2022.12.23 – Open Broadband News

European Commission revises broadband network State aid rules

The European Commission has adopted a revised Communication on State aid for broadband networks (‘Broadband Guidelines’). The revised Broadband Guidelines set out the rules under which the Commission will assess State aid measures notified by Member States to support the deployment and take-up of broadband networks in the EU.

The new rules contribute to the EU’s strategic objectives of ensuring gigabit connectivity for everyone and 5G coverage everywhere by the end of the decade, which is essential to achieve the digital transition of the Union. The new Guidelines will enter into force the day following their publication in the Official Journal of the European Union, which is expected in January 2023.

The revised Broadband Guidelines will provide an up-to-date framework to support the digital transition and reflect technological, regulatory and market developments. In addition, the new rules reflect the current EU policy priorities as set out in the Gigabit Society Communication, the Shaping Europe’s Digital Future Communication, the Digital Compass Communication, as well as the Digital Decade Policy Programme recently adopted by the European Parliament and the Council.

Internet speeds up in Portugal

Over four in five Portuguese households now use fixed high-speed internet services. According to the regulator ANACOM, the number of households reached 3.5 million at the end of the third quarter. This was 6.8% more than in the same period last year and equivalent to 83.5% of all residential homes in the country. ANACOM notes that around nine in 10 new high-speed network customers contracted a serviced supported by FTTH.

The highest penetration of fixed high-speed internet was in Lisbon (96.6%), followed by Azores (91.1%) and Algarve (86.6%). The regulator also says that at the end of the first half of this year 51% of high-speed accesses had download speeds of between 100-1400 Mbps (-11pp less than a year earlier), 31% speeds of between 400 Mbps and 1 Gbps (+12.7pp) and 5% of 1 Gbps or higher (+2.8%).

It is estimated that in Q3 this year at least 6 million households were cabled with a high-speed network, 2.6% more than in the same quarter of the previous year. The growth seen was lower than that recorded a year ago (4.5% year-on-year). The coverage of high-speed networks was 93.2%, 1.9pp more than in the third quarter of 2021.

Auto chips seen as biggest revenue producer in ‘23: KPMG survey

With a shortage of chips during the pandemic hurting the automotive sector especially hard alongside an explosion of investment in electric vehicles and self-driving cars, it might come as no surprise that chip executives are laser focused on chip revenues from the auto sector.

A new survey of 151 chip executives conducted by KPMG and the Global Semiconductor Alliance found the automotive sector will be the most important revenue driver in 2023, pushing wireless communications into second place from its previous top spot.  Wireless chips have long been seen as a top revenue driver in many of the 18 years of the survey.

“The automotive industry has been at the short end of the stick from a supply chain perspective,” said Lincoln Clark, a partner and global semiconductor practice leader at KPMG. “How auto learns from that experience going forward will be interesting to watch as the need for chips is only going to expand with EV and cars, hybrid and electric.”

Service providers have $100billion+ opportunity in enterprise services

Communications service providers (CSPs) could collectively account for about $101billion, or 43%, of the $232billion that enterprises will spend globally by 2027 on services and solutions, such as security, software-defined WAN (SD-WAN), edge capacity and industrial automation. But capturing that essential revenue opportunity will not come easily, according to a new report, Telecom’s $100B Enterprise Opportunity, from Appledore Research.

The team at the research firm has identified a range of services that enterprises use and are willing to pay for and that current CSPs have a role in delivering incremental broadband connectivity, SD-WAN without integrated security, edge compute capacity, industrial automation, automated security and security-centric professional services.

The Appledore team believes “today’s telecom operators can secure a unique position in supporting the growing needs of enterprises. The requisite capabilities are certainly available today, and the indicators are already there that having them leads to market success and incremental revenues”, but that “capturing this business is conditional on CSPs making fundamental changes in their operational capabilities and mindset.”

With planning funds in hand, states turn to broadband consultants

The National Telecommunications and Information Administration (NTIA) in recent weeks has made multiple announcements releasing funds to help states develop plans for the Broadband Equity, Access and Deployment (BEAD) program. With dollars in hand or incoming, a ticking clock and few internal resources, several states are now turning to consultants for help.

Earlier this year, every state submitted a letter of intent to participate in NTIA’s $42.5 billion BEAD program, unlocking up to $5 million per state in planning funds, ahead of the minimum $100 million in broadband deployment funds to come later. States are also entitled to roughly $1 million in grants to design digital equity plans.

The planning grants are to help states assess their broadband needs as well as staff up their broadband offices, and ultimately design plans to submit to NTIA to get their full BEAD funds approved.

States have 270 days from receipt of planning funds to submit a five-year action plan to NTIA on how they will structure their BEAD and digital equity programs to close their digital divides. Several states have started issuing requests for proposals for consultants to design their BEAD and Digital Equity Act plans, and many more are expected to do so as funds continue rolling out.