View
220
Download
0
Category
Preview:
Citation preview
7/29/2019 John Krzywicki Analysys Mason 12
1/26
Facilitating Socio-Economic Transformation ThroughBroadband, Especially Mobile Video Enablement
Presentation for Latin American Spectrum Conference (Policy Tracker)
John Krzywicki, Partner , Analysys Mason
24 October, 2012
7/29/2019 John Krzywicki Analysys Mason 12
2/26
Confidentiality notice
Copyright 2011. The information contained herein is the property of Analysys Mason Limited and is provided on condition that it will not bereproduced, copied, lent or disclosed, directly or indirectly, nor used for any purpose other than that for which it was specif ically furnished
7/29/2019 John Krzywicki Analysys Mason 12
3/26
3
We have 12 offices serving over 300 clients in over 100 countries
Europe London Dublin Edinburgh
Madrid Milan Paris Cambridge Manchester
Asia Pacific New Delhi Singapore
Americas Washington DC
Middle East and Africa Dubai
Introducing Analysys Mason
7/29/2019 John Krzywicki Analysys Mason 12
4/26
We have unique telecoms expertise in Latin America
Analysys Mason has worked extensively in Central and Latin America, including Mxico, Brazil,Chile, Peru, Aruba, Barbados, Bermuda, Cayman Islands, Grenada, Jamaica, Santa Lucia,Dominican Republic, El Salvador, Trinidad and Tobago, and Venezuela
Our clients include regulators, operators, investment banks and government bodies
Introducing Analysys Mason
EXAMPLES OF PROJECTS COMPLETED IN LatAm
Assessment of broadband environment in a LatAm country
Development of a top-down LRIC model for MTR
Pricing strategy and product positioning in the Caribbean
Development of strategic business and operations plans for C@ribNET, a regional education network
Review of the regulatory framework for a national regulator
Assessment of the competitiveness of the mobile market in aCaribbean country
Delivery of a communications infrastructure for the JamaicanMinistry of National Security
Cost modelling of a NGN core in Latin America
General competition plan, for an association of operators inBrazil
Service pricing study for a regulator
http://www.analysysmason.com/About-Us/News/Newsletter/Will-NGA-resolve-or-reinforce-digital-disadvantage/http://www.broadbanduk.org/component/option,com_docman/task,doc_view/gid,1036/Itemid,63/7/29/2019 John Krzywicki Analysys Mason 12
5/26
Introduction
The objective of the presentation is to:Explore the social impact of broadband, and especially the rise of video enabled devices
emphasise the social benefits which video enabled devices and their usage for socialnetworking may create
mention the challenges which obstruct the proliferation of video enabled devices
Suggest possible relevant actions which may enable the reaping of the benefits stemming fromthe use of video enabled devices for social networking
5Introduction
7/29/2019 John Krzywicki Analysys Mason 12
6/26
Executive summary
In the last decade, Latin America (including the Caribbean,hereafter LAC) has caught up to the developed world in thepenetration of mobile services (mostly prepaid, with simplecheap devices)
In the developed world, video enabled social networking hastaken off
the rise of the iPad and other tablets, plus YouTube,Skype and many other services
Video enabled applications (real time, live) can greatlyfacilitate family interactions to improve health care,education, and other activities valued by societies, especiallysocieties in developing countries
This opportunity is particularly strong in LAC, because of thediaspora in the US, and the simple tendency to use USexperience to bootstrap improvements back into the homecountries
There are many barriers in LAC countries, barriers well
beyond the scope of the telecom regulators to fixa holistic approach across agencies is needed
IDB can be a tremendous catalyst for this on a great manyfronts
6
Geographic distribution of mobile phone subscriptions
Executive summary
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2 0 0 0
2 0 0 1
2 0 0 2
2 0 0 3
2 0 0 4
2 0 0 5
2 0 0 6
2 0 0 7
2 0 0 8
2 0 0 9
2 0 1 0
2 0 1 1
2 0 1 1 ( p o p . )
US & Canada Europe Asia Latin America Africa
P o p u l a
t i o n s p
l i t
7/29/2019 John Krzywicki Analysys Mason 12
7/26
Broadband has economical and societal impact on multiple sectors
Broadband penetration leads to higher GDP growthincrease than fixed and mobile penetration
many sub-measures show improvement withhigher penetration (productivity, innovation, jobs insector, etc.)
Demonstrating the impact of new broadbandnetworks is more difficult as these have higher deployment costs
Also, new broadband networks have an impact over multiple sectors:
government services
financial services
education
Healthcare
IDB estimates for LAC only are much higher: 3.2%GDP increase after 10% broadband increase (March2012: Bridging Gaps, Building Opportunity)
7
Impact of 10% penetration increase on GDP
Source: World Bank study
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
F i x e
d
M o
b i l e
I n t e r n e
t
B r o a d
b a n
d
I n c r e a s e i n
G D P g r o w
t h
High-income economiesLow- and middle-income economies
Why and how to stimulate the ICT sector
7/29/2019 John Krzywicki Analysys Mason 12
8/26
Broadband penetration in LAC is currently significantly behind that of OECD countries
Currently, LAC countries have a much lower penetration of both fixed telephony and internet thanOECD countries
Mobile penetration of 100% exists, as is standardalmost worldwide now, but almost all phones arenarrowband and not smartphones
There are different socio-demographic andeconomic conditions to consider
Capital-intensive sector with sunk costs andsignificant O&M
There is a gap between the mobile penetration rateand mobile broadband penetration (growthopportunity)
Broadband in LAC
Source: IDB, OECD
Fixed line and internet penetration
0% 10% 20% 30% 40% 50% Argentina
Brazil
Colombia
Chile
Guyana
Peru
Suriname
Bolivia
Ecuador
Paraguay
Uruguay
Venezuela
OECD
Penetration
Internet Fixed line
8
7/29/2019 John Krzywicki Analysys Mason 12
9/26
LAC is connected at very low speeds and at high prices, which are notaffordable to many
Average broadbandspeed offered
Average priceper MB
Broadband in LAC
Source: Galperin and Ruzzier (2010, 2011)
Average broadbandplan price
9
7/29/2019 John Krzywicki Analysys Mason 12
10/26
Telecoms indicators suggest growth and improvement in Latin America,however, it is still behind the developed world
Latin America has experienced a surge in PC penetration
PC penetration in Latin America has grown from 5% in2001 to 18% in 2011 and is expected to reach 34% by2020
such statistics may not reflect the impact of tablets
PC penetration in Latin America has grown at CAGR of 13% between 2001-2011, while in North America 5%
Latin America has also experienced growth in Internet
penetrationInternet penetration in Latin America has grown from 6% in2001 to 39% in 2011 and is expected to reach 53% by2020
Internet penetration in Latin America has grown at CAGRof 21% between 2001-2011, while in North America 5%
Mobile penetration in Latin America is relatively high, above120%
10
PC population penetration
Telecoms indicators in Latin America
Source: Euromonitor International, ITU
Internet population penetration
0%
20%40%
60%
80%
100%
2000 2005 2010 2015 2020
I n t e r n e
t p e n e
t r a
t i o n
Asia Pacific Eastern EuropeLatin America Middle East and AfricaNorth America Western Europe
0%
20%
40%
60%
80%
100%
120%
2000 2005 2010 2015 2020
P C p e n e
t r a
t i o n
Asia Pacific Eastern EuropeLatin America Middle East and AfricaNorth America Western Europe
7/29/2019 John Krzywicki Analysys Mason 12
11/26
The deficiency of broadband is compounded by the lack of resources inmany LAC countries
GDP per capita in IDB countriesGDP per capita in OECD countries
Broadband in LAC
Source: EIU
0
10
20
30
40
50
60
70
80
90
100
A U
A T
C A
C Z
D K
E E F
I F R
D E
G R I S I E I L I T J
P K R
L U
N L
N Z
N O P
L P T
S K S
I E S
S E
C H
T R
G B
U S
G D P p e r c a p
i t a
( U S D t h o u s a n
d s
)
0
10
20
30
40
50
60
70
80
90
100
A R
B Z
B O
B R
C L
C O
C R
D O
E C
S V
G T
G Y
H N
H U
J M
M X N
I P A
P Y
P E
S R
T T
U Y
V E
G D P p e r c a p
i t a
( U S D t h o u s a n
d s
)
11
7/29/2019 John Krzywicki Analysys Mason 12
12/26
The rise of social networking has transformed both the developed and thedeveloping world
The advent of social networking has contributed to a widerange of transformations, with direct effect on:
human relationships
communication and interaction access any time, anyplace
ability to organise and incite social and political change
promotion of education and news
targeted marketing and advertisement
Social networking has had an impact on both the developedand the developing world, despite the lack of robust landlinebroadband services in many parts of the latter
US: Facebooks role in the elections
Middle East: political shifts
China: censure
Brazil: 3rd
top Twitter nation
12
Social networking: connecting the world
Social networking and video enabled devices: background
7/29/2019 John Krzywicki Analysys Mason 12
13/26
Unlike simple mobile voice communication, video-enabled devices facilitatehigh quality real-time interactivity
Majority of long-distance communication is still insufficientlyinteractive:
voice-based (usually via mobile or fixed networks)
written (electronic or via a mobile network e.g. SMS)
The demand for greater interactivity has been evidenced bythe growth of applications such as Skype
in Q4 2010, Skype had about 145 million connected users
42% of the calls made were video calls
Unlike simple mobile voice communication, video-enableddevices can enable high quality real-t ime interactivity
when executed over good quality uncongested network,video calls may act almost as a substitute of in personcommunication
in the US, far over-represented among early adopters of tablets are grandparents
13
Real-time interactivity via video call
Social networking and video enabled devices: background
7/29/2019 John Krzywicki Analysys Mason 12
14/26
Prices for video enabled devices are still prohibitively high for citizens of developing countries, however, future price decrease may stimulate uptake
Current prices for video enabled devices are prohibitively
high for citizens of developing countries compared to their income
an iPad 3 with 32GB costs USD1011 in Brazil, where theGDP per capita at PPP is estimated at USD11 900
in contrast, in the US which has a GDP per capita at PPPof about USD48 350, an iPad 3 with 32GB costs USD729
The high production costs of video enabled devices deter themass adoption of these devices
however, the anticipated decrease in prices is likely to leadto an increase in uptake
Future affordability of smart phones and tablets is likely to beespecially important in countries below the top 40 in GDP per capita
This is the tip and maybe half of the iceberg country bycountry there are also services taxes and other economicbarriers; spectrum issues abound; international connectivitylimitations will have to be solved; intellectual property issuesare also likely to be encountered
14
Comparative pricing for iPhone 4S
Social networking and video enabled devices: background
Source: Apple website, operators website, EIU
Device Operator Price (USD) Price(local)
iPhone 4S 16GB Apple onlinestore, BR
986 BRL1999
iPhone 4S - 16GB Apple onlinestore, MX
754 MXN9699
iPhone 4S - 16GB Apple onlinestore, US
549 USD549
Device Operator Price (USD) Price(local)
iPad 3 32GBWi-Fi + 3G
Apple onlinestore, BR
1011 BRL2049
iPad 3 32GBWi-Fi + 3G
Apple onlinestore, MX
863 MXN11 099
iPad 3 32GBWi-Fi + 3G
Apple onlinestore, US
729 USD729
Comparative pricing for iPad 3
7/29/2019 John Krzywicki Analysys Mason 12
15/26
and stimulate positive externalities such as improved healthcare andeducation
15
Promoting healthcare via video enabled devices
Benefits of using video enabled devices for social networking
Education
Intensified interactions which putparents more squarely in themiddle of the learning processes
E.g. iMeet application is used for remote parent/teacher conferences
Healthcare
Greater interaction between familymembers when it comes tohealthcare
E.g. Patients Know Best, an onlineconsultation record based on Skype,allows patient-doctor communication
Other usesAmbulance and mobile medicalpersonnel, police, social workers,first responders and front line in-the-field people
7/29/2019 John Krzywicki Analysys Mason 12
16/26
Video enabled social networking may be capable of stimulating positivechange with a success rate greater than other projects like distance learning
Video enabled social networking may be capable of
stimulating positive change in habits in the LAC regionsocial networking is driven by users , not imposed
LAC residents are enthusiastic adopters of socialnetworking applications
Emerging market citizens are willing to spend on telecoms
middle class Brazilians are willing to spend 3% of incomeon telecoms
Previous projects have had limited success due to lack of real-life interactivity
MIT Media Lab USD100 Netbook
distance learning
16
Social networking may stimulate domino effect in human behaviour
Benefits of using video enabled devices for social networking
Social Networking is thespoonful of sugar that helps
the medicine go down
7/29/2019 John Krzywicki Analysys Mason 12
17/26
The experience of OATS (Older Adults Technology Services) in the USoffers a compelling analogy as to why our thesis will work [1]
As nothing like what we have been suggesting has had the time to penetrate LAC, we looked for an analogy in the US a
technology challenged group that would, upon being enabled, use technology as the means to many other ends. That led us toOATS
OATS, founded in 2004, has taught over 5,000 elder Americans in Brooklyn how to use laptops, PCs, tablets and other tech devicesfor a wide variety of purposes
20- 25% of their constituency is Latino
We interviewed their founding Director, Thomas Kamber, a recognized authority in technology issues for older adults. Key findingsof their experience include
Tablets are potentially the best medium yet, because the live video is more impactfulTablets are especially useful for their Latino constituency keyboards and mouses are a hindrance for the barely literate, and for the English challenged. The widely recognized intuitiveness of the iPad greatly eases the process of learning to use, andgreatly encourages use and participation
For all constituencies, in the US the laptop/PC interfaces for health care interactions are catastrophically bad authenticationgets in the way, and video can solve that
17Benefits of using video enabled devices for social networking
7/29/2019 John Krzywicki Analysys Mason 12
18/26
The experience of OATS (Older Adults Technology Services) in the USoffers a compelling analogy as to why our thesis will work [2]
Kamber embraces the theory of the spoonful of sugar than helps the medicine go down
A course on health care applications drew a modest response. Courses on how to use tablets/pcs for a range of fun anduseful applications draws far better He said it was best to do travel, entertainment, social networking, and health care andeducational topics all together
For a specific five week course, OATS did a study of 66 seniors, before, during and after the course. The results are stunning:
His opinion is that the LAC diaspora is especially ripe for video enabled social networking because the interfaces are so mucheasier to use, and the desire for social networking, especially within the extended family units, is so strong
The video format is an equalizer
Id be an optimist about use by Latinos
18Benefits of using video enabled devices for social networking
When tracked, 71% of the seniors used their new
found skills to do health care research
7/29/2019 John Krzywicki Analysys Mason 12
19/26
Latin America can tap on strong connections to the US to develop ICTusage benefits locally
There are one million or more foreign born in the US from Brazil and the Dominican Republic, while for Mexico, this figure is 10M
The US communities can be surprising large compared to the home population: for every 7 Dominicans in the DominicanRepublic, there is 1 Dominican in the US (for El Salvadorans the ratio is 4 back home to 1 in the US)
Today the strength of the bonds between migrants and their home country can be measured in the level of remittances
The World Bank estimates that USD325 billion will flow back to developing countries in 2010, of which USD58 billion will go toLatin America and the Caribbean alone
In some countries, these remittances can add up to a significant impact in 2009, remittances contributed 19% of the GDP of Honduras, 17% for Guyana, and 16% for El Salvador
Family calling patterns between the US and these countries of weekly and often nearly daily are common, especially in LACcountries
Migrants can contribute far more to their home countries, both in their traditional family role as parent, spouse, or child, but also inmany cases leveraging their professional roles as doctors, teachers, or lawyers
19
Source: WorldBank, US Census Bureau
Opportunities in Latin America
7/29/2019 John Krzywicki Analysys Mason 12
20/26
For the EU, Analysys Mason reviewed 100+ studies of the benefits of broadband the analysis goes far beyond what is presented today
Broadband benefits
Community Crime and
public safety
Education andskills
Economy and employment
Healthcare
Equality and
inclusion
Finance andincome
EnvironmentWell-
being
eGovernment
Many studieshave attempted
to quantifybenefits
Somequantification of
benefits fromparticular
applications
Evidence of benefits largely
anecdotal
20
7/29/2019 John Krzywicki Analysys Mason 12
21/26
The proliferation of video enabled social networking is constrained by theinfrastructural challenges in Latin America
Broadband uptake is deterred by:
poor or non-existent landline infrastructure
high digging up/ replacement costs
New mobile technologies such as LTE offer an alternative:
higher throughput than 3G
lower operating costs
2G mobile services (no broadband) are widely available,
however, 3G (reasonable broadband, but not excellent) israther limited. 4G (excellent broadband) is in distant future
Overall, mobile broadband penetration in developingcountries is much lower than in the developed world
21
Comparison between developed and developing countries
Challenges deterring the proliferation of video enabled devices
Source: ITU
0
20
40
60
80
100
120
140
2 0 0 5
2 0 0 6
2 0 0 7
2 0 0 8
2 0 0 9
2 0 1 0
P e n e
t r a t
i o n p e r
1 0 0 I n h a
b i t a n
t s
Mobile Cellular Subscriptions Developed Countries
Mobile Cellular Subscriptions Developing CountriesMobile Broadband Subscriptions Developed Countries
Mobile Broadband Subscriptions Developing Countries
This chart says, withoutintervention, the pattern of
mobile broadband growthwill repeat the one of mobilesubscribers growth, with a
loss of benefits to LAC
7/29/2019 John Krzywicki Analysys Mason 12
22/26
Most countries have so far mostly concentrated on coverage andpenetration
22Why and how to stimulate the ICT sector
Coverage Penetration UsageIntensity of
usage
As regards to broadband take-up stimulation plans, developed countries have so far mostly concentrated their efforts on increasing penetration of ICT services and
broadband network coverage, through a set of regulatory and policy implementationtools targeting access and market efficiency issues
Broadband stimulation targets
7/29/2019 John Krzywicki Analysys Mason 12
23/26
Developing LAC countries should stimulate usage intensity to exploitbroadband benefits
Broadband benefits
Coverage Penetration UsageIntensity of
usage
While supporting coverage and penetration increases, developing countries should shift their efforts from the supply side to the demand side, by stimulating broadband usage, and high-
intensity usage in particular. These are the new conditions for access regulation to stimulateICT growth and growth in the economy
(consumer and enterprise)
Broadband stimulation targets
23
7/29/2019 John Krzywicki Analysys Mason 12
24/26
The challenges facing LAC are easy to list but hard to solve. #1 is a lackof resources. Here are the next big six (which of course are related to #1):
Lack of backbone (or very high costs)
Lack of final mile access (fixed and mobile)
While not the focus of this presentation, Analysys Mason did a nine country study elsewhere in the developing world (all but onecountry had similar GDP/capita to most of LAC). Even with the comparatively benign geographies involved, mobile wasconsistently the only viable answer to reach 60% or more of the population
High cost (and often limited) international connectivity
High cost devices
Lack of spectrum (see item two)
Lack of IT literacy/capability in the general population
24Challenges facing LAC
7/29/2019 John Krzywicki Analysys Mason 12
25/26
In LAC a holistic, multi-agency approach will be needed, with in countryexecutive branch participation, if not leadership
The telecom regulator, while mostly sympathetic to the overall thesis, has no control over many of the barriers (e.g., tariffs, taxes,even international telecom capacity)
let alone the ability to develop and promote heath care or educational programs
e.g., the telecom regulator in Panama understands this
In a situation where the benefits cut across many sectors, national executive leadership will be an important catalyst
This is an opportunity for a catalyst, like the work of this conference, and the work of multinational bodies, and simple concertedeffort in each country
25Actions: national governments
7/29/2019 John Krzywicki Analysys Mason 12
26/26
Contact details
26
CambridgeTel: +44 (0)845 600 5244Fax: +44 (0)1223 460866cambridge@analysysmason.com
DubaiTel: +971 (0)4 446 7473Fax: +971 (0)4 446 9827dubai@analysysmason.com
DublinTel: +353 (0)1 602 4755Fax: +353 (0)1 602 4777dublin@analysysmason.com
EdinburghTel: +44 (0)845 600 5244Fax: +44 (0)131 443 9944edinburgh@analysysmason.com
LondonTel: +44 (0)845 600 5244Fax: +44 (0)20 7395 9001london@analysysmason.com
MadridTel: +34 91 399 5016Fax: +34 91 451 8071madrid@analysysmason.com
MilanTel: +39 02 76 31 88 34Fax: +39 02 36 50 45 50milan@analysysmason.com
New DelhiTel: +91 11 4700 3100Fax: +91 11 4700 3102newdelhi@analysysmason.com
ParisTel: +33 (0)1 72 71 96 96Fax: +33 (0)1 72 71 96 97paris@analysysmason.com
SingaporeTel: +65 6493 6038Fax: +65 6720 6038singapore@analysysmason.com
Boston/Burlington MATel: +1 202 331 3080Fax: +1 202 331 3083washingtondc@analysysmason.com
Manchester Tel: +44 (0)845 600 5244Fax: +44 (0)161 877 7810manchester@analysysmason.com
John KrzywickiPartner
John.krzywicki@analysysmason.com
Analysys Mason15 New England Executive Park,Burlington, MA 01801
Global mobile: +1 617 759 2105
Recommended