Insight
insight
Insight BROADBAND SERVICE PROVIDERS GAIN SUBSCRIBERS WORLDWIDE The top 10 broadband service providers globally gained 23.3 million subscribers between Q1 2009 and Q1 2010, according to a broadband provider rankings report by Telegeography. 39% of the world’s 492 million broadband subscribers are customers of the top 10 providers, with Chinese operators China Telecom and China Unicom accounting for 20% of the total global broadband subscriber numbers. Both companies gained nine million subscribers over the past year, which is the equivalent of US provider Verizon’s entire customer base. South Korean provider KT has displaced Telecom Italia as the 10th largest broadband ISP, with the Italian operator moving into 11th place.
MOBILE VOIP USERS TO INCREASE IN MATURE MARKETS
TOP 10 BROADBAND SERVICE PROVIDERS
China Telecom China Unicom NTT Comcast AT&T Deutsche Telekom Time Warner Cable Verizon France Telecom KT 0
44
sept 10
30
40
50
60
Source: Telegeography
NUMBER OF MOBILE VOIP USERS Rest of Asia-Pacific
Latin America
Indian subcontinent
North America
120
Mobile VoIP users (millions)
Far East & China Central & Eastern Europe Western Europe
0 2010
2011
2012
Calendar year
Source: Juniper Research
WIMAX SUBSCRIBERS BY REGION, Q1 2008 – Q1 2010
1,800,000 1,600,000 1,400,000
Africa
Middle East
Asia-Pacific
North America
Eastern Europe
Western Europe
Latin America Wimax subscribers
The Asia-Pacific region has overtaken north America as the home to the largest number of 4G broadband wireless subscribers, according to figures from Telegeography’s 4G research service. Subscription in the Asia-Pacific region has increased by 7% in the past year to 1.7 million, or 29% of the total 5.7 million 4G subscribers globally. North America was second, down one place from last year on figures based on the year ending March 2010 with 1.4 million subscribers, predominantly in the US and Canada. Telegeography says Wimax is attractive to operators in Asia as it is cheap and can bypass the last mile in fixed access networks, which are still dominated by the incumbent operators. The third largest market for 4G is eastern Europe with approximately 1.1 million subscribers. This growth is driven by Russian operators like Yota in Russia, which is committed to converting its network from Wimax to LTE cellular technology.
20
Broadband subscribers (millions)
The number of mobile VoIP users will exceed 100 million in developed markets by 2012, with over half the users residing in Europe and north America, according to a new study by Juniper Research. Juniper Research’s study, Mobile Voice Strategies: mVoIP Opportunities and Business Models, 2010-2015, identifies a direct correlation between the roll-out of 3G services and increased adoption of VoIP in developed countries. A high percentage of mobile VoIP applications are carried via Wifi and bypass the provider’s network. This traffic will result in lost revenues, amounting to about $5 billion by 2015, says Juniper. The researcher notes there is the potential for alliances between mobile VoIP players and traditional operators which may provide the best option for incumbents that are planning to address and provide mobile VoIP services.
ASIA-PACIFIC LEADS THE WAY FOR 4G WIRELESS SUBSCRIPTION
10
1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2008-Q1
2009-Q1
2010-Q1
Calendar year
Source: Telegeography
capacity magazine
Insight
A pending 4G auction and proposed wholesale broadband access policies will spur competition in the UK telecoms market and increase revenue for all UK providers, according to Pyramid Research. Pyramid projects the market will generate a revenue opportunity of £228 billion in the next five years, and that investments in new technologies will mean strong growth in broadband based services. The UK is lagging behind many western European markets in highspeed broadband infrastructure but BT says it will spend approximately $1.5 billion on its fibre network, enabling access to 40% of households by 2012. The UK telecoms market declined by 2.3% in 2009 as a result of the global economic crisis, with the share in mobile and fixed markets reduced by 2% and 7% respectively.
POTENTIAL FOR GROWTH IN BULGARIA The Bulgarian telecoms market is to grow at a compound annual growth rate (CAGR) of 4.8% in the next five years, with broadband internet and mobile data services most primed for growth, according to Pyramid Research. Pyramid Research’s Europe Country Intelligence Report on Bulgaria projects that the country's telecoms market value will reach $2.8 billion by 2015 and its broadband services will present a $1.9 billion revenue opportunity between 2010 and 2015. By 2015, the Bulgarian broadband population penetration rate could almost double from 16% to 30%. In addition to broadband growth, the report notes the potential for CAGR to increase in IPTV and VoIP by 46.4% and 38.7% respectively between 2010 and 2015. Data revenue will reach 34% by 2015 because of an increase in fixed and mobile internet penetration.
46
sept 10
40%
Internet users 44.0
Internet users (millions)
Market penetration 40 30% 30 20% 20
16.6 10%
10.3
10
4.7
4.4
4.2
4.0
3.5
3.2
1.4 0%
e bw
da an
ba Zim
Ug
a
Tu nis ia
n
ny Ke
a ric
da
Af
Su
a So
uth
co
eri
roc
Alg
yp
t Mo
Eg
Ni
ge
ria
0
Source: Buddecomm
Tunisia has the highest market penetration, at 34%. The study was based on 38 countries in Africa.
THE UK COMMUNICATIONS MARKET REVENUE, 2008-2015
Pay-TV $70
Broadband internet Dial-up internet
$60 Fixed VoIP Revenue (US$ billions)
UK TELECOMS MARKET TO GROW AFTER ITS 2009 DECLINE
50
Market penetration
Wholesale prices for internet bandwidth have reduced by almost 90% in Africa as the region benefits from increased access to international fibre bandwidth via submarine cables, according to research firm Buddecomm. Broadband is replacing dial-up as the most used access method for connection, resulting in increased investment into terrestrial fibre backbone infrastructure to ensure further development of bandwidth access in landlocked countries. With more cables set to go live in 2011, additional fibre systems have promoted competition in a once monopolised market. Buddecomm notes that improvements in internet access have been confined mainly to capital cities, but this is set to change because of the rapid spread of mobile data and 3G broadband services. Mobile networks are bringing access to many less developed regions for the first time. Nigeria has the highest number of internet users with 44 million and
TOP 10 AFRICAN INTERNET USER COMMUNITIES, EARLY 2010
$50
Fixed circuit-switched voice Mobile data
$40
Mobile voice $30 $20 $10 $0 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
Source: Pyramid Research
BULGARIA COMMUNICATIONS MARKET REVENUE, 2008-2015 IPTV Broadband internet
$3.0
Dial-up internet $2.5 Revenue (US$ billions)
AFRICA BENEFITS FROM INCREASED INTERNATIONAL BROADBAND ACCESS
Fixed VoIP Fixed circuit-switched voice
$2.0
Mobile data $1.5
Mobile voice
$1.0
$0.5
$0.0 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
Source: Pyramid Research
capacity magazine
insight
DTH PAY TV SUBSCRIPTION CONTINUES TO GROW
GLOBAL DTH PAY TV SUBSCRIBER GROWTH
Satellite direct-to-home (DTH) subscription continues to grow steadily at rates of 13% to 15% per year and with the number of subscribers now standing at over 150 million globally, reports Telegeography. As telcos and cable companies battle for a market share in the pay TV and telecoms markets, DTH operators have continued to grow globally, with five times as many subscribers on the platform compared to IPTV subscribers. Its growth rates double those achieved by cable TV competitors. ARPU for DTH is more than double that of cable companies and telcos globally, excluding north America where the gap is closer. The data is based on Telegeography’s Globalcomms pay TV research service which tracks 530 pay TV operators and forecasts for over 170 countries quarterly.
MOBILE BROADBAND REVENUE RATES TO DOUBLE BY 2014
Source: Telegeography
MOBILE BROADBAND SERVICE REVENUE DOUBLES 2010-2014
Revenue collected by service providers for cellular services was $675 billion in 2009, and is expected to top $829 billion by 2014, according to Infonetics Research. Between 2010 and 2014, mobile broadband revenue will more than double, says Infonetics. The market research firm’s Mobile Services and Subscribers: Voice, SMS/MMS and Broadband report expects mobile broadband subscription to reach 1.8 billion worldwide by 2014. According to the report, LTE subscription will also increase, with 153 million subscribers expected by 2014, mainly in Asia-Pacific and EMEA. Due in large part to the high concentration of mobile operators in developed markets in western Europe with good HSPA coverage, the EMEA region leads the mobile broadband race, having outpaced early 3G adopters such as Australia, Japan and South Korea, reports Infonetics.
NORTH AFRICAN OPERATORS FACE TOUGH COMPETITION Only the smartest operators in the north African telecoms market will survive, as the market becomes filled with new and less valuable subscribers, according to research consultancy Delta Partners. The region has been growing at a CAGR of 20% between 2007 and 2009, and is expected to grow at a CAGR rate of 7% for the next five years, due to a blend of strong mobile voice, growing demand for mobile broadband and a large youth population. But profitability is expected to shrink, meaing that the region’s players will have to consider carefully where they make future investments. Governments in north Africa are also promoting competition in the telecoms and ICT sectors, and will have to consider a growing interest in the region from international players that will affect the business models of local players. Morocco, Tunisia and Egypt are progressing towards becoming regional hubs in the ICT sector.
www.capacitymedia.com
Source: Infonetics Research
NORTH AFRICAN TELECOMS GROWTH
Source: Delta Partners
sept 10
47
Insight BROADBAND SERVICE PROVIDERS GAIN SUBSCRIBERS WORLDWIDE The top 10 broadband service providers globally gained 23.3 million subscribers between Q1 2009 and Q1 2010, according to a broadband provider rankings report by Telegeography. 39% of the world’s 492 million broadband subscribers are customers of the top 10 providers, with Chinese operators China Telecom and China Unicom accounting for 20% of the total global broadband subscriber numbers. Both companies gained nine million subscribers over the past year, which is the equivalent of US provider Verizon’s entire customer base. South Korean provider KT has displaced Telecom Italia as the 10th largest broadband ISP, with the Italian operator moving into 11th place.
MOBILE VOIP USERS TO INCREASE IN MATURE MARKETS
TOP 10 BROADBAND SERVICE PROVIDERS
China Telecom China Unicom NTT Comcast AT&T Deutsche Telekom Time Warner Cable Verizon France Telecom KT 0
44
sept 10
30
40
50
60
Source: Telegeography
NUMBER OF MOBILE VOIP USERS Rest of Asia-Pacific
Latin America
Indian subcontinent
North America
120
Mobile VoIP users (millions)
Far East & China Central & Eastern Europe Western Europe
0 2010
2011
2012
Calendar year
Source: Juniper Research
WIMAX SUBSCRIBERS BY REGION, Q1 2008 – Q1 2010
1,800,000 1,600,000 1,400,000
Africa
Middle East
Asia-Pacific
North America
Eastern Europe
Western Europe
Latin America Wimax subscribers
The Asia-Pacific region has overtaken north America as the home to the largest number of 4G broadband wireless subscribers, according to figures from Telegeography’s 4G research service. Subscription in the Asia-Pacific region has increased by 7% in the past year to 1.7 million, or 29% of the total 5.7 million 4G subscribers globally. North America was second, down one place from last year on figures based on the year ending March 2010 with 1.4 million subscribers, predominantly in the US and Canada. Telegeography says Wimax is attractive to operators in Asia as it is cheap and can bypass the last mile in fixed access networks, which are still dominated by the incumbent operators. The third largest market for 4G is eastern Europe with approximately 1.1 million subscribers. This growth is driven by Russian operators like Yota in Russia, which is committed to converting its network from Wimax to LTE cellular technology.
20
Broadband subscribers (millions)
The number of mobile VoIP users will exceed 100 million in developed markets by 2012, with over half the users residing in Europe and north America, according to a new study by Juniper Research. Juniper Research’s study, Mobile Voice Strategies: mVoIP Opportunities and Business Models, 2010-2015, identifies a direct correlation between the roll-out of 3G services and increased adoption of VoIP in developed countries. A high percentage of mobile VoIP applications are carried via Wifi and bypass the provider’s network. This traffic will result in lost revenues, amounting to about $5 billion by 2015, says Juniper. The researcher notes there is the potential for alliances between mobile VoIP players and traditional operators which may provide the best option for incumbents that are planning to address and provide mobile VoIP services.
ASIA-PACIFIC LEADS THE WAY FOR 4G WIRELESS SUBSCRIPTION
10
1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2008-Q1
2009-Q1
2010-Q1
Calendar year
Source: Telegeography
capacity magazine
Insight
A pending 4G auction and proposed wholesale broadband access policies will spur competition in the UK telecoms market and increase revenue for all UK providers, according to Pyramid Research. Pyramid projects the market will generate a revenue opportunity of £228 billion in the next five years, and that investments in new technologies will mean strong growth in broadband based services. The UK is lagging behind many western European markets in highspeed broadband infrastructure but BT says it will spend approximately $1.5 billion on its fibre network, enabling access to 40% of households by 2012. The UK telecoms market declined by 2.3% in 2009 as a result of the global economic crisis, with the share in mobile and fixed markets reduced by 2% and 7% respectively.
POTENTIAL FOR GROWTH IN BULGARIA The Bulgarian telecoms market is to grow at a compound annual growth rate (CAGR) of 4.8% in the next five years, with broadband internet and mobile data services most primed for growth, according to Pyramid Research. Pyramid Research’s Europe Country Intelligence Report on Bulgaria projects that the country's telecoms market value will reach $2.8 billion by 2015 and its broadband services will present a $1.9 billion revenue opportunity between 2010 and 2015. By 2015, the Bulgarian broadband population penetration rate could almost double from 16% to 30%. In addition to broadband growth, the report notes the potential for CAGR to increase in IPTV and VoIP by 46.4% and 38.7% respectively between 2010 and 2015. Data revenue will reach 34% by 2015 because of an increase in fixed and mobile internet penetration.
46
sept 10
40%
Internet users 44.0
Internet users (millions)
Market penetration 40 30% 30 20% 20
16.6 10%
10.3
10
4.7
4.4
4.2
4.0
3.5
3.2
1.4 0%
e bw
da an
ba Zim
Ug
a
Tu nis ia
n
ny Ke
a ric
da
Af
Su
a So
uth
co
eri
roc
Alg
yp
t Mo
Eg
Ni
ge
ria
0
Source: Buddecomm
Tunisia has the highest market penetration, at 34%. The study was based on 38 countries in Africa.
THE UK COMMUNICATIONS MARKET REVENUE, 2008-2015
Pay-TV $70
Broadband internet Dial-up internet
$60 Fixed VoIP Revenue (US$ billions)
UK TELECOMS MARKET TO GROW AFTER ITS 2009 DECLINE
50
Market penetration
Wholesale prices for internet bandwidth have reduced by almost 90% in Africa as the region benefits from increased access to international fibre bandwidth via submarine cables, according to research firm Buddecomm. Broadband is replacing dial-up as the most used access method for connection, resulting in increased investment into terrestrial fibre backbone infrastructure to ensure further development of bandwidth access in landlocked countries. With more cables set to go live in 2011, additional fibre systems have promoted competition in a once monopolised market. Buddecomm notes that improvements in internet access have been confined mainly to capital cities, but this is set to change because of the rapid spread of mobile data and 3G broadband services. Mobile networks are bringing access to many less developed regions for the first time. Nigeria has the highest number of internet users with 44 million and
TOP 10 AFRICAN INTERNET USER COMMUNITIES, EARLY 2010
$50
Fixed circuit-switched voice Mobile data
$40
Mobile voice $30 $20 $10 $0 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
Source: Pyramid Research
BULGARIA COMMUNICATIONS MARKET REVENUE, 2008-2015 IPTV Broadband internet
$3.0
Dial-up internet $2.5 Revenue (US$ billions)
AFRICA BENEFITS FROM INCREASED INTERNATIONAL BROADBAND ACCESS
Fixed VoIP Fixed circuit-switched voice
$2.0
Mobile data $1.5
Mobile voice
$1.0
$0.5
$0.0 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
Source: Pyramid Research
capacity magazine
insight
DTH PAY TV SUBSCRIPTION CONTINUES TO GROW
GLOBAL DTH PAY TV SUBSCRIBER GROWTH
Satellite direct-to-home (DTH) subscription continues to grow steadily at rates of 13% to 15% per year and with the number of subscribers now standing at over 150 million globally, reports Telegeography. As telcos and cable companies battle for a market share in the pay TV and telecoms markets, DTH operators have continued to grow globally, with five times as many subscribers on the platform compared to IPTV subscribers. Its growth rates double those achieved by cable TV competitors. ARPU for DTH is more than double that of cable companies and telcos globally, excluding north America where the gap is closer. The data is based on Telegeography’s Globalcomms pay TV research service which tracks 530 pay TV operators and forecasts for over 170 countries quarterly.
MOBILE BROADBAND REVENUE RATES TO DOUBLE BY 2014
Source: Telegeography
MOBILE BROADBAND SERVICE REVENUE DOUBLES 2010-2014
Revenue collected by service providers for cellular services was $675 billion in 2009, and is expected to top $829 billion by 2014, according to Infonetics Research. Between 2010 and 2014, mobile broadband revenue will more than double, says Infonetics. The market research firm’s Mobile Services and Subscribers: Voice, SMS/MMS and Broadband report expects mobile broadband subscription to reach 1.8 billion worldwide by 2014. According to the report, LTE subscription will also increase, with 153 million subscribers expected by 2014, mainly in Asia-Pacific and EMEA. Due in large part to the high concentration of mobile operators in developed markets in western Europe with good HSPA coverage, the EMEA region leads the mobile broadband race, having outpaced early 3G adopters such as Australia, Japan and South Korea, reports Infonetics.
NORTH AFRICAN OPERATORS FACE TOUGH COMPETITION Only the smartest operators in the north African telecoms market will survive, as the market becomes filled with new and less valuable subscribers, according to research consultancy Delta Partners. The region has been growing at a CAGR of 20% between 2007 and 2009, and is expected to grow at a CAGR rate of 7% for the next five years, due to a blend of strong mobile voice, growing demand for mobile broadband and a large youth population. But profitability is expected to shrink, meaing that the region’s players will have to consider carefully where they make future investments. Governments in north Africa are also promoting competition in the telecoms and ICT sectors, and will have to consider a growing interest in the region from international players that will affect the business models of local players. Morocco, Tunisia and Egypt are progressing towards becoming regional hubs in the ICT sector.
www.capacitymedia.com
Source: Infonetics Research
NORTH AFRICAN TELECOMS GROWTH
Source: Delta Partners
sept 10
47
