Voice Over Broadband and IP Telephony

Transcription

1 Voice over IP in Europe: A quick scan on markets and potential strategies for market entries Dr. Du-ill Josef Kim, Korea Business Services Ltd. infoskorea@hanafos.com, Phone: , Fax: This quick scan gives a first impression on the broadband penetration in Europe, the major markets for VoIP in Europe, and strategies for market entries by listing potential competitors and clients for the products of VoIP hardware.

2 Table of Contents 1. World Broadband... 3 World broadband lines exceed 150 million Europe Broadband European broadband subscribers to reach 38 million at the end of Germany France UK Italy Voice over broadband over 5 million subscribers from double-play and triple-play VoIP Service Providers in Germany IP Telephony for Companies Examples: Competitors and potential partners VoIP Hardware Allnet Snom VoIP Phones Sipura Technology, Inc Swyx Solutions GmbH TEDAS Technology GmbH Important Events and Exhibitions Action Ponts for Suppliers Appendix

3 1. World Broadband World broadband lines exceed 150 million Broadband in Point Topic's latest analysis of the World broadband market indicates broadband subscriptions rose to 136.4m by 30 September This marks a 53% increase from 89m lines in the same quarter last year - an absolute increase of 47m lines. The Asia Pacific share of subscriptions stood at 43% with 58.7m lines. EMEA's market share increased by 4% since Q to 27% and 37.1m lines, as the Americas share declined by 3% to 30% reaching 40.6m lines. The USA remains the world's leading broadband country achieving 31.7m lines in Q China is in second place, adding 3m to reach 22.2m lines, and is pulling further ahead of Japan which had 17.2m lines. France overtook Canada to take sixth place with 5.7m lines. The UK added 762,000 lines in Q3 - the most by any European country, and reached 5.1m lines. In terms of percentage growth Thailand led the way with 95% growth to reach 110,000 lines - which were mainly DSL. Elsewhere, the Eastern European countries have displayed particularly strong growth, due to a combination of strong demand and greater transparency in their respective telecommunications markets. Hungary for example achieved 69% growth with cable modem and other broadband subscribers now featured amongst mainstream DSL subscriptions. Poland also experienced solid growth of 59% and is approaching 500,000 broadband lines. In other parts of Europe, Turkey continues to grow strongly registering 43% to reach 272,500 broadband lines. Latin American countries also feature in the 'top ten' for growth, with Mexico achieving 33% and approaches 500,000 broadband lines. Argentina had growth of 26% as it passed 400,000 lines. In terms of broadband penetration, South Korea remains the leader on almost 25 broadband lines per 100 people, with Hong Kong still in second place with 21 lines per 100 people. The Netherlands has made the biggest impact in this 'top ten' overtaking Canada to take 4th place with 17.5 broadband lines per 100. Israel has also been impressive in eighth place with 13.9 lines per overtaking both Japan and Sweden. Smaller countries, with less than 500,000 population, are excluded from this ranking but some of them are also reaching high penetrations. Iceland, for example, now has over 12 broadband lines per 100 population. There are an ever growing number of countries offering broadband, additions to Point Topic's analysis this quarter are Jamaica and Guernsey. 3

4 Top ten broadband countries by number of lines: Q204 - Q304, Source: Point Topic 2. Europe Broadband 2.1 European broadband subscribers to reach 38 million at the end of 2004 Access to broadband Internet services has soared across Europe during 2004, according to the latest Strategy Analytics report, `Broadband Subscriber Market Forecast: Europe.' Nearly half of Internet households now access the Internet using broadband, and the broadband subscriber base is predicted to reach 38 million households by the end of 2004, an increase of 61 percent over The report concludes that service providers must deliver lower prices, faster speeds and bundled services in order to remain competitive. It also predicts that more than half of all European households, or 88.4 million, will have broadband service by As usual, broadband adoption varies significantly from one European country to another. The leading market today is the Netherlands, where 45 percent of all homes will have a broadband connection by the end of By contrast, Germany, Ireland and Greece will still have penetration rates below 20 percent. Strategy Analytics concludes that the countries with the fastest adoption rates are those with the greatest levels of competition between service providers. "2004 has been the year of local loop unbundling (LLU)," notes Martin Olausson, Senior Analyst, Broadband Media and Communications. "French consumers in particular have benefited from intense rivalry between competing service providers and the incumbent, France Telecom. We fully expect a similar impact in other European countries once LLU becomes more widely available." 4

5 The majority of European broadband users continue to choose DSL services, which have an 81 percent share of the market. Most of the rest use cable (19 percent), while a small minority subscribes to other services such as fiber-to-the-home (FTTH). This report predicts that DSL will maintain this position until 2008, but that emerging services such as FTTH and wireless will gain share. 2.2 Germany Germany is meeting the demand for broadband by pushing ahead with DSL as rapidly as possible. It presently has the largest broadband market in Europe. However, broadband growth in Germany is slowing down as compared to other European nations, which added large number of broadband subscribers. For example, Germany added only 640,000 subscribers and was overtaken by France and UK, which added 1million each in the second quarter of Unbundling has been required in Germany since January However, Deutsche Telekom (the incumbent) does not face much competition either from DSL or from cable modems because the German cable TV networks are technically backward and largely controlled by Deutsche Telekom itself up to now. Deutsche Telekom offered a wholesale DSL option in early The country has one of the lowest percentages of DSL lines sold by Competitive Local Exchange Carriers (CLECs) in Europe. 2.3 France The broadband market in France is relatively uncompetitive. France Telecom has been allowed to dominate the business and residential sectors and faces little challenge from the cable networks - some of which it owns or formerly owned. France Telecom has one of the highest number of broadband subscribers in Europe. Initially, it did not use its position as market leader to drive DSL rollout forward as rapidly as another European operator such as Deutsche Telekom had done. It started promoting low-cost popular DSL products during the second half of It started promoting low-cost popular DSL products during the second half of In mid-2001, Cegetel (France Telecom's first Competitive Local Exchange Carrier (CLEC) competitor) began offering its own ADSL service. 5

6 The French residential broadband market has seen the development of a new type of residential ADSL offer based on unbundling since December Unbundling is becoming a growing phenomenon in France. Alternative operators use their own high-speed equipment to maintain better control over the economic and technical parameters of their ADSL offers. This allows them to differentiate their own offers from that of the incumbent operator. Colt telecom, Free, LdCom and Easynet were the active unbundling operators until the summer of Since then, 4 new operators signed a local loop access agreement, including two (Telecom Italia and Telecom Development) who were deploying on a national level. Three other signatory operators are positioning themselves at the regional level. 2.4 UK The UK is one of the most liberalised telecommunications markets in the world, with the first steps towards liberalisation taken in LLU (Local Loop Unbundling) has yet to have a big impact in the UK. At the end of September 2003, around 7,600 local loops were being used to provide DSL service to business consumers. These loops are mainly used to provide SDSL, ADSL and video on demand services to business. British Telecom (BT) is the major incumbent telecommunications operator, offering both retail and wholesale DSL services in the UK. Other operators such as Bulldog Communications, Easynet and Clara.net sell the wholesale services of BT. The major operators offering cable modem services in the UK are NTL and Telewest. 2.5 Italy The Italian environment for broadband is oriented around DSL and FTTH. With regards to fibre, Italy is one of the more advanced countries in Europe in developing fibre-to-the-building technology and services. The main DSL service providers are incumbent Telecom Italia and Blixer, Virgilio and e.biscom. Blixer and Virgilio resell Telecom Italia offerings, and e.biscom is building its own access network. 3. Voice over broadband over 5 million subscribers from double-play and triple-play There were over 5 million VoIP subscribers by the middle of 2004, with the majority of customers shared by half-a-dozen or so operators. There are now approximately 1000 VoIP providers around the world. Most of these have set up during 2003 or Many have very few subscribers at the moment. The number of start-ups shows that there is clearly widespread belief in the potential of VoIP. But how many people are actually using VoIP? Point Topic has researched a sample of the IP Telephony market to produce a profile for its Broadband Money Makers service. This sample does not include Internet-only services like Skype. It concentrates on telephony services where the customer plugs a telephone into the customer s broadband modem. These operators are sometimes called voice over broadband providers. 6

7 Yahoo Broadband in Japan reported over 4 million VoIP subscribers, around 80% of worldwide VoIP subscribers. Helped by traditionally high telephony tariffs in Japan Yahoo Broadband boasts an impressive penetration rate of over 94% of its broadband subscribers. The other 5 leading reporting operators totalled just under 1 million subscribers. Operator Subscriber numbers Date B2 (Sweden) 50,000 July 2004 Cablevision (USA) 115, June 2004 FastWeb (Italy) 300,000 September 2004 Free (France) 330, June 2004 Vonage (USA) 200,000 July 2004 Yahoo Broadband (Japan) 4,038, June 2004 Total 5,033,050 Q Subscriber numbers for 6 leading VoIP operators That gives a total of a little over 5 million VoIP subscribers at mid 2004, not counting subscribers using VoIP from the host of other VoIP providers. Yahoo Broadband's dominance will steadily reduce as other operators catch up after their head start, developing products and marketing strategies that suit local market and regulatory conditions. Significant other operators include Free in France, with around 330,000 customers taking its triple play of broadband Internet, TV and telephone. In the US, Vonage, which pioneered the market for IP Telephony companies, reported 200,000 customers by July 2004, up from 44, months earlier. But competition, especially from cable companies and inter-exchange carriers like AT&T, is growing fast. During 2004 therefore, the trend in VoIP subscriber growth outside Japan is for broadband service providers like Free or FastWeb to add voice subscribers as part of a double play or triple play offering. Pure-play VoIP providers like Vonage are less important to the overall picture than they were 12 months ago. In the medium term, tariffs from incumbent operators will become lower, and broadband service providers will offer VoIP services. This will eventually all but remove the competitive position (based on pricing and second line provision) of pure-play VoIP providers. 5. VoIP Service Providers in Germany No big telco company in Germany is offering VoIP for the private use. And only three of the renowned internet companies decided to step into the VoIP area: Web.de, Freenet and 1&1. Most of the service providers are small and unknown: 7

8 1&1» dsl.1und1.de 1 Xnet.de» Bluesip» Broadnet Mediascape» Econo» Freenet Phone» Greentel» Purtel» QSC» Sipgate» Sip Snip» Yip» Web.de Freephone» www3.freephone.web.de 6. IP Telephony for Companies Due to the massive cost advantages of IP telephony while using broadband internet networks the usage of IP telephony in Europe is especially interesting for small and medium companies or larger corporations with offices on several locations including other countries. This so called business costumer market is fast growing and has very good short- and midterm perspectives. Therefore in the past two years some specialised companies offering complete enterprise IP telephony solution emerged and are constantly establishing a partner network (resellers or authorised distributors) around themselves. For a company which manufactures devices and hardware there are three potential sales channels along the value chain: Companies which offers complete enterprise IP telephony solutions, resellers and distributors. The problem concerning the identification of such companies as potential partners or buyers of telephony hardware is that we can observe a fragmentation of the classical value chain and fading frontiers. An advantage of this new situation is that reputated telcos come under pressure by new service providers and the backward and forward integration of manufacturers and application providers. 8

9 The end of the classical value chain, Source: DETECON 7. Examples: Competitors and potential partners VoIP Hardware 7.1 Allnet Valua-added distribution and manufacturing of innovative products. Company with offices in Germany, Italy, Spain, Danmark and USA. Contact: Allnet Deutschland GmbH Maistr Germering, Germany Phone: telekom@allnet.de Product: VoIP Phone Allnet 7950 Integrated Adress Book with up to 200 contacts 10 short cut buttons headset, free speech mechanism telephone conference included waiting loop melodies and tones second 10/100Mbit Ethernet-switch for PC (Switch) 9

10 compatibel with German SIP-Providers: Nikotel, SipSnip, BlueSIP, Web.de, Sipgate, PURtel, FWD two line display, German menue (2x16 signs) Installation beyond existing DSL-Router oder direct at internet connection (PPPoE support) STUN und UPnP Quality of Service (QoS) Digital Signalprocessor DSP for high voice quality Codec-support für G.711, G.729a/b, G Echo-Unterdrückung 7.2 Snom VoIP Phones German company with experience in building latest SIP devices. They offer latest security technology (HTTPS, SIPS, SRTP), are easy to maintain (web interface, plug and play setup), support NAT (STUN, UPnP, ICE) and offer a rich call control feature set (transfer, call parking, call completion). Contact: snom technology AG Pascalstraße Berlin, Germany Phone: +49 (0) info@snom.com Products: snom 190, 200 and 220 graphical backlit display (128x64) 5 programmable function keys RFC 3261 compliant SIP stack H.323/H.450 stack NAT-support 16-bit, 16 khz audio subsystem 2 port Ethernet switch national language support (NLS) Asian Language Support (ALS): Japanese loose routing and strict routing support blind and attended transfer call hold, call wait music on hold support call divert call intrusion call completion number guessing speed dialing handsfreemode dialling missed calls taken calls 10

11 call waiting indication STUN client (NAT traversal) Plug and Play support (UPnP) HTTP Server phone book conference call redial several ring tones DTMF 7.3 Sipura Technology, Inc. Sipura Technology's products, comprised of VoIP CPE (Customer Premise Equipment) and station endpoint equipment, help bring an exciting new world of communication services to customers and profitable new revenue streams to operators. Contact: 560 S. Winchester Blvd Suite 500 San Jose, CA Products: SPA-841 Business Phone The Sipura SPA-841 IP telephone can be configured as a two (2) line or, via a simple software upgrade, a four (4) line full featured business phone with pixel based graphical display, speakerphone and headset port. Stylish and functional in design, the SPA-841 can be used in residential, SOHO, enterprise and small to medium business service offerings including IP PBX, hosted IP telephony and IP Centrex. The SPA-841 leverages Sipura s market leading technology and manufacturing proficiency to deliver an upgradeable, high quality IP telephone unparalleled in value and support. 7.4 Swyx Solutions GmbH Swyx was founded in 1999 to develop and sell an softwarebased IP-PBX for Microsoft Windows Server. Since then SwyxWare has been installed in more than companies in Europe to provide them with convincing competitive advantages arising from more powerful, easier to use and less expensive telephony solutions. SwyxWare has been tested by several independent test groups, journalists and magazines and was able to establish an extremely good response with excellent evaluation marks. Larger companies turning to the benefits of converging voice and data solutions have approved that the future of telephony lies within the convergence of networks and applications - and SwyxWare products offer these value already. 11

12 Contact: Swyx Solutions GmbH Joseph-von-Fraunhofer-Str. 13a Dortmund, Germany Phone: +49 (231) Fax: +49 (231) Product : With SwyxWare, Swyx offers a telephony solution which handles incoming and outgoing calls over the data network. This software-based IP-PBX takes over all features of traditional PBXs and additionally enables the users to carry out far more functions which facilitate their working conditions. Details see: TEDAS Technology GmbH Since its foundation in 2002 TEDAS Technology GmbH is developing technology leading software products for IP Telephony, with emphasis on new services for ISP/ASP and business customers. Together with its partners, TEDAS has emphasized customer service and quality by offering trainings, consultancy, and products in the fields of technological development, marketing and sales. Being able to supply solutions for any business sector, responding on customer needs and being a knowledgeable resource are major competitive advantages of TEDAS. Furthermore, given by the range of products from TEDAS, true convergence of data and voice is possible. TEDAS is the technological source for integration of data and voice. Our mission today is the integration of telephony into the data network. With our global partners we focus on the business fields Carrier, ISPs and ASPs. Our vision is to simplify office communication while offering businesses of any size a customized complete package. In the rapidly growing market of IP telephony, TEDAS is clearly at the forefront. Contact: Kuellenhahner Str. 37 D Wuppertal Germany Tel. +49 (202) Fax +49 (202) Important Events and Exhibitions Trade Shows and Events offer useful possibilities to take a closer look at the IP telephony product ranges and the diverse manufaturers, distributors and resellers in Europe. One of the most important are listet below: 12

13 2005 VON Conference & Expo in San Jose, USA CeBIT in Hannover, Germany Comms Channel Expo in Birmingham, United Kingdom VON Europe in Stockholm, Sweden KOMCOM in Hannover, Deutschland HCC Hannover 9. Action Ponts for Suppliers Design retail products and user interfaces along major social trends, in particular for elderly customers, lifestyle segments, mobile customers and ease of use. Take the business opportunities of new convergent applications resulting from pervasive computing. Prepare the portfolio for the migration to NGN and Fixed Mobile Convergent Services. Fragmentation of the value chains and convergence will lead to market entry of numerous non-traditional Telcos. Also suppliers have to decide clearly about their strategic focus and outsource non-core business. Along the value chain the network, service and sales layer have totally different Key Performance Indicators. This will be reflected in future carriers organizations through separate SBUs, Profit Centers, or even legal entities. 13

14 Suppliers will have more and different customers. In their core business Telco-Suppliers will have to deal with future NetCos, specialized on wholesale business. Costleadership strategies of NetCos may increase price competition among suppliers. Netcos may also become fierce competitors to suppliers in the outsourcing- and outtasking business for network O&M. Future ServCos and SalesCos will clearly focus on services and differentiate and individualize them. Suppliers will have to help them in this respect: - They may operate outsourced networks and become sales and CRM partners. Telcos today have little brand loyalty. They have to reposition sales activities and partner with brand companies including suppliers / device manufacturers. Traditional Telco brands may become ingredient brands. Appendix Share of broadband lines by region, Source: Point Topic 14

15 Top ten broadband countries by lines added: Q3 2004, Source: Point Topic Top ten broadband countries by percentage growth: Q3 2004, Source: Point Topic 15

16 Top ten broadband countries by penetration: Q2 - Q3 2004, Source: Point Topic Broadband technologies in top ten countries: Q3 2004, Source: Point Topic 16