Weekly News

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 […]

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 […]

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 […]

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 […]

Last week’s newsletter looked at growth in the connectivity segment of the value chain globally. This week’s newsletter looks at some specific examples and trends. In terms of global EBITDA margin, the connectivity segment sits at 30%, which is considerably higher than anywhere else along the value chain. The table shows examples from some Asia Pacific (APAC) countries and there is a wide variation. Indonesia and Thailand have incredible EBITDA margins of around 50%. South Korea is generally improving and moving towards the 30% global average. Australia sits at just about the average of 30%, though there are some worrying […]

Operators from around the world have made claims that the current telecoms environment is unsustainable and that their investments in the segment are unviable because they can’t make any profit. Here are statements from European operators and from an Australian operator. These are serious companies making the claim that their operations, their investments and employees will be shut down because it is impossible to make money. So, let’s do a quick analysis of these claims. In the table below, we have the growth between 2008 and 2020 of segments of the Internet Value Chain. It shows that in 2008, the […]

In August 2022, I wrote a blog post about the need for innovation in the allocation of spectrum. One proposal was to allocate spectrum to a Managed Spectrum Park (MSP). This blog post provides a bit more detail on how this could be done. For simplicity, let’s assume that there is 60MHz available in a high-demand frequency band such as 800MHz. The question is how to allocate the 60MHz effectively.  MSPs are appealing because they address the main failing of the current mechanism for allocating spectrum: winner takes all. An operator that wins a traditional national spectrum auction gets all […]

Our usual take on sector-specific telecom taxes is that they increase the price of telecom services, lead to either a slowdown in demand or even a massive reduction in demand (we’re looking at you, Uganda). But there is another aspect that is not as widely known: how governments’ can have an impact on retail prices by trying to control wholesale prices. Australia is a great example of good intentions that became mired in inflexible policies and has lead to really high prices and slow speeds.  In 2009, Australia started building a National Broadband Network (NBN) with the objective to deliver […]

Spectrum is an extremely high-value resource with companies prepared to pay enormous sums of money for exclusive access. Nigeria recently held an auction for 100MHz in the 3.5GHz band and MTN paid USD273 million for a 10 year exclusive license. But one of the main problems is that spectrum is often not fully utilized. There are geographic areas that a national operator might decide not to use that spectrum and there may be legitimate operational reasons for this decision. However, from a country perspective, this is a wasted opportunity because spectrum is in high demand and could be used to […]

Airtel Africa released its results for the quarter ended June 2022 and their performance is pretty impressive. EBITDA margin increased from 44% to 49% between 2020 and 2022. Revenues jumped from US$ 3.4 billion to US$ 4.7 billion. But one of the more interesting statistics is the trend for both voice and data. Data grew by 108% for the 2 years between June 2020 and June 2022 and voice grew by 44% for the same period. Strong data growth is the new normal but it’s the strong voice growth that is unexpected, especially when it’s predicted that voice revenues will […]