Thursday, May 26, 2011

USA - AT&T's acquisition of T-Mobile - comments by Greg Rosston

[technology academics policy] AT&T’s announced acquisition of T-Mobile’s U.S. wireless communications business raises important competition policy issues that require careful analysis by the agencies that must approve the acquisition, the Federal Communications Commission (FCC) and the Antitrust Division of the U.S. Department of Justice. The United States currently has one of the most competitive and best-performing wireless communications industries in the world. Four carriers (AT&T Mobility, Verizon Wireless, Sprint, and T-Mobile) provide service to almost the entire nation, and several smaller carriers provide regional service, at least one of which operates in each of the major metropolitan areas. American consumers benefit from competition as prices in the United States are substantially below prices for comparable services in other nations. As a result, American consumers are among the world’s most intensive users of broadband wireless communications.

Superficially, the proposed acquisition appears to run seriously afoul of the merger policy of the antitrust enforcement agencies. The first step in merger analysis is typically to measure concentration—an indicator of the extent of competition.

Based on the high concentration of the industry, the Antitrust Division will try to determine if the merger would cause an increase in consumer prices. Another concern of the Antitrust Division will be the effect of acquisition on competition in specific local markets.

Greg Rosston Examines the Competitive Implications of the Proposed Acquisition of T-Mobile by AT&T Mobility

Sao Tome - Government and CST agreed to details of a submarine cable

[telecompaper] The government of Sao Tome and Principe, Africatel and the Companhia sao-tomense de Telecomunicacoes (CST), controlled by Portugal Telecom, have signed an agreement for the establishment of a managing body for the submarine cable called STP Cabo. According to Portugal Telecom vice president, Luis Pacheco, this is the largest investment made by a company of Sao Tome, estimated at USD 700 million.

Sao Tome govt, CST sign submarine cable agreement

New Zealand - Telecom is to split off its network operations to support the govt's broadband network proposal

[reuters] New Zealand's dominant phone provider, Telecom Corp , said on Tuesday it expects to split its network operations into a separate company by the end of year as it starts building a government-sponsored broadband network, sending its shares to a near-16 month high.

Telecom said it expected to start work later in the year on rolling out the network in 24 regions, including the biggest city Auckland and the capital Wellington, the lower North Island and most of the South Island.

But the NZ$1 billion ($790 million) deal will force Telecom to demerge its network company, Chorus, into a separate listed entity, while it changes into a telecommunications retailer.

"We are absolutely clear that this is a positive deal for our shareholders, as well as delivering an effective fibre programme for New Zealand," said Telecom Chief Executive Paul Reynolds.

The structural separation, which Telecom had put forward to satisfy competition concerns, still requires a law change and shareholder approval.

It will be done through a court approved scheme, which will leave Telecom shareholders with stakes in the two companies.

Under the agreement, the government's Crown Fibre Holdings will invest NZ$929 million in Chorus through a mix of debt and equity as the broadband network is built.

The shares will be non-voting and no dividends will be paid before 2025, wile the debt will be unsecured and non-interest bearing.

Telecom NZ to split by year-end for broadband build

Bulgaria - Delays in implementation of the EU directives to reduce consumer contracts from 24 to 12 months

[sofia echo] Bulgaria is delaying the adoption of the new European Directive on telecommunications, which should come into force on May 26 2011, stipulating universal rights for citizens of EU countries and facilitated access to services when using telephone, mobile or internet connections.

According to the new regulations, EU member states should ensure that contracts for telecommunication services do not require an initial commitment period of more than 24 months.

The countries should also allow users to subscribe to a service with a maximum contract duration of up to 12 months and ensure that the process of number portability does not exceed one working day.

In addition, the contracts should also contain detailed information about compensation and reimbursement if the quality of service does not comply with the minimum standards.

These changes should be added to Bulgaria's Electronic Communications Act (ECA), which is still to be co-ordinated among the relevant authorities.

The European Commission has said it would impose penalties on EU states which have failed to prepare for the new regulations.

Bulgaria delays adoption of new EU rules on telecommunications

Saturday, May 21, 2011

New Zealand - Many rural schools not to get a fibre connection

[nz herald] Nearly 500 rural New Zealand schools may not receive a fibre internet connection under the Government's ultra-fast broadband scheme or rural broadband initiative (RBI).

One of the selling points of the $285 million RBI was its promise to hook up 700 rural schools to high speed internet.

However, according to data from telecommunications researcher Jonathan Brewer, 470 schools - servicing 108,000 students - will not be covered by the programme.

Communications Minister Steven Joyce confirmed that some schools that would not get a fibre connection in the broadband schemes.

However, figures from the Minister suggested the number of schools that would miss out is closer to 300.

"There will be some schools in what is known as Zone Three that will be contracted to receive Fibre connections separately from the UFB and RBI contracts, because they don't fit with in the relevant UFB and RBI geographic footprints. That contract [to connect them] won't be set until after the final fibre footprint of the UFB areas is known," Joyce said.

Telecommunications User Association (TUANZ) chief executive Paul Brislen said he was under the impression that all schools were a priority.

"We need to make schools a priority, both the UFB and RBI were predicated on high speed broadband to schools and for me that's non-negotiable, we have to have decent connectivity to our schools - if no-where else," he said.

TUANZ, InternetNZ and Federated Farmers have written to Joyce and Education Minister Anne Tolley requesting more information on which schools would miss out.

The group called the situation "inequitable and an anomalous public policy outcome".

"The analysis has also shown that about 90% of the schools in Zone 3 are within 2 kilometres of existing Chorus fibre. We therefore believe that most of the 470 schools can be provided fibre connections at a modest cost quickly."

In the RBI:

* Telecom and Vodafone will lay 3,100 kilometres of fibre internet cables and build 154 new cell towers

* 86 per cent of rural houses and businesses having access to broadband peak speeds of at least 5 megabits per second (compared with 20 per cent at present).

* The extension of mobile coverage by 6,200 square kilometres to 125,700 square kilometres of rural New Zealand.

Rural schools may miss out on broadband

Australia - NBN still seen as politically beneficial for Labor Party

[the australian] IN a break from her woes, Julia Gillard this week went to Armidale in NSW to demonstrate that the National Broadband Network is a political winner for Labor with the Coalition still unable to gain traction with its critique.

The NBN may become the greatest white elephant in Australia's history dressed up in hi-tech modernism. But its political agenda still works in Labor's favour as a pitch to regional interests, 21st-century education and Gillard's exploitation of the NBN as symbolic of Labor vision and hi-tech nation building.

"The NBN is the greatest infrastructure project in this nation's history," Gillard declared at this mainland Australia rollout. The technology was "transformative" and, as for the possibilities, they were "absolutely endless and truly global". Trashing the old copper-based services, Gillard said slow connections would no longer plague workplaces, schools, homes and universities. Yes, the nirvana is at hand.

In response, the Coalition struggled. Shadow treasurer Joe Hockey said Labor was offering everybody a Bentley when the nation could only afford a Commodore. Tony Abbott was faced with questions from the regional media along the lines "Isn't it about the future?" and "Shouldn't we have the best infrastructure?". And, moreover, what's so bad about a Bentley?

This week was a reminder: Abbott's political assault on Labor is too narrowly based. So far he has mobilised unpopular issues, notably the carbon tax and boat arrivals, against Labor. But Abbott must show he can shift opinion and win debates on pivotal policies such as the NBN. This was a plus for Labor at the 2007 election, a bigger plus at the 2010 election and critical to Tony Windsor's support for the minority Gillard government.

If Labor can win the NBN battle at a third election, the Coalition will be stamped as hopeless Luddites, a brand Labor will reinforce with Abbott's climate change scepticism.

Remember the political origins of the NBN. It was marketed by Kevin Rudd as a concept both "Labor to its bootstraps" and proof that Labor was the party of the future. Under Rudd, the NBN exploded from a $4.7 billion project to a $43bn colossus that offered 93 per cent of Australian homes broadband speeds of 100 megabits per second. This was the most important financial decision of Rudd's first term outside the fiscal stimulus. There is no public evidence it was opposed by Wayne Swan and Lindsay Tanner, the economic ministers. The Abbott-led Coalition failed in 2010 to grasp the potency of the NBN as a political issue or as a defining economic debate of this era.

Labor's position is that the NBN will eventually deliver a return on investment. The budget forecasts a rapid rollout with the government providing $27.5bn in equity including $18.2bn in the three years from 2011-12. The government will retain full ownership during the rollout to authorise its political aim of prioritising the NBN in regional areas.

Consider the NBN's apparent beauty - because it is a public enterprise that generates a return it is designated as off-budget yet Labor's position is that public ownership is initially essential because private enterprise would never meet these social policy specifications.

Finance Minister Penny Wong says because the NBN will get a return the government's $27.5bn contribution is not recurrent funding and, therefore, cannot be redirected. The potential contradiction is the project is a Labor-engineered national infrastructure venture but also a commercial venture.

When it comes to the NBN, opposition communications spokesman Malcolm Turnbull is lethal. Turnbull has a comprehensive grip on the policy, financial and technical flaws. His critique is withering yet this week proved the Coalition lacks any "cut through" attack. Turnbull went on to ABC1's Lateline on Wednesday night to hammer Labor on the NBN. The result? The news instead was Turnbull's criticism of Abbott's climate change policy. Turnbull said he did not anticipate crossing the floor again on carbon pricing but his critique of Coalition policy (virtually by describing that policy) was unmistakable and a break for Gillard when she was under pressure. Indeed, it was a double negative - Turnbull got no traction on his NBN attack and he gave Labor a free kick on climate change.

The point is the Coalition cannot govern successfully unless it prevails, some time, in the NBN battle. Failure to carry this debate will damage its prospects at the next election anyway. It is the NBN, more than any other single issue, that documents the economic policy gulf between Labor and Coalition.

The principles that constitute Turnbull's attack are, first, that the NBN is the zenith of Labor's indulgent attitude to finances and refusal to honour its own words by applying a cost-benefit analysis to a project that, using Labor's own figures, has a price tag heading towards $50bn.

Second, the NBN is a government-owned monopoly that is likely, as the Organisation for Economic Co-operation and Development said, to weaken competition in wholesale broadband services with the risk that prices will be higher than otherwise (highlighting Labor's constant willingness to impose higher prices on households).

And third, by putting all its bets on "fibre to the home" Labor has gambled on one technology and one method, revealing its faith in government's ability to pick the best technology years ahead. As Turnbull says, the decision to build an entirely new fibre to the premises regardless of whether cheaper network architectures would do the job, and the decision that this will run to 93 per cent of homes, "is an ideological choice, not an engineering or economic necessity". Indeed, Turnbull argues that "fibre to the node" or "fibre to the curb" would deliver high speeds at half the cost.

The economic argument made by Gillard and Communications Minister Stephen Conroy relies on productivity. But productivity is tied to cost. The test here is whether Labor delivers genuine productivity or the biggest white elephant in Australia's history.

Turnbull argues that, for most people, the extra bandwidth "is of no real value". Indeed, he compares it to a farmer 50km from town who agitates to get the road sealed, only to find the local council builds a six-lane highway to his property. The extra capacity has no value. And it is entertainment functions (think video), not noble productivity enhancements, that drive bandwidth demand.

Turnbull's tactic is to hold Labor to account for "every misstep, every setback", aware that take-up rates and prices will make or break the NBN's success. On impressions so far, the NBN risks having lower-income households subsidising higher-income households that are de facto entertainment centres. The other subsidy is from the city to the regions, a declared virtue of the minority government parliament.

Indeed, legislating the NBN is the most significant decision so far of the current parliament. Yet the NBN, compared with carbon pricing, receives scant attention. In many ways the NBN is the purest example of contemporary Labor philosophy - its justification being the need to compensate for market failure via a government-directed national project. This model is instinctively grasped by the Australian public, remains popular and has deep roots in the nation's old-fashioned pre-reform culture. At the heart of Turnbull's response is a difficult idea: the separation of means and ends. That is, the Coalition believes in universal broadband but thinks the NBN is an extravagant and inefficient answer.

Of course, the Howard government contributed to the Coalition's current dilemma. Conroy's model achieves the long desired structural separation between retail-level services and the network infrastructure. By contrast, one of Howard's worst mistakes was to privatise Telstra as a monopoly.

This week, speaking to the Queensland Media Club, Turnbull fingered the looming Telstra-NBN deal being negotiated - it sees NBN Co paying Telstra about $9bn in net present after tax value terms in return for it decommissioning its copper access network. Turnbull argues that if an incoming Coalition government wanted to redesign the NBN and use part of the copper customer access, then "it would have to negotiate a new deal and pay Telstra yet again".

In short, Turnbull says a Coalition government will face difficulty unscrambling and re-designing the NBN. Indeed, this is just the start, given the political expectations Labor has fuelled.

Turnbull got headlines this week, much to his anger, because of his climate change policy remarks. The truth, however, is that Turnbull, as communications spokesman, faces an immediate battle that penetrates to Labor's political strength, to core Liberal-Labor policy differences and to Turnbull's own political skills. One necessary step is for him to abandon his public declarations about climate change policy. But none of this denies Abbott's problem: on broadband policy Labor still wins in the political optics. Abbott has an image problem in this area that is overdue to be addressed.

NBN plays to Labor's strength

UK - MPs call for LTE coverage obligation to be extended to reach another 2 million people

[computer weekly] MPs have supported a parliamentary motion urging Ofcom to ensure that mobile broadband coverage is extended to include an extra two million people in rural areas,

Tory MP Rory Stewart, who proposed the motion, said that 98% mobile broadband coverage is vital to Britain's economy.

Stewart is MP for for Penrith and The Border and an outspoken campaigner to increase the coverage requirement in Ofcom's 800MHz and 2.6GHz spectrum auction from 95% to 98%. Now more than 100 MPs have given their backing to the motion - the most to sign a motion in living memory, says Stewart.

"The fundamental thing we were trying to get across in debate is that this is the smartest, cheapest investment we can possibly make for economic growth. It's a no brainer," he told Computer Weekly in an interview after the debate in the House of Commons.

"It's insane to say millions of people in Britain and not going to be able to use this technology that is so important in the next five years."

Ofcom calculates that in order to increase coverage to 98%, 1,200 more phone masts would need to be built at £150,000 each - which it estimates could knock £200m off the auction price. But Stewart says this calculation could be far too high as some companies will not need to build masts from scratch and could be encouraged to bid high to secure bids against competitors.

But he acknowledges that getting Ofcom and the government to change its mind may not be easy. "We've still got a lot of work to do, the Treasury is under a huge financial crunch, and we're asking it to take the risk of losing up to £200m at auction," he said.

However, the timing is urgent, he says. "This is the last chance because once the [spectrum] licence is sold it will be very difficult to come back to companies in three years' time and say, 'Would you mind including another two million people' because there will be no obligations to do so," said Stewart.

"It would be much more inconvenient and expensive to make the government do it at this point as the Treasury would have to be taxing people more or robbing from other departments."

Without getting the key parties on board the extension stands little chance of happening, he says. "We've got to get Ofcom, the Treasury and the Department for Business to change their minds and get key officials involved - then the problems will evaporate," he said.

"The next big deadline is when the auction terms will be announced at the end of the year. My main agenda is to make sure when this happens, that 98% coverage is included. I don't mind how do it, I'm not trying to tell Ofcom how to do job - just that the risk of losing up to £200m is worth taking. This is a basic issue of moral and social justice," he said.

The Ofcom consultation on the auction terms closes in 10 days. "I will be working endlessly with every single company so we can say to Ofcom and the government that the [telecom] companies are willing and see we can identify any glitches in the system. In the meantime I would really encourage the public to write into the Ofcom consultation," said Stewart.

MPs call for extending mobile broadband coverage to 98% of UK

Broadband - Charles Kenny questions investment in broadband, saying it is not linked to economic growth

[npr] Expanding broadband access is international development's latest cause celebre, and it's easy enough to see why. The incredibly rapid spread of cell phones has enabled residents of the developing world to text crop prices to market and arrange bank credit; the Arab Spring has been fueled, filmed and mobilized using Facebook, Twitter, and YouTube. It's a tempting story line: If basic communications technologies like mobile phones are good, and narrowband Internet has even more uses, surely broadband Internet is the secret to unlocking global progress. If micro-entrepreneurs in rural Africa can access global markets through their flash-enabled websites, and if education and medical care can be imparted through streaming video technology, surely the world's poor can leapfrog into prosperity.

Indeed, that's the conclusion of a high-level U.N. panel that issued a report on the subject during last September's United Nations summit on the Millennium Development Goals. The Broadband Commission for Digital Development, co-chaired by Mexican telecom magnate Carlos Slim — the richest man in that country's history — and Rwandan President Paul Kagame, issued a "Declaration of Broadband Inclusion for All." Members of the wide-ranging commission — including billionaire Richard Branson, the heads of UNESCO and other international organizations, the Senegalese singer Youssou N'Dour, and high-profile development types such as Jeffrey Sachs and Muhammad Yunus — all joined in the chorus for broadband. "In the 21st Century, broadband networks must be regarded as vital national infrastructure — similar to transport, energy and water networks, but with an impact that is even more powerful and far-reaching," the report states. Many development organizations have jumped on the broadband bandwagon as well, declaring public subsidies for the spread of fiber-optic cable across regions from Africa to Central Asia a potential funding priority.

But with such a wide spectrum of the world's thought leaders backing the cause, it might be a surprise that the broadband report is rather thin on specifics and evidence. Its 69 pages have space for 58 photographs of commission members, but not one footnote to an academic article. In fact, the distance between the report's optimism and the existing literature on broadband's impact on development could be measured in astronomical units. To suggest the commission's conclusions were half-baked would be an insult to the frozen dinner roll.

It's true that information and communication technologies are having a big impact in the developing world. Ten African markets alone generate over $1 billion in mobile-service revenues each year, and the total for the continent is about $45 billion. Already, more than half of Internet users and nearly half of all broadband subscribers live in low- and middle-income countries. Information technology and business process offshoring (things like operating call centers and records management overseas), was close to a $100 billion industry in 2009, according to the U.N. Conference on Trade and Development (UNCTAD) — and much of those revenues were captured by developing countries. India's share of the industry alone has grown from $1 billion in 1990 to almost $60 billion in 2009.

But just because information and communication technologies in general are having a big development impact, and broadband in particular is spreading rapidly, doesn't mean that digging trenches and laying fiber-optic cables are the fastest way to a world free of poverty. For a start, there is little evidence that ubiquitous speed and nationwide broadband networks is necessary for firms to benefit from the opportunities offered by offshoring through the Internet. India's booming IT industry claims by far the largest share of the global business process offshoring market: 35 percent, according to UNCTAD. But India also ranks 114 in the world in terms of average connection speed, according to a survey by global consultancy Akamai.

Second, there is precious little evidence linking broadband rollout to economic growth. Sadly, in the commission's report one of the few brief nods to actual studies of the impact of broadband notes that "estimates suggest that for every 10 per cent increase in broadband penetration we can expect an average of 1.3 per cent additional growth in national gross domestic product." That is indeed what one unpublished study claims, but the analysis supporting it is tenuous. The estimate is based on economic growth rates and broadband penetration from 1980 to 2006. Countries with more broadband also grew more rapidly on average, reports the study. But for most of that period, broadband didn't even exist. So, the considerably more plausible interpretation of the analysis is that countries that grew faster between 1980 and 2006 could afford more rapid rollout of broadband as it became available in the new millennium.

Foreign Policy: Put The Breaks On Broadband

Fibre - Vodafone argues against fibre to fill "not spots" and in favour of wireless

[eweekeurope] A new report by Vodafone suggests that mobile is a better way to patch broadband not-spots than fibre

Mobile operator Vodafone claims that many emerging economies are investing unnecessarily in fibre optic broadband networks, when they should be focusing instead on extending the reach and capability of mobile networks.

In its 2011 Social Impact of Mobiles (SIM) report, Vodafone warns that the current level of investment in fibre optic networks in emerging markets is unsustainable, due to the cost of deployment in rural areas. It also points out that, given the ubiquity of low-cost phones in these countries, mobile is likely to remain the primary way for people to access the Internet.

“We believe that our findings show that the current emphasis on delivering fibre optic cable everywhere overlooks other effective means of extending the use of broadband in an affordable way,” said Diane Coyle, chair of the Vodafone SIM Panel and editor of the report.

Fibre vs. mobile

Vodafone used the Indian states of Maharashtra, Karnataka and Rajasthan as an example, to compare the feasibility of extending fibre access networks against mobile networks. The company concludes that the deployment of a fibre access network would only be commercially viable in 3 percent of the districts, while wireless broadband coverage could be provided in 98 percent of the districts.

In reality, the solution to the problem of broadband provision in remote areas is likely to be a combination of different technologies, including ADSL, fibre, mobile 3G and satellite. While Vodafone makes a valid point about the widespread use of mobile technologies in developing countries, it should be noted that the company is itself a mobile network provider, and therefore prone to bias.

The report goes on to state that social networking sites such as Facebook are helping to build demand for data usage to the point where economies of scale accelerate.Vodafone recommends that governments in developing countries make an effort to provide mobile-enabled services free of charge, in order to increase broadband take-up and reduce the digital divide.

The importance of mobile spectrum

The report also highlights that the availability of spectrum will drive technology innovations and better coverage for the growing demand for mobile broadband services in emerging economies.

“It is tempting to see the spectrum challenge as being the same in developed and emerging markets. That would be fundamentally wrong,” the report states. “The reason is that the widespread fixed networks offer the possibility in developed markets of carrying a sizeable proportion of the data traffic (e.g., via Wi-Fi). But those possibilities just do not exist in the emerging markets and therefore all that traffic will fall on the mobile networks.

“Absent plentiful spectrum, the traffic will suffocate service quality. Emerging markets are going to need large and appropriate spectrum assignments to deliver their data applications.”

Meanwhile, in @Britain, the communications regulator Ofcom is currently preparing for the long-awaited auction of 4G spectrum around 800MHz and 2.6GHz, which is due to take place in the first quarter of 2012. Ofcom recently released research, stating that 4G mobile technology will deliver more than three times the capacity of existing 3G technologies, using the same amount of spectrum.

This increased spectrum capacity is essential in meeting the UK’s rapid increase in mobile traffic, fuelled by the growth of smartphones and mobile broadband data services. Only this week, a group of MPs opened a debate in the House of Commons, in an attempt to pressurise both Ofcom and the government to expand the provision of 4G technologies to more isolated rural communities.

Vodafone Warns Against Excessive Fibre Investment
see also Vodafone report

USA - Bay Area is to get an enhanced wireless broadband network

[prnewswire] Today the Alliance for Jobs and Sustainable Growth, a coalition of business and labor, announced its support of the Bay Area Wireless Enhanced Broadband System (BayWEB), a new wireless broadband network that promises to help law enforcement, create jobs, and improve wireless access in underserved areas.

"Business and labor don't agree on everything, but we agree that this public-private project is necessary because it will help law enforcement agencies communicate better in emergency situations," said Leon Chow of SEIU-United Healthcare Workers West and an Alliance leader. "BayWEB will improve the safety of the entire Bay Area by providing law enforcement agencies with a state-of-the-art, interoperable, LTE 4G broadband network."

The Alliance cites three reasons for supporting BayWEB: it helps public safety; it creates jobs; and it increases broadband access to underserved areas and institutions such as community colleges, hospitals, schools and libraries.

Steve Falk, President of the San Francisco Chamber of Commerce and an Alliance leader, emphasized job creation.

"This project will bring 1,300 jobs into the Bay Area," said Falk. "We need this kind of project in tough economic times. Unlike most projects, the timeline is immediate and the positive impact will be felt within the first two years."

According to a resolution passed unanimously by the Alliance, BayWEB will provide public broadband access for Bay Area community colleges, hospitals, health care providers, public libraries, and schools as well as business and residential customers in areas with limited or no access to high-speed Internet.

The resolution also says that for public safety users, BayWEB will deploy a "comprehensive LTE 4th Generation wireless broadband network."

"This state-of-art system will support data interoperability, allowing Bay Area emergency responders to connect on a common dedicated data network for the first time," says the resolution. "In a disaster situation, BayWEB will enable emergency responders to have broadband access to mission-critical information and improve the delivery of health and safety services to millions of Northern California residents."

The $72.4 million project is jointly funded through a federal BTOP (Broadband Technology Opportunities Program) grant of $50.5 million and $21.9 million in private funding from Motorola Solutions. The company was awarded the federal grant following a competitive review process administered by the U.S. Department of Commerce as part of the American Recovery and Reinvestment Act.

Business-Labor Alliance Announces Support of "BayWEB" Broadband Network

Friday, May 20, 2011

UAE - Regulator reports twice as many mobile phones as people

[zawya] The UAE had more than 11 million mobile phone subscribers at the end of February, pushing its penetration rate close to 200 per cent, one of the highest rates in the world, official figures showed on Wednesday.

Internet subscribers also exceeded 1.4 million while landline users stood at around 1.7 million at the end of February, showed the figures by the Abu Dhabi Department of Economic Development.

In a report marking the May 17 international telecommunications day, the Department highlighted the steady expansion in the UAE's telecom industry and the surge in penetration rates despite its rapid population growth rates.

"The UAE's drive in this respect resulted in a leap in telecommunications and IT user indexes, registering 199.3% mobile penetration rate by February 2011, 63.2% internet user rate, and 30.6% of landline users for the same month."

It noted that many international studies and research published recently confirm that the UAE, the second largest Arab economy, is well-positioned amongst the top regional and international IT and telecommunications developed countries, leading the Arab nations according to the Global IT and Telecom Report issued by International Economic Forum for the last three years.

The UAE topped Arab countries in the global network readiness index for the same period to become amongst the world's best five countries in network readiness, the report said.

"This highlights the success of the public and private sectors as well as individuals to adopt and implement IT and telecommunications, and it is in line with the outcomes of the UAE IT and Telecommunications survey."

It showed the UAE came in the world's 24th position according to the 2011 Global IT and Telecommunications Report, one degree behind the position it held in 2009 and 2010. It said the retreat does not reflect a setback to development efforts in IT and telecommunications but shows that some countries elsewhere were able to grab a higher rate of growth last year.

"However, the UAE is expected to take a better position in 2011-2012, especially with all areas located within Abu Dhabi City are now fully covered with fibre optic network (FTTx), which made Abu Dhabi the first capital in the world to be completely covered with this network," it said.

The report said the FTTx project is planned to cover the whole UAE by end of 2011, making it the first country to be fully covered with this network.

"All such positive signs indicate that the IT and Telecommunications sector in the UAE will experience a leap in the coming years, fueled by the Government's huge support and rapidly-growing expenditures in this sector. investments in IT and telecommunications sector are expected to grow 15% in 2011, to reach Dh 18.4 billion against Dh16.1 billion in 2010," it said.

"Such a growth rate coincides with the country's efforts to invest in It and telecommunications related applications such as space technology. Abu Dhabi is gearing up to launch its second satellite, Ya Sat, by end of this year, following its launch of pilot first satellite. The Dubai-based Emirates Institution for Advanced Science and Technology (EIAST) will launch its second satellite in the last quarter of 2012....all those indicators highlight the ever-growing and important role played by IT and telecommunications sector in the UAE in building knowledge-based and competitive economy that is fueled by excellence and creativity. Besides, the sector is doomed to transform the country from the regional leadership into global competitiveness."

UAE IT and Telecommunications Indexes (February 2011)

Landline Statistics

Number of landlines

Penetration rate of landline (for 100 people)

Mobile phone statistics

Mobile Active Subscribers

Penetration rate (for 100 people)

Mobile users-GSM

Mobile users- prepaid

Internet Statistics

Internet users

Subscribers via landlines

Broadband subscribers

Broadband subscribers (for 100 people)

Internet users (for 100 people)

Source: Telecommunications Regulatory Authority

UAE has 11m mobile phone users

New Zealand - The Telecoms Bill is facing a difficult passage requiring support from minor parties

[national business review] The controversial Telecommunications Amendment Bill is back in parliament for its final lap, setting the scene for a Telecom split and the final stages of Crown fibre contract negotiations.

Opponents hoping for major changes during the legislation's select committee phase will be disappointed.

For, as predicted by NBR, the finance and expenditure select committee reported the Telecommunications Amendment Bill returned to the house yesterday with its two most controversial provisions intact (see a PDF here).

National and the Maori Party (forming a majority on the committee) recommended the bill in its current form; Act, Labour and the Greens did not. Labour promised to repeal a key element - the so-called ten-year regulatory holiday - for Crown fibre companies - if elected.

Act: might as well flush $1.35 billion down the toilet
Act voted for the bill's first reading, but with MP Sir Roger Douglas expressing reservations. New leader Don Brash - like Sir Roger and a second Act MP, Heather Roy - has been an outspoken critic of government involvment in broadband. Now, as earlier flagged by NBR, it has become a strong opponent.

Sir Roger sharpened his rhetoric on this morning, telling RNZ that the government might as well "take one thousand five hundred million dollars and flush it down the toilet."

Act's coalition agreement with National requires it to support the government main election promises. However, Communications Minister Steven Joyce evaded the question of whether the telco bill fell under this category, offering only that National and Act are "working through the issues."

Maori Party support shored up
The bill is still set to pass its second and third readings regardless by dint of Maori Party support, recent shored up with the establishment of Nga Pu Waea, a new group that will meet bi-monthly with Telecom and Vodafone to ensure the $300 million rural broadband intiative (RBI) provides connectivity options for marae, addresses land access issues and explores Maori employment opportunities. Communications minister Steven Joyce said Nga Pu Waea could be extended to the $1.35 billion urban ultrafast broadband initiative.

Telecom shares (NZX: TEL) were up 1.35% to $2.335 in late trading on the NZX as the news was announced, contiinuing the company's recent bull run.

Two key elements intact
InternetNZ is not happy.

“The biggest problems with this legislation were the imposition of a regulatory holiday preventing the Commerce Commission from doing its job in the fibre environment and Telecom rather than Government leading the structural separation process,” InternetNZ chief executive Vikram Kumar said this afternoon.

“Neither of these major flaws have been fixed.

"Act, the Greens and Labour MPs on the committee have set these out as key problems they have with the bill, and we agree."

The Greens said the bill delivered Telecom a "legalised monopoly". Labour pledged to repeal elements of the legislation.

TelstraClear, which has been running TV and newspaper campaigns attacking what it calls, confusingly, "The Ultra Fast Broadband Bill" expressed disappointment but not surprise.

Federated Farmers, Consumer, most telcos bar Telecom oppose bill
“Given Minister Joyce’s unwavering faith in his own views and the politics of the whole situation, I am hardly surprised by the outcome,” chief executive Allan Freeth said. “But I am disappointed by the lack of respect shown by the Minister to the industry and consumer groups alike, and the inevitable cost and loss of choice for New Zealanders.” A coalition including Federated Farmers, Consumer, InternetNZ, Tuanz, Vodafone and 2degrees has opposed the bill.

“I had hoped this Government would have learned from recent history which has seen Telecom fined a record $12 million for anti-competitive behaviour, and mobile termination rates forced down only after action by the Commerce Commission," Dr Freeth said.

A few small changes
Mr Kumar acknowledged that the select committee had made minor tweaks.

“We do welcome small changes the Committee has made to the Bill. There are bigger penalties for breaches to LFC undertakings; a requirement for the Minister to consult the Commerce Commission for some decisions, and a useful narrowing of the broad power the minister would have had to spend funds from the Telecommunications Development Levy on almost anything," Mr Kumar said.

“Importantly, the Committee has fixed the definition of Equivalence that will apply to Local Fibre Companies from 2020. It is now clear that an equivalence of inputs standard is required."

Still, “Overall, this Bill favours Telecom’s shareholders over the wider New Zealand public. It seems that the market has made the same assessment, with Telecom’s share price jumping up," Mr Kumar said.

The legislation's impact

Among other measures, the bill sets out the regulatory frame work for the rural and urban broadband projects; allows the government to buy Telecom assets; and a spun-off Telecom network company to invest in local lines and fibre companies without the usual level of M&A scrutiny (crucially, such deals can only be entered into after the initial round of Crown fibre regional contracts are signed).

It also includes provision for a 10-year forbearance period for ultrafast broadband regional contract winners - a measure Mr Joyce has described as a pragmatic move to attract private co-investors. The minister has also argued that pricing is set by contracts with the government over the decade-long "regulator holiday" (it can go down, but not up). Mr Kumar, and others have worried it might not fall as fast as other countries.

As Act peels away, Crown fibre bill hinges on Maori Party support

New Zealand - Parliamentary Committee has left a regulatory holiday in place in the telecoms bill

[nz herald] A parliamentary select committee report on the ultra-fast broadband law has left it mostly intact, despite a tide of industry opposition.

The finance and expenditure committee reported back to Parliament yesterday on the Telecommunications (TSO, Broadband, and Other Matters) Bill and recommended it become law, if several changes are made.

The bill paves the way for the Government's $1.35 billion ultra-fast broadband scheme, which plans to lay fibre internet cables across 75 per cent of New Zealand over the next 10 years.

Although proposing tweaks to the bill, the committee believed the hotly debated regulatory forbearance period should be kept in place.

This section of the law would remove the Commerce Commission's ability to regulate price on the broadband network until December 31, 2019.

The committee made its decision on advice from Crown officials that the forbearance would result in lower wholesale and retail prices "by removing the risk premium" for investors.

The logic is that if the commission cannot regulate the network, prices will remain stable and investors will have the confidence to put money into the scheme.

Price caps would be put in place to ensure they cannot be raised unfairly.

Notes from a meeting between Communications Minister Steven Joyce and Labour's Clare Curran suggest that providing price certainty and removing the risk premium would lower the cost of the broadband roll-out by $400 million to $600 million.

The select committee report also recommended the commission should be unable to review the forbearance period to see if it was working until the end of 2018.

Previously, a review was allowed after 2016.

Telecommunications Users Association chief executive Paul Brislen, who spearheaded industry opposition to the "regulatory holiday", was underwhelmed by the changes the committee put forward.

"They haven't addressed any of the big concerns at all.

"They seem to be of the opinion that officials say there is no problem and that's that."

Labour and the Green Party produced minority reports and opposed removing the Commerce Commission's ability to regulate fibre, fearing it would negatively affect competition.

Labour has indicated it will repeal the bill if it returns to power in November.

The Act Party also criticised the bill and was against the Government's funding of fibre internet.

As well as facilitating the rollout of fibre, the bill also makes the necessary changes for Telecom to split its wholesale business from its retail arm, which the company proposed as part of its bid to be the Crown's private partner in the scheme.

These changes will come into law only if Telecom wins the broadband contracts and will be dropped if the company is unsuccessful.

The bill cannot go to a vote in the House until the Crown announces who it will partner with and whether Telecom will be involved.

Industry insiders have tipped that a decision will be made this week.

Regulation holiday stays in broadband law

Zimbabwe - Econet will invest USD 400 million to upgrade its network

[global telecoms business] Econet Wireless, which is Zimbabwe’s largest mobile telecommunications network, is investing $400 million to enhance its network and improve customer care.

The group corporate communications manager Rangarirai Mberi in an interview with The Zimbabwean stated that the amount was sourced from the firm’s savings nationally after the country converted to using the US dollar.

Mberi told the paper: “In total we have invested about $600 million in Zimbabwe. In Zimbabwe this year alone we have invested at least $400 million upgrading our service as well as replacing out-dated equipment to bring into the country updated facilities so as to enhance our coverage.”

The company plans to have 11 million subscribers by the end of 2012. Econoet is owned by Strive Masiyiwa, a Zimbabwe-born businessman now based in South Africa.

Econet invests $400m on Zimbabwe net

Antigua - Government with LIME will provide a computer for every teacher with Internet access

[carribbean] Government, in partnership with telecommunications company LIME, has announced a new initiative that will provide every teacher in Antigua and Barbuda with a modern, high-speed laptop computer.

In addition, each teacher will receive at their homes, four months of free high-speed Internet and then at a significantly reduced rate for three years.

This new component of the Connect Antigua and Barbuda Initiative, “Technology for Education 20/20”, was announced yesterday by Prime Minister Baldwin Spencer, on the observance of World Telecommunication and Information Society Day.

The Technology for Education 20/20 initiative is slated to commence in September of this year and will directly empower over 1600 primary and secondary school teachers, both in public and private schools and will be administered by the Ministry of Information, Broadcasting, Telecommunications, Science and Technology.

Prime Minister Spencer said the cost of this broadband connectivity, as well as the indoor customer premises equipment to access the Internet, are being absorbed by the Government.

All secondary schools, both private and public, will also become Wi-Fi enabled to allow them to become virtual hot spots. The costs associated with this Internet connectivity will be met by the Government.

“Our teachers will not be left behind. Our students will not be left behind. The ICT revolution has dramatically and positively impacted on the education landscape in Antigua and Barbuda,” Prime Minister Spencer said.

“We are transforming lives as we connect city and village schools and teachers to information and knowledge on the Internet. We are narrowing the gap that separates those with and without access to information and knowledge, thereby broadening opportunities for a better life.”

LIME’s Country Manager, Davidson Charles, said a laptop in the hands of all teachers speaks to empowerment and communication opportunities.

“LIME considers this project essential to the development of our communities. The Internet has revolutionized the way we study, communicate, shop, transact business and even entertain others. It is important that students and teachers become more aware of advancing technology,” he said. “ICTs in education are not transformative on their own.

Transformation requires teachers who can use technologies to improve student learning. The professional development of teachers in the areas of ICT integration is essential. Unless teachers/educators model effective use of technology in their own classrooms, it will not be possible to prepare a new generation of teachers who effectively use the new tools for teaching and learning,” he added.

Minister of Information, Broadcasting, Telecommunications, Science and Technology, Dr. Edmond Mansoor said that as Antigua and Barbuda surges forward as a developing nation, public-private partnerships like the one developed with LIME are critical.

Laptops for all teachers in Antigua

USA - Cox, Optimum Business and Verizon rank highest in satisfying business customers with telecommunications data services

[prnewswire] As the network outage performance gap narrows among major providers in the telecommunications industry, the proficiency of account teams and customer service representatives has emerged as a key differentiator in customer satisfaction, according to the J.D. Power and Associates 2011 U.S. Major Provider Business Telecommunications Study(SM) – Data Services, released today.

For a second consecutive year, the industry average for short- and long-duration outages has declined significantly. The average number of short-duration outages (lasting less than five minutes) experienced by customers during the past six months has decreased by more than 22 percent, to 4.6 incidents in 2011 from 5.9 in 2010. The average number of extended outages (greater than five minutes) has dipped more than 24 percent in the same period to 1.9 incidents in 2011, from 2.5 in 2010.

Consequently, performance-related issues are not among the top reasons customers would consider switching providers in 2011. However, the study finds that the greatest differences in satisfaction between customers who intend to switch and those who intend to stay with their current provider revolve around the empathy and responsiveness of account executives and customer service representatives.

"As annual improvements in network performance continue, empathy-related attributes, such as concern for customers' needs, have materialized as elements that can make or break a service provider," said Frank Perazzini, director of telecommunications at J.D. Power and Associates. "All service providers have pushed a percentage of their customer support to Web-based applications, and rightly so, as their customers have largely embraced this channel. However, when a customer's business is in peril due to a telecommunications problem, they want to connect with a service representative who understands the critical nature of their situation and will act immediately."

Among large enterprise businesses, the study finds early signs of economic optimism, with 53 percent forecasting growth in 2011, compared with 47 percent in 2010. This optimism has manifested itself in the number of large enterprise businesses that say they plan to add data lines in 2011—33 percent, compared with 30 percent in 2010. Small/midsize businesses are collectively more conservative, with 46 percent forecasting growth in 2011. Home-based businesses are the least optimistic, with 36 percent predicting growth in their businesses in 2011.

The study also finds that electronic billing has a strong effect on overall carrier satisfaction. Among customers who rate their provider a 10 on a 10-point scale, 63 percent indicate they use online billing systems, while those who rate their provider a 4 or lower are 10 percent less likely to use electronic billing. Satisfaction with the billing experience averages 715 (on a 1,000-point scale) among customers who report utilizing the online billing feature, compared with only 643 points otherwise.

The study measures customer satisfaction with providers of telecommunications data services, such as cable modem, DSL, T1, T3/DS3, Ethernet and frame relay. Providers are ranked in three segments: home-based businesses (companies based in a residential location with one to five employees); small/midsize businesses (companies with two to 499 employees); and large enterprise businesses (companies with 500 or more employees).

Five factors are used to measure satisfaction across all three segments: performance and reliability; billing; cost of service; offerings and promotions; and customer service. A sixth factor—sales representatives/account executives—is included for small/midsize businesses and large enterprise businesses.

With an index score of 632, Cox Communications ranks highest in the home-based business segment. Cox performs particularly well in the cost of service and performance and reliability factors. Optimum Business (631) and Verizon (624) follow in the segment rankings.

Optimum Business by Cablevision ranks highest in the small/midsize business segment with a score of 681, and performs particularly well in five of the six factors driving satisfaction: sales representatives/account executives; cost of service; performance and reliability; offerings and promotions; and customer service. Cox follows Optimum Business in the segment rankings with a score of 656, and Comcast ranks third with 631.

In the large enterprise business segment, Verizon ranks highest in customer satisfaction with a score of 698, and performs particularly well in all six factors: performance and reliability; sales representatives/account executives; customer service; cost of service; billing and offerings; and promotions. AT&T follows Verizon in the segment rankings with a score of 653.

The 2011 U.S. Major Provider Business Telecommunications Study is based on responses from 5,928 business customers of telecommunications data services at home-based, small/midsize and large enterprise businesses in the United States and includes evaluations of their data service providers. The study was fielded in November 2010 and February 2011.

J.D. Power and Associates Reports: As Network Performance Improves, Differentiator Among Telecommunications Providers for Business Customers Shifts to People

Kenya - Safaricom has seen a 13% drop in pre-tax profits due to rising costs

[afrique en ligne] Kenya-Telecommunications - Mobile operator Safaricom yesterday reported a 13 per cent drop in pre-tax profit for the full-year 2010 as costs rose faster than revenue growth mainly because of a bigger payroll and marketing spend. Profit before tax stood at Sh18.3billion down from the record Sh21billion recorded the year earlier. Revenues, however, climbed 13 per cent to Sh94billion in line with analysts' prediction fueled by strong growth in non-voice revenues services; M-PESA, SMS and data. Speaking during an investor briefing yesterday, CEO Bob Collymore said Safaricom's strategy of diversifying from being merely a voice company was paying off. "Our strategy to diversify and grow non voice revenue is paying off as attested by the impressive growth of data and MPESA and this trend is expected to be amplified in the future," Collymore said.

M-PESA revenues jumped 50 per cent to Sh12billion while mobile and fixed data revenue rocketed by a massive 466 per cent to Sh5.4billion to buoy static voice revenues which stood at Sh63billion.

Analysts hailed the results terming them better than expected given the competitive business environment telecoms operated in during the year under review. Safaricom could have done much better but for a surge in costs.

A 25 per cent jump in operating expenses to Sh45.7billion up from Sh36.5billion as well as depreciation charges meant that earnings before interest, tax, depreciation and amortization fell from Sh36b.6billion to Sh35.7billion.

The board approved a dividend payout of Sh8billion which works out to 20 cents a share or 60 per cent of profit after tax. Last year the company paid out 50 per cent of its taxed profits as dividend and reinvested the rest.

With capital expenditure on infrastructure such as network expansion expected to remain or surpass the Sh25.3billion spent last year, management yesterday indicated it may be in the market for funds either from the capital markets or through loans. "Our balance sheet is still very underleveraged," Collymore said.

Going forward Collymore said the company would segment its customers for better targeting with products. Nkore Mwebesa of CFC Stanbic Financial Services praised the performance. "I think the results are pretty good under the circumstances. The fact that they have been able to grow revenue (despite the tariff wars) is commendable ," Mwebesa said. "It was better than expected. Most of the investors we spoke to I think they are yet to grasp the strategy especially the impact of non voice revenues." Aly Khan Satchu of Rich Management concurred. "It was better than I expected. I had a lower number," said Satchu.

Telecommunications-Kenya: Safaricom Profits Drop By Sh2.7 Billion

Saturday, May 14, 2011

India - Govt is to invite bids for wireless broadband access spectrum later this year

[economic times] In June, the telecom department will invite bids from mobile phone companies, fixed-line operators and ISPs to kick off its countrywide wireless broadband push aimed at bridging the digital divide. However, the telecom department has decided to put up only one slot for bidding in each of the 22 circles. This means, only one private telecom player will be allowed to roll out a wireless broadband network in each telecom zone. The second slot has been reserved for state-owned BSNL. The project will be subsidised by the Universal Service Obligation Fund, or USOF.

"BSNL will be asked to match the L1 price quoted by the successful private sector bidder in each circle after we conclude the tendering exercise that is likely to start next month. The objective is to expand pan-India wireless broadband coverage by leveraging the existing passive infrastructure created for mobile telephony in rural and remote locations," said a senior official in the telecom department. "If no private telco bids in a particular circle, BSNL will be asked to go it alone there," added an official in the telecom department.

DoT to invite bids for National Wireless Broadband in June

France - To support rural users, Ministry is allowing extra spectrum in the 4G auction

[pc world] French Internet users in rural areas may end up getting faster mobile broadband than other parts of the world, after a minister said that operators would be allowed to buy more spectrum.

Last week, √Čric Besson, minister of Industry, Energy and the Digital Economy, said that the country's mobile operators would be allowed to buy up to two 15MHz channels of spectrum -- one for data downloads and one for uploads -- in the 800MHz band, which will be sold in an upcoming 4G auction.

That sets it apart from other European countries, including Sweden and Germany, where operators are only able to buy two channels of 10MHz. In the U.S., Verizon Wireless also uses two channels of 10MHz for its LTE (Long Term Evolution) network. Larger chunks of spectrum mean operators can offer faster speeds, in the same way a road with three lanes can handle more traffic than one with two lanes.

For the faster speeds to become a reality operators have to be willing to buy that amount of spectrum, while networks and modems would have to be able to handle the wider channels. Unsurprisingly, operators are keeping mum about their plans. Orange can't comment formally on the upcoming LTE auctions at the present time, a spokesman said via e-mail.

Current radio base stations for LTE are compatible with the wider channels, according to a spokeswoman at Ericsson.

However, modems will be more challenging. Using larger channels in the 800MHz band would require advances in radio-frequency components technology, according to Qualcomm, which makes the chipsets that go into, for example, USB modems. Such performance improvements are not expected in the short and medium term, since they would require improvement of several orders of magnitude compared to the performance of current components, it said.

The 800MHz band is very attractive to operators, because its signal propagation provides good indoor coverage and can also be used to expand broadband coverage to rural areas. Today, LTE needs 20MHz channels to perform at its best. But that is only available to operators in higher bands, including 2.6GHz -- though that band does not have the same range and indoor coverage as the 800MHz band.

So, having more spectrum may not pay off immediately. But as components evolve that may change. Also, next generation mobile networks will allow operators to use a technology called carrier aggregation to bunch together spectrum in different bands and use them as one data link.

The 1.8GHz band is being pushed by some as an alternative that could offer users and operators a good compromise of speed and coverage.

Caps on the amount of spectrum operators can buy are being put in place to ensure a competitive market. Whether France, in the end, chooses a 15MHz cap over 10MHz remains to be seen. The auction's final details will be announced later this month, according to a spokesman at local regulator ARCEP.

France May Get Faster Mobile Broadband Than Other Countries

UK - 90% of premises to have 25 Mbps "superfast" broadband by 2015

[daily telegraph] Mr Hunt said that broadband speeds of two megabits per second (Mbps) should be available to the whole country by 2015 but 90 per cent of homes and business will have superfast broadband of 25Mbps or better.
He told a conference in London: “If we press ahead with expansion of superfast capabilities, then we can put the UK in the global fastlane.”
The Government has said that it wants Britain to have the best broadband network in Europe by 2015. It believes that the market will provide superfast broadband to around two thirds of the country but the final third will need some help.
To that end has made £530 million available to councils and Local Enterprise Partnerships for projects to extend broadband in their area.
Mr Hunt said: “We have set aside the money and the expertise to make this happen. Now local authorities need to step up to the plate by bringing forward their own plans and setting out how they will deliver this level of ambition.”

Superfast broadband 'for 90 per cent of Britain by 2015'

Pakistan - Operators of an illegal VoIP gateway for phone traffic convicted

[daily times] Additional Sessions Judge Tanveer Meer Thursday rejected a bail plea filed by a cyber crime case accused of running illegally gateway exchange and adjourned the case till April 25. The complainant into the case was Zonal Director Pakistan Telecommunication Authority (PTA) Rawalpindi.

A First Information Report (FIR) vide 04/ 10 dated 09/2010 was registered against the accused under section 31 of PTA 1996, r/v 36, 37 ETO 2002 r/w 420,468,471,109 PPC. PTA Zonal Director (ZD) Rawalpindi Muhammad Shafiq lodged a complaint No. 5/2010(IVT) ZDR/PTA with Federal Investigation Agency (FIA) dated 09-04-2010.

PTA official, in his complaint, claims that a Retail Sale officer (RSO) at M/s Saif Communication situated in F-10 Markaz Islamabad Sajjad Anwar was asked about the mobile phone SIM 0313-5241114 that was used to load Rs 30 to 40 thousand twice a week using unauthorized VoIP gateway exchange.

RSO Sajjad Anwar, PTA alleged, disclosed that the said mobile number was in use of Muhammad Zakria Khan, owner M/s Pakistan Motors F-10. Sajjad said Zakria had paid through cheques for easy loads, his latest cheque of Rs 35,000 bearing No 4959858 of Standard Chartered Bank, Islamabad dated 08/04/10.

FIA along PTA officials raided Pakistan Motors and took Zakaria into custody. After a little argument, he produced the said SIM and an operational illegal VoIP gateway exchange being operated for illegal termination of international voice using unauthorized Voice over Internet Protocol (VoIP).

The defence counsel Thursday submitted the bail application claiming his client was falsely embroiled in the case and ulterior motive on the part of complainant and the police. The counsel asked the court for an interim bail of the accused against on hundred thousand rupees but court rejected the bail plea. The accused was arrested on April 10, 2010, a seven-day physical remand for the accused was obtained from competent court and on 17/04/2010 he was sent to judicial lockup. Earlier the officials seized the equipment and arrested the accused that, upon further interrogation, disclosed that he also ran another illegal VoIP gateway exchange in F-11/4, Islamabad. The accused, using these gateways, entertained overseas calls at source country(s) and converted into VoIP by using Internet as a medium. The calls were transmitted to Pakistan where the illegal gateway exchanges containing mobile SIMs / IMSIs were installed. The calls were converted from VoIP to GSM and transmitted to destination telephone numbers so it would appear to the recipients that calls were coming from local mobile telephone numbers. The original overseas telephone numbers were masked the legal gateway Exchange at source country and Pakistan were being bypassed, hence causing wrongful loss of millions of US$ to the exchequers of source county (s) and Pakistan.

It was learned, during the investigation, that the accused perpetrate the crime in connivance with his elder brother Hafiz Muhammad Bilal who had sent him money from UAE through Western Union, AA Exchange Company (Pvt.) Ltd. as a fund to operate illegal gateway exchange. It came out that he received an amount of Rs.135,995.99/- through Western Union vide MTCN No. 308-631-2406 sent by his brother from United Arab Emirates (UAE).

FIA informed the court that it had seized IMSI (SlMs), illegal gateway equipment, debit card, and visa card from his possession. Other perpetrators involved in the case with Zakria are also being included in the case once their complete particulars are obtained.

FIA also informed that the further investigation regarding the case was under way and vowed to complete it soon. Additional Sessions Judge adjourned the case till April 25, 2011.

Illegal gateway exchange case

ICTs - Rapid growth across the developing world

[vanguard] ICT development has been astonishing in every region of the world over the past five years but recent developments have proven that the developing world and emerging markets actually drive the telecom successes in the entire world at the moment.

Admitted that over a hundred countries of the world has passed 100 percent in mobile penetration but the rave of the moment is Africa, one of the emerging markets, where there still exists untapped human market for mobile penetration.

At the last count, Eastern Europe is said to be counting about 126.6 percent mobile penetration at the end of 2010. Western Europe also is said to be trailing with 118 percent penetration. This is even when the North and Southern Americas are also said to be fast approaching saturation.

This clearly indicates that if the efforts to connect the next one billion unconnected people are to be intensified, it must focus in the emerging markets of Asia Pacific and Africa. Although the Asia Pacific region itself is also moving towards saturation with about 68.6 percent as at last quarter of 2010.

Interestingly, in Africa, mobile cellular penetration is also moving, closing at 41.4% in 2010. This was higher than it had been in Asia_Pacific three years earlier, where in 2007 it reached 36.4%. This development gives a good signal emerging markets potential to keep world development in progression

Yet statistics from the International Telecommunications Union, ITU, says that there were as many fixed broadband subscriptions in the developing world in 2010 as there were in the developed world in 2008. Two years earlier, developed world accounted for 251 million while the developing world is now accounting for 253 million. China alone is said to account for around half of all the developing world’s fixed broadband subscriptions.

How emerging markets drive world telecoms growth

Universal service - Economists argue there is no rationale for subsidizing voice or Internet access

[regulation 2.0] Economists Greg Rosston and Scott Wallsten argue that the FCC should take the cash now collected from everybody’s phone bills to extend voice service to poor people and remote areas, and redirect the money to high-speed Internet service (read broadband). They recommend experimenting to see which approaches to spreading broadband access work best, and to employ competitive bidding for companies hired to provide the subsidized services. That would certainly beat business-as-usual, which amounts to throwing money at an old problem (getting plain old telephone service) and hoping it will stick.

What’s absent, though, from the policy conversation is a clear economic rationale for subsidizing voice or Internet service in the first place. It would be nice to see if the social returns exceeded the costs – for all we know, from an efficiency perspective the optimal subsidy is no subsidy at all.

Broadband in Every Pot?

China - Capital spending on broadband is to rise by two-thirds by 2013 to USD 1.15 per annum, but seeing first saturation

[wireless federation] A recent research has revealed that propelled by government support, China’s broadband capital spending is expected to rise by two-thirds from 2010 to 2014.

Spending on broadband infrastructure equipment by China’s telecommunications operators will soar to $1.15 billion in 2014, up from $925 million this year and $688 million in 2010, as presented the below figure.

By 2015, however, revenues will decline to $1.02 billion as the broadband market for urban Internet users approaches the saturation point.

According to researchers, government interest and support for expanding high-speed Internet access in China will drive massive growth in broadband expenditures during the next few years. This strong broadband expenditure growth is all the more remarkable given that overall communications capital spending in the China will rise only slightly during the coming years. Overall spending is declining in the short term and rising only marginally over the long term because of a slowdown in spending on wireless infrastructure in China.

Government spending The 12th Five-Year Plan issued by China’s Ministry of Industry and Information Technology (MIIT) established aggressive development targets for the China telecommunications industry from 2011 to 2015.

During this time, China’s mobile communications user base will reach more than 1.1 billion with total Internet users climbing to 600 million, representing a 40 percent penetration rate. Despite the expansion, overall growth in telecommunications spending in China will slowing during the next four years as the historic expansion and upgrade of mobile networks in the country slows. And although spending reached a peak of $7.9 billion attained in 2009, it is expected to plunge to $4.9 billion in 2011.

Given the weakness in wireless, total capital spending for China’s telecommunications carriers during the next three years will rise just slightly, increasing to $5.4 billion by 2014. Broad expansion for broadband spending In April 2010, seven Chinese government ministries announced their support for a stimulus plan to build fiber broadband access networks nationwide.

Following this proposal, China Telecom immediately commenced its Broadband China, Fiber Cities project aimed at providing households in all cities with populations of 20 million people or more with access to high-bandwidth capability by the end of 2013.

Meanwhile, China Mobile announced an expenditure of $2.2 billion to construct a passive optical network (PON) in cooperation with China Tietong Telecommunications Corp. China Mobile also is aiming to put its smart grid plan into motion and has plans to build 1 million Wi-Fi hot-spots during the next three years.

Researchers expect total PON ports to hit 53 million users in China by 2011 and fiber-based broadband subscribers to reach more than 57 million people, including more than 30 million fiber-to-the-home (FTTH) customers.

Over the course of 2011, China Mobile will be testing the time division long-term evolution (TD-LTE) wireless standard on a small scale, with hopes to achieve download speeds of approximately 100 megabits per second. The company plans to activate a commercial network at some point in 2012.

China telcos’ broadband capital spending to boom by 2014

USA - AT&T has a potential penalty of USD 6 billion if its acquisition of T-Mobile falls through

[venture beat] We already knew that AT&T had promised T-Mobile a $3 billion breakup fee if their merger isn’t approved by regulatory agencies, but now it appears that AT&T may have another $3 billion worth of assets at stake in the deal, Reuters reports.

That extra $3 billion includes $2 billion worth of wireless spectrum and a roaming agreement valued at $1 billion, sources told the news agency. A $6 billion breakup fee would be worth about 15.4 percent of AT&T’s $39 billion T-Mobile deal, potentially breaking global records, Reuters notes.

With so much at stake, the news tells us that AT&T must be even more confident about the merger’s approval than we previously thought. And in the slight off-chance the deal falls through, T-Mobile will make a bit of a killing just for being courted.

Opposition to the merger emerged almost immediately after AT&T proposed the deal in March. Speaking off the record, an FCC official said that the deal will face a “steep climb” towards approval. Sprint also didn’t waste any time opposing it. And this past Wednesday, AT&T CEO Randall Stephenson defended the merger to an exceedingly skeptical Senate committee.

The deal still needs to be approved by the Federal Communications Commission and the Department of Justice.

Reuters’ estimates come from analyst and consultant figures. AT&T likely doesn’t have a full $6 billion on the line with the deal, but whatever is at stake is certainly much more than $3 billion.

AT&T could lose up to $6B if T-Mobile deal falls through

Monday, May 09, 2011

Zimbabwe - Mobile growth has been substantial in voice, with strong forecasts for Internet and broadband

[media update] Mobile subscriber numbers in Zimbabwe have trebled from early 2009 to mid-2010, whereas fixed line subscriptions have remained stagnant. With demand for voice services increasingly met, future growth is predicted to occur around mobile internet and broadband provision.

Both mobile operators and internet access providers will benefit from this second wave of growth. However, increasing political instability in the run-up to elections expected to be held in 18 to 24 months and a business environment not always conducive to proper process are expected to have a negative impact on market prospects.

New analysis from Frost & Sullivan (, An Overview of Zimbabwe's Vibrant Telecommunications Market, finds that the Zimbabwean mobile communications market earned revenues of $372.2-million in
2009 and estimates these to reach $1,343.7-million in 2016. This represents a compound annual growth rate of 20.1 per cent, considerably lower than the phenomenal 40.6 per cent revenue growth experienced from 2008 to 2009.
However, declining growth rates are expected when markets become increasingly saturated.

"Mobile operators are the largest contributors to telecommunications revenues in Zimbabwe," notes Frost & Sullivan ICT Industry Analyst, Protea Hirschel. "As 3G networks expand, mobile operators compete more directly with Internet access providers. These, in turn, have entered the voice market, adding to competition."

Unfulfilled demand, initially for voice and increasingly for data services, is one of the main drivers of growth for mobile communications. Fixed lines are unlikely to meet this demand in Zimbabwe.

Mobile subscriber numbers trebled from less than two million at the end of
2008 to 6.9-million in mid-2010. The uptake of 3G by subscribers has also been very high and, at the end of 2010, exceeded the number of fixed line subscriptions. Fixed lines have remained stagnant at 390,000, as the incumbent has struggled for resources to maintain its network.

Nonetheless, very high unemployment rates, estimated to be in excess of 80 per cent, mean that consumer spending on communications competes with spending on basic necessities. Affordability, therefore, ultimately constrains average revenue per user (ARPU).

"The success of several promotions over the last 18 months has, however, shown the importance of affordable pricing in Zimbabwe," remarks Hirschel.
"Offering subscribers a compelling value proposition will continue to be of importance in this market."

Network quality of mobile networks in Zimbabwe is generally considered to be poor by subscribers. Perceived low network quality has also resulted in a high incidence of multiple SIMs as subscribers hedge their bets between networks.

After the dollarisation of the economy in 2009, network capacity of all mobile operators was unable to keep up with demand from consumers, contributing to poor network quality. Capacity constraints have, to an extent, been overcome at present.

However, erratic power supply remains a significant challenge for all telecommunications operators. Not only does it result in a degraded service experience for subscribers, but it also adds to operating costs as multiple power sources have to be factored into the cost base.

"Networks offering a higher quality service with fewer dropped connections have an advantage over competitors," states Hirschel. "As erratic power supply is a major contributor to poor network quality, decreasing reliance on grid electricity and backup diesel generators by using alternative energy, such as solar wind or hybrid powered base station designs, will result in long-term OPEX reductions. This will also help to preserve profit margins in the long-term as ARPU is expected to decline."

Mobile broadband to ensure continued vibrancy of Zimbabwe's telecommunications market

Thursday, May 05, 2011

Australia - A further increased in consumer complaints is putting pressure on Govt to tighten rules

[smh] THE federal government is under renewed pressure to tighten regulation on the telecommunications sector after another big rise in customer complaints.

New complaints for the quarter rose more than 30 per cent to just under 60,000, and a spokeswoman for the Communications Minister, Stephen Conroy, said the industry needed to do better at resolving complaints in the first instance.

Complaints from Vodafone customers to the Telecommunications Industry Ombudsman between January and March rose by 96 per cent from the previous quarter, to 14,670.

In a statement, Vodafone said complaints did indeed rise "sharply", particularly in January at the "peak of network and service issues". But it said decreases were recorded in February and March, "with a significant decrease in [ombudsman] complaints in April, similar to November 2010 levels".

The ombudsman said that most other large service providers also had an increase in complaints, although it did not reveal those figures.

The Australian Communications Consumer Action Network pushed for regulators to adopt tough new regulations for the industry.

It said the complaints statistics showed 2010-11 was destined to be the worst financial year on record for Australian telecommunications customers.
''The industry will point the finger at Vodafone and say, yet again, that there is no problem. The truth of the matter is that complaints about customer service and complaint-handling issues continue to climb across the board,'' the chief executive of the network, Teresa Corbin, said.

Senator Conroy's spokeswoman said rising complaints were the reason the government released a discussion paper evaluating whether the telecommunications ombudsman was equipped to continue to deal with complaints. Submissions are on the department's website.

The Australian Communications and Media Authority is also working through its Reconnecting the Customer inquiry. At the same time, the industry is revising its self-regulatory Consumer Protection Code.

''The government is considering whether new protections that enhance the well-being of consumers are needed," Senator Conroy's spokeswoman said.

Read more:

Telecommunications complaints soar again

N Korea - Govt has cracked down on electronic devices following the uprisings in Tunisia and Egypt

[world tribune] North Korea has confiscated electronic equipment capable of disseminating information about democracy uprisings that have raged through the Arab world.

At the same time, the Pyongyang regime has tightened control over the movement of people, in an operation designed to prevent similar disturbances among its own people.
All institutions and households were ordered to report on how many computers and electronic devices including portable data storage devices such as USB sticks and MP3 players they own, a government source here said.

N. Korea unnerved by Arab uprisings, tightens control over all electronic devices

Algeria - Changes in the structure of the regulator might enable growth of telecoms markets

[tmc] According to a new report from Pyramid Research, the Algerian Telecom market is an attractive market that still has yet to realize its potential. The report states that it will take a restructured l'Autorite de Regulation des Postes et des Telecommunications (ARPT) and less control by the government to allow foreign investment to reach Algerian Telecom operators.

The report on Algeria states that political changes may benefit the telecom sector. The report comes with a precise profile of the country's telecommunications, media and technology sectors that is based on proprietary data from Pyramid's research in the market. A detailed competitive analysis is provided in the report of both the fixed and mobile sectors. It also tracks the market shares of technologies and services and monitors the introduction and spread of new technologies.

Just like its Arab neighbors, Algeria also expects to see many changes in 2011. One of the reasons why Algeria is behind its neighbors in the telecom sector is due to the delay of rolling out 3G technology.

In a release, Majd Hosn, associate research analyst at Pyramid said that, “Algeria's 2010 telecom revenue CAGR between 2010 and 2015 is 7.1 percent, an indication of healthy growth mainly spurred by a strong increase in revenues for broadband Internet and mobile data. Pyramid forecasts a total market revenue of $6.58 billion by 2015. If Algeria fails to invest in new technology and telecom infrastructure development projects, we expect to see them fall short of our 7.1 percent growth forecast through 2015.”

The sale of Djezzy to MTN (News - Alert) last year was blocked by the Algerian government and they hit Orascom (owners of Djezzy) with $600 million in back taxes and did not give them the access to import any equipment until all back taxes were paid, which strongly hindered operations for Algeria's largest provider.

Hosn added that, “The ARPT will be a key body in implementing change and making consumers' best interests a priority. The operators in Algeria have the most to gain from the changes being demanded by the Algerian people.”

Pyramid says that Telecom Success in Algeria will be Determined by Political Change

UAE - A gang was caught transferring money from post-paid to pre-paid SIM cards, defrauding the operator

[khaleej times] A five-member gang including three men and two women was arrested by the Abu Dhabi police for allegedly taking advantage of the promotional offers of mobile phone service providers to swindle Dh400,000 by transferring credit from the post-paid numbers to prepaid users.

The gangsters managed to get 200 post-paid connections in the name of bogus companies and false persons. They offered the credit of the post-paid numbers for sale via ‘balance transfer’ option to prepaid mobile users.

According to Brigadier Hamad Ahmed Al Hamadi, Director of the Criminal Investigation Department, the overall credits transferred from such SIM cards billed around Dh400,000.

According to the police, the accused were illegally staying in the country and took up forged trade licences and passport copies with fabricated visa pages to get the post-paid mobile connections.

Al Hamadi pointed out that some trade shops colluded with the gang by selling out the credit of such post-paid connections to pre-paid users who ask for balance transfer.

The case came to light when the Organised Crime Section at the CID of Abu Dhabi Police received authentic report confirming that a gang of Arab nationality took the advantage of the promotional offers of cell phone service providers to trick them.

Colonel Dr Rashid Mohammed Burasheed, head of the Organised Crime Section, said a well-studied plan was chalked out to nab the criminals. Three men and two women were apprehended inside their houses from where the policemen recovered lots of forged papers, the devices used in duplication and forgery in addition to cell phones and some post-paid SIM cards

Gang arrested for
duping telecom firm of Dh400,000

Wednesday, May 04, 2011

New Zealand - Regulator found Telecom NZ had been reporting different assets values for regulatory and financial purposes

[national business review] Labour's Clare Curran told NBR that while the Commerce Commission had disputed a regulatory rather than a market valuation, "It certainly does show that Telecom appears to be gaming the system for its advantage - which is a pattern of behaviour we’ve seen over a number of years."

The communications spokeswoman added, "Given the biggest factor in the ultrafast broadband programme is the cost issue, this doesn’t fill one with reassurance that Telecom’s accessment of cost and its negotiating positions put to the govenement and Crown Fibre Holdings".

Ms Curran said the episode underlined why all telecommunications companies needed "rigorous" regulatory scrutiny, rather than the 10-year regulatory holiday proposed under the Telecommunications Amendment Bill, which will govern public-private companies created under $1.35 billion ultrafast broadband (UFB) programme. Telecom is bidding for 25 UFB regions.

UPDATE 2pm: While there is no direct link between today's announcement and Telecom's bid for government Crown fibre business, Telecommunications Users' Association head Paul Brislen saw broader implications.

"The government is about to potentially give Telecom $1 billion of public money and guaranteed limited Commerce Commission oversight for the rest of the decade - and that strikes me as something of a concern given the revelations of today," Mr Brislen told NBR. He added:

"I'd also expect to see some questions being asked of the TSO payments of the past decade if Telecom has been overestimating cost of keeping the rural sector connected. And I'd imagine Vodafone and TelstraClear will be asking for some of their money back."

The TSO (Telecommunications Service Obligation) levy was charged to telecommunications industry companies - chiefly Vodafone (around $16 million a year) and TelstraClear (up to $4 million) to subsidise Telecom for servicing so-called commercially non-viable customers. It is being phased out as the new rural broadband initiative is introduced.

Telecom overstated its worth - watchdog

Mexico - Competition authority has fined Telcel USD 1 billion for unfair practices

[AP] Mexico's antitrust agency confirmed Sunday that it levied a $1 billion (12 billion peso) fine against the Mexican cellphone subsidiary of tycoon Carlos Slim and ordered it to stop unfair practices.

The Federal Competition Commission said it found that Slim's Telcel business engages in "relative monopolistic practices" by overcharging competitors to connect calls to Telcel users.

The fine against Telcel is the maximum penalty possible — 10 percent of the company's assets because it is a repeat offender, the agency said in a statement. It gave Telcel 30 days to say how it will change its practices. Telcel also has 30 days to appeal.

Slim's telecom company, America Movil, revealed the fine April 15. It said it was studying all options for appeal.

A commission official said the fine is the largest ever levied by the 18-year-old watchdog agency and was made possible by a 2006 reform that raised fines for repeat offenders.
The agency's statement said Telcel charges competitors higher interconnection rates to call Telcel users than it does to connect calls between its own clients. The interconnection rate is even higher than the full price Telcel charges its users to make a phone call, the commission said.

Telcel engages in relative monopolist practices "by abusing its substantial power in the market to unfairly displace its competitors and thus affect the competition process in the landline and cellphone markets, hurting the consumer," the statement said.

The commission said that in setting the fine it took into account the seriousness of Telcel's practice, how intentional it was, the duration of the practice and Telcel's share of the market.

The decision resulted from an investigation begun in 2006 at the request of competitors such as Axtel, Megacable and Telefonica.

"The competition problems associated with high interconnection fees in Mexico generate losses of $6 billion each year to consumers," the commission said.
Telcel's parent company, America Movil, is the largest provider of wireless telephone service in Latin America, with 225 million subscribers. Its 2009 revenue totaled $30 billion.

Named the richest man in the world by Fortune magazine, Slim, 71, also controls Mexico's dominant landline phone company, Telmex. He is estimated to be worth $74 billion, with holdings in communications, retail, manufacturing, oil and construction. Some of his companies have come under various allegations of monopolistic practices in the past.

Mexico agency confirms $1B fine for Slim's company

UK - Competition Commission has published guidance for telecoms price appeals

The Competition Commission (CC) has published guidance for parties involved in
telecoms price appeals.

The new guidelines result from a review published by the CC in January, which made a number of recommendations for the CC and other bodies with the aim of making the overall process for such appeals more effective and efficient. At the same time, the CC consulted on draft guidelines and is now publishing the final version of these along with a summary responses to the original draft.

The new guidance (CC13)

USA - Supremes supported AT&T (and business in general) in forcing individuals to abide by arbitration clauses in contracts

[bloomberg] A divided U.S. Supreme Court bolstered the ability of businesses to channel customer and employee complaints into arbitration, ruling that companies can block people from pressing those claims as a group.

Voting 5-4 along ideological lines, the court said an AT&T Inc. (T) unit can enforce a contract provision that requires its wireless customers to press any claims individually in arbitration. The majority said a U.S. arbitration statute trumps a California law that would have invalidated the provision.

The case may affect tens of millions of arbitration agreements in California alone, including provisions in employment agreements, consumer loan applications and cable- television contracts. The ruling will also help companies in at least 18 states where companies now are restricted or barred from requiring consumers to accept class-action bans.

“It changes the law completely” in those states, said Alan Kaplinsky, chairman of the consumer financial services practice at Ballard Spahr LLP in Philadelphia.

Justice Antonin Scalia said in his majority opinion that class actions would interfere with “fundamental attributes of arbitration,” including its streamlined nature.

“The switch from bilateral to class arbitration sacrifices the principal advantage of arbitration -- its informality -- and makes the process slower, more costly and more likely to generate procedural morass than final judgment,” Scalia wrote.

Class Actions Limited as U.S. Supreme Court Supports AT&T

New Zealand - Regulator's report shows a drop in investment while competition has increased

[commerce commission] The Commerce Commission has today released its 2009/10 telecommunications monitoring report analysing the state of New Zealand telecommunications markets.

“The report shows investment in the telecommunications industry reduced slightly compared to 2008/09, largely due to the completion of Telecom’s XT network and the first stage of 2degrees’mobile network during the previous financial year, but fixed line investment increased slightly,” said Dr Ross Patterson, Telecommunications Commissioner.

“The report also shows that competition in all telecommunications markets has continued to increase. Consumer choice and quality of service continues to improve, while prices have fallen,” said Dr Patterson.

The total number of fixed broadband connections has more than doubled in nearly five years with fixed line broadband penetration increasing to 25 percent of the population. An estimated 61 percent of households now have fixed line broadband. Wholesale broadband connections (excluding unbundled copper local loop or UCLL) have more than tripled over the same time from 100,000 to 342,000 connections.

“Despite this progress, challenges remain. In the fixed line market, while more than 100 exchanges serving more than 60 percent of subscribers have been unbundled, the impact of cabinetisation will reduce the number of lines which can be unbundled by more than 50 percent by December 2011,” said Dr Patterson.

“In the mobile market, while call minutes have increased by 5 percent, usage remains low by international standards. New Zealanders make an average of 79 minutes of calls per month compared with 120 minutes per month in Australia and 198 minutes per month in the UK. In addition, off-net prices are significantly higher than on-net prices, discouraging calls between customers of competing networks”.

Competition in telecommunications continues to improve but challenges remain says Commerce Commission

Australia - Telstra has been winning large numbers of customers through its spending campaign

[business spectator] Telstra’s billion-dollar-plus cash splash is now sending waves rather than ripples through the telecommunications sector.

In a presentation to a Macquarie Group conference today Telstra’s David Thodey provided an update on the impact of last year’s decision to spend $1 billion on improving its customer service and to make it offerings more price-competitive. At its half-year results he revealed the strategy of buying customers was working, with more than a million new customers, mainly in mobiles.

Today’s update shows that across the board it is adding customers, with another 364,000 mobile services added in the March quarter. For the nine months to March, Telstra added 1.3 million new services, compared with only 271,000 for the same period last financial year. Post-paid mobiles were up a net 197,000 for the March quarter and 494,000 for the nine months.

It also added 141,000 bundles of product in the third quarter, with 561,000 net new bundles sold for the nine months to March against the 146,000 added in the same period previously. Where previously its retail fixed line broadband customer base was shrinking, there were 47,000 new services added in the third quarter and 186,000 for the nine months.

Thodey would also have been pleased that sales of the relatively new T-Box and T-Hub products are gaining real momentum, with 67,000 sold in the March quarter and 281,000 for the nine months.

All up, another million customers were added in just the three-month period to end-March.

While the new customers might be coming at a steep cost, in this pre-national broadband network period it is critical that Telstra rebuilds its customer base, retaining as many fixed-line customers as it can for eventual profitable transfer of their connections to NBN Co and building the mobiles customer base that will be a key to its infrastructure-based future.

In his presentation Thodey also confirmed that Telstra remains on track to launch its 4G wireless broadband network by the end of this year. The group has previously said the network will be focused on the major CBDs, but it will free up significant capacity on the existing Next G network and help Telstra maintain its network quality advantage over its rivals.

With Vodafone suffering badly from network congestion and degradation issues, Telstra’s new-found aggression has, with hindsight, been exceptionally well-timed.

The key issues, of course, are whether it can maintain the momentum and/or retain the new customers. With most of its bundled offers and, one assumes, its post-paid wireless plans, locking customers in for two years it has every chance to do so if it can deliver better customer service than it has in the past.

The other thing Telstra has going for it, which Thodey also referred to, is that its financial muscle, its ownership of Sensis and its 50 per cent interest in Foxtel give it the capacity and the relationships to get access to content that differentiates its offerings.

Last week’s AFL broadcasting rights deal included for the first time rights acquired by Telstra that will enable it to stream games live over the Next G network or to its T-boxes as an IPTV offering. It has also struck a deal with Foxtel that will see a tailored Foxtel product including about 30 channels streamed to the T-Box, as well as an on-demand service.

In the post-NBN environment Telstra won’t be competing in the fixed line space purely on price and brand (although it will need to be competitive) but will be able to offer unique content, like live sport, which will give it a unique competitive advantage.