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May 2015

National Broadband Plans: Deployment Models & their Effectiveness in Improving Broadband Penetration

Ozgur Aytar | Research Director

Sunil Kumar Verma | Managing Analyst

Deepa Dhingra | Analyst

Single User Price: US$ 3,495

https://www.pyramidresearch.com/


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Summary

National Broadband Plans: Deployment Models & their Effectiveness in Improving Broadband Penetration,’ a Research Report by Pyramid Research, is an assessment of national broadband plans of several countries across the globe. The report analyses targets, technologies, role of government and private sector as well as funding strategy as included in the broadband plans of countries in all the regions.

The report is organized as follows:

• Introduction: Correlation between broadband penetration and PPP-adjusted GDP per capita, Characteristics of Good Broadband Plan and Regional Investment requirements. It also highlights about the characteristics of a Good National Broadband Plan alongwith relevant examples of the countries where the National Broadband Plan featured these characteristics.

• Global Review of NBP Frameworks: This sections highlights about the key trends and insights of the National Broadband Plans across various regions wrt to the priorities, implementation timelines, preferred technologies for deployment of broadband network, role of Government & Telcos and the investment/fundings for the implementation of these plans.

• Analysis of National Broadband Plans for Regions: This includes information regarding the National Broadband Plan for key selected countries across all the regions. Additionally it also includes Key trends and case examples elaborating the National Broadband plans of select countries.


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• Increasing number of countries are adopting national broadband plan or a strategy as a tool to improve broadband infrastructure to stimulate economic growth. The number of countries with a specific broadband plan/strategy increased to XX in 2014 from just XX in 2005.

• Majority of the countries are experiencing growth of both fixed and mobile broadband services. National broadband plans of developed countries, which already have high broadband penetration, are targeting on boosting the speed of broadband services while focus of emerging countries are on improving coverage of broadband networks to eradicate digital divide.

• Most of the countries, both developed and emerging, have selected fiber-optic and LTE technologies as they support applications and services that require high bandwidth and provide better quality.

• Governments in all the countries are actively participating to ensure development of broadband infrastructure. In some countries, Governments are supporting through providing funds and subsidies to telcos to contribute to the cost of deployment, whereas in some countries, Governments are supporting through modifications in policies and spectrum allocation.

• Telcos are also investing heavily in deployment of network and technologies that support high speed broadband services to extend coverage and increase bandwidth.

Key Findings


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Source: Pyramid Research

Correlation of broadband penetration with GDP per capita

Broadband subscriber growth continues to trend upward, despite slow GDP growth in many countries.

Qatar has the highest rate of PPP-adjusted GDP per capita in the world, while Switzerland boast the highest broadband penetration. Efforts by governments in the form of national broadband plans are expected to boost the development of broadband services worldwide.

EXHIBIT 2: BROADBAND PENETRATION AND PPP-ADJUSTED GDP PER CAPITA, 2014

Nigeria Afghanistan

Oman

Qatar

Indonesia

UAE

South Africa

Saudi Arabia

India

Singapore

Egypt Dominican Republic

Philippines

Panama Venezuela

Malaysia

Bahrain

Thailand

Australia

US

Ireland Taiwan

Turkey

Austria

Chile

Italy

El Salvador

Ecuador

Switzerland

Brazil

Japan

Mexico Colombia

Hong Kong

Israel

Canada

Finland

Russia

Slovakia

Germany Belgium

Argentina

Poland

Netherlands

Spain

Czech Republic

UK France

Honduras

Portugal

Vietnam

New Zealand

China

Romania

South Korea

Uruguay

Puerto Rico

Bulgaria

Ukraine

Kuwait

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000

Bro

adb

and

pen

etra

tio

n o

f p

op

ula

tio

n

PPP-adjusted GDP per capita (2014)


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Extend coverage

Emerging APAC

NA (Canada)

CEE

LA

AME

Provision high-speed broadband

Developed APAC

NA (US)

CEE

WE

AME

Deploy new technology

WE

AME

LA

Other targets

AME

EXHIBIT 6: COMMON TARGETS ACROSS REGIONS


Targets and priorities of NBPs

NBPs target wide coverage and speed along with advances in technologies and services.

• The focus in emerging markets in Asia-Pacific (APAC), Latin America (LATAM) and Africa & the Middle East (AME) is primarily on improving coverage of broadband services to reduce the digital divide and speed up economic development. In contrast, developed markets such as Western European (WE) and developed APAC countries are emphasizing improving the speed of broadband services. Canada’s recently adopted national plan focuses on extending coverage to rural areas, while the US has set a target of offering 100Mbps download and 50Mbps upload speeds. Some countries in the WE, AME and LA regions have targets for upgrading or deploying new technologies: Portugal aims for nationwide LTE coverage, Brazil has a target of getting FTTH connection to XX% of the population, and Morocco aims to have 4G networks rolled out. Some countries – Qatar, Turkey – include in their NBPs the use of broadband in government institutions, schools, offices and such.


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EXHIBIT 11: FIXED-BROADBAND PENETRATION AND GDP PER CAPITA IN SELECT APAC MARKETS, 2014

Asia-Pacific continues to witness the expansion of broadband services, with the focus shifting to rural areas. Broadband services have been expanding for a long time in the region, but despite many efforts by governments and operators, the digital divide remains glaring. The huge investments required to deploy and expand broadband networks, ROI concerns among operators and a lack of basic infrastructure in rural and remote areas are hindering the growth of broadband services, creating a divide in access and use between various demographic groups. Even though Pyramid Research estimates that the number of broadband lines will increase from XXm in 2013 to XXm by year-end 2019 – up XX%. But the broadband penetration growth rate will remain low: we expect it to reach XX% at the end of 2019, up from XX% in 2014. There clearly remains huge potential for broadband services to grow in Asia-Pacific.

Developed markets in APAC such as Singapore and Hong Kong have higher broadband penetration rates than emerging ones like India and China. Pyramid Research found Afghanistan to have the lowest penetration rate in the region in 2014, XX%, while Hong Kong had the highest, XX%, even though Singapore had the highest PPP-adjusted GDP per capita: $XX.

EXHIBIT 10: FIXED-BROADBAND LINES AND PENETRATION OF POPULATION IN APAC, 2014-2019


Regional broadband market context in Asia-Pacific

Broadband in the region is growing slowly on account of a lack of investment in rural and remote areas.

Afghanistan Indonesia India

Singapore

Philippines

Malaysia Thailand

Australia Taiwan

Japan

Hong Kong

China

South Korea

0%5%

10%15%20%25%30%35%40%45%

$0 $20,000 $40,000 $60,000 $80,000

BB

pen

etra

tio

n o

f p

op

ula

tio

n

PPP-adjusted GDP per capita

0%

5%

10%

15%

0

200

400

600

2014A 2015E 2016E 2017E 2018E 2019E

Bro

adb

and

p

enetratio

n

Bro

adb

and

lin

es

(mill

ion

s)

Broadband lines Broadband penetration of population


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Country NBP objectives Strategic initiatives Timeline,

budget Key players Technologies

China Short-term targets: • Fixed broadband to XX% of households. • 3G coverage to XX% of the total population. • FTTH coverage in all urban areas. • Broadband access in XX% of administrative

villages. • Broadband speeds of 20Mbps in urban

areas and 4Mbps in rural areas. Long-term targets: • Broadband access to XX% population. • Fixed broadband coverage to XX% of

households. • 3G or better access to XX% of population. • Broadband access to XX% of administrative

villages. • Speeds up to 50Mbps in urban areas and

12Mbps in rural areas.

The government opened up the broadband market to the private sector in November 2014.

To accelerate the growth of broadband, it awarded LTE licenses in December 2013.

Budget: $XXbn by 2020 Timeline: Short term: 2015 Long term: 2020

NA LTE, fiber-optics (FTTx)


EXHIBIT 16: OVERVIEW OF NATIONAL BROADBAND PLAN OF CHINA

Aiming to get broadband access to 100% of population by 2020, China unlocks the market to the private sector.

Overview of NBPs in Asia-Pacific (cont’d)


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EXHIBIT 30: FORECASTS OF 3G+ SUBSCRIPTION GROWTH RATES IN SELECT LATAM MARKETS, 2014-2019

Regional broadband market context in Latin America (cont’d)

Smartphone proliferation and the affordability of mobile broadband are driving mobile data growth in Latin America, forcing operators to invest significant amounts in upgrading their networks and deploying new technologies.

EXHIBIT 29: MOBILE SUBSCRIPTIONS AND PENETRATION OF POPULATION IN LATAM, 2010-2019

0%

20%

40%

60%

80%

100%

120%

140%

0

100

200

300

400

500

600

700

800

900

1000

Pen

etration

of p

op

ulatio

n

Sub

scri

pti

on

s (m

illio

ns)

3G+ subs Rest of mobile subs

Penetration of population

14%

15%

13%

9%

12%

11%

14%

36%

16%

5%

26%

29%

12%

20%

14%

0% 10% 20% 30% 40%

Latin America

Argentina

Brazil

Colombia

Costa Rica

Chile

Dominican Republic

Ecuador

Mexico

Puerto Rico

Peru

Paraguay

Panama

Uruguay

Venezuela

3G+ subscription CAGR 2014-2019



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Country NBP objectives Strategic initiatives Timeline, budget Key players Technologies

Argentina Targets: • Fiber-optic coverage

expanded to XX% of the population by 2015.

• New fixed broadband networks to provide 10Mbps speed.

• Broadband service to all public schools.

The government will provide financial encouragement to local operators over the last-mile segment and will work with local governments to outfit public facilities such as libraries with free access to Internet services.

Budget: $XXbn (P8bn) Timeline: 2015

State-owned satellite firm ArSat is working with Alcatel-Lucent on rolling out a nationwide fiber-optic network.

Fiber-optics

Ecuador Target: • XX% Internet

penetration of the population.

The telecom regulator, Arcotel, is working to modify legislation in order to expand the coverage of Internet services.

Budget:NA Timeline: 2017

NA Fiber-optics (FTTx)


EXHIBIT 31: OVERVIEW OF NATIONAL BROADBAND PLANS OF ARGENTINA AND ECUADOR

Government in Argentina and Brazil invest in fiber-optic technology to enhance broadband coverage.

Overview of NBPs in Latin America region


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Portugal Short-term targets: • Nationwide LTE coverage Long-term targets: • Speeds of at least 30Mbps

for XX% of the population. • Speeds of at least

100 Mbps for XX % of households.

The government established a national funding plan to support broadband deployment. The plan includes about XX% private investment; the rest is to be contributed by public funds.

Budget: NA Timeline: • Short term:

2015 • Long term: 2020

NA Satellite, DSL, wireless (LTE), fiber-optics (FTTx)

United Kingdom

Short-term targets: • Download speeds of at

least 2Mbps for XX% population.

Long-term targets: • Speeds of at least 24Mbps

for XX of the population. • 4G coverage to XX% of

population.

Funding by the British Government, including £XXm to developing 22 super-connected cities in the UK, and investments by BT

Budget: Phase I: $XXm (£XXm) Phase II: $XXm (£XXm) Timeline: • Short term:

2015 • Long term: 2017

British Telecom (BT) will deploy G.fast technology in 2016/17 to offer speeds of up to 500Mbps (and 1Gbps as a premium).

Wireless (LTE), fiber-optic (FTTx)


EXHIBIT 58: OVERVIEW OF NATIONAL BROADBAND PLANS OF PORTUGAL AND THE UNITED KINGDOM

Portugal has established a national funding plan to provide LTE coverage across country while in the UK, the combined funding of the government and the incumbent BT will create super-connected cities.

Overview of NBPs in Western Europe (cont’d)


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Romania Targets: • Provide fixed

broadband coverage to 100% of the Romanian population.

• Provide access to broadband services with speeds of more than 30Mbps to XX% of households.

• Offer broadband access speed of 100Mbps to at least XX% of households.

Romania is rolling out LTE and fiber technology to extend the coverage of broadband connections.

Budget: €XXbn Timeline: 2020

Fixed operator RomTelecom and mobile operator Cosmote Romania, have won the tender to carry out the RoNet project, which focuses on covering unserved areas with broadband access.

Wireless (LTE), fiber-optics


EXHIBIT 70: OVERVIEW OF NATIONAL BROADBAND PLAN OF ROMANIA

Project RoNet aims to provide broadband coverage to 100% of Romania’s population through €4bn in funding from the government.

Overview of NBPs in Central & Eastern Europe (cont’d)


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Nigeria

Short-term targets: • Wireless broadband penetration of XX%

and coverage to XX% of population. • Wired broadband penetration of XX%

and coverage to XX% of population. Medium-term targets: • Wireless broadband penetration of XX%

and coverage to XX% of population. • Wired broadband penetration of XX%

and coverage to XXZ of population. Long-term targets: • Wireless broadband penetration of XX%

and coverage to XX of population • Wired broadband penetration of XX%

and coverage to XX% of population • LTE or 3G to at least XX% of the

population by 2017.

The Nigerian government is considering providing seven licenses for broadband services to infrastructure companies, forcing the incumbents to lease their capacity to competitors.

Budget: NA

Timeline: • Short term:

2015 • Medium

term: 2018 • Long term:

2020

NA Wireless (LTE, 3G), fiber-optics, ADSL

EXHIBIT 82: OVERVIEW OF NATIONAL BROADBAND PLAN OF NIGERIA

Overview of NBPs in Africa & the Middle East (cont’d)

Incumbents will lease capacity to new entrants in Nigeria in order to raise both wired and wireless broadband penetration rates.


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Table of contents Table of contents 2

Table of exhibits 3

Executive summary 6

Section 1: Introduction 9 Definitions and report scope Overview of national broadband plans Correlation of broadband penetration with GDP per capita Characteristics of a good national broadband plan Economics of broadband network deployment

Section 2: Global review of NBP frameworks 16 Targets and priorities of NBPs Preferred technologies for implementation Roles of governments and telcos in implementation Funding the achievement of plan targets

Section 3: National broadband plans in Asia-Pacific: Overview, trends and examples 21 Regional broadband market context in Asia-Pacific Overview of NBPs in Asia-Pacific Asia-Pacific case studies Case study: National broadband plan of Australia Case study: National broadband plan of China Case study: National broadband plan of Malaysia

Section 4: National broadband plans in Latin America: Overview, trends and examples 37 Regional broadband market context in Latin America Overview of NBPs in Latin America Latin America case studies Case study: National broadband plan of Mexico Case study: National broadband plan of Brazil

Section 5: National broadband plans in North America: Overview, trends and examples 53 Regional broadband market context in North America Overview of NBPs in North America North America case studies Case study: National broadband plan of the US

Section 8: National broadband plans in Western Europe: Overview, trends and examples 60 Regional broadband market context in Western Europe Overview of NBPs in Western Europe Western Europe case studies Case study: National broadband plan of the UK Case study: National broadband plan of Spain Case study: National broadband plan of the Netherlands

Section 6: National broadband plans in Central & Eastern Europe: Overview, trends and examples 73 Regional broadband market context in Central & Eastern Europe Overview of NBPs in Central & Eastern Europe Central & Eastern Europe case studies Case study: National broadband plan of Romania Case study: National broadband plan of Russia

Section 7: National broadband plans in Africa & the Middle East: Overview, trends and examples 84 Regional broadband market context in Africa & the Middle East Overview of NBPs in Africa & the Middle East Africa & Middle East case studies Case study: National broadband plan of Kenya Case study: National broadband plan of Qatar Case study: National broadband plan of Nigeria Appendices 102

Companies mentioned in the report About Pyramid Research


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Table of exhibits

Exhibit 1: Countries with national broadband plans, 2014 11

Exhibit 2: Broadband penetration and PPP-adjusted GDP per capita, 2014 12

Exhibit 3: Characteristics of a good national broadband plan 13

Exhibit 4: Characteristics of a good national broadband plan (cont'd) 14

Exhibit 5: Regional investment requirements 15

Exhibit 6: Common targets across regions 17

Exhibit 7: Prevalent technologies in NBPs 18

Exhibit 8: Government and telco measures in support of national broadband plans 19

Exhibit 9: Uses of government and telco funds 20

Exhibit 10: Fixed-broadband lines and penetration of population in APAC, 2014-2019 22

Exhibit 11: Fixed-broadband penetration and GDP per capita in select APAC markets, 2014 22

Exhibit 12: Mobile subscriptions and penetration of population in APAC, 2010-2019 23

Exhibit 13: Forecasts of 3G+ subscription growth rates in select APAC markets, 2014-2019 23

Exhibit 14: Overview of national broadband plans of Afghanistan 24

Exhibit 15: Overview of national broadband plans of Australia and India 25

Exhibit 16: Overview of national broadband plan of China 26

Exhibit 17: Overview of national broadband plans of Malaysia 27

Exhibit 18: Overview of national broadband plan of New Zealand 28

Exhibit 19: Overview of national broadband plans of Pakistan and Singapore 29

Exhibit 20: Overview of national broadband plan of Taiwan 30

Exhibit 21: Availability of NBN services in Australia 31

Exhibit 22: Percentage of premises in Australia with high-speed broadband access, by technology, 2013 32

Exhibit 23: Urban and rural shares of Internet subscribers in China, 2012 and 2013 33

Exhibit 24: Fixed-broadband penetration of population in China 34

Exhibit 25: Governance structure of Malaysian broadband implementation 35

Exhibit 26: 3G and total mobile subscription growth in Malaysia, 2006-2013 36

Exhibit 27: Fixed-broadband lines and penetration of population in LATAM, 2014-2019 38

Exhibit 28: Fixed-broadband penetration and GDP per capita in select LATAM markets, 2014 38

Exhibit 29: Mobile subscriptions and penetration of population in LATAM, 2010-2019 39

Exhibit 30: Forecasts of 3G+ subscription growth rates in select LATAM markets, 2014-2019 39

Exhibit 31: Overview of national broadband plans of Argentina and Ecuador 40


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Table of exhibits

Exhibit 32: Overview of national broadband plan of Colombia 41

Exhibit 33: Overview of national broadband plans of Costa Rica and Chile 42

Exhibit 34: Overview of national broadband plans in Dominican Republic and Brazil 43

Exhibit 35: Overview of national broadband plan of Mexico 44

Exhibit 36: Overview of national broadband plans of Puerto Rico 45

Exhibit 37: Overview of national broadband plan of Peru 46

Exhibit 38: Overview of national broadband plans of Paraguay and Panama 47

Exhibit 39: Overview of national broadband plans of Uruguay and Venezuela 48

Exhibit 40: Fixed and mobile broadband penetration in Mexico, 2012-2019 50

Exhibit 41: Minimum and average broadband speed requirements as determined by Anatel 51

Exhibit 42: Fixed broadband subscribers in Brazil, August 2014 52

Exhibit 43: Fixed-broadband lines and penetration of population in NA 2014-2019 54

Exhibit 44: Fixed-broadband penetration and GDP per capita in NA markets, 2014 54

Exhibit 45: Mobile subscriptions and penetration of population in NA, 2010-2019 55

Exhibit 46: Forecasts of 3G+ subscription growth rates in NA markets, 2014-2019 55

Exhibit 47: Overview of national broadband plan of the USA 56

Exhibit 48: Overview of national broadband plan of Canada 57

Exhibit 49: Map of fixed 25Mbps/3Mbps broadband access in the US, December 2013 58

Exhibit 50: Residential fixed-broadband lines by technology in the US, 2014 59

Exhibit 51: Fixed-broadband lines and penetration of population in WE, 2014-2019 61

Exhibit 52: Fixed-broadband penetration and GDP per capita in select WE markets, 2014 61

Exhibit 53: Mobile subscriptions and penetration of population in WE, 2010-2019 62

Exhibit 54: Forecasts of 3G+ subscription growth rates in select WE markets, 2014-2019 62

Exhibit 55: Overview of national broadband plans of Belgium and France 63

Exhibit 56: Overview of national broadband plans of the Netherlands and Finland 64

Exhibit 57: Overview of national broadband plans of Germany and Italy 65

Exhibit 58: Overview of national broadband plans of Portugal and the UK 66

Exhibit 59: Funding and targets of Broadband Delivery UK program 67

Exhibit 60: Availability of next-generation networks and superfast broadband in the UK, 2014 68

Exhibit 61: Objectives of Digital Agenda for Europe 69

Exhibit 62: Objectives of Digital Agenda for Spain 69

Exhibit 63: Key broadband market indicators for the Netherlands, 2013 72


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Table of exhibits

Exhibit 64: Fixed-broadband lines and penetration of population in CEE, 2014-2019 74

Exhibit 65: Fixed-broadband penetration and GDP per capita in select CEE markets, 2014 74

Exhibit 66: Mobile subscriptions and penetration of population in CEE, 2010-2019 75

Exhibit 67: Forecasts of 3G+ subscription growth rates in select CEE markets, 2014-2019 75

Exhibit 68: Overview of national broadband plans of Hungary and Bulgaria 76

Exhibit 69: Overview of national broadband plans of Czech Republic and Russia 77

Exhibit 70: Overview of national broadband plan of Romania 78

Exhibit 71: Overview of national broadband plans of Poland 79

Exhibit 72: Romanian alignment with the Digital Agenda for Europe 2020 80

Exhibit 73: Goals of the Russian’s Ministry 82

Exhibit 74: Fixed and mobile broadband penetration in Russia, 2010-2019 83

Exhibit 75: Fixed-broadband lines and penetration of population in AME, 2014-2019 85

Exhibit 76: Fixed-broadband penetration and GDP per capita in select AME markets, 2014 85

Exhibit 77: Mobile subscriptions and penetration of population in AME, 2010-2019 86

Exhibit 78: Forecasts of 3G+ subscription growth rates in select AME markets, 2014-2019 86

Exhibit 79: Overview of national broadband plan of Egypt – short term targets 87

Exhibit 80: Overview of national broadband plan of Egypt – long term targets 88

Exhibit 81: Overview of national broadband plans of Tunisia 89

Exhibit 82: Overview of national broadband plan of Nigeria 90

Exhibit 83: Overview of national broadband plan of Israel 91

Exhibit 84: Overview of national broadband plans of Morocco and Turkey 92

Exhibit 85: Overview of national broadband plan of Qatar and Iran 93

Exhibit 86: Overview of national broadband plans of Kenya and Gabon 94

Exhibit 87: Short-term and long-term targets of Kenya's national broadband plan 95

Exhibit 88: Kenya fixed-line broadband penetration of population, 2013 to 2019 96

Exhibit 89: Qatar national broadband network 97

Exhibit 90: Qatar residential broadband subscriber growth forecast, 2013-2019 98

Exhibit 91: Short-term, medium-term and long-term targets of Nigeria's NBP 99

Exhibit 92: Fiber-optic access line growth in Nigeria, 2013-2019 100

Exhibit 93: Nigeria national broadband plan penetration targets 101


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Companies mentioned in the report

Alcatel-Lucent

ArSat

Axtel

Azteca Comunicaciones

Bell Canada

British Telecom

BSNL

Cantv

CenturyLink

China Mobile

China Telecom

China Unicom

Claro

Cosmote Romania

Deutsche Telekom

Frontier Communications

Grupo Instituto Costarricense de Electricidad (Grupo ICE)

INEA

IslaLink

Iusacell

KPN Netherlands

Maroc Telecom

Natcom

Nitel

Orange Kenya

Orange Spain

RomTelecom

Rostelecom

Safaricom

SES SA

SingTel

StarHub

Tele2 Netherlands

Telecomm Telégrafos

Telefónica de España

Teléfonos de Mexico

Telekom Malaysia

Telekom Romania

T-Mobile Netherlands

Turk Telekom

VDT Communications

Virgin Media and EE

Vodafone Netherlands

Vodafone Spain

Warburg Pincus


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Reasons to Buy

• The ‘National Broadband Plans: Deployment Models & their Effectiveness in Improving Broadband Penetration’ report provides a comprehensive examination of National Broadband Plans in all the six regions along with trends and case studies to help companies and operators make informed decisions pertaining to investments in network and technologies, understand Governments’ role and optimize return on investment.

• This report provides a five-year forecast of 3G+ subscription and penetration, developed using bottom-up modeling methodologies of Pyramid Research. The forecast would help executives understand growth opportunities for their companies as per emerging trends in broadband segment.

• Information on broadband plans of several countries in each region; analysis of targets, technologies, governments’ support, operators’ role and funding strategies; case studies of specific countries from each region and key takeaways and recommendations will help broadband operators to develop understanding of markets across the globe and factors driving demand and adoption of broadband services in domestic and international markets.


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