Digital Economy and
Broadband Applications
Mission to Japan, Korea and Singapore 18 – 26 October 2010
Mission Report - Summary
Digital Economy and Broadband Applications
Mission to Japan, Korea and Singapore, 18 – 26 October 2010 Mission Report
Opportunities ... 6
Key findings ... 6
Network Overview ... 10
Participating Australian Organisations ... 11
Austrade Contact:
Ms Janelle Casey, Global Leader, ICT Health & Biotechnology, Ph: +61 07 3364 7704 [email protected]
Summary
Asia has the greatest number of FTTx (fibre to the x (location)) subscribers with 78% of total world subscriptions.1
Significant FTTH field technologies, equipment and infrastructure experience exists in the markets visited – Japan, South Korea and Singapore.
There are similarities between broadband networks proposed in Australia, and those in Japan, South Korea and Singapore.
Network connectivity exists through fibre/cable internet (ultra-fast broadband, >30mbps has high penetration in all markets), and also wireless (for example, LTE and 4G services are being introduced as complementary technologies).
Widespread use of FTTP and GPON in Asia confirmed the technology is accepted in those markets as future-proof.
Key findings relate to the role of national strategies in driving development of the ICT industry across the public and private sectors, the importance of ubiquity as a guiding principle in the development of technology and the broader market, and the efforts of Asian governments and industry associations to raise awareness, and encourage usage, of high-speed broadband.
National Strategy
Broadband policies are a key component of national economic and industry development strategies in Japan, South Korea and Singapore, and high-speed broadband is considered essential to build competitiveness and maintain GDP growth.
All three governments have taken an interventionist approach to driving applications development and broadband usage. Government policies and programs are articulated in National Strategies for the ICT industry. The programs and policies outlined in the National Strategies are linked to GDP growth outcomes and are actively co-ordinated across portfolios.
For example, in Singapore, the CIO offices across government agencies are staffed by IT managers from the Infocomm Development Agency.
In Korea, data centres belonging to individual agencies have been consolidated, and placed under the management of National Computing and Information Resources Administration (NCIRA).
Fast broadband is a key plank of future growth policies in Japan, Korea and Singapore. It is considered important for enhancing both business and social outcomes.
Some of the social examples given by the markets visited include infection control in Singapore;
earthquake/emergency warnings in Japan; addressing the shortage of medical staff in Korea.
Delegates expect different ‘drivers’ will affect rollouts in Australia.
Japanese, Korean and Singaporean governments are committed to broadening network connectivity and fostering a competitive environment for the development of broadband services. National and Local Governments play a key role in policy and business co-ordination and cooperation.
1 Source IDATE and FTTH Council Europe
None of the jurisdictions visited by the delegation had a detailed cost benefit analysis for infrastructure investment in FTTP networks. There is potential for collaboration regarding measurement of the benefits of a high-speed FTTP broadband network.
Usage
All governments are also taking measures to increase usage of high speed broadband. For example, Japan’s new ICT policy aims for 100% plus rates of household usage of ultra-fast broadband (>30mbps, FTTH and Cable internet) by FY2015.
The network is not just for communications – it is widely recognised to be a tool for value creation through its facilitation of new business models including cloud computing and SaaS
All markets recognise challenges in increasing household usage of e-services including health, e-education, consumer applications (e.g. smart homes) and e-government. The private and public sectors have introduced initiatives to increase household, industry and consumer usage of
broadband services.
Universal access (ubiquity)
Anything, Anywhere, Anytime – high-speed broadband has a ubiquitous nature
Ubiquity is the key feature of an NBN, rather than bandwidth, which is treated as a given. Reaching all citizens to enable delivery of government services is the main objective. Driving take-up by the provision of on-line services is a common strategy.
Delegates assesses Australia is not falling behind in applications development, or its ability to develop high-speed broadband applications – however the availability of ubiquitous broadband in Australia and consumer awareness, is a challenge to the development of the sector
Cross-industry representation and thought leadership:
Mission participants valued the opportunity to liaise with mission delegates from different areas of the technology industry – including state government policy/program management, ICT industry
association representatives, Internet Service Provider, ICT research bodies, telecommunications consulting and infrastructure project management
Participating Mission delegates have agreed to establish an ongoing, informal broadband
technologies advisory group to share industry/market insights and information with each other and provide thought leadership to the broader ICT industry and Austrade on a range of issues including technology comment and evaluation, trade, investment and research and development opportunities.
Organisations Visited
The Mission had meetings and discussions with these organisations:
Japan
o Japan Ministry of Internal Affairs and Communications
o NTT (the world's largest telecommunications company by revenue)
o Nomura Research Institute (NRI) (provides total IT solutions, and seeks to develop innovative client-focussed services and applications)
o NEC Broadband Solutions Centre
o NTT Tsukuba Forum 2010 and Trade Show
o Fujikura - a leading global manufacturer of optical fibre, tools and test instruments o Sumitomo Electric - a leading global manufacturer of optical fibre, tools and test
instruments
o Australian Embassy Korea
o Korean Communications Commission
o National Information Society Agency (topic e-Government) o BIT Computer (topic e-Health)
o Clive International (topic e-Learning) o Naver (NHN) ((topic web portal)
o NeoWiz (topic On-line Entertainment, PC Games) o Korea Electric Power Corporation (topic Smart Grid) o Plantynet (topic Internet filtering)
o LS Cable - a leading global manufacturer of optical fibre o KT (Korea Telecom) Broadband Business
o Alleh Square, KT’s Display Centre o SK Telecom - Ubiquitous Museum
o Samsung Electronics (topics: Samsung Museum Display Room, Mobile Gallery, WiFi) Singapore
o Infocomm Development Authority of Singapore o Integrated Health Information Systems Pte Ltd (IHiS) o Singapore Infocomm Technology Federation (SiTF) o FutureSchools@SG (Ministry of Education)
o Singtel
o FusionWorld - Institute for Infocomm Research o StarHub Pte Ltd and Nucleus Connect
o Amazon Web Services o Microsoft Singapore o Ogilvy Digital Lab o PayPal
Opportunities
Export, Inward Investment and Research & Development opportunities
o Delegates recognise there is an opportunity to develop Australian industry capability and establish Australian leadership in the development of high-speed broadband applications o Australia has an opportunity to develop broadband applications and services for export into
these markets.
o Mission participants were greatly impressed by the evidence of R&D related to ICTs being undertaken by prestigious research institutes in Japan, Korea and Singapore.
o Potential for NICTA / CSIRO / university partnerships with organisations in smart grids/digital media/e-health/web services etc.
Includes partnerships with foreign investor companies interested in building the network
o Asian governments and industry have developed public awareness programs for Retail Service Providers and enterprises about digital economy solutions/applications e.g. IAAS, PAAS, e-health. They also have experience in the establishment of demonstration / i-experience centres raising community awareness of broadband applications
Key findings
Markets and governments in our region are committed to fast broadband and have developed policies and programs to encourage major investments, and prioritise connectivity, usage, speed, ubiquity and innovation:
Government planning All governments have developed detailed policies/programs to advance ultra-fast broadband connectivity and usage.
Telecommunications Industry Development In both Japan and Korea, telecommunications industries are focussed on business development that leverages off the 'first mover' advantage from ultra-high speed NBNs in their countries.
Telecommunications equipment and service companies not only produce a huge range of power and communications cables, but also a complete range of all the tools and instruments that are needed by field technicians and engineers. There is a strong focus on R&D, manufacturing quality, and means of achieving optimum productivity in the field (e.g. fibre jointing tools that can be used by workers with low-levels of training, and very low friction house cable that slide easily through small diameter or crowded communications conduits). There is a similar focus on R&D and international standardisation for wireless systems.
Mission participants could see firsthand how these products are showcased at prestigious industry events like the Tsukuba Forum run under the auspices of NTT. Japanese and Korean multinationals are experienced in global FTTH rollouts and are pushing strongly into export markets. The size of Australia's proposed NBN holds high appeal to these suppliers, many of which have an interest in partnership with Australian companies.
Investment All markets have made major (multi US$bn) investments to upgrade broadband infrastructure and usage
Governments have made competitive grants to partly subsidise FTTH capital costs. e.g. in
Singapore the grants for NG NBN rollout will amount to SG$1B, compared with a total projected cost of about SG$6B. (The area of Singapore is around ~750 sq km). In Japan tax breaks were offered to companies involved in building broadband facilities.
Roll-Out and associated Civil Engineering Works Given the low cost/km of optic fibre cable, the large cost in FTTP rollouts is for civil engineering works. The features of rollouts in Japan, Korea and Singapore differ from Australia:
o The nature of residential housing in Japan, Korea and Singapore is dominated by clusters of high-rise condominiums, so the model is FTTP (to a comms room in the basement), and backbone fibre to a comms cupboard on each floor.
o In Korea, outside the CBD (where cabling is in underground ducts and pits) , a majority of cabling is overhead on power poles, with overhead lead-ins to premises; this is a material factor in improving the speed and cost of rollout, and the adoption of very simple rules as to who pays what to get connected.
o Given the move towards the 'Internet of Things', provision is made in the rollout to bring fibre to numerous sites that have the potential to become connected e.g. in Singapore, the Next Generation NBN rollout includes fibre to bus stop shelters, traffic lights (that often include CCTV for traffic congestion monitoring), other CCTV security locations, potential
environmental monitoring points, potential digital signage points.
Connectivity Connectivity to ultra-fast broadband networks is high in all markets. In some markets the relative lack of international connectivity presents a bottleneck, compared to the high-speeds attainable for domestic traffic.
There is also a commitment to ensuring fast wireless technologies are also available.
o E.g. Wireless broadband: In Singapore, the Infocomm Development Authority (IDA)
developed a policy for WiFi to be ubiquitously available for Singapore citizens through three local wireless operators, and there are Wireless@SG Hot-Spots in thousands of locations and growing. This is one of its Next Generation National Infocomm Infrastructure initiatives, being part of the nation's 10-year masterplan called Intelligent Nation 2015 (iN2015). The targeted users of this wireless broadband network are broadly classified as "people on the move" - people who require wireless broadband access while away from their homes, schools and offices. In addition to the free "basic tier", there will be a paid "premium tier" for those seeking bandwidth beyond 1 Mbps, or for connectivity options with higher-quality of service.
Pricing to Consumers For ultra-high speed internet (> 30 Mbps symmetrical) the cost is typically about AU$30 to AU$65 per month, but can be less in a multi-dwelling unit.
To interpret the pricing of FTTH services, salaries and cost of living in the respective countries should be taken into account. Services tend to be bundled with combinations that include some or all of fixed telephone, Internet, PayTV and mobile telephone, which may be around AU$100 per month.
Usage Increasing the usage of high speed broadband is an area of focus. It is widely anticipated that ultra-high speed broadband, will either enable a new range of services to be delivered or make existing services work better or cheaper.
There is an active search for 'killer' applications for the business and domestic markets in such sectors and services as:
o Cloud computing and storage (embracing Infrastructure aaS, Platform aaS, Software aaS, Voice aaS, and XaaS (anything as a service)), e-government, e-commerce, health, education and training, logistics, high definition collaborative videoconferencing, advertising including differentiated digital signage (with inbuilt audience measurement), distribution of digital films to movie theatres, on-line gaming, smart grid (electricity generation, distribution,
management, fault-finding and repair, metering etc), environmental monitoring, telework, social networking, etc.
o Alternatively, the focus is on broadband playing a part in conjunction with other ICTs - for example RFID tags and smart Phones (or PDAs) in a hospital environment or in logistics.
o Usage rates are expected to increase through:
The provision of the widest possible array of online services. Private sector services are encouraged to follow closely on the heels of mandated government services.
the provision of the widest possible array of online services and applications;
the development of ubiquitous broadband and access to broadband services across devices;
increased competition among service providers;
establishment of internet/technology experience centres to educate the community about new products and services;
targeted government policies to educate the community on broadband services (tailored to consumer, school and SME segments); and
generational change.
o Asian markets visited by the Mission rely on their human resources (not natural resources etc) to maintain global competitiveness - and are committed to driving increased usage of broadband services.
Applications possible only through a Nation-wide Broadband Network?
If there is an NBN to every premise with symmetrical bandwidth, it provides an opportunity to exploit the high speed uplink which has been a barrier in the past. For example, with cloud computing (which is a new paradigm), business benefits from ultrafast symmetrical and secure data communications.
Other examples observed include scalable multimedia processing & delivery (eg.
high definition videoconferencing, tele-collaboration), multimedia data mining, distance education, some forms of tele-health, some e-Government services, visual-based user information extraction (that provides means of user categorisation).
Speed: Korea aims to roll out Giga internet networks by 2012 (alleh KT, SK broadband and LG Dacom currently supply 100mbps FTTH services), Japan aims for 100% household usage of ultra- fast broadband – ie FTTH, cable internet – by 2015 (FTTH currently provides speeds of 100-200 mbps with 90% coverage), and Singapore will receive 1Gbps under its Next Generation NBN.
Ubiquity The availability of ubiquitous services is expected to increase broadband usage rates over time
Benefits, Impact on GDP, Productivity and Employment Although Mission participants made attempts to gather factual information in respect to these economic factors, little was obtained that could be utilised in an Australian context.
Industry development was however a key objective of broadband penetration and usage in all markets, along with improving the health, education and social well-being of the population.
Network Overview
Fixed broadband
Japan Korea Singapore
FTTH from 100-200mbps, around 18m subscribers
DSL 50mbps, around 10m subscribers
CATV,
160mbps, around 4m subscribers
Over 30mbps to over 30%
households nationwide
50-100mbps to 66% of
households nationwide
Speeds of 100mbps to beyond 1Gbps to be
delivered by Next Generation (NG) NBN by 2013
Over 90%
broadband usage in homes and
businesses by 2015
Mobile broadband 3G mobile, 7.2mbps, 112m subscribers (LTE to offer 75-100mbps)
Public Wifi, 54mbps, 8m subscribers
XGP-Wimax, 20-40mbps
CDMA then WCDMA, and WiBRO.
LTE
wireless@sg offers speeds of up to 1 mbps across 7,500 hotspots.
1.7m unique subscribers
Capital investment NTT AUD
$40bn for fibre optic access
AUD $60bn for 3G LTE
SGD $1bn
overnment grants.
Total project size
$5-6 bn.
Participating Australian Organisations
Australian Information Industries Association Ms Kelly Hutchinson
General Manager Corporate Relations
Communications Alliance Mr John Stanton
Chief Executive Officer
National ICT Australia Dr Phil Robertson Chief Operating Officer
Commonwealth Scientific and Industrial Research Organisation Dr Peter Kambouris
Business Development Manager
Queensland Government - Department of Employment, Economic Development and Innovation Mr Paul Russell
Director, Digital Economy
iinet
Mr Steve Dalby
Chief Regulatory Officer
Peter Farr Consultants Australasia Mr Peter Farr
Chairman and Principal Consultant
GHD
Mr Leon Rawson
Senior Engineer/Service Line Leader Power Delivery
Tasmanian Government – Department of Economic Development Tourism and the Arts c/o Mr John McGee
Director Digital Futures
