free summary broadband report 2013

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A reportfrom The

Economist Intelligence

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Broadband business opportunitiesAnalysis of national broadband strategies in 57 countries

2013

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SUMMARY

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The Economist Intelligence Unit Limited 2013 2

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BROADBAND BUSINESS OPPORTUNITIES Analysis of national broadband strategies in 57 countries

Broadband business opportunities: Analysis of national broadband strategies in 57 countries provides a detailed analysis of government broadband plans around the world, including speed targets, technology choices, investment plans and universal service goals. The report is intended to provide telecommunications sector stakeholdersincluding fixed, wireless and integrated operators; internet service providers; technology vendors; and investorswith data and analysis to support global, regional and country-specific business plans. The report is also a useful benchmarking tool for government policymakers and regulators. The first part of the report assesses the current broadband landscape and expected developments over the next 12 months. The second part provides individual details of broadband plans for 57 countries, and the EU.

The countries in this report are selected on the basis of two criteria: those with well-established and detailed plans (such as Singapore, South Korea and Estonia), and countries of sufficient size and prominence (no matter the level of sophistication of their plans), such as Brazil and Nigeria. Each new edition of the report adds new countries, as governments continue to unveil overarching national strategies to guide broadband development and attract investment. Countries with plans that include specific speed targets, government investment levels and completion dates receive more detailed profiles.

Foreword

Acknowledgements: The Economist Intelligence Unit would like to thank the following people for their time and insight during the research phase of this report: Atif Ansar, Research Fellow, BT Centre for Major Programme Management, Sad Business School, Oxford University; Phillippa Biggs,

Coordinator, Broadband Commission for Digital Development, ITU; Agustn Daz-Pnes, Telecommunication Economist and Policy Analyst, OECD;

Doyle Gallegos, Lead ICT Policy Specialist, World Bank; Aleksander Lazarevic, Team Leader, Broadband Policy, European Commission; Nancy Sundberg,

Regulatory Specialist, ITU; and Susan Teltscher, Head, ICT Data and Statistics Division, ITU.

The editor of the report is Jason Sumner, Lead Analyst, Telecoms, EIU: [email protected]


Contents

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4 Executive summary

7 Key findings

21 Country profiles

21 Asia Pacific 21 Australia 25 China 26 India 27 Japan 29 Malaysia 32 New Zealand 35 Philippines 36 Singapore 38 South Korea 40 Thailand 41 Taiwan

42 Europe 42 Armenia 42 Austria 43 Belgium 43 Bulgaria 44 Czech Republic 45 Denmark 47 Estonia 49 European Union 50 Finland

52 France 55 Germany 58 Greece 60 Hungary 61 Ireland 64 Italy 66 Latvia 66 Lithuania 67 Montenegro 68 Netherlands 70 Norway 70 Portugal 72 Romania 73 Slovakia 74 Spain 75 Sweden 78 Switzerland 78 United Kingdom

83 Latin America and Caribbean 83 Argentina 84 Brazil 85 Chile 85 Colombia 87 Costa Rica 87 Ecuador 88 Jamaica

88 Middle East and Africa 88 Bahrain 89 Egypt 90 Ghana 90 Israel 91 Kenya 91 Lebanon 92 Morocco 92 Nigeria 93 Qatar 94 South Africa 94 Uganda

95 North America 95 Canada 97 United States

Cover image:

iStockphoto.com


F our years after many of the worlds largest countries launched ambitious broadband plans to spur economic growth, this report assesses the business opportunities that these national broadband strategies will create for the telecommunications industry. On the basis of current government targets and network construction, it considers the future prospects for broadband infrastructure, content and services.

THREE-SPEED WORLD: National targets are dividing the worlds broadband markets into three categoriessuperfast, fast and catching up.

At the top of the rankings are the superfast early adopters, mainly in developed Asian markets, which aim to connect most of their populations at speeds well over 100 Mbps.

Leading the fast middle tierin terms of headline-speed ambitionsare Finland, Qatar and Estonia, each with targets to connect more than 90% of their populations to 100 Mbps services by 2015.

Catching-up countries, with less ambitious or detailed plans, show untapped potential but require demand-side improvements to device costs and education, in addition to supplemental infrastructure.

Executive summary

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MORE FRAGMENTATION AFTER 2015: The three-speed framework will define broadband infrastructure and service opportunities for the next few years, after which the catching-up countries in developing markets will further splinter along speed and adoption lines.

The Asian early adopters will stay ahead of the pack in terms of top speeds and adoption rates until at least 2015.

With fibre laid and networks in place, the market structure for providing broadband supply in the superfast Asian countries is also already mature.

The urban-rural divide will increase in the fast countries of Europe and North America, with the best market opportunities in built-up areas, and there will be limited public sector support where the business case is weak.

Clear leaders and laggards in infrastructure and services will emerge in the catching-up countries over the next two years, as more governments adopt digital plans and investment strategies.

CONTENT WILL BE KING: In superfast and fast countries, broadband policy is shifting from establishing infrastructure to building demand for networked content and services, a trend that will accelerate after 2015.

Asian early adopters do not yet provide many signposts in the search for superfast applications that could be adopted in other markets.

Smart applications show promise in superfast countries, but it is too early to tell when and how these services will tip into widespread use.

Internet protocol television (IPTV), already established around the world, will be the most predictably lucrative consumer service delivered over broadband networks in superfast and fast markets for the next 12 months.


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The fast markets have enough infrastructure in place to serve as innovation laboratories for broadband-enabled content and services, but winners and losers will be determined after 2015.

For the most part, mid-tier fast countries, mainly in Europe, are relying on competition at the infrastructure level to drive down consumer prices and increase take-up. Sources of future investment remain unclear.

More broad-based innovations are expected in the areas of healthcare, education and telework, despite facing cultural barriers that have little to do with speed.

CATCHING-UP COUNTRIES GO MEGA MOBILE: In the short term, the enormous business opportunity in catching-up countries will be found in megacities and mobile services, but spectrum scarcity, a lack of harmonised standards and inadequate fixed infrastructure will need to be addressed.

Many catching-up countries that have not specified target speeds and deadline dates will nevertheless connect hundreds of cities to fibre in the next 12 months.

Broadband opportunities in many catching-up regions will be centred on mobile access, and infrastructure will develop in tandem with the market for content and services.

The lack of basic services for banking, health, education and transportation in some African markets offers an opportunity to build a new mobile delivery model from the ground up.

CONCLUSION: Governments have so far mainly focussed on supporting broadband infrastructure. Next-generation broadband strategies will transition to the complex tasks of assessingand where appropriate, promotingmarkets for content and services; providing status reports on targets, education levels and device prices; and integrating plans with other policy instruments, including national budgets.

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EstoniaCURRENT STATUS AND INDUSTRY INVOLVEMENTConstruction of the 100 Mbps EstWin broadband network is currently under way, and the first 500 km of the network went live in August 2011. In April 2012 it was reported that 1,200 km and over 400 interconnections points had been deployed, delivering the network to 77 local municipalities at that time.

In May 2010 seven pilot projects saw contracts worth a total of EEK50m (US$4.3m) awarded to infrastructure companies Corle and Eltel, and equipment vendor Ericsson, for the rollout of infrastructure in rural areas.

In May 2011 Eltel was awarded a contract for maintenance and management of the EstWin network.

In July 2010 the Estonian Broadband Development Foundation (ELA) put a second round of contracts out to tender for an additional 18 rural projects in different parts of the country. Contracts were subsequently awarded to Corle, Eltel, Ericsson, Televrgu and a Finnish-owned energy and telecoms infrastructure company, Empower.

Contracts for a third phase of construction, totalling a further 1,000 km of the network, were then put out to tender in August 2011 and awarded in October 2011 to Eltel (13 projects), Corle (seven projects), Ericsson (four projects) and

Empower (two projects).

BACKGROUNDIn April 2009 the Estonian Association of Information Technology and Telecommunications (ITL) released a working paper entitled Development Vision of the Next-generation Broadband Network in Estonia, which set out a national strategy and action plan to expand broadband service into rural regions of Estonia. Following the release of the paper, the Estonian Broadband Development Foundation (ELA) was established in August 2009 by the Ministry of Economic Affairs and Communications and ITL. ELAs remit is to build a fibre network, called the EstWin project, in all of the countrys rural regions by 2015, under a public-private partnership model. Members of ELA include

ESTONIA

CONSTRUCTION OF THE100 Mbps EstWin broadband network is currently under way, and the first 500 km of the network went live in August 2011.

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Estonian operators and technology companies Elion, Elisa, EMT, Televrgu and Levira; regional players Eltel, Ericsson and Tele2; and representatives from the economic affairs and communications ministry, the Ministry of Internal Affairs, the Ministry of Agriculture and the Ministry of Finance.

CURRENT PLAN: SUMMARYThe EstWin broadband network project is targeted only at rural regions of Estonia, with commercial operators expected to develop infrastructure in other areas. EstWins main goal is to ensure that 100Mbps services are available to all households and businesses by 2015. But ELA will be responsible for the construction only of the backhaul transit network, providing a wholesale service that gives operators open access to its passive, dark-fibre network, with transparent and equal pricing for all. The network is eventually expected to cover 6,400 km and provide around 1,400 interconnection points. The government is relying on the private sector to provide last-mile access and services to users on a technology-neutral basis. Indeed, ELAs operating guidelines state that it will not provide any end-user services and will act as a non-profit organisation whose financials will be publicly disclosed. The government has pledged funding for EstWin of up to 25% of the total project cost of 383m (US$502m), with funding of 22m provided by the European Union for the first 2,000 km of network build. Commercial operators involved in the project have agreed to share the remaining costs of the network.

Estonia: Public funds pledged for broadband plansTotal (US$m) Per household covered (US$) As % of annual fixed telecoms

retail revenueAs % of annual government budget revenue

133 230 46% 1.58%

National government targets for a next-generation network (NGN) and universal broadband

NGN speed (Mbps)

NGN coverage (households %)

Households covered (m)

NGN completion date

Universal speed (Mbps)

Universal completion date

100 100% 0.58 2015 100 2015

Summary of government approachDirect funding- backbone

Direct funding- metro

Direct funding- rural

Tax incentives or government loans

Network control or intervention (construct, own or operate)

Public-private partnership

Predominantly facilitative/ regulatory

Strong utility/municipal/ local authority involvement

4 - 4 - - 4 - -


This is a free summary of The Economist Intelligence Units Broadband Business Opportunities report.

The full 100-page report contains data on speed targets and planned public expenditure, plus profiles on the latest country-level developments. It can be purchased at The Economist Intelligence Units online store:

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