Nº 2 2014 > ICT market trends
Mobile broadband, smartphones, apps, fixed networks
Four challenges for fourth generation regulators
Governments throughout the world are striving to bring information and communication technologies (ICT) to everyone. Many depend on ITU for industry information, and a special edition of Trends in Telecommunication Reform 2014 themed Fourth-Generation Regulation: Driving Digital Communications Ahead, has been published by ITU’s Telecommunication Development Bureau to coincide with the World Telecommunication Development Conference, to be held in Dubai, United Arab Emirates, from 30 March to 10 April 2014. In the first chapter, on which this article is based, authors Nancy Sundberg and Youlia Lozanova deal with “Key ICT market and regulatory trends”.
Half the world’s population was covered by a third-generation (3G) mobile broadband network in 2013. Migration to long-term evolution (LTE) technology seems to be happening much faster than the earlier migration from 2G to 3G networks. By 2013, commercial LTE networks were operating in 88 countries (according to the GSM Association) or 101 countries (according to the Global mobile Suppliers Association), up from 14 in just three years. Ericsson estimates that 65 per cent of the world’s population will be covered by LTE by 2019, compared with 10 per cent in 2012.
More than a billion smartphones were shipped in 2013, representing 38 per cent annual growth and overtaking feature phone sales. Sales of smartphones in 2014 are expected to rise — by 500 million more handsets in China and India, 47 million more in Brazil and 46 million more in Indonesia. Tablets are also selling well, with more than 263 million of them expected to be sold in 2014 compared with 179 million just a year ago.
Apps and mobile data traffic
The applications (apps) market reached more than 100 billion downloads in 2013, representing 50 per cent growth over the previous year. Total revenues were estimated at USD 26 billion in 2013, even though free apps accounted for 91 per cent of total downloads.
Mobile video traffic accounted for more than 50 per cent of mobile data traffic at the end of 2013, and is expected to grow to nearly 70 per cent by 2018. By then, mobile cloud applications are likely to account for 90 per cent of total mobile data traffic (Figure 1).
Cisco estimates that the number of mobile Internet connections will exceed 10 billion by 2018 and will be 1.4 times greater than the world’s population. According to Ericsson, mobile data traffic is expected to grow at a compound annual growth rate (CAGR) of 45 per cent over the 2013–2019 period, and fixed data traffic will grow at a CAGR of 25 per cent. Cisco further predicts that by 2018, Wi-Fi or small cell networks will handle 52 per cent of global mobile traffic, up from 45 per cent in 2013.
At the end of 2013, more than 11.7 million kilometres of fibre and microwave backbone transmission networks were available in five global regions — Africa, the Arab States, the Asia-Pacific, the Commonwealth of Independent States (CIS), and Latin America and the Caribbean. Data collecting for these regions is part of an ITU project to map global connectivity (Figure 2).
International submarine cables have been deployed along the eastern and western coasts of Africa, increasing the options for international high-speed connectivity between that continent and the rest of the world.
Looking at the regional distribution of the available capacity, it appears that the Asia-Pacific region accounts for no less than 85 per cent of fibre and microwave backbone networks outside Europe and North America, with China and India alone operating more than 9.7 million kilometres (Figure 2, left chart). The top 10 countries by route-kilometre account for 95 per cent of all operational fibre and microwave infrastructure but many smaller countries rank high in terms of the proportion of their population connected.
State subsidies have largely contributed to covering four out of every five citizens in the CIS region, while in Latin America, public-private partnerships and private entrepreneurship have been the main drivers of expanding networks to cover more than two-thirds of the population.
Despite the gigantic efforts being deployed and the achievements to date, the digital divide remains significant in the Asia-Pacific region, where some 40 per cent of the population remains out of reach of a backbone transmission network. Only slightly more than one-tenth of the population is within 10 km of a backbone network. Geography and demography are undoubtedly among the factors complicating connectivity efforts, because large territories, arid zones and scattered populations constitute major infrastructural challenges.
In Africa and the Arab States, about one-quarter of the population falls within a 25 km range of a backbone network, and in CIS and Latin America this proportion is closer to one-third of the population.
Comparing actual broadband service penetration figures (both fixed and mobile) with the proportion of people within a 50 km range of a backbone network, it appears that further efforts are needed to capitalize on the potential market and available capacity (Figure 3). The best performing region for take-up as a proportion of capacity is Asia-Pacific, where more than half of the population within the 25 km range has been connected. At the opposite end of the scale, Africa is still struggling to connect half of those within the 10 km range.
Getting the unconnected population living within reach of an operational fibre transmission network to subscribe to digital access services clearly requires governments to undertake further economic and regulatory efforts. Economies need to capitalize on the existing fibre networks by bringing affordable broadband services closer to the user. Within a 10 km range of a backbone network, there is a clear economic model for access and backhaul networks. Effectively connecting the population within the 25 km range is, however, also likely to require establishing viable public-private partnerships.
ITU’s mapping project highlights the importance of bringing transmission networks closer to the population to foster Internet connectivity and broadband uptake. It also indicates that, by adding kilometres of fibre in the transmission network, the number of people having access to the digital world may increase in a similar proportion.
Meanwhile, it is important to make the most of the existing copper lines to ensure that citizens benefit from high-speed broadband services. This can provide an alternative solution, at least in the short term, for increasing access speeds up to 1 gigabit per second (Gbit/s) in the last hundred metres of the network. The G.fast project is one of the solutions that can be envisaged.
G.fast is a suite of new ITU broadband standards capable of achieving access speeds of up to 1 Gbit/s using existing copper telephone wires. G.fast is optimized for short-range deployments within a range of 250 metres of a fibre terminal, which is connected to a dozen or more existing copper telephone lines leading to nearby premises.
However, providing greater capacity on the supply side may not be enough. Adopting digital literacy strategies and local content development policies to stimulate demand for digital services is crucial to ensure that telecommunication pipes are not left empty.
Policy-makers need to devote attention to educating consumers and preventing misbehaviour and hazards online, so that citizens can fully understand the potential of the digital ecosystem and truly benefit from being online. In a globalized, data-driven world, digital content (data) can be stored, processed, published and made available instantaneously to all. Whether consumers can trust that their rights are protected will increasingly weigh on users’ behaviour in the digital world.