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[UK ONS] The 2010 Internet Access survey of households and individuals measures home access to the Internet and individuals’ use of the Internet across the UK.

The key findings from the survey show that:
• 30.1 million adults used the Internet every day or nearly every day, almost double the estimate in 2006
• 9.2 million adults had never used the Internet
• 31 per cent of Internet users connected via a mobile phone, up from 23 per cent in 2009
• 17.4 million adults used the Internet to watch television or listern to the radio, an increase from 6.4 million in 2006
• 73 per cent of households had Internet access
• 31 million people bought or ordered goods or services online in the last 12 months

Internet Access 2010 – Households and Individuals

[live mint] The world’s largest computer chip maker, Intel Corp., which promotes the so-called wireless inter-operability for microwave access, or Wimax, technology as the standard for wireless broadband Internet, now says it may support the rival Long Term Evolution (LTE) technology.

“Question is, (in the) long term is LTE much bigger? Possibly yes, quite possibly yes,” said Tom Kilroy, Intel’s global sales and marketing head. “Whenever LTE makes it to the market, Intel will support LTE.”

Wimax and LTE are similar but competing technology standards that telecom operators can choose between for offering wireless broadband services. Intel, which earned $35 billion (`1.41 trillion) of revenue in 2009, manufactures chips that make computing devices Wimax-enabled. LTE is backed by another chip-maker, Qualcomm Inc.

In June, India auctioned wireless broadband spectrum for `38,540 crore, with just one company—Infotel Broadband Services Pvt. Ltd, now owned by Reliance Industries Ltd (RIL)—emerging as a pan-India operator. Qualcomm participated in the auctions and won access to four regions, or circles.

Kilroy, who met local telecom operators during his trip to India last week, said Intel was not “religious” about Wimax and its research and development (R&D) plans are geared to support LTE if that technology becomes the industry standard.

But the chip-maker continues to bet on an interim Wimax phase as network equipment for LTE is evolving slowly.

For Intel, the uptake of Wimax by Indian operators translates into demand for Wimax-enabled devices. India, with low Internet and computer penetration levels, offers a huge opportunity for companies such as Intel.

“They (Indian telecom operators) have signed the big checks, they’ve got the spectrum,” said Intel’s managing director, sales and marketing, South Asia and India head Sivakumar Ramamurthy. “These are like tomatoes on the shelf; they tend to rot if you don’t make use of them. And you paid for that already.”

He added that the operators know if they want to deploy a technology today, they have only one choice—Wimax. “The question is: Do you jump in, go the whole hog and build that business out, and then figure out what your long-term strategy is?”

Staunch Wimax-backer Intel to support LTE

[economist] TAKE a taxi in Bangkok and the driver’s mobile phone is sure to chirp. A long conversation ensues, usually by speakerphone, since few cabbies bother with headsets. It is not just that cabbies are chatty; it is also that talk is cheap. Once reserved for the rich, mobile phones are now ubiquitous in South-East Asia.

But what is good news for taxi drivers is less so for mobile operators. Price wars in nearly-saturated markets have mangled profit margins. One answer is to prod customers to use data services, such as e-mail, web-browsing and access to a variety of “applications”—all of which could, some analysts think, spur new growth.

Yet this new growth will not come easy. Mobile-phone firms have shown they can make profits from the poor. But can they persuade them to upgrade to smart-phones or cough up money for data services? This sounds like a stretch in Indonesia, where subscribers spend only $5 a month on mobile-phone services, one-tenth of the American average. That said, there are plenty of smart-phone users in Jakarta and Bali. Thailand has also seen a boom in these computer-like devices, despite a political upheaval that has repeatedly delayed the auction of licences for third-generation (3G) wireless networks, which allow for higher data speeds.

Elsewhere, operators are wary of investing too much in 3G networks. Most mobile users in South-East Asia are pre-paid customers who shop around for bargains. In the Philippines, juggling multiple SIM cards is common: users switch between them to take advantage of cheaper in-network calls or price promotions. This makes it hard for operators to build brand loyalty, let alone sell premium services.

Still, in some countries operators have rolled out 3G networks and begun to reap the benefits. In 2007 only 7% of subscribers in Malaysia had a handset capable of connecting with a 3G network. Last year, 25% did. And if “dongles” (devices that connect laptops to mobile networks) are included, Malaysia’s 3G penetration may be closer to 40%, estimates Jayesh Easwaramony of Frost & Sullivan, a consultancy. As a result, data products and services now account for 10% of profits at Malaysia’s Celcom and one-third of revenue growth.

In Indonesia and Thailand, most calls involve people actually talking to each other. Yet these markets will eventually pass an “inflection point” where data services outstrip other revenue growth, predicts Sachin Gupta of Nomura Securities, an investment bank. Younger markets may move faster: Cambodia, Laos and Vietnam already have 3G networks up and running.

Cheaper handsets should speed this process. The same happened with standard mobile phones, whose prices dropped sharply, particularly after they were unbundled from operator contracts. Another attraction will be smart-phone applications, such as Facebook. The world’s largest social network is becoming increasingly popular in Indonesia and the Philippines. Finally, smart-phones could become a substitute for broadband access at home, which still is not widespread in South-East Asia.

Even mothballed Myanmar is coming along, albeit slowly. Until recently, its military rulers did not permit pre-paid mobile services on its network. Obtaining a local SIM card meant shelling out at least $1,500, assuming you had the right connections. No mobile roaming was allowed. Recently, however, the government began selling pre-paid cards to anyone with $20 to spare. Alas, the numbers cannot be topped up and expire after a month. It seems that the generals understand as little about building customer loyalty as they do about earning the political sort.

Talk is cheap – In a saturated market, firms need customers to buy bells and whistles

[prwire] Australia’s broadband infrastructure is holding back the economy, according to 75% of respondents to an online poll from broadband comparison site Compare Broadband.

Compare Broadband asked site visitors, “Is Australia’s broadband infrastructure holding back the nation’s economy?” Three quarters (75.4%) of the 475 voters (358 votes) said ‘Yes’, while only 21.3% (101 votes) said ‘No’, and 3.4% (16 votes) ‘didn’t know’.

A significant proportion of Australia’s economy is based on the farming and resources sectors, yet broadband access in rural areas is restricted. Even in some metropolitan areas, businesses and consumers cannot receive high-speed broadband connections.

It is hard to imagine the multi-billion dollar resource companies in the Outback not having high quality broadband, but in some instances this must be the case as Australia’s vast geographical landmass has prohibited infrastructure in certain bush locations.

With the current hung parliament in Australia, and its winner being decided by three independent candidates who all live in regional areas where broadband is lacking, broadband could be the deciding factor to the political conundrum at hand.

Compare Broadband’s General Manager, Scott Kennedy, said: “I’m surprised that 75% of people feel our current broadband infrastructure is stifling the economy. Evidently it is an important issue to Australian consumers. The NBN may well be on the money.”

Another argument for broadband internet being key to Australia’s economy centres on the telecommunications and information technology industries. If businesses have faster broadband, they can then compete on a par with rival Asian companies. Prime Minister Julia Gillard has also pointed out that the NBN itself will provide a huge number of jobs via its necessary construction and maintenance.

All of these issues point to a belief by Australians that our economy is being held back because of the current broadband infrastructure’s lack of speed and availability. It will be interesting to see which way the three remaining independents go in the coming week, as the Federal government’s $43 billion optical fibre-to-the-home NBN policy varies greatly from the Coalition’s $6.5 billion Mobile Wireless network plan.

Australia’s broadband infrastructure ‘holding back the economy’

[the australian] LABOR’S $43 billion National Broadband Network may be the most politically rewarding pork barrel of all if it gets Julia Gillard over the line with the country independents.

But, like most politically driven investment, it is unlikely to provide the best return for taxpayers and even telco users. Broadband Minister Stephen Conroy doesn’t really contest this point in continuing to dodge the simple question of why Labor refuses to put the infrastructure project through a cost-benefit analysis.

Instead, Conroy points to the study he commissioned from McKinsey and KPMG that found the NBN could be built with the $43bn price tag and be “affordable for all Australians”.

“We’ve got on with the job as we promised at the last election of building the national broadband network,” he argued on the Sky News program Australian Agenda.

Except that the McKinsey “implementation study” was required to take the NBN as a given, not consider any less expensive alternatives and not conduct a cost-benefit study as urged by the Productivity Commission and the Organisation for Economic Co-operation and Development. And except that the advertised bill has blown out from $4.7bn at the last election to $43bn.

Shortly after the election, country independent Tony Windsor suggested the $43bn figure was “fictitious” and he wanted to see the “real trail” of numbers. But after being briefed, Windsor backed Labor’s NBN on the weekend, describing the Coalition’s $6bn alternative as “retrograde”.

The country independents are naturally attracted to Conroy’s NBN promise that “every person and business in Australia, no matter where they are located, will have access to affordable, fast broadband at their fingertips”. The university town of Armidale in Windsor’s New England electorate is an early release site for the NBN rollout. “It’s too good an opportunity for country Australia to pass up,” Windsor says.

Near-universal high-speed broadband is understandably an intoxicating prospect. For government, guarantees that everyone will win, or no one will lose, no doubt scores highly with focus groups and media sound bites.

The formula initally proved effective for Gillard in defending Labor’s $16bn primary school construction stimulus. Putting building projects on school grounds would avoid the lengthy approval processes required for other sites.

A universal stimulus also delivered a political benefit: because school grounds dotted every electorate, every electorate should be grateful. Coalition backbenchers could be lampooned in soon-to-be-reformed parliamentary question time for opposing the stimulus spending but busting to be identified with new school halls in their own seat. It turned pear-shaped when the costs of fast-tracking a nationwide template building program in more than 7900 schools became apparent.

The McKinsey report describes the NBN implementation task of burying or stringing up 250,000km of optic fibre along most roads in the country and connecting 5000 premises each workday over eight years as enormous.

And, to make the numbers come close to adding up, competiton has to be suppressed in the name of micro-economic reform.

“The structural separation of Telstra is one of the most significant micro-economic reforms in this country in 20 years,” Conroy said at the weekend. “It will drive productivity growth.”

Vertically separating Telstra’s retail and network arms would have been a big micro-economic deal 20 years ago. But technology is eroding the monopoly power of Telstra’s copper network as people flock to more competitively provided mobile services.

And Labor’s NBN would more likely reduce, not increase, competition by mandating a government-owned wholesale monopoly that will pay Telstra $11bn for access to the telco’s ducts and pipes, to shift over its wholesale customers and to shut down its copper network.

While structurally separating Telstra in this way may increase retail competition, it is designed to suppress competition in broadband infrastructure. The deal further requires Telstra to stop supplying high-speed broadband over its coaxial pay-TV (or HFC) cable that now passes 2.5 million homes.

This effective destruction of capital is required to support the government monopoly mandate of one technology (fibre) over the existing copper or HFC networks.

While fibre is clearly the fastest technology now, Telstra’s own declining fortunes show that consumers highly value the mobility provided by competitive wireless broadband. It’s akin to consumers being prepared to pay many times more for water out of a bottle than out of the natural monopoly of the fixed water pipes in their homes.

Most of the IT world backs spending $43bn of other people’s money on a super-duper fibre network. But a collection of telco suppliers, including AAPT’s Paul Broad, two week ago issued an alternative broadband plan, based on next generation 4G mobile technology, that rejected the NBN model of “infrastructure monopolies with retail competition”.

The Alliance for Affordable Broadband argues that a mix of technologies and market-based provision could include 4G coverage for 98 per cent of Australians at up to 100 megabits per second and even higher-speed fibre broadband for schools and hospitals. It would cost perhaps $3bn.

And Committee for the Economic Development of Australia research head Michael Porter argues that any benefits from Conroy’s vertical separation of Telstra will be swamped by his suppression of horizontal broadband competition between fibre, the copper network and HFC.

Tellingly, the Productivity Commission backs Porter by arguing that “strong competition” between the rival broadband infrastructure “is likely to provide the best outcomes for the country”.

It says the viability of any one type of broadband infrastructure should not depend on “inappropriate constraints on other modes of delivery”.

Porter further suggests that Labor’s NBN deal could eventually run into the Australian Competition and Consumer Commission as an illegal restraint on competition. “I would expect the ACCC to reject the decommissioning of HFC cable for broadband,” he says.

If so, Labor’s NBN plan could involve both a multi-billion-dollar payment to Telstra to breach competition laws and a pork barrel to the country independents that helped win their crucial votes.

NBN is good for Gillard, not taxpayers