Developing Next Generation Access Networks Challenges in the SEE Region Developing Next Generation...

Developing Next Generation Developing Next Generation Access NetworksAccess Networks

Challenges in the SEE RegionChallenges in the SEE Region

Jaroslaw K. PonderJaroslaw K. PonderStrategy and Policy Unit

International Telecommunication Union

The 1st Southeastern Europe Broadband 2006 Conference & Expo (http://seebb2006.tninternational.com/ )

10-11 April 2006, Belgrade, Serbia and Montenegro

Note: The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU. Jaroslaw K. Ponder can be contacted at Jaroslaw.Ponder@itu.int

10 April 2006 Jaroslaw.Ponder@itu.int 2

AgendaAgenda

• Concept of IP-enabled NGNs and next generation access networks

• Techno-economic analysis and implications for access networks

• Worldwide and regional trends • Challenges for the SEE region

Concept of Concept of IP-enabled NGNs and IP-enabled NGNs and nnext ext ggeneration eneration access naccess networksetworks

We all build the Information We all build the Information Society togetherSociety together!!

NGN versus NGANNGN versus NGAN

• ITU-T SG 13: Rec. Y.2001 A NGN is a packet-based networkpacket-based network able to provide

telecommunication services and able to make use of multiple broadbandmultiple broadband, QoS-enabledQoS-enabled transport technologies and in which service-relatedservice-related functionsfunctions are independentindependent from underlying transport-related transport-related technologiestechnologies.

It enables unfettered accessunfettered access for users to networks and to competing service providers and/or services of their choice.

It supports generalized mobilitygeneralized mobility which will allow consistent and ubiquitous provision of services to users.

• What is different? Multimedia Generalized mobility Convergence Integrity Multi-layer orientation Open character

NGN: New environmentNGN: New environment

AccessAccess IP-basedIP-basedNetworksNetworks

ApplicationsApplications

Source : Telefonica 2005

What drives NGN development? What drives NGN development?

• Better financial performance Revenue growth Margin protection Reduced OPEX and CAPEX

• Operational issues Obsolescence & modernization Reliability, resilience & quality Capacity & scalability Simpler and faster provision of service

• Competitive issues New service roll-out/substitution & service

differentiation Market share growth & protection Convergence of voice, data and IT enables provision of

new offerings in packages

NGN impactNGN impact

• Convergence • Market structure • Market potential• Business models• Price strategies • Sell strategies• Customer preferences • Customer protection• Regulatory model• What next…

NowService A Service B Service C

Net. A Net. B Net. C

FutureServices A, B, C

IP Platform(QoS)

Access Networks

New requirementsNew requirements

• Up-grade of the core networks• Expansion of next generation access

networks• Fix Mobile Convergence • High investment programmes• Very high investment risk

Unknown business models Unknown regulatory proceedings Regulatory holydays under discussion

Next Generation Next Generation Access Networks Access Networks

• Fixed xDSL Cable TV PLC FTTx

• Wireless Mobile infrastructures;

2G to 3G and beyond 3G WiFi and WiMAX Satellite Digital broadcast

infrastructures Wireless Mesh networks

Service Driven Next Generation Service Driven Next Generation Access NetworksAccess Networks

Downstream / (Mb/s)

Video preview Advanced videophony

0.06 0.6 2 10 35

Broadband + Multi HDTV

Interactive TV

Broadband +Multi VoD

Local web server teleworking

Broadband Video

TelephonyVideo Games

Peer to Peer

Note: Adopted from TPSA

Fixed voice/ Fax / Dial-up

Downstream / (Mb/s)

Mobile Broadband

ADSL 2+

0.06 0.6 2 10 35

Broadband + Multi HDTV

TV / VoD Interactive TV

Broadband +Multi VoD

VDSLLocal web server

teleworking

Peer to PeerFTTx

Fixed BWA

Note: Adopted from TPSA

Service Driven Next Generation Service Driven Next Generation Access NetworksAccess Networks

Life of Next Generation Access Life of Next Generation Access TechnologiesTechnologies

FTThVDSL2

ADSL2+

ADSL GPRS GSM

WiFiEDGE

Life cycle of next generation access

technologies is relative and depend on the regional or

country particularities

Emerging Growing Matured Declining time

Worldwide and regional trendsWorldwide and regional trends

Broadband access worldwide Broadband access worldwide (2005)(2005)

0 5 10 15 20 25 30

United States

Sweden

Norway

Finland

Belgium

Israel

Taiwan, China

Canada

Switzerland

Iceland

Denmark

Netherlands

Hong Kong, China

Korea (Rep.)

Cable modem

16.315.6

Broadband penetration by technology, top 15 economies,

DSL and Cableprevail over other

technologies worldwide

FTTx in Europe FTTx in Europe (2005)(2005)

Source: IDATE (2005)

European FTTx subscribers

Home / Building passed

Source: IDATE (2005)

Few countries started development of FTTx

infrastructure.

The customer base is still very small but grows very fast in most of leading economies

Broadband access in SEE Broadband access in SEE (2005)(2005)

0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8%

Serbia & Montenegro - Montenegro

Serbia & Montenegro - Serbia

Bulgaria

Serbia & Montenegro - Kosovo

The former Yugoslav Republic of Macedonia

Bosnia & Herzegovina

Romania

Croatia

Turkey

Cable modem

Broadband penetration by technology in SEE, 2005

Broadband penetration rates of SEE leading countries do not

exceed 1%

Broadband subscription price, Broadband subscription price, (cheapest plan sampled, monthly, US$, top 75, 2005)(cheapest plan sampled, monthly, US$, top 75, 2005)

54.5553.27

51.3950.98

50.5250.1450.1450.0150.0050.0050.0049.83

48.4148.0747.8247.3847.0646.7546.4746.3245.91

45.1244.6044.51

43.9543.85

43.2142.23

40.9040.0039.9939.85

39.0538.1237.8537.6037.6037.60

35.9535.30

34.8333.6833.48

32.8331.92

30.8530.08

27.6427.63

26.6025.4925.0725.0725.01

23.7623.6223.58

22.9122.18

21.0520.4520.2620.00

19.3518.8018.78

17.0415.52

14.1613.5013.1312.99

11.519.87

512512256256

1024512768384

512256384256

70430001024

256256384256

2565122048512

51210241024256

1024256256

60081922563000

256512102413000

256384256768

10244001024

20482048512512

6405122048640

2048256256256

512640512

25640963841024

512512512256

20485125122048

5128192

0 10 20 30 40 50 60

GuernseyMauritiusAndorra

MaltaColombia

French GuianaMartinique

AustriaHonduras

JamaicaPanama

Dominican Rep.Chile

Norw aySingapore

LuxembourgFaroe Islands

OmanVenezuelaCosta Rica

MaldivesSpain

PortugalPhilippines

SenegalPolandBosniaTunisia

Czech RepublicPuerto RicoNicaragua

Sw itzerlandSw edenBulgariaCanadaAlbaniaBelgiumIreland

Korea (Rep.)New Zealand

BahamasMorocco

CroatiaCyprus

PeruSlovenia

NetherlandsUnited Kingdom

EstoniaUkraine

Hong Kong, ChinaGuadeloupe

GermanyItaly

Macao, ChinaIsraelBrazil

AustraliaSri Lanka

GuyanaMalaysiaUruguay

United StatesIndonesia

FranceIndia

ThailandJordan

LithuaniaTaiw an, China

KazakhstanSlovak Republic

IcelandChinaJapan

44.5143.9543.85

43.2142.23

40.9040.0039.9939.85

39.0538.1237.8537.6037.6037.60

35.9535.30

34.8333.6833.48

32.8331.92

30.8530.08

51210241024256

1024256256

60081922563000

256512102413000

256384256768

10244001024

20482048

0 10 20 30 40 50 60

GuernseyMauritiusAndorra

MaltaColombia

French GuianaMartinique

AustriaHonduras

JamaicaPanama

Dominican Rep.Chile

Norw aySingapore

LuxembourgFaroe Islands

OmanVenezuelaCosta Rica

MaldivesSpain

PortugalPhilippines

SenegalPolandBosniaTunisia

Czech RepublicPuerto RicoNicaragua

Sw itzerlandSw edenBulgariaCanadaAlbaniaBelgiumIreland

Korea (Rep.)New Zealand

BahamasMorocco

CroatiaCyprus

PeruSlovenia

NetherlandsUnited Kingdom

EstoniaUkraine

Hong Kong, ChinaGuadeloupe

GermanyItaly

Macao, ChinaIsraelBrazil

AustraliaSri Lanka

GuyanaMalaysiaUruguay

United StatesIndonesia

FranceIndia

ThailandJordan

LithuaniaTaiw an, China

KazakhstanSlovak Republic

IcelandChinaJapan

Broadband prices per 100 kbit/s Broadband prices per 100 kbit/s (top 75, 2005)(top 75, 2005)

10.6610.63

10.4210.40

9.799.60

9.319.21

8.818.648.588.578.57

7.917.657.64

6.956.84

6.646.51

6.265.79

5.535.49

5.365.345.27

5.155.04

4.284.22

4.043.993.963.91

3.693.673.673.673.57

3.353.273.253.253.21

3.022.90

2.572.56

2.452.412.38

2.221.931.84

1.681.651.59

1.351.281.221.161.161.05

0.940.830.730.73

0.520.49

0.250.200.180.080.07

Argentina 75Venezuela 74

Moldova 73Mauritius 72

Martinique 71Costa Rica 70

Bulgaria 69Brazil 68Spain 67

United ArabSenegal 65Andorra 64Albania 63

Uruguay 62Jersey 61Turkey 60

Philippines 59Jamaica 58

Peru 57Austria 56

Norw ay 55Bermuda 54Lithuania 53Morocco 52

Qatar 51Bahamas 50

Georgia 49Ukraine 48

Indonesia 47Poland 46Bosnia 45Croatia 44

Czech Republic 43Estonia 42

Paraguay 41Viet Nam 40

France 39Ireland 38

India 37Australia 36

Sw itzerland 35Denmark 34Sri Lanka 33

Israel 32Cyprus 31

Botsw ana 30Luxembourg 29

Malaysia 28Kazakhstan 27

French Guiana 26New Zealand 25

Thailand 24Slovak Republic 23

China 22Guadeloupe 21

Slovenia 20Jordan 19

Singapore 18United Kingdom 17

Guyana 16Belgium 15

Macao, China 14Italy 13

Canada 12Portugal 11

Hong Kong, ChinaNetherlands 9

Finland 8Germany 7

United States 6Sw eden 5

Iceland 4Taiw an, China 3

Korea (Rep.) 2Japan 1

9.218.81

8.648.588.578.57

7.917.657.64

Peru 57Austria 56

Qatar 51Bahamas 50

France 39Ireland 38

Israel 32Cyprus 31

Guyana 16Belgium 15

Finland 8Germany 7

5.365.345.27

5.155.04

4.284.22

4.043.993.963.91

Peru 57Austria 56

Qatar 51Bahamas 50

France 39Ireland 38

Israel 32Cyprus 31

Guyana 16Belgium 15

Finland 8Germany 7

2.412.38

2.221.931.84

1.681.651.59

Peru 57Austria 56

Qatar 51Bahamas 50

France 39Ireland 38

Israel 32Cyprus 31

Guyana 16Belgium 15

Finland 8Germany 7

The broadband prices for in selected SEE countries

are very high and very high and not affordable for

average user

Wireless technologies Wireless technologies

In 2004 in Romania 279’408 users of 3G, 2.7%

of all mobile subscribers

(16 position)

In 2004 Moldova 3’000 users of 3G, 0.4% of all mobile

subscribers(32 position)

Number of cellular users per 100 inhabitants

34%38%

47% 49% 49%

57%61%

Kosovo

Bosnia

Albania

Romania

Turkey

Bulgaria

Croatia

2002 2003 2004 2005 Fixed T. (2005)

Measuring Measuring Opportunities Opportunities

Digital Opportunity Index

1/3 1/3

DOIDOI

OpportunityOpportunity UtilizationUtilization

Infrastructure

Digital Opportunity Digital Opportunity IndexIndex

DOIDOI

percentage of population covered by mobile cellular telephony

internet users per 100 inhabitants

Proportion of households with fixed line telephone

mobile cellular tariffs as a percentage of per capita income

internet access tariffs as a percentage of per capita income

ratio of broadband internet subscribers to

internet subscribers

ratio of broadband mobile subscribers to

mobile internet subscribers

mobile cellular subscribers per 100 inhabitants

proportion of households with Internet access at home

mobile internet subscribers per 100 inhabitants

proportion of households with a computer

Utilization

Infrastru

ctureInfrastructure

Infrastructure

Digital Opportunity Index in Digital Opportunity Index in developed economies and CEEdeveloped economies and CEE

• DOI Leaders: Korea, Hong

Kong and Japan

CEE: High opportunities but low utilization

• Mobile component and broadband

Digital Opportunity Index inDigital Opportunity Index inSouth Eastern Europe South Eastern Europe

• DOI in SEE Leaders: Croatia,

Turkey, Bulgaria

Special Cases: Romania, Macedonia, Albania

CEE: High opportunities but low utilization

SEE: Low opportunities High opportunities but low utilization

Note 1: DOI results calculated on different dataset as results presented on the previous slide

Opportunity Infrastructure Utilization DOI

Estonia 0.94 0.59 0.19 0.58

Slovenia 0.97 0.48 0.17 0.54

Czech Rep. 0.93 0.42 0.23 0.53

Malta 0.94 0.33 0.27 0.51

Cyprus 0.97 0.43 0.12 0.51

Croatia 0.92 0.52 0.1 0.51

Slovak Rep. 0.94 0.42 0.14 0.5

Greece 0.93 0.43 0.06 0.47

Hungary 0.92 0.4 0.1 0.47

Latvia 0.88 0.37 0.12 0.46

Poland 0.94 0.36 0.08 0.46

Lithuania 0.93 0.34 0.09 0.46

Turkey 0.89 0.38 0.05 0.44

Bulgaria 0.72 0.31 0.09 0.38

Bosnia 0.86 0.2 0.02 0.36

Serbia and Montenegro 0.74 0.24 0.04 0.34

Rumania 0.56 0.24 0.07 0.29

Macedonia 0.64 0.19 0.03 0.29

Albania 0.58 0.1 0.01 0.23

Note 2: Calculated on base of 2004 data

DOI in selected SEE CountriesDOI in selected SEE Countries

base data indicator sub index weighted base data indicator sub index weighted base data indicator sub index weighted base data indicator sub index weighted

Oportunity 0.92 0.74 0.64 0.89percentage of population covered by mobile

cellular telephony98 0.98 0.32 95 0.95 0.31 99 0.99 0.33 95.98 0.96 0.32

2.52 0.84 0.28 2.35 0.85 0.28 6.01 0.62 0.21 2.11 0.87 0.29

0.74 0.96 0.32 11.3 0.44 0.14 13.3 0.34 0.11 2.45 0.88 0.29

Infrastructure 0.52 0.24 0.19 0.38Proportion of households with fixed line

telephone84 0.84 0.17 23.23 0.23 0.05 29.21 0.29 0.06 76 0.76 0.15

58.37 0.58 0.12 44.96 0.45 0.09 37.23 0.37 0.07 47.99 0.48 0.10

96.8 0.97 0.19 49.07 0.49 0.10 22.2 0.22 0.04 61 0.61 0.12

0.00 0.00 0.00 0.00 0.00 0.00 0.72 0.01 0.00

proportion of households with a computer 19.07 0.19 0.04 3.7 0.04 0.01 6.78 0.07 0.01 5.12 0.05 0.01Utilistaion 0.10 0.04 0.03 0.05

internet users per 100 inhabitants 29.5 0.30 0.10 11.4 0.11 0.04 7.69 0.08 0.03 14.13 0.14 0.05ratio of broadband internet subscribers to

internet subscribers0.02 0.00 0.00 0.004 0.00 0.00 0.02 0.00 0.00 0.02 0.00 0.00

ratio of broadband mobile subscribers to mobile internet subscribers

0.00 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00

DIGITAL OPPORTUNITY INDEX 0.51 0.34 0.29 0.44Reference

population (mln) 4.438 10.645 2.031 67.612GNI per capita (USD) 6'590 2'620 2'350 3'750

TurkeyMacedoniaSerbia COUNTRY Croatia

Note: Calculated on base of 2004 data

DOI in selected SEE CountriesDOI in selected SEE Countries

base data indicator sub index weighted base data indicator sub index weighted base data indicator sub index weighted base data indicator sub index weighted

Oportunity 0.56 0.72 0.58 0.86percentage of population covered by mobile

cellular telephony95 0.95 0.31 99.4 0.99 0.33 85 0.85 0.28 98 0.98 0.32

5.78 0.64 0.21 9.55 0.40 0.13 13.6 0.15 0.05 3.97 0.75 0.25

17.66 0.12 0.04 4.08 0.80 0.26 4.94 0.75 0.25 2.48 0.88 0.29

Infrastructure 0.24 0.31 0.10 0.20Proportion of households with fixed line

telephone58 0.58 0.12 78 0.78 0.16 8.78 0.09 0.02 24.71 0.25 0.05

45.85 0.46 0.09 60.41 0.60 0.12 35.8 0.36 0.07 27.4 0.27 0.05

6 0.06 0.01 10 0.10 0.02 5.4 0.05 0.01 48.7 0.49 0.10

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

proportion of households with a computer 11 0.11 0.02 5.89 0.06 0.01 1.17 0.01 0.00 0 0.00 0.00Utilistaion 0.07 0.09 0.01 0.02

internet users per 100 inhabitants 20.19 0.20 0.07 28.1 0.28 0.09 2.34 0.02 0.01 5.37 0.05 0.02ratio of broadband internet subscribers to

internet subscribers0.03 0.00 0.00 0 0.00 0.00 0 0.00 0.00 0.01 0.00 0.00

ratio of broadband mobile subscribers to mobile internet subscribers

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

DIGITAL OPPORTUNITY INDEX 0.29 0.38 0.23 0.36Reference

population (mln) 22.4 8.81 3.41 4.27GNI per capita (USD) 2'920 2'740 2'080 2'040

BosniaAlbaniaCOUNTRY Romania Bulgaria

Note: Calculated on base of 2004 data

Challenges for SEE countriesChallenges for SEE countries

Challenges for SEE CountriesChallenges for SEE Countries

• Definition of long term goals of the regulatory policy; privatization process

• Regulatory reform and harmonization• Promotion of pro-competitive policy

and focus on dynamic aspects• Balance between service based and

infrastructure based competition• Efficient and workable unbundling

policy • Optimal spectrum management• New approaches relevant for IP-

enabled NGNs

Thank you very much Thank you very much for your attention!for your attention!

Jaroslaw K. Ponder International Telecommunication UnionStrategy and Policy Unit E-mail: Jaroslaw.Ponder@itu.int http://www.itu.int/spu Tel: 00 41 22 730 60 65Fax: 00 41 22 730 64 53

We are building global We are building global information society together!information society together!

Resources Resources

• Full version of this presentation and others focusing on NGN: www.itu.int/osg/spu/presentations/

• NGN regulatory and policy resources:http://www.itu.int/osg/spu/ngn/ngn-policy-regulatory-resources.html

• ITU activities on NGN:www.itu.int/spu/ngn

International International Telecommunication Telecommunication

UnionUnion

ITU - International ITU - International Telecommunication UnionTelecommunication Union

• The oldest specialized UN agency with more than 140 years of experience in communication sector

• Headquarters in Geneva plus regional offices

• ITU staff: more than 750 from more than 80 countries

• 189 member states, more than 640 sector members

• ITU Agenda for Change• Structure of the ITU

ITU-T – Telecom Standardization ITU-R – Radio-communications ITU-D – Development Bureau

ITU – InternationalITU – InternationalTelecommunication UnionTelecommunication Union

ITU’s Strategy and ITU’s Strategy and Policy Unit (SPU)Policy Unit (SPU)

http://www.itu.int/spuhttp://www.itu.int/spu

• New Initiatives Programme Digital Bridges (2005) Ubiquitous Network Societies (2005) Today’s Networks Tomorrow (2005) What Rules for IP-enabled NGNs? (2006) Digital Transformations in the Information

Society (2006) Regulatory Environment for Future Mobile

Multimedia Services (2006)• Many other activities…

Developing Next Generation Access Networks Challenges in the SEE Region Developing Next Generation...

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