Starlink prices

This week’s newsletter is a brief look at Starlink’s prices. Starlink has generated a lot of buzz in some countries and has been touted as the solution to closing the rural connectivity gap. Starlink has acquired a license in Malawi and also in Zambia and is projected to be available in the first quarter of 2023. It has applied for a license in Tanzania. Its service is currently available in North America, Europe, Australia, Brazil and Chile. It is available in Ukraine, though on a waitlist basis.  There is no doubt about Starlink’s potential from an access point of view. […]

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Taking too long to test the waters

In a recent public letter, some large MNOs made the claim that “[d]igital platforms are profiting from “hyperscaling” business models at little cost while network operators shoulder the required investments in connectivity.” The letter implies that digital platforms have rolled out their platforms at a relatively insignificant cost. It also implies that MNOs are unable to build their own applications to compete against digital platforms because of some unspecified “blockage”.  In fact, nothing stops telcos from investing in other parts of the Internet value chain. Some of these investments, such as mobile money, have been hugely successful, while others have […]

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Competition and investment in the Internet value chain in Europe

The CEOs of Deutsche Telekom, Vodafone, Telefonica and Orange released a joint statement on 14 February 2022 that called upon large content platforms “to contribute to the cost of the European digital infrastructure that carries their services.” The statement raised several questions and left them unanswered. The aim of the letter seems to be a call for a regulatory intervention. South Korea’s Sending Party Network Pays (SPNP) regime is referred to positively as a way to create a “fair” regulatory environment. The letter relies heavily upon a proposal put forward by the European Telecommunications Network Operators’ Association (ETNO) to move […]

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ZICTA’s outlook on ICT sector taxes

In October this year, the Zambia ICT Authority (ZICTA) released a report assessing the impact of the National Budget on the ICT sector. It’s a fantastic document that should be required reading for any regulator in Africa. The main focus of the report is on the impact of tax policy on the ICT sector. The biggest change in the 2023 budget is the removal of a two-tier corporate tax rate, where ICT companies paid higher taxes than companies in other sectors of the economy. Prior to the 2023 budget, ICT sector companies paid  corporate taxes of 40% on profits over […]

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The Status of Community Networks in Kenya

RIS has been working on the status of Community Networks (CNs) in Africa. Our first challenge was simply the lack of data about CNs. Unlike formal telecom operators such as mobile networks like MTN, Airtel or Vodacom, many CNs purposefully operate in a grey legal area. This partly reflects the history of the telecom sector, which was dominated by fixed-line incumbents in the late 20th century and is now dominated by mobile operators. Until recently, regulators have either actively excluded CNs or ignored them. This means that some CNs operate without official licenses and want to keep a low profile.  […]

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ITU panel on challenges for digital transformation

Today, Dr. Christoph Stork from RIS moderated the ITU Workshop on “Economic and fiscal incentives to accelerate digital transformation of data and applications over telecommunication infrastructure”. Dr. Stork provided an overview of the impact of OTTs on telco revenues and profitability, how to measure progress towards a faster Internet and the impact of taxation on broadband. One of the slides shows how quickly data speeds and latencies are evolving and consumers demand more data-intensive applications like video and augmented reality and artificial intelligence. Mobile broadband download speeds have increased by 150% in just 4 years. Upload speeds are lagging, but […]

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Competition and Investment in the Internet Value Chain in South Korea and Australia

RIS is delighted to release a new report that directly addresses claims by telco’s that Over the Top Applications (OTTs) are the cause of unsustainable and unviable investments in the telco sector. Based on an in-depth analysis of annual financial reports, quarterly pricing data and other publicly available sources of information, the report shows that telcos are generating above average EBITDA margins from the demand for broadband connectivity. The higher demand for content from consumers translates into demand for better speeds and data allowances and this increases telcos’ revenues. There are two case studies that show how poorly thought out […]

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Competition and data prices in Nigeria

This week there was some controversy in Nigeria when the Nigerian Communications Commission (NCC) instructed the telco’s to withdraw a 10% price increase. According to the NCC, the price increase was not fully authorised. The proposed price increase of 10% comes after a proposal from the Association of Licensed Telecom Operators (ALTON) that a 40% price increase was justified. Clearly, the telco’s are preparing the public and the regulators for a price increase. Let’s investigate what the current status of prices and profitability is in Nigeria, especially compared to other countries in the region and across the continent. The data […]

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Open source coverage maps

In August, the weekly newsletter was about why there is no common standard for mobile coverage maps and the result was a wide range in accuracy, with operator coverage maps generally unusable. This week is a follow-up and compares one source for mobile coverage maps, Open Cell ID, versus actual coverage. RIS designs and operates Universal Access and Service (UAS) portals for Namibia and Malawi, so we have access to accurate population and geographic coverage maps. The table below compares geographic and population coverage. In Malawi, Open Cell ID geographic coverage misses 45% of the geographic area that is actually […]

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“Pay for access” is dead in the water

In February 2022, the four largest ISPs (or MNOs) in Europe wrote an open letter demanding that Content and Application Providers (CAPs) pay for access to their networks. We’ve covered this debate from a variety of different angles in previous newsletters, starting all the way back in April 2022: MNO EBITDA margins; the connectivity segment’s growth compared to other segments of the value chain; the cause of stagnant MNO revenues; the impact of Sending Party Pays in South Korea; the role of data caps in limiting revenue growth; the cost of capital and return on equity for all segments of […]

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