Broadband Access development.A multidimensional focus project
February 2008, Trinidad & Tobago
Omar de León, [email protected], www.teleconsult.us
Regional seminar on costs and tariffs for LAC countries
Unión Internacional de Telecomunicaciones
ITU Seminar – Costs and Tariffs, LAC – February 2008 2
AgendaAgenda
• Brief introduction to Convergence and Broadband (C&B).
• ITU Project Framework.
• New technologies for Convergence and Broadband.
• New business models.
• Relevant ITU documentation on Broadband development.
• Regional analysis on current situation.
– Technologies
– Regulation
– Broadband teledensities
– Economics
• Conclusions
ITU Seminar – Costs and Tariffs, LAC – February 2008 3
ConvergenceConvergence andand BroadbandBroadband ((C&BC&B))Development correlation
The telecommunications industry has recently entered into a totally new development model, characterized by a highly dynamic structure that includes value constellations instead of value chains, linking several industries such as content, IT, advertising and so on, around to thirsty customers from the Top to the Base of the Pyramid. These new models are embedded in a Convergence Building founded on Broadband Access.
ITU Seminar – Costs and Tariffs, LAC – February 2008 4
ITU Project FrameworkITU Project FrameworkBrief description
• This project was coordinated by the ITU Regional Office for the Americas, the Telecommunications Technologies and Networks Development Unit and the area office in Honduras.
• Its scope is rooted in and aligned with the regional initiativesapproved at the ITU World Telecommunication Development Conference, held in Doha in March 2006.
• In particular, under Regional Initiatives in the Americas Region, Resolution 17 (Rev. Doha, 2006), “Implementation of regionally approved initiatives at the national, regional, interregional and global levels”, includes in Annex 1, Section 3 “Support to administrations in the design and implementation of policies and programs for large-scale development of broadband access, with a view to meeting national universal service objectives”.
• It focuses on residential broadband as this is the main reference service for ICT development and Universal Service.
ITU Seminar – Costs and Tariffs, LAC – February 2008 5
New technologies for C&B INew technologies for C&B ICabled technologies.
• Copper Pair. Several known technologies can be applied to this physical access, including, among others, ADSL (up to 8 Mbps. and 3 Kms.), ADSL2 (12 Mbps.), ADSL2+ (24 Mbps.) and VDSL (up to 100 Mbps. as fibre extension to the premise). It forms the basis of several broadband services such as IPTV.
• Broadband on the Power Line. This technology can reach from about 2 to 80 Mbps. but is not currently well developed.
• Fibre Optics. : Fibre to the Cabinet (FTTCab), Fibre to the Curb (FTTC), Fibre to the Building (FTTB) and Fibre to the Premise / Home (FTTH). Each one extends the fibre closer to the CPE (Customer Premise Equipment). Up to the highest TX hierarchies are used.
• Hybrid Fibre Cable (HFC). This is an extended kind of access that uses the Cable TV network through the use of Cable modems. 27 to 38 Mbps. are obtained for 6 MHz channeling.
ITU Seminar – Costs and Tariffs, LAC – February 2008 6
New technologies for C&B IINew technologies for C&B IIWireless.
HSUPAHSDPA
TD-SCDMA
CDMA2000
W/CDMA
1x EV-DO1xRTT
WiMax 802.16 2004
1x EV-DV
Mobile PHS
CDMA 450 - fix
EDGE
Fix
and
mob
ile3G
Mob
iles
Fix
Evolution
WiFi 802.11 a, b, g
WiMax 802.16e, mobile
LTE
UMB
ITU Seminar – Costs and Tariffs, LAC – February 2008 7
New technologies for C&B IIINew technologies for C&B IIISpecific for Convergence. Main examples.
• IMS, MMD y TISPAN. Architectures for Convergence. • Parlay. It enables the development of applications that operate
across converged networks, through technology-independent application programming interfaces (APIs). It is a secure, measured, and billable interface.
• UMA – 802.21. It allows seamless Multi media Independent Handover (MIH) through different wireless technologies networks such as GSM, WiFI, WiMax, Bluetooth, etc.�
�
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Applications Layer: PoC, Media Servers, SE, AS, Third Parties applications
IMS Control Layer: P/I/S CSCF, SG, HSS, etc.
Transport Layer: Full IP
Acces Layer: xDSL, Cable, WiMax, 2G, 3G, PSTN
New layer structurefor Convergence
ITU Seminar – Costs and Tariffs, LAC – February 2008 8
New business modelsNew business modelsMain development vectors
• The telecommunication market is competitive and changes continuously. This includes close business relationships betweentraditional telecommunication operators, broadcasting and cable TV operators, and companies from different industries.
• These relationships result in a review of the traditional value chain, as long as different companies are developing new business models in which the traditional access and transmissionservices are merging and driving operators into progressive revenue sharing with other operators or companies, mainly from the IT and content industries.
• Under this umbrella a lot of new services are offered: IPTV overFibre or xDSL, mobile telephony roaming across different networks, context-sensitive mobile services (nearer preferred restaurants, etc.), interactive television, unified communications, seamless enterprise – mobile communications, niche mobile TV content providers, Mobile Virtual Network Operators (MVNO), mobile applications (sales force support, etc.)
ITU Seminar – Costs and Tariffs, LAC – February 2008 9
Relevant ITU documentation and Relevant ITU documentation and efforts on Broadband developmentefforts on Broadband development
These are the latest documents produced by ITU, in addition to alarge number of reports, results and recommendations, in its effort to develop broadband, and as the foundation for the Access to the Information Society. This documentation was used as a basis for this project, in conjunction with other ITU and documentation from regional associations.
• The World Telecommunication Development Conference (Doha, 2006) Final Report.
• Birth of Broadband. ITU Internet Reports. ITU. September 2003.
• Seventh edition of Trends in Telecommunication Reform, Regulating in the Broadband World. ITU. 2006.
• Eighth edition of Trends in Telecommunication Reform, Road to Next-Generation Networks. ITU. 2007.
ITU Seminar – Costs and Tariffs, LAC – February 2008 10
Regional analysis on current situation IRegional analysis on current situation ITechnologies
• Cable modem and xDSL are widely deployed and competing.
• WiMax is mainly entering into the fixed access niche.
• Fibre Optics is still a commercial service with almost no residential users.
• 3G and 3,5G are well developed and most countries have either one technology or the other (EDGE, EV-DO, HSDPA and so on).
• Satellite and LMDS, among others, are scattered throughout the region with no prevalence in the broadband market.
ITU Seminar – Costs and Tariffs, LAC – February 2008 11
Regional analysis on current situation IIRegional analysis on current situation IIRegulation Trends and Region 1• In an environment of rapidly changing market conditions,
telecommunication policies and regulation play an important role in the promotion or restriction of convergence and broadband development.
• Being well aware of this situation, countries with the most advanced regulation frameworks have made further profound changes, through the following main drivers.
• For each we briefly present the general situation in the region.• Access to the Information Society. • General Regulation:
• Prospective and competition-oriented regulation frameworks are the main principles to be applied to all issues of regulation. There is a general though weak trend toward the application of both principles.
• New Access and IX rules taking into account convergence and the layered structure of the market. No changes perceived in this issue.
• Follow up on markets that are evolving into competitive markets, for instance the “Local Access Market”. No country was found to be following up these changes.
ITU Seminar – Costs and Tariffs, LAC – February 2008 12
Regional analysis on current situation IIRegional analysis on current situation IIRegulation Trends and Region 2
• Grandfathering. There is a strong respect for the acquired rights.• Consider the merging of different industries into the traditional
telecommunication industry. No formal issues about this.• Symmetrical regulation between telecommunications and
broadcasting and Cable TV operators. Strong trend towards this unless restrictions applied to IPTV in several countries.
• Light Touch Regulation. No trend towards this was noted.• Widely applied cost orientation on regulated prices, regulation
fees, etc. Most countries apply this orientation. • New structures for National Regulatory Authorities oriented to new
market structures and behaviors. Not perceived yet.• Regional harmonization oriented toward traditional issues (avoid
interference, same technical standards, etc.) and new issues such as those that strengthen economies of scope and scale in the “regional market”. Strong harmonization through ITU and CITEL but no perceived trend toward looking for economies of scale in the regional market.
ITU Seminar – Costs and Tariffs, LAC – February 2008 13
Regional analysis on current situation IIRegional analysis on current situation IIRegulation Trends and Region 3
• Spectrum management specific issues:• Spectrum liberalization general principle. Some movement towards
this principle.• Progressively leaving the “Command and Control” model moving
towards competition oriented models of “Exclusive Rights” and “Common and Open Access”. Not at all. A few countries allow the transfer of use of a band and some countries analyzing it. Exceptions are El Salvador and Guatemala.
• Spectrum Trading in secondary markets. Not at all. It seems to be far from full spectrum trading that allows the right of use as a kind of property right. Exceptions are El Salvador and Guatemala.
• Technology and Services neutrality. Technology neutrality is a generalized situation. Service neutrality is still generally restricted.
• Progressively leave Spectrum Cap conditions. This is a complex issue in the region that is being maintained even with highly competitive markets with HHI as those of the most competitive markets.
ITU Seminar – Costs and Tariffs, LAC – February 2008 14
Regional analysis on current situation III Regional analysis on current situation III a) Broadband Latam Teledensity ITU-ICT statistics
End of 2006. Broadband vs. Narrowband teledensity varies greatlyamong countries.
�
0,12
3,14
5,94
1,36 1,34
0
0,74
0,20,61
0,22 0,2
3,4
0,340,54
0,25
1,71
3,07
1,97
2,62,96
0,66
5,73
0,7 0,56
2,55
0,14
1,3
0,841,24
0,36 0,19
1,03
0,08
2,01
0,78
1,91
2,95
0,82
2,72
4,01
0
1
2
3
4
5
6
7
Argen
tina
Bolivia
Brazil
Chile
Colombia
Costa
RicaCub
a
Domini
can R
ep.
Ecuad
orEl S
alvad
orGua
temala
Hondu
ras
Mexico
Nicara
gua
Panam
aPar
aguay
Peru
Urugu
ayVen
ezue
laLa
tam
Paises
nº d
e ac
ceso
s / 1
00 h
abita
ntes
Accesos BA Accesos BE
�
�
ITU Seminar – Costs and Tariffs, LAC – February 2008 15
Regional analysis on current situation III Regional analysis on current situation III b) Broadband World Regions Teledensity ITU-ICT statistics
End of 2006. Broadband regions teledensity shows big differencesbetween them.
2,6 2,734,33
8,9311,19
13,69
19,6
32
0,120
5
10
15
20
25
30
35
Africa Latam Asia M ediamundial
Americas Europa Oceania Regionesavanzadas
Paiseslideres
Regiones
nº
de
acce
sos
/ 100
hab
itan
tes
ITU Seminar – Costs and Tariffs, LAC – February 2008 16
Regional analysis on current situation III Regional analysis on current situation III c) Broadband Teledensity Growth Rates ITU-ICT statistics
By the end of 2006 our region shows high growth rates that demonstrate that it is moving towards teledensity values of welldeveloped countries. These rates continue during 2007.
4,01 3,14
5,94
1,360,2
3,4 3,071,97
2218
15
50
12
28 2630
02468
101214161820
Argenti
na
Brasil
ChileColom
biaEcu
ador
Mexico
Urugu
ayVen
ezue
la
Paises
acce
sos
/100
hab
itan
tes
0
10
20
30
40
50
60
tasa
de
reci
mie
nto
(%
)
Penetracion Crecimiento
ITU Seminar – Costs and Tariffs, LAC – February 2008 17
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 1 – Main trends in the Region
• This analysis was undertaken using the latest primary sources from the web pages of all the operators in all the countries analyzed.
• Prevalent technologies, xDSL and Cable Modem, are competitors on prices and commercial conditions. They can be considered in the same “Relevant market”.
• WiMax is entering the same market but through an unstable relation between price and conditions.
• Mobile broadband is an extremely variable market from the point of view of technologies, peak rates, average rates and so on. Inthis project we consider all broadband access as comparable because mobility is its main characteristic.
• Other technologies have no significance in the broadband market.• Following comparisons are made on the basis of the nearest to
512 Kbps. downstream broadband service.
ITU Seminar – Costs and Tariffs, LAC – February 2008 18
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 2 – Lowest Prices comparison on USD per 100 Kbps.
0,00
5,00
10,00
15,00
20,00
25,00
30,00
35,00
40,00
US
D
USD por Tecnologías
ADSLCMWiMAX
ITU Seminar – Costs and Tariffs, LAC – February 2008 19
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 3 – ADSL – USD / 100 Kbps vs. GNI and % GNI PPP
ADSL
0
5
10
15
20
25
0 200 400 600 800 1000 1200 1400 1600
INB (PPP)
Argentina Bolivia Brasil Chile Colombia Costa Rica Cuba EcuadorEl Salvador Guatemala Honduras Mexico Nicaragua Panamá Paraguay Perú
Dominicana Uruguay Venezuela
ITU Seminar – Costs and Tariffs, LAC – February 2008 20
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 4 – ADSL – USD / 100 Kbps as a % GNI PPP
0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 4,50% 5,00%
Ecuador
Bolivia
Paraguay
Nicaragua
El Salvador
Perú
Venezuela
Guatemala
Dominicana
Brasil
Colombia
Chile
Uruguay
Costa Rica
Panamá
Argentina
Mexico
Cuba
Honduras
% INB (PPP)-ADSL
ITU Seminar – Costs and Tariffs, LAC – February 2008 21
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 5 – CM – USD / 100 Kbps vs. GNI and % GNI PPP
CM
0
5
10
15
20
25
30
35
40
0 200 400 600 800 1000 1200 1400 1600
INB (PPP)
Argentina Bolivia Brasil Chile Colombia Costa Rica Cuba EcuadorEl Salvador Guatemala Honduras Mexico Nicaragua Panamá Paraguay Perú
Dominicana Uruguay Venezuela
ITU Seminar – Costs and Tariffs, LAC – February 2008 22
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 6 – WiMax – USD / 100 Kbps vs. GNI and % GNI PPP
WiMAX
0
5
10
15
20
25
0 200 400 600 800 1000 1200 1400 1600
INB (PPP)
Argentina Bolivia Brasil Chile Colombia Costa Rica Cuba EcuadorEl Salvador Guatemala Honduras Mexico Nicaragua Panamá Paraguay Perú
Dominicana Uruguay Venezuela
ITU Seminar – Costs and Tariffs, LAC – February 2008 23
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 7 – Unlimited 3G – USD vs. GNI and % GNI PPP
3G
0
25
50
75
100
125
0 200 400 600 800 1000 1200 1400
INB (PPP)
Argentina Bolivia Brasil Chile Colombia Costa Rica Cuba EcuadorEl Salvador Guatemala Honduras Mexico Nicaragua Panamá Paraguay Perú
Dominicana Uruguay Venezuela
ITU Seminar – Costs and Tariffs, LAC – February 2008 24
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 8 – Unlimited 3G – USD as a % GNI PPP
0,00% 5,00% 10,00% 15,00% 20,00% 25,00%
Ecuador
Brasil
Guatemala
Venezuela
Mexico
Chile
Uruguay
Colombia
Argentina
Bolivia
Costa Rica
Cuba
El Salvador
Honduras
Nicaragua
Panamá
Paraguay
Perú
Dominicana
% INB (PPP)-3G
ITU Seminar – Costs and Tariffs, LAC – February 2008 25
Regional analysis on current situation IVRegional analysis on current situation IVEconomics 9 – Conclusions
• xDSL, Cable Modem and WiMax prices are roughly in the order of USD 5 -10 per 100 Kbps.
• Analyzing these prices as percentages of Gross National Income (GNI) per country, gives a better understanding of regional affordability differences.
• Those countries with lower GNI are in a weaker position to access broadband services, as a basis for Access to the Information Society.
• Mobile access to 3G and 3.5G is in a weak position as prices for unlimited access are several times higher than those for fixed technologies on a USD per 100 Kbps. basis. Nevertheless these services have mobility plus.
ITU Seminar – Costs and Tariffs, LAC – February 2008 26
Conclusions
Technologies
All the most advanced technologies are being widely used in the Region, except Fiber Optics as FTTx.
Market forces
Trends are toward a faster increase of teledensities. Operators are prepared to invest and users are “hungry”.
Economics
xDSL / CM / WiMax are competitive access at similar/higher prices than in developed countries. Different GNIs produce affordability problems.
Conclusions
Regulation and Public PoliciesOn these issues the Region is behind the more forward-looking countries but is moving toward more advanced regulations.
ITU Seminar – Costs and Tariffs, LAC – February 2008 27
Conclusions
•The Region is ready to expand its broadband infrastructure: operators and users are prepared for it.•Prices are close to being internationally aligned but GNIs are challenging affordability.• Stronger policies for Information Society seems to be required.•Regulation should align as soon as possible with those of the more advanced countries.
ITU Seminar – Costs and Tariffs, LAC – February 2008 28
Thank you foryour attention
[email protected], www.teleconsult.us