WCA November 2010

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Wire & Cable ASIA – November/December 2010 29
Telecomnews
Fixed broadband
subscribership is up in
Europe, up further in Asia
The number of subscribers to
fixed-line broadband services globally
reached just under 449 million by the
end of the second quarter of 2010, up
10% from a year before, according to
the New York-based market research
firm ABI Research.
“The key fixed broadband subscriber
growth was found in the Asia-Pacific
region, adding approximately three
million subscribers in the second
quarter of 2010,” Jason Blackwell,
digital home practice director at
ABI, said from Singapore on the
release of the report. (“Fixed Broad-
band Subscriber Numbers Approach
449 Million in 2Q 2010,” 19th August).
Despite continued economic un-
certainties in the European telecoms
market, fixed broadband growth in
the region was found to be positive
in the first six months of the year,
although slower than in 2009,
especially in saturated markets such
as the Netherlands, Germany and
Switzerland.
“In mature European markets, opera-
tors are resorting to bundled pack-
ages including TV, fixed telephone,
and broadband service in order to
maintain ARPU (average revenue
per user),” said Khin Sandi Lynn, a
research associate at ABI Research.
“Overall European fixed broadband
subscriber numbers surpassed
126.4 million at the end of 2Q 2010.”
Other noteworthy items in the report
include:
In addition to price competition, ✆
✆
broadband speeds are still very
much an important factor for
consumers when choosing their
package, with many operators
believed to be upgrading their
existing networks in order to
provide higher speeds. For
example, Jazztel, one of the
leading broadband operators in
Spain, has launched an Internet
service offering up to 30 Mbps
based on new VDSL2 technology.
Similarly, the cable operator ZON
in Portugal covered 2.8 million
homes with Eurodocsis 3.0.
In the Asia-Pacific region, China ✆ ✆
represents approximately 59% of
total APAC broadband revenues.
Yet, with a penetration rate of just
28%, the Chinese broadband
market still has enough room to
grow.
Chinese broadband operators are ✆ ✆
described as gearing up to expand
coverage of FTTx (fibre-to-the-x:
the “last-mile” connectivity method
which replaces metal with fibre).
Chinese fibre broadband sub-
scribers will total almost 34 million
at the end of 2015, with a CAGR
(compound annual growth rate) of
26.6% between 2010 and 2015.
Anticipated tremendous
growth in emerging-market
Internet usage would
pose challenges for
telecom-related businesses
The number of Internet users in the
principal emerging markets is set to
nearly double by 2015, according to
a 1st September report that foresees
1.2 billion Internet users in China,
India, Brazil, Russia and Indonesia
within five years. The report, by the
Boston Consulting Group, suggests
that the late-comers – up from about
610 million in 2009 – will enjoy certain
advantages.
Without having gone through a long
preliminary phase of technological
development, these emerging-market
countries are able to usher their Web
users straight to mobile devices.
But businesses, while heartened
by the prospect of huge numbers
of new clients, are likely to feel the
strain of keeping pace with vaulting
expectations as well as with rapidly
evolving technologies.
No fewer than five undersea cables connecting Africa with Europe and India
were under construction or will have become operational in 2010. They
represent an investment of more than $2.5 billion and could boost African
data capacity to more than 16 terabits a second in 2012 from almost none
in 2000.
As noted by Cornelis Groesbeek, a Johannesburg-based independent tele-
communications consultant who spoke with Bloomberg News, the new band-
width may reduce broadband prices by as much as 90%, making it difficult
for companies such as France Telecom SA and Cable & Wireless Worldwide
Plc, of Britain, to realise a return on their African cable investments. Operators
including Vodafone Group Plc, also British, and South Africa’s MTN Group
Ltd may also find themselves in competition with companies offering some
of the world’s lowest rates – as little as $2.91 a month for voice service in
Tanzania. It will be recalled that excess capacity has brought down cable
companies before this. A notable example was the contribution of bandwidth
glut on transatlantic networks to the 2002 bankruptcy of Global Crossing Ltd,
then the fourth-largest corporate failure in US history. (“African Undersea
Cable Glut May Spell Price War for Operators,” 4th August)
Bloomberg reporters Matthew Campbell and Nicky Smith mentioned a factor
that may protect the African-based operators from an Atlantic-type debacle:
more phone operators, as distinguished from solely cable companies, are
investing in infrastructure, “seeking to make money from services they can
offer through the pipes.” These operators are banking on growth in Africa,
where broadband penetration is reliably estimated at just 3.2 per cent.
“The Atlantic operators were aggressively selling in the wholesale market,
and that was their main business,” Bloomberg was told by Richard Elliott,
the managing director of Apollo Submarine Cable System Limited, a British
operator of two transatlantic fibre optic cables. “Many of the investors in
African cables have significant other businesses.”
Bloomberg ✆
✆ cited as an example the East African Submarine Cable System
that went live on 16th July. EASSy is owned by 16 investors, all phone
operators, including MTN and India’s Bharti Airtel Ltd, and Glo-1, an
$800 million link from Britain to Lagos now going into service, is financed
by the Nigerian phone company Globacom Ltd.
With five new undersea cable linkages, will Africa
go from having too little Internet capacity to
having too much?