Aussies taking determined steps toward functional separation

If you read about functional separation on this website, then you have a very solid understanding on one of the most important regulatory tools for enabling competition in telecommunications. The UK and New Zealand have successfully implemented functional separation on their incumbent operators. Australia is very close on their heels.

From a CommsDay report, we learn:

In Australia, the Department of Broadband, Communications and Digital Economy has hired a BT director to provide a $60,000 consultancy on functional separation.

Mobile broadband means innovation can come from all over the globe

There will be 250 million mobile Internet subscribers by the end of 2009. A post on GigaOm goes into great depth about the state of wireless broadband. By September of this year EMEA (Europe, M. East, Africa) will have 60 million subscribers, North America 37 million, and Asia-Pacific will have 56 million mobile broadband users. All indicative of the reality that mobile broadband will be a key gateway for users to get onto the Internet.

These are all signs that the emerging wireless broadband network — regardless of the networking protocol is good for innovators and innovation. More entrepreneurs should be thinking about leveraging this wireless broadband platform in a more meaningful fashion. In developing and emerging markets, this could see technology helping people overcome everyday struggles and generate whole new sectors to economies.

The graphic below helps put the emergence of mobile broadband in context:

Click to view in High-Resolution

Aussie regulator pushes for stricter separation of Telstra units

 

Regulators more willing to put telcos under the lens

Presently attempting to work through a large backlog of articles. The article that is the basis of this post continues to keep the spotlight on the regulatory changes being proposed for Telstra. Australia’s incumbent operator is squarely in the sights of Australian regulators:

Australia’s competition watchdog said imposing a tough structural separation regime on Telstra Corp. (TLS.AU) is the only way to guarantee an equal playing field during the transition to a planned multibillion dollar national broadband network but the company argues there’s no need for such a move.

This calls for looking at regulatory issues comes while Australia attempts to roll out the $43 billion NBN:

New cable down under will lower broadband Internet costs

A new international broadband cable landed on Sydney’s north shore. Stretching 4787km to Guam, the Pipe Networks project, dubbed PPC-1, offers Australian broadband users the promise of significantly lower Internet costs.

What’s Unwired Fiji thinking? New pricing for business Internet service falls way short of the mark

In an earlier post, Unwired Fiji was praised for deploying a next-generation WiMAX network. A loyal reader forwarded me me an email sent out by Unwired that details new services that take advantage of their new network infrastructure and this news should be greeted with much less enthusiasm. Unwired would have benefitted from waiting for the July 17th announcement of the liberalisation of access to the international gateway to  go to their customers with much more attractive pricing terms.

The company has unveiled two new service offerings for business users. Axxcess is a shared solution aimed at small and medium-scale enterprises. SkyFibre is a dedicated option for larger corporate outfits.

The trouble with Telstra and lessons for operators in our region

An earlier post outlined how regulators in Australia would require Telstra to agree to a functional separation of its network and retail operations. This post is an attempt to explain how a shifting regulatory environment is forcing major changes for Australia’s incumbent operator. Later this week, another post on Telstra will highlight a recent court verdict which forms the basis for why funtional separation is an unavoidable reality for network operators like FINTEL.

Leadership at telecom operators around the Pacific would be wise to look at the situation Telstra finds itself in down under. The Australian, reports on what can only be described as an implosion. Telstra finds itself battling government regulators, trying to piece together a functioning board of directors, selecting a successor

Telstra comes under attack on many fronts

for a very controversial CEO who has been sent packing, and in the latest development, likely prospect of a shareholder revolt.

Under the confrontational leadership style of CEO Sol Trujillo, the company has for years bristled at what they called burdensome government regulation. At times, this has resulted in Telstra carrying out a quite vocal campaign against Canberra. The aggressive stance of the company under the Trujillo-era culminated in the recent exclusion of Telstra’s bid to tender for construction of a national fiber network and the government opting to go the process under its aegis.

Glimpses of July 17th Announcement

Two more months and then we'll know what the beast looks like

Until the announcement on July 17th of the 2nd round of telecom sector liberalisation, we are like the people in this picture, only able to  guess at the parts of the elephant. We have already seen what competition in mobile means, and on that day, we will be given the road map for how Internet will advance in Fiji.

So, as we attempt to piece together what the elephant looks like, let’s take a look at what Dionisia has for us over at FijiLive:

The deregulation of international access, scheduled for July 17 this year, is phase two of the process. It will mean that any domestic reseller of telecommunication services may directly source its international bandwidth needs without going through FINTEL, as was previously the case.

Her article was very informative and helps us get a better understanding of how FINTEL is positioning itself with regard to future competition and government regulation.  By getting out ahead of government calls for liberalisation of the international gateway they hope to avoid more serious measures that government might push.

First campus WiMAX network launched in Taiwan

Alcatel-Lucent and Tatung University have announced the launch of Taiwan’s first WiMAX 16e campus network. The project will foster research and innovation in wireless broadband technologies.

Such deployments are crucial to rolling out commercial services:

“Before deploying WiMAX application services in the commercial market, field testing and evaluation are crucial. Tatung University’s network not only proves WiMAX’s capabilities in real life but also provides a wealth of data as well as an R&D environment for WiMAX developers and research institutes,” said C.Y. Hsu, the leader of Tatung University’s Wireless Broadband Laboratory.

Tatung Infocomm, a local operator, seeks to launch it’s commercial WiMAX offering in the near future. Everyone involved  agree on what is possible over WiMAX:

Tatung University and Alcatel-Lucent are also demonstrating WiMAX technology’s maturity through various innovative, state-of-the-art WiMAX application services, including smart metering, digital video surveillance systems, IPTV, PS3 gaming , IMS, and high-speed video streaming.

The maturing of WiMAX as a technology should mean greater consideration for deployment from operators in the Pacific.

Functional separation hops onto stage down under

Telstra has received clear signal of change in policy direction from Canberra

Last week, an unprecedented $43 billion plan to build a next-generation national fibre network was announced by the Australian Government. The announcement is a change in direction by the Government, which is now seeking a public-private partnership to deploy a fibre-to-the-home network covering 90% of Australians in the next eight years. The paper also outlines new measures the Government and regulatory bodies will pursue to foster greater competition. The move has great implications for incumbent operator, Telstra, now facing a very different competition landscape and downward pressure on its stock price.

A key new addition to the toolkit of regulators is functional separation, where  the incumbent operator (owner of the network) is required to create a separate network unit which handles essential network services to other providers and to the incumbent’s own retail units at the same prices and using the same non-price terms and conditions and processes.

Next-generation wireless networks for mobile and broadband Internet

Emerging economies face all sorts of opportunities to leapfrog entire stages of economic development.  Mobile phone usage is leading to the demise of wired line service.  Similarly, wireless broadband service offers the same potential for disruptive impact.  Regulatory bodies must stay on top of these developments to ensure a variety of outcomes:

• investment in next-generation network infrastructure and services
  
• promoting competition in services
  
• ensuring the technology is propagated as widely as possible

For Fiji, we can pretty safely say that wireless networks will deliver broadband Internet in the future.  This is because the country lacks the population density to justify the expenditure in fiber-optic cable, the new standard in wired internet service.  As wireless technologies close the performance gap and become cheaper from wider use, they will become more viable.

With regular Internet usage estimated at less than 5% of the population, the challenge is to create wireless networks that cover as much of the population as possible, and have service plans that are within reach of the average person.

Here is a comparison of WiMAX and LTE, competing standards for 4G or next-generation networks:

So despite their differences in origin and current availability, the two siblings may grow closer with time, especially as newer iterations on the standard emerge. Wright said 85 percent of the work and technology for WiMax equipment will be reused in Motorola’s LTE equipment designs. The true battle isn’t between the competing 4G networks, but between wireless and wired broadband.

“The performance and capabilities of WiMax and LTE will only get better over time, and will represent a direct competitive threat to the existing broadband services,” Wright says. “People will make a choice, just like today when people are disconnecting their wired lines for voice.”

This should help put the competing standards into perspective.  In Fiji, the WiMAX providers are Kidanet and Unwired.  Since LTE is very closely affiliated with mobile phone operators and manufacturers, Digicel and Vodafone are in that camp.

Understanding what these standards mean for each other, as well as to wired and wireless broadband connections will be a key part of how regulators ensure sufficient competition to spur investment in the technology and guarantee service to as wide a segment of the population.  The blurring of the lines between mobile and mobile Internet is also something regulators need to be aware of.

Deploying these networks is an expensive and as yet, untested proposition.  WiMAX is available now and has been successfully tested and deployed in many locations.  You can read about a pilot project in Spain, testing capabilities of the latest generation WiMAX Rev-e standard. LTE is undergoing early field testing by Fujitsu in Japan.

Both WiMAX and LTE are IP-based networks, which poses a real test for mobile phone operators as they figure out how to handle the switching technology to best deal with voice as well as data.  That is part of the reason why LTE deployment is not expected to arrive until 2012.

In earlier posts, I discussed how sharing infrastructure in a public-private partnership arrangement might be the best way to guarantee that service is available to as wide an area as possible.  Well, news out of the UK suggests that mobile phone operators are seeking partnerships to share network infrastructure with each other, in a bid to reduce operating costs:

British broadsheet The Guardian is reporting that UK cellcos Vodafone and O2 are planning to combine their network infrastructures. Talks between the two operators are reported to be at an ‘advanced stage’ and an announcement on the tie-up is expected within the next few weeks. Additionally, it is believed that Orange, which already has a network sharing agreement with Vodafone, may ask T-Mobile and Hutchison 3G UK for permission to join the two operator’s network sharing venture, Mobile Broadband Network Ltd (MBNL). All five operators, despite the rumoured link-ups, will continue using their own brand names. The sharing agreements could see a reduction in the approximately 51,000 base stations across the UK, in turn reducing operating costs for all of the cellcos.

via UK cellcos mulling network sharing agreements: CommsUpdate : TeleGeography Research.

Regulators are now faced with an even more difficult task of ensuring successful competition policy.  Still, emerging economies are offered the potential to leapfrog yet another stage of development entirely.  It might make sense for regulators to do a market analysis to see if such an agreement between operators and government would bring about successful outcomes of lowered costs to the consumer and wide availability of service.  In my estimation, avoiding the costly duplication of service should be something that is explored furhter.   Lowered initial investment expenditure and reduced operating costs would make companies more willing to deploy wireless technology quickly and more widely.