Investing in next-generation networks


  • Business
  • Saturday, 21 Mar 2009

Without a doubt, high-speed Internet access is one way to attract foreign investors as video-conferencing with head-offices around the world, or data transfer, has become an essential part of doing business. In the business world, time, they say, is money.

Speeds of 50Mbps (megabits per second) for downloads and 10Mbps for uploads will be a norm and this in itself will drive a whole host of online applications and services. Japan and South Korea, respectively, have download speeds of 63Mbps and 49Mbps. In Malaysia, you should be happy if you get 2Mbps as the norm is 512 or 256kbps.

What this means is South Korea and Japan have bigger pipes than Malaysia. It’s something akin to the water tap in your house; if you were to replace the commonly used half-an-inch in diameter pipe in your kitchen with a five or 10-inch one, what would likely happen? Chances are you’d be more concerned about the kitchen floor rather than the unwashed dishes in the sink.

Governments as well as private network operators realise the need to invest in next-generation networks (NGN) and they support the shift to bigger bandwidth if it involves Government investments.

In Malaysia, the Government is in public/private partnership with Telekom Malaysia Bhd (TM) to deploy a high-speed broadband network that is capable of offering 10 to 100Mbps.

Similarly, many other countries, despite the economic crisis, are continuing to forge ahead with the broadband plans.

The United States

In the United States, the government under President Barack Obama has allocated US$7.2bil to support broadband build-up. Even though it is limited, the investment for a country as big as the United States, many advocate apportioning the funds to areas that really need the stimulus.

A report said: “The most effective way for use of the funds is to support the deployment of moderate speed broadband to homes or businesses in under-served areas and not to be subsided where homes can already subscribe to broadband.”

Realising the potential of NGN, US telecommunications giant AT&T last week said it would invest nearly US$18bil to expand its wireless and wire-line broadband networks. That will create 3,000 jobs in 2009 and demand for products.

Singapore

Information technology is clearly at the heart of Singapore and the next big thing on the agenda – to improve its IT competitiveness. Despite the slowdown, IT spending will increase from US$4.8bil in 2008 to US$7.2bil in 2013. A report said a large part of the budget was allocated for the US$750mil project to build a national broadband network for homes, businesses and government institutions.

It also has an Intelligent Nation 2015 (iN2015) project. Contracts for the first phase are out and this will link businesses, schools, hospitals and homes. Under this project, copper access network will be replaced with fibre by 2015. Singapore already has fibre to the curb but it is currently replacing the last-mile copper with fibre.

Interestingly, a key decision in the iN2015 project was to build an open access network even though the country already has two high-speed broadband networks.

The third network is owned by a network company and operated by an independent operating firm that offers services over the network which is subject to price control and universal service obligations. That separation ensures fair and equitable access for all players.

Greece

Greece’s government wants to fast forward into the digital age by building a dark fibre infrastructure for the access network that will pass two million homes over the next five years. The fibre roll-out costs 1.2 billion euros (RM5.9bil), of which the Greek government will finance 700 million euros through a public-private partnership.

It is reported that the Greek government will pay “available dividends’’ to the network construction consortium for each home passed, with additional dividends awarded when subscribers are connected.

The government will issue an international public tender for the construction of the network in the first half of this year and award contracts by the year-end.

China

China’s government will allocate two billion yuan (RM1.07bil) to develop the next-generation broadband wireless networks over the next two years.

Combined with corporate and local investments, initial investment in the technology should be approximately 10 billion yuan, according to a report.

The focus will be on the development of next-generation cellular broadband communications systems, including but not limited to 3G and referring more to LTE, 4G, and other long-term technological developments. State investment will ultimately total as much as 20 billion yuan. This combined with local and corporate investments could total 100 billion yuan till 2020.

Britain

BT Group Plc will push ahead with its £1.5bil super-fast broadband investment plans after regulator Ofcom said there will be no regulatory barriers to develop the infrastructure that will give up to 20 million UK homes access to high-speed Internet by 2012.

Related stories: Speeding up broadband Co-existing with TM From snail’s pace to lightning speed Better-priced packages on the cards

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