organization representing 600 or so small telcos -- points out that the carriers he represents pay 25 to 35 percent more for content access than Verizon Communications Inc. (NYSE: VZ - message board) does.

In addition, some rural carriers have customer bases located hundreds of miles away from the nearest Internet backbone and have to connect through multiple carriers to reach it. “The transport costs far exceed anything they could get from their customers,” McHugh said.

In a lot of these cases, running fiber all the way to the home is not a feasible option. “We have to resort to doing some tricks with DSL,” said Steve Kemp, senior director of product marketing with Alcatel-Lucent. “The name of the game is getting the home within 3,000 feet and that 30 Mbit/s parameter.”

Kemp says the best solution for rural carriers is putting out remote DSLAMs just like AT&T Inc. does with U-verse. But DSLAMs are costly deployments, and small carriers don’t have the scale that AT&T does to make it more worthwhile. Even still, Kemp says it’s a more efficient option than fiber. “Ideally, you use as much of the existing copper as possible. Getting the fiber out deeper compromises 70 percent of the costs, so its still cheaper than FTTH.”

In the end, conference participants here said many small telcos will never be able to deliver the same services to their customers that a Verizon or Comcast Corp. can. Programs like RUS and USF are not expansive enough to make the more expensive services like video worthwhile although many small carriers are still trying. “I don’t think everyone is going to be a video provider,” says Kemp.

Mobile advertising

Mobile Search Adspend to Reach $2bn by 2013, Representing More Than 34% of Total Mobile Advertising Spend, According to Juniper Research

Download this press release as an Adobe PDF document.

Annual adspend on mobile search will reach $445m in 2008 - representing more than 34% of total mobile adspend - before rising to more than $2bn by 2013. In two new reports, Juniper Research has highlighted the key role of mobile search applications and services within the mobile advertising environment.

Hampshire, UK (PRWEB) May 21, 2008 -- Annual adspend on mobile search will reach $445m in 2008 - representing more than 34% of total mobile adspend - before rising to more than $2bn by 2013. In two new reports, Juniper Research has highlighted the key role of mobile search applications and services within the mobile advertising environment.

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While mobile advertising was historically dominated by campaigns conducted almost exclusively via SMS, the mass adoption of 2.5G and 3G handsets - combined with the development of applications enabling targeted, instant measurement and frequency capping - mean that we now have a situation where consumers can receive personalised advertising across a variety of rich media delivery channels.
The reports - Mobile Search and Discovery and Mobile Advertising - found that as operators abandon the "walled garden" model, consumers were increasingly searching for content both on and off-portal, thereby providing a substantial target audience for advertisers.

However, the reports note that there are significant opportunities for advertising across a host of mobile applications and delivery mechanisms, with nascent channels such as MMS and idle-screen advertising attracting a combined annual adspend of more than $1bn within five years.

According to Juniper Research's Principal Analyst, Dr Windsor Holden, "While mobile advertising was historically dominated by campaigns conducted almost exclusively via SMS, the mass adoption of 2.5G and 3G handsets - combined with the development of applications enabling targeted, instant measurement and frequency capping - mean that we now have a situation where consumers can receive personalised advertising across a variety of rich media delivery channels."

Other findings from the reports include:

* Total mobile adspend will rise from $1.3bn in 2008 to more than $7.6bn in 2013
* Mobile search revenues (including data charges) will reach $4.8bn by 2013
* Both mobile search adspend and total mobile adspend will be highest in the Far East/China region, followed by Western Europe and North America

OECD - broadband

Broadband growth and policies in OECD countries: ministerial background report

Broadband plays a critical role in the workings of the economy and society. It connects consumers, businesses, and governments and facilitates social interaction. Hence, broadband policies are now a vital instrument to ensure the competitiveness of OECD countries and to address pressing societal concerns. This report examines broadband developments and policies, and highlights challenges such as connecting users to fibre-based networks or coverage of rural areas. It also outlines emerging issues that may need policy attention as we move to next-generation networks. The findings are also relevant to emerging and developing economies designing broadband strategies.

China - earthquake damage

Telecom's Earthquake Loss Nears RMB 3B

China's telecom industry is facing a loss of approximately RMB 3 billion due to last week's earthquake in Sichuan province, reports China Business News. According to Ministry of Industry and Information (MII) data, 25,735 mobile base stations and 3,833 telecom bureaus and institutions were affected by the disaster in Sichuan, Gansu and Shanxi provinces.

Mobile Internet

Mobile browser maker says social networks top use

People who use their cell phones to surf the Web tend to steer to social networking sites like MySpace and Facebook ahead of news, maps or weather, mobile browser company Opera says.

The Norway-based software firm — which says its mobile browser, Opera Mini, is the world's most popular — studied the Internet habits of more than 44 million Opera Mini users worldwide and reports there are major differences in how people use the mobile Web. Opera says it looked at aggregated data.

Worldwide, some 40 percent of mobile Web traffic heads to social networks and one-fourth to content portals or search engines, Opera said. In the United States, South Africa and Indonesia, 60 percent of mobile Web traffic clicks lead to social networks.

Here are other patterns the company's research revealed: Russian and Ukrainian users flock to entertainment and sports sites; Chinese choose search engines first; and Brits check e-mail more than others, while Germans shop the most on the mobile Web — though both uses remain small.

Chief executive Jon von Tetzchner said the company has its highest market shares in Russia, Ukraine and Indonesia where an inexpensive cell phone may be the only form of Web access for many people. Opera attracts between 20 percent and 25 percent of mobile Web users in Russia, which is its biggest market.

He said the first programs to offer Web services on phones — wireless application protocol or WAP browsers — "did a lot of damage" because their stripped-down Web access and focus on text information like news deterred many possible mobile Web users.

That is changing as programs like Opera's Mini browser compress full Web sites for mobile use and users are now increasingly checking out the same kind of content on their phones that they would from a desktop computer.

"It really is one Web, with people using whichever device they choose to connect to the Internet," von Tetzchner said.

Opera says "full Web surfing" now makes up some 77 percent of all mobile Web traffic, squeezing out WAP and .mobi services.

Opera Mini was used by 11.9 million people in March, the company said. It is more widely used than Apple Inc.'s Safari for the iPhone and proprietary software on Nokia phones and BlackBerry devices from Research in Motion Ltd.

UK - rural broadband

Rural homes 'lead broadband UK'

Rural households are now more likely to have a broadband connection than residents of towns, says Ofcom.

The regulator's regional communications market report shows that 59% of rural households have broadband compared to 57% of urban homes.

It is the first time that the country has overtaken the town, according to the report.

Four years ago urban dwellers were twice as likely to have broadband as those living in the country.

Europe - broadband wireless access

Commission decision on the harmonisation of the 3400-3800 MHz frequency band for terrestrial systems capable of providing electronic communications services in the Community

The Commission has supported a more flexible use of spectrum in its Communication
on "Rapid access to spectrum for wireless electronic communications services through
more flexibility", which inter alia addresses the 3400-3800 MHz band.

Technological neutrality and service neutrality have been underlined by Member
States in the Radio Spectrum Policy Group (RSPG) opinion on Wireless Access Policy
for Electronic Communications Services (WAPECS) of 23 November 2005 as
important policy goals to achieve a more flexible use of spectrum. Moreover,
according to this opinion, these policy goals should not be introduced abruptly, but in
a gradual manner to avoid disruption of the market.

The demise of yellow pages

Dial I for internet

Phone-book companies are heading for a long, slow decline

WHEN the drains are blocked, the air-conditioning has given up or your life depends on someone delivering a take-away, you pick up the phone book. In most countries the companies that produce them have big chunks of the advertising market and enjoy some of the fattest margins in the media business. But now, because of the internet, investors have taken fright. Shares in Yell, which owns phone books in Britain, America and Spain, fell by 26% on May 20th when it announced its results. That was partly due to concerns about slowing economic growth and the company's debt load, but also because of worries about its long-term future. The firm's shares have now fallen by 75% in the past 13 months.

The problem for yellow-pages businesses in developed markets is that people are increasingly searching for local services online. A survey by the World Advertising Research Center found that in 2005, 57% of Europeans said they would turn first to the printed yellow pages when seeking goods and services. A year later that number had fallen to 51%, and 24% said they would go online, up from 20% in 2005. Small and medium-sized businesses (SMEs), which make up most of the advertisers in yellow pages, are noticing the shift. The fear is that they will follow the audience and jump ship for the internet.

“Ten years ago SMEs had one marketing option: printed yellow pages,” says Paul Zwillenberg of OC&C Strategy Consultants, in London. “Now they can buy space on, or they can bypass yellow pages by building their own website and optimising it on Google, or simply buying keywords from Google.” There are signs that larger, more technologically aware SMEs are already doing just that.

Yellow-pages firms are moving onto the internet too, but they face intense competition online, unlike the near-monopolies they enjoy in print. In Britain attracts fewer visitors than Google Maps, the search giant's local-search service. Only three big yellow-pages firms, in France, Norway and Sweden, have recreated their dominance on the internet. The biggest of these is PagesJaunes Groupe in France, which beats Google Maps for visitors. It helped that customers were already familiar with Minitel, a precursor to the internet that featured PagesJaunes. In addition, the firm started to invest in its website ten years ago, says its boss, Michel Datchary. Other yellow-pages companies, he says, have tried to protect their print products at the expense of online growth.

Another difficulty in moving online is that directories dare not allow reviews or recommendations, because they earn money from advertising. But “people now want more than a book full of advertisers—they want word of mouth and a sense of community”, says Douglas McCabe of Enders Analysis, a research firm.

Yellow-pages firms have two great strengths which mean that their decline is likely to be gradual. First, the information they offer is still far more extensive and reliable than most of what can be found on the internet. Google acknowledges this, and pays directories firms around the world to use their data. Second, small firms are loyal to phone books, because they get results. In Spain, where Yell owns Páginas Amarillas, eight out of every ten searches in the phone book resulted in a call to a small business. Pirate's Cave Chandlery, a boat-supplies firm in England which employs six people, launched its own website four weeks ago, but plans to stay with the Yellow Pages for the time being. “Lots of people don't have computers,” explains Debra Hardy, the accounts manager, “and we don't want to miss them.”

Africa - undersea cables

SAT-3 reinforces market monopolies in Africa - Study

Johannesburg, South Africa, May 15 2008 -- A study examining the impact the SAT-3 fibre optic submarine cable has had on telecommunications in four African countries has found that the potential of the cable has not been properly exploited.

Instead, ownership of the cable by telecoms incumbents in the countries researched has reinforced their market positions.

The study, conducted by the Association for Progressive Communications (APC), set out to analyse the effect ownership of the South Atlantic 3/West Africa Submarine Cable (SAT-3/WASC) has had on the communications markets in Angola, Cameroon, Ghana and Senegal. It focused on the ‘Africa section’ of the submarine cable – running along the west coast of Africa down to southern Africa – with a specific emphasis on access and cost.

Wednesday, May 21, 2008

France - investigation into state aid for France Telecom

State aid: Commission launches in-depth investigation into financing of retirement pensions of state employees working for France Télécom

The European Commission has decided under the state aid rules of the EC Treaty to launch an in-depth investigation into the reform of the arrangements for financing the retirement pensions of state employees working for France Télécom which were introduced in 1997 at the time of the liberalisation of the telecommunications sector. It will look in particular into whether the reduction in the charges borne by France Télécom following the reform constitutes state aid that is compatible with EC Treaty rules. The in-depth investigation will give third parties the opportunity to comment on the measure. The opening of an investigation in no way prejudges its outcome.

Competition Commissioner Neelie Kroessaid "Whilst we welcome structural reforms designed to assist incumbent monopolists in adapting to a liberalised market we must ensure that these reforms do not distort competition between operators to an extent contrary to the common interest."