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WORLDWIDE MARKET RESEARCH REPORT - CISE

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EC/IST FP6 Project No 026920<br />

Work Package: 6<br />

Type of document: Report<br />

Date: 20.12.2007<br />

File name: OP_WP6_D37_V1.0.doc Version: 1.0<br />

Title: Worldwide Market Research Report 197 / 356<br />

further international fibre cables are built. Total Internet bandwidth supplied by satellite has<br />

dropped from 24.1% in 1998 to 11.5% in 2006. 26 countries get 100% of their international<br />

internet bandwidth entirely by satellite.<br />

Both retail and wholesale prices for international voice traffic have dropped dramatically.<br />

Nevertheless falls in both prices remain uneven with a large number of countries maintaining<br />

incumbent monopolies that allow them to keep prices artificially higher.<br />

[A33] Despite considerable falls in international retail calling prices in many countries across<br />

the continent and the legalisation of VoIP in key markets, the existence of the grey market<br />

remains extensive in all African countries.<br />

There are currently eight countries where VoIP is more or less legal. 36 out of 54 countries<br />

and territories in Africa forbid the use of VoIP by regulation or by law. Of these 36 countries,<br />

30 have only one international gateway. The remaining six countries have either licensed an<br />

international gateway to a Second National Operator (SNO) or have licensed more widely to<br />

their mobile operators.<br />

[A34] IP-TV is seen by many as an essential service for broadband providers like Telkom to<br />

lift their average revenue per user and enhance their general service offerings, but in Africa,<br />

this service is very narrow. In countries where IP-TV is launched we generally see high<br />

broadband penetration rates and bandwidth rich environments, something that cannot be<br />

said for South Africa. For IP-TV to make business sense, high broadband penetration rates<br />

are required to achieve economies of scale. This raises the question as to whether Telkom<br />

has sufficient subscriber numbers on their 4 Mbps ADSL service, the minimum speed<br />

needed to support true IP-TV services. A further concern is the low monthly usage<br />

allowances associated with local broadband offerings. These low monthly caps will influence<br />

the potential success of a service like IP-TV, unless another solution is found. The dilemma<br />

is that standard IP-TV offerings relying on broadband access will definitely not be able to<br />

function in an environment where 3 GB monthly caps are commonplace. While there are<br />

concerns regarding usage limits and speeds for IP-TV over services like ADSL, gated<br />

communities have the advantage of rolling out fast and uncapped local networks using<br />

technologies like Wi-Fi and Broadband over Power Lines.

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