Monday, 26th May 2008

INFO BOX

TV is Highest Reaching Medium Across Countries
Source: Indiantelevision.com, 24th May 2008

Though television in general is the highest reaching medium with more than 85 per cent penetration in 2007, the reach in India is just above 50%. According to research firm Magna Global, TV outshines other media as being the highest reaching, except for Germany and India. Radio reaches more than 60% of the population, except for Spain, India and China.

Countering figures given from time to time by the Indian government, the study shows radio reaches a bare 20%, newspapers around 38%, magazines just over ten per cent, and Internet less than five per cent. Newspapers still have penetration of more than 60% in Germany, China, the United States, Italy and the United Kingdom, although the reach is particularly lower in France and Russia, with less than 20 per cent. Magazines have an impressive penetration in Germany and France, with more than 85%, but do not perform as well in the United States and India, with less than 25% reach.

The Internet, although still newly emerging, has a reach of more than half the population in most of the countries studied. In the United States, penetration is at about 70%, while in the United Kingdom and Germany penetration is more than 60%. However, in the BRIC countries (Brazil, Russia, India and China), the penetration is still lower than 30%.


SPORTS SHORTS

* The Indian Premier Cricket League has reached an agreement to stream matches live on the Internet and to mobile phones in regions including India, Pakistan and the Middle East in a deal with Dubai-based company netlinkblue reported to be worth almost $50 million over 10 years. Netlinkblue is looking to target cricket fans with content from the Twenty20 competition including live streaming and a 72-hour online catch-up service. The deal excludes markets such as the US, UK, South Africa and New Zealand due to existing deals with broadcasters. In the UK Setanta has a five year pay-TV deal with the IPL that also covers online video rights. ATV, Sportcal.com, Sportbusiness.com, 26th May 2008

* The Philippine Basketball Association board of governors opted to set another meeting before deciding to whom it would grant the league’s broadcast rights after drawing more data on the contending networks. To date, Solar Sports, with RPN-9 as carrying station, is offering a straight-up three-year deal. ABS-CBN is apparently offering a four-year package with the option to sign a three-year contract-extension at the end of the initial deal. The STAR source said Solar Sports’ package is P31 million better than the amount being offered by the Lopez-owned network in the first three years of its offer. The board set another meeting Tuesday also at the PBA office in Libis, Quezon City for further discussion. Meanwhile, speculation is that the PBA governors are to accept the offer of Solar Sports over that of ABS-CBN. Abs-cbnnews.com, 23rd May 2008

* Hong Kong mobile operators have been caught by surprise by PCCW’s sudden decision to lift interconnection fees by 25%. However, they have no choice but to accept the new charges. The regulator Ofta last Friday announced the hike in the fixed to mobile interconnection charge (FMIC) from HK4.36 to HK5.45 cents per minute. A Smartone Vodafone spokesman said the carrier “does not agree to such an increase” but would enter into talks with PCCW. “If we can’t reach an agreement we will seek a determination from Ofta,” he told telecomasia.net. A spokesperson for Hutchison Telecom, Hong Kong’s largest mobile provider, said the company had been taken by surprise by the move. “We are still studying it,” the offcial said. PCCW filed the new charges on April 17. Under local rules it becomes official after 30 days unless Ofta finds it amounts to anti-competitive behavior. telecomasia.net, 26th May 2008

* Japanese public broadcaster NHK will start experimental test transmissions of its spectacular Ultra-HD system (7680 x 4320 pixel) in 2011-12. Japan switches off its analogue terrestrial transmissions on July 24 2011, and NHK will hold onto some of the frequencies permitting expansion into next-generation HDTV. Dr Kenkichi Tanioka, director general of NHK’s science and technical research laboratories, was outlining NHK’s timetable at a major presentation in Tokyo on May 22, saying that he anticipated further testing and development taking until 2016, and implementation following on. Unlike in the past when broadcasters from the USA, Europe and Japan fought each other over rival TV transmission systems (the USA’s “Grand Alliance”, EBU’s DVB and Japan’s analogue Muse and then Hi-Vision digital system are all different), there seems to be a wish from all parties to avoid costly and overlapping effort in the search for next-generation HDTV. Rapid TV News, 25th May 2008

* India's Spice group will invest up to $300 million this year in its telecom operations in the two states it provides services, and is talking with firms to rent network infrastructure. The Spice group is confident of getting spectrum in Andhra Pradesh "soon," Dilip Modi, group president, global operations said. Spice has licences to operate in six of India's 23 telecom circles but a paucity of spectrum, or radio airwaves to transmit the wireless signals, means it cannot immediately start services in all of them. It has operations in Punjab and Karnataka, the report added. "In the two circles we will invest $200-$300 million. As we get more visibility on spectrum, we will invest more," Modi said. Spice, which had 4.2 million of India's over 261 million mobile users in end-March, is 39.2% owned by Malaysia's state-controlled Telekom Malaysia. Spice aims to double its subscriber base to at least 8 million in 2008. telecomasia.net, 26th May 2008

* Dhanus Technologies Ltd has informed the Bombay Stock Exchange that the company is launching a new service branded "V-tel mobile service". V-tel mobile service is aimed at Indians traveling abroad and can be used in 229 countries in the world. V-tel mobile offers free incoming calls in over 50 countries and charges discounted rates for home country calls as well as for calls made within the respective country during travel. The company has already obtained permission from the department of telecommunications. Thehindubusinessline.com, 23rd May 2008

* Bharti Airtel has called off merger talks with South Africa's largest mobile phone network operator, MTN Group, a company statement said. Bharti Airtel said it was pulling out of talks with MTN because the South African firm had presented a different merger structure from what had been agreed to earlier this month. "This new structure envisages Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Bharti Airtel held by the Bharti family and Singtel, in exchange for a controlling stake in MTN," the statement said. "Bharti's vision of transforming itself from a homegrown Indian company to a true Indian multinational telecom giant, symbolizing the pride of India, would have been severely compromised and this was completely unacceptable to Bharti," the statement said. telecomasia.net, 26th May 2008

* Advanced Interactive Sciences, LLC (AIS), a provider of integrated response solutions to the direct response industry, has joined the Mobile Marketing Association (MMA). The MMA is a non-profit association that aims to stimulate the growth of mobile marketing and its associated technologies. As a provider of response solutions that convert responders through any channel - phone, web or mobile - into buyers, AIS' solution enables coordination of multi-channel marketing programs through one company. AIS mobile response solution blends “the immediacy of mobile with the ease of a phone call for order completion”. With mobile click-to-call capability, prospective customers don't need to dial the phone. They have to click on the phone number on a mobile website, banner landing page or SMS and are directed to the AIS speech platform for order completion. By partnering with AIS, mobile marketing companies can track consumers through to completion of a transaction whether the result is an order, a lead or an appointment. Indiantelevision.com, 24th May 2008

* Live coverage of the Champions League final penalty shoot-out was the most watched TV moment of the year in the UK so far, according to ITV. The broadcaster said that overall 11.1 million viewers tuned in to watch Manchester United beat Chelsea in Moscow. Audiences peaked at 14.6 million with ITV securing a 60% share of the viewers – 46% for the whole match. A further two million viewers watched pay-television broadcaster Sky Sports' coverage of the match - the channel's best ratings for a Champions League final since 2004. An average of 6.2 million people watched all of ITV1’s live Champions League coverage this season – making it the most-watched season for five years. Sportbusiness.com, 23rd May 2008

* Bayern Munich, the recently-crowned German soccer champions, earned highest share of television rights revenue generated by the Bundesliga during the 2007-08 season, netting €29.1 million ($45.7 million). Bayern’s tv rights share was €3 million more than VfB Stuttgart received when they won the Bundesliga title in 2006-07. Werder Bremen and Schalke 04 finished second and third in the tv rights table compiled by Ernst & Young mirroring their final places in the Bundesliga this season. Werder Bremen received €27.4 million while Schalke 04 received €25.7 million. Around €360 million was split between the Bundesliga’s 18 clubs, €15 million more than the previous season. The sum comprised international and domestic television deals. Hansa Rostock, which finished second from bottom in the Bundesliga, were given a €13.1-million share, while FC Nürnberg netted €19.3 million despite finishing just one place above Hansa. Ernst & Young added that in Spain and Italy, where television rights are not marketed centrally, top clubs could earn 10 or 15 times more than the bottom clubs. Sportcal.com, 23rd May 2008


MORE NEWS

Thailand/New Media: AIS Postpones Bangkok 3G Launch on Permit Delay

Thailand's AIS said it will have to postpone the commercial launch of its 3G mobile broadband services in Bangkok until mid-July as the National Telecommunications Commission (NTC) is behind schedule in approving equipment imports. The country's largest mobile operator earlier planned to introduce 3G commercial service in Bangkok in mid-June after it was launched in Chiang Mai early this month. AIS has been given approval by the NTC to upgrade 30 base stations to high-speed packet access (HSPA) technology. President Wichian Mektrakarn said AIS was likely to delay services in Bangkok for another month since the the NTC could not approve the equipment imports and relocation of the five 3G base stations from Chiang Mai to Bangkok. He said the Chiang Mai bases were too large for existing demand. The company planned to introduce an equal number of base stations in Bangkok.

The 30 sites could accommodate 10,000 subscribers, but capacity would be as low as 5,000 if customers use data services simultaneously. AIS's 3G service includes video calling, video streaming and full song and music video downloads. Wichian admitted that 3G in Chiang Mai was only a trial venture, not a serious rollout due to its limited on bandwidth and the fact that only a handful of handsets are 3G-capable. "We don't expect much revenue from 3G now. We just want to raise awareness of 3G in Thailand," he said. "With our limited bandwidth of only 5 MHz with one carrier, it's impossible for AIS to provide full broadband services." However, he said, AIS planned to introduce 3G in another 20 major cities.

Although 3G on existing networks requires AIS to pay under existing concessions, he said the company needed to act now on 3G rather than do nothing. Wichian said AIS was on the verge of applying for a 3G license running on the 2100 MHz band in order to move aggressively into the sector. telecomasia.net, 26th May 2008


China/New Media: China Telecom Restructuring May Be Under Way

China's biggest mobile phone company will take over a smaller fixed-line carrier, a state news agency said Friday, in what was expected to be the start of a sweeping industry restructuring. China Mobile Communications Corp. will acquire China Railway Communication, also known as Tietong, the Xinhua News Agency said, citing information from state-owned China Mobile. Regulators are believed to be preparing a series of mergers that will link up China's fast-growing mobile carriers with fixed-line partners to invigorate competition. Fixed-line carriers have seen demand slump as new customers opt for mobile service.

"The long-awaited restructuring of the Chinese telecoms market appears closer than ever before," Jing Li, a China telecoms analyst for the consulting firm Global Insight, said in a report to clients. An industrywide plan might be released as early as this weekend, Li said. "A successful restructuring will undoubtedly spur competition in the market as the resultant telecoms players square up to each other," Li said. The overhaul also is expected to affect China's biggest fixed-line carrier, China Telecom Corp., and its smaller rival, China Netcom Group Corp., as well as No. 2 mobile operator China Unicom Ltd.

In Hong Kong, trading in China Netcom and China Unicom shares was suspended pending an announcement. Trading in China Unicom shares was suspended in Shanghai. There was no indication how long the suspensions would last. China has the world's biggest population of mobile phone users, with some 520 million accounts, and the government says that should reach 600 million soon. Mobile carriers say the number of new accounts is growing at double-digit rates, while fixed-line carriers say subscriber numbers are flat or falling. China Telecom and China Netcom have tried to boost revenues by promoting broadband Internet, Web-based cable TV and other services but earnings still are growing more slowly than at mobile carriers. Beijing is preparing to roll out third-generation, or 3G, service that will support video, Web access and other services. That is expected to boost revenues further for mobile companies as it opens up opportunities for new services. CentralDaily.com, 23rd May 2008


ARTICLES, COMMENTS, INTERVIEWS & OPINIONS

Viewing Behaviour Shifts as IPTV Gains Traction

Research from analyst firm Canalys indicates that, while the IPTV market will continue to gather momentum over the next four years, competition from other video delivery platforms will make it increasingly difficult for service providers to convince consumers to invest in services. Established cable, satellite and terrestrial digital TV offerings will continue to develop, and online video services will increasingly compete for viewer attention, making it essential that IPTV providers (and indeed pay-TV operators in general) continue to develop their services in a bid to differentiate them from the competition.

"IPTV growth was strong in 2007, albeit from a relatively small base," said Canalys senior analyst Adrian Drozd. "The number of worldwide IPTV subscribers increased from under four million at the end of 2006 to over ten million at the end of last year, with annualised subscription revenue closing in on the two billion Euro mark," Drozd continued. "Solid progress is expected to continue over the next four years. By the end of 2011, Canalys expects the number of IPTV subscribers to have reached 67 million – more than a six-fold increase over 2007 levels."

EMEA remains the leading region in terms of consumer uptake, accounting for 54 per cent of the worldwide subscriber total at the end of last year. "France is still the driving force in the Western European IPTV market," explained Drozd, "with France Telecom having passed the one million subscriber mark and both Free Telecom and Neuf Cegetel continuing to expand." But rapid growth in the French market has been facilitated by service providers’ desire to promote low-cost triple-play bundles, where IPTV is part of the service mix, but not a huge revenue generator in its own right. "While the growth of IPTV in France has dwarfed the progress of most other European countries, it has arguably come at the expense of revenue generation," Drozd added. "IPTV has helped to attract and retain subscribers, but the emphasis must now shift to revenue generation to justify the significant investments being made in video delivery."

Outside Europe, progress has also been strong. "Seven IPTV services had more than half a million subscribers each by the end of 2007," said Drozd. "Verizon has since exceeded the one million mark in the US and PCCW (Hong Kong) is closing in on that milestone." But despite early promise, major hurdles remain for the IPTV market. Canalys believes that usurping the role of established cable and satellite digital TV platforms will be a tougher challenge than many in the IPTV industry expect. Convincing consumers to switch pay-TV provider will be both difficult and expensive, unless services are either highly price-competitive or offer considerable benefits over the competition. "Offering the same content and services as the competition will not provide the necessary returns, but delivering a compelling mix of on-demand and high-definition programming alongside a range of advanced interactive services just might," Drozd concluded. ATV, 26th May 2008

Thailand's Mobile Market Reached 53 Million Subscribers by End-2007

Research and Markets (http://www.researchandmarkets.com/reports/c92742) has announced the addition of "2008 Asia - Telecoms, Mobile and Broadband in Myanmar and Thailand" to their offering. The neighbouring countries of Thailand and Myanmar continue to provide an interesting contrast. Similar in both population size and land area, the two countries have been developing along totally different economic paths. Thailand, a constitutional monarchy, which has certainly been struggling with its democratic processes and institutions, has nonetheless been able to offer an essentially open market. On the other hand we have Myanmar operating as it has under a repressive military dictatorship for many years now and presenting a market that remains totally closed and centrally controlled. GDP per capita in Thailand is running at around US$4,000; in Myanmar it is less than US$250. The development of their respective telecom sectors reflects the same divide. In mobile and Internet penetrations Thailand leaves Myanmar far behind. Even in basic fixed-line telephone services, a segment of the market that the Thais have not given any priority, Myanmar is continuing to lag far behind Thailand.

The overthrow of Thailand's Shinawatra government in a military coup in September 2006 was followed by a period of government by a military-appointed administration; happily this interim period ended without too much pain and certainly no further military intervention when general elections were held in late 2007 and a new government was installed. As the country continued its search for increased political stability, there can be no doubt that the upheaval over the last few years has had considerable negative impact on (1) the Thai economy, (2) the administration of the country and (3) investor confidence.

The telecom sector witnessed the appointment by the post-coup government of a Minister for Information and Communication Technology who, at least initially, took a policy position that was essentially against what were seen as Thaksin Shinawatra's telecom reforms. The new minister, for example, wanted to roll back the process of privatisation of the two state-owned telcos, TOT and CAT; further to this, he wanted to restore some of their regulatory powers. While generally seen within the industry as a rather regressive administration, some positive reforms did emerge during this period.

Despite all the difficulties, Thailand's telecom sector has continued to display a surprising amount of energy. The country's mobile telephone market in particular has recorded strong annual growth rates, the recent high level of growth taking the industry by surprise. By early 2008, mobile penetration was around 82%. In a matter of only six years, the mobile market had moved from 8 million in 2001 to 53 million in 2007.

Apart from the booming mobile sector, the Internet is an area of the Thai market that has also been popular - at least in its dial-up form. Oddly, the development of broadband Internet has been languishing. It was not until 2005 that the number of broadband subscribers started to move in any serious fashion. A reasonably strong growth trend has continued since then and by end-2007 there were around 1 million broadband subscribers in the country. Broadband penetration was still under 2%, however.

Thailand has certainly been seeing the benefits of a liberalised market with the highly competitive mobile sector being the big beneficiary. Nevertheless, sectoral reform remains unfinished business. It took four years after the enabling Telecommunications Act was adopted as law in 2000 for the country's new regulator, the National Telecommunications Commission, to be put in place. And once it became operational, the NTC had to contend with the volatile political environment following the 2006 coup, again throwing uncertainty over the regulator's role. Even with a newly-elected government in place in early 2008 the future direction for the regulator was not exactly clear.

Myanmar's telecom sector continues to be dominated by the state-owned monopoly telephone service provider, Myanmar Posts and Telecommunications (MPT). This ministry's form has indeed been consistent with the overall operating environment of an economy where change is simply slow. The country has been battling both economic problems and a troubled political climate. Soaring inflation remains a major problem (34% in 2007). The country's centrally planned economy is plagued by weak fiscal and monetary management, resulting in major economic imbalances, which are not likely to be easily or quickly resolved.

These problems, combined with a disturbing lack of transparency, have not surprisingly frightened off foreign investment. In the meantime, the telecom sector is characterised by what can only be described as stunted growth. In fact, following the political and social upheaval of late 2007 subscriber data reports suggested that things were actually going backwards.

The telecom sector reflects the overall state of the national economy and society. It should also be noted that Myanmar's official economic data is not considered reliable, making actual growth rates difficult to ascertain. Nevertheless, it is reasonable to assume that fixed-line telephone penetration remains at or below 1%; the penetration of mobile services is even less than that; and Internet access continues to be severely restricted in its availability to the general public.

At the same time, given the state of the economy and the absence of serious foreign investment, the MPT's level of capital investment in telecom's infrastructure has been depressingly low. To cap this off, the country suffered a devastating cyclone in May 2008 resulting in a huge loss of life and massive damage to the country's fragile infrastructure.

Key highlights:

- Thailand's mobile market had reached 53 million subscribers by end-2007. After more than seven straight years of strong growth, the annual increase in the mobile subscribers was still running at over 30% coming into 2008.

- The broadband Internet market in Thailand saw another year of vigorous subscriber growth in 2007, running at an annual rate of around 60% with all the signs suggesting that this would continue through 2008.

- While interest in broadband services was finally picking up in Thailand, it was happening from a relatively small base; overall broadband penetration remained low (under 2%).

- Despite a slowing in economic growth following the September 2006 coup, the post-coup government, after a number of missteps, worked hard to stimulate the economy, looking to such initiatives as free trade agreements. Then in December 2007 a newly-elected government committed itself to the task of getting the country back on track.

- Myanmar's mobile market, after reportedly growing at an annual rate in excess of 100% in 2006, managed another healthy expansion in 2007 with a 40% jump in subscribers.

- Of course, this growth was from a low subscriber base in the first place - up from 126,000 subscribers (0.3% penetration) in 2005 to 325,000 (0.7%) in 2007.

- With information on growth patterns being difficult to obtain, one source suggested that mobile subscriber numbers had in fact declined from a mid-2007 peak.

- From totally different perspectives Thailand and Myanmar must both seriously address regulatory reform; Thailand needs to work to get fresh momentum in its stalled reform processes; Myanmar needs to get some sort of reform process started. The latter has a lot further to travel in this regard. CentralDaily.com, 23rd May 2008