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.

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.

Do monopolies have an interest in thwarting broadband plans?

In recent weeks, this site has focused a great deal on the situation with Telstra in Australia. It’s because this drama has so many dimensions worth analyzing. A key development was the court ruling against Telstra on the improper use of Optus client information. Telstra used information it had access to as wholesale service provider to assist its own retail unit in targetting Optus customers.

These smaller developments are contributing to what is going to be a very dramatic overhaul of telecommunications policy down under.

Optus Chief Paul O’Sullivan on why he thinks Telstra will try to delay roll-out of the new broadband network proposed by the Government:

“The incentives for Telstra to delay a roll-out of a new high-speed broadband network or to try to re-monopolise a high-speed broadband network remains,” he said.

“The fundamental drivers of most companies’ behaviour lie in their underlying economics and in their competitive position. In Telstra’s case that drives them to very notable characteristics.

“First of all, they have a very strong incentive to delay the roll-out of any competitive infrastructure which levels the playing field in services to the home.”

The news from Australia should only make us wary of FINTEL. Is the upcoming announcement in July merely rhetoric of change from their part, when all that’s really being done is securing FINTEL’s competitive position? As wholesale provider of bandwidth to Vodafone, Digicel, Kidanet, etc. they say that market forces and competition will drive down prices. But, looking at what the Optus CEO is saying and the court ruling on the improper use of customer information, it is becoming harder and harder to believe FINTEL.

As developments in Australia prove, without competition in the operation of the underlying network, pricing of services will remain high.

Huawei to invest in PNG infrastructure

China’s leading telecommunications company, Huawei Technologies, will invest in Papua New Guinea’s telecommunications infrastructure. According to a leading PNG daily, the decision is a “a demonstration of confidence in the Pacific island country’s economy”.

Huawei also signed a memorandum of understanding with the PNG officials for plans that include providing assistance setting up an Integrated Government Information Service (IGIS). The IGIS would help PNG Government deliver e-govt. services such as passport and visa applications, tax and medical rebates, vehicle registration, etc.

Untangling the SPIN about submarine cable projects

Landing a submarine cable is no small task (Source: SPIN presentation)

An Up-to-date primer on the state of submarine cable projects in the Pacific Region is titled Trans-Pacific Capacity: Possible New Price War? It includes a section that heavily references the South Pacific:

The latest construction wave began in 2006 and has been centered on the Asian and Pacific Regions. The current round of activity started with the Gondwana, Australia to New Caledonia system,Telstra’s Australia to Hawaii system and six new trans-Pacific cables. These new cables are the Trans Pacific Express, Asia American Gateway, FLAG’s Eagle, Next Generation Network, and the Unity cable projects (Source: TMC).

Out of these six projects, only one faces significant delay:

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.

The Promise of O3b Networks

I’ve written previously about O3b Networks, a satellite start-up that promises to deliver IP backhaul services to the developing world.  I had a good fortune to speak with their CEO, Director of Asia-Pacific Sales, and Head of Ground Networks at the recent PTC conference in Honolulu.

Satellite technology, in a new configuration, promises to release the 3rd world from the shackles placed on them by domestic telecom monopolies.

They have just announced the signing of a new contract with Quark Communications in Guyana. An excerpt from their press release:

“With less than 1% penetration of broadband Internet usage in Guyana, we feel we have a moral obligation to provide all Guyanese Internet access for educational, commercial, and medical purposes,” said Brian Yong, CEO and Founder of Quark Communications. “The problem has traditionally been that it is very expensive to connect into the global communications infrastructure. With O3b, we now have access to ‘fibre like’ connectivity at an affordable price.”

Though emphasis of this blog is on Fiji and the Pacific Islands, it helps to bear in mind that a wide range of countries in the Global South face essentially the same issues when it comes to access to international telecommunications.  O3b’s presence helps ISPs in these countries to get access to high-speed backhaul facilities for a fraction of the price.  Where the only alternative is to lay expensive fiber-optic cable to establish international access, O3b offers hope.  Fiber projects come with price tags starting at $300 million, an impossibility for small nations dealing when looking at their spending priorities.

O3b is not tackling this problem with unproven technology.  They are relying on existing satellite technology (see graphic below) deployed in a very different constellation to achieve a coverage area for majority world/developing countries in entirety.  Some technical specifications:

Courtesy of O3b Networks

Additional online resources for O3b:

A Link to a short clip where you can hear a National Public Radio program feature on O3b in Africa

Diagram of O3b satellite constellation, a key difference from providers of the past (Video provided by O3b):

You can find press releases, media coverage,  and the most current company information on the O3b Networks website.

New Satellite Venture could be lifeline for Internet in the Pacific

     

The recent round of deregulation brings promise (Digicel launches in two weeks), but the internet is still an area of uncertainty because the monopoly license on the sole internet gateway (Southern Cross Cable) has not been challenged.  And more importantly, FINTEL seems to have been able to hold off efforts to deregulate in this area because it is on the hook to the network owner C&W, soon to be acquired by AT&T. 

FINTEL is well aware that to challenge their dominant status, govt. would have to pry control of the gateway from them–at an estimated price tag of $300 million, that is out of reach of Fiji Govt. finances.

Additionally, investing in a competing new cable running to say American Samoa, Hawaii, or New Caledonia would come at a price of about $100 million, which is also out of reach.

 

Annnouncement this week of Google’s investment in a new satellite business venture that seeks to provide broadband internet access at low and reduced rates to Africa, Latin American, and Asian countries offers a great deal of promise to Pacific Island countries. 

While the O3B website does not list the Pacific as an area where they will operate, we can only cross our fingers that when they launch their satellites in 2010, the Pacific will be part of the coverage.  The concept of satellite-based 3G wireless internet backhaul to get ISPs up and running in developing countries is extremely exciting and offers hope to the 3 billion people who still do not have internet access.

See also my previous post on how regulators can enforce ‘functional separation’, which would have to be done in Fiji to pry loose Fintel’s grip on internet backhaul in Fiji.

Next post: How mobile usage might affect the move toward expanding internet infrastructure in Fiji.

 

 

 

 

 

 

 

Sydney-New Caledonia undersea cable comes online.

Forwarding an email from a friend of this blog. Fiji will have to consider making a similar investment.

Source: Pacific Magazine

Worldwide map of under-sea internet cables

02 SEPTEMBER 2008 NOUMEA (Pacnews) —— Internet connections in New Caledonia have been given a significant boost on Monday when the newly-installed undersea fibre optic cable was officially commissioned, reports Oceania Flash.  

The 2,200 kilometre cable, nicknamed “Gondwana”, now links the French Pacific territory to Sydney (Australia), with an added bandwith and a much-awaited alternative to the satellite-only connections.

Local post and telecom company OPT General Manager Jean-François Ollivaud said the investment was in the tune of some six billion French Pacific Francs (US$75.5 million).

The cable was installed earlier this year by French company Alcatel Lucent. The investment required OPT subscribing a loan of some
US$50 million.
 
Internet users can now experience a much faster connection, up to seven times faster than the current speed.

OPT is now offering cheaper rates, which are also reflected in the new rates offered by the four local Internet Service Providers.
But the average connection for a speed of 500 kilobytes per second (kbps) is still 10,000 French Pacific Francs (US$25). It  also means that for the same price, subscribers can now double up their speed.

However, OPT is now planning to go further in the price reduction for the less favoured, with a plan to introduce a “bottom” access to ASDL broadband at a speed of 128 kbps for about US$50 a month.

New Caledonia’s government spokesman Pascal Vittori said the main objective of the new cable was to allow a drop in the cost of Internet, therefore a wider access for a wider fringe of the population.

In French Polynesia, the local government is also seriously considering a similar cable link to Hawaii. The investment cost has been valued at some US$122 million.
 
Meanwhile, in the third French Pacific territory, Wallis and Futuna, the local OPT has also announced last week a new development: it now has its very own domain name, the .wf (dot WF).
 
Before that, a typical Wallis and Futuna-hosted e-mail address would end with @wallis.co.nc, a clear sign of a dependence upon New Caledonia…….PNS (ENDS)