Demand for connectivity in remote and rural areas is increasing at a pace, and a significant amount of this demand derives from the rapidly expanding oil, gas and mining industries.
According to a report by PricewaterhouseCoopers (PwC) earlier this year, Africa holds 7% and 8% of the world’s oil and gas supplies respectively, highlighting the need for further investment in the region’s telecoms sector.
The extreme remoteness of some operations in the oil, gas and mining industry poses a real challenge for carriers, particularly as there is growing demand for fibre connectivity to these locations.
“We closed a piece of business late last year with a large African mining company where we are delivering terrestrial services over fibre to a large mine in Zambia,” says Tim Passingham, SVP of enterprise and government business for EMEA at Level 3 Communications.
This, he says, marks a significant change in the way connectivity is delivered to this industry vertical, which has previously been reliant on satellite links.
Moving forward, Passingham believes a blend of satellite and fibre communications will be essential, with satellite supporting the initial exploration of new resources.
“As we go to more and more locations in search of oil or other natural resources, satellite will be really important. We are seeing enormous growth in the bandwidth needed over satellite,” Passingham says.
Investment in satellite is, however, still growing, with Orange Business Services announcing in February that it is enhancing its satellite service capabilities in the Americas. The move will see the operator extend its presence across corporate private networks with increased capacity, new licences, services and customer implementations in the oil, gas and mining industries. It in particular has targeted offering live telepresence over a satellite connection to more remote locations.
In the long term, however, fibre-optic technology enables the oil gas and mining industries to greater maximise their profitability, with larger bandwidth for real-time voice, data and video applications. “Real-time, mission-critical data seems to be on the rise,” says Simon Bull, senior consultant at Comsys. “And oil companies are putting more people on the rig now. That drives demand.”
“Digital by default” is a theme resonating throughout European governments trying to move towards a more digitised world.
Governments across the globe are looking towards telecoms to save money and streamline operations. “If you are not doing something digitally then why not? That’s the question being asked,” says Passingham.
Opportunities with governments vary from implementing teleconferencing systems to the complete overhaul of a nationwide network.
Governments are presently exploring ways to collapse multiple networks on to a single PSN-accredited public sector network to save money. This aims to streamline operations where multiple carriers are putting multiple networks into a single government building, Passingham explains.
Another area governments are looking to support, particularly in Europe, is the growth of small and medium enterprises. “Governments are doing a lot to help small businesses thrive and technology has a huge part to play in that,” Passingham says.
The UK government is in particular looking to contract more services with SMEs in the telecoms and technology space. It is looking at ways to drive down costs for SMEs and streamline their businesses, which includes enhancing telephony helpdesks and email services, right up to delivering a multi-channel approach for nationwide expansion.
Whilst the overall market is retracting in size because governments are spending less on ICT, opportunity is growing as they try to spend money more efficiently. Moving forward, information security will be a key requirement for the public sector.
“[Information security] has always been important but I see that becoming increasingly important,” Passingham says. “I see improved encryption over networks, and I also see an increased use of unified communications.”
Global security and defence alliance NATO (North Atlantic Treaty Organisation) told Capacity in 2013 that it had earmarked €2 billion for communications contracts.
Agreements between operators, ISPs, technology companies and defence organisations have been cropping up in the last 12 months as the vertical looks towards telecoms solutions to secure and advance its services.
“I think you will see a lot of investment there [in defence and security],” says Passingham. “There is significant growth in that market right now.”
A number of deals in the sector are already in place from last year.
Vodafone signed a strategic partnership with defence, aerospace and security firm BAE Systems for increased connectivity in February 2013, while BT have also moved into the defence space, having signed agreements with the Centre for the Protection of National Infrastructure (CPNI), Government Communications Headquarters (GCHQ) and the Ministry of Defence (MoD) later in July.
Level 3 Communications signed a contract with the NATO Communications Information Agency (NCIA) in January 2013 to install and maintain an IP VPN to be used by the NATO-Russia Council Co-operative Airspace Initiative (NRC CAI).
The aim of the partnership was to enhance airspace transparency between NATO and Russia, identify any suspicious aircraft activities and provide early warnings through the monitoring of NATO-Russian airspace.
A recent report from the Strategy Analytics Advanced Defense Systems (ADS) service highlights the growing importance of military communications and the challenges that lay ahead.
“Managing bandwidth in increasingly congested spectrum will be a key challenge in meeting future demands for data-centric military communications,” says Asif Anwar, director at ADS. “This is leading to the use of higher frequencies, particularly evident in the military satellite communications segment.”
Moving forward, other key areas for telecoms in the defence sector include multi-mode and multi-band radio solutions.
In February this year, Level 3 signed its 25th consecutive contract to act as the official television broadcaster of the Super Bowl in the US.
For the first time in history, the event – one of the most-watched television events in the US each year – was broadcast in Times Square, New York in collaboration with FOX Sports, and required a hybrid set of telecoms solutions.
“A lot of sport is watched live and it is becoming a very interesting market,” says Passingham. “I think the traditional media landscape is going to change quite a bit in the next few years.”
Traditional broadcast services are gradually being moved online and the sector has changed almost unrecognisably over the last ten years. Live streaming is putting an enormous strain on networks, heightening the importance of content delivery networks (CDN).
According to estimates, the total CDN market is expected to reach $7.4 billion by 2017 with a CAGR of 24.6%. Last November, Level 3 announced it was extending its CDN through additional PoPs in Asia, Europe, the Middle East, Africa and Latin America.
“One of the biggest growth areas for Level 3 has been around CDN,” Passingham says.
Its rival Verizon is also set to more aggressively target opportunities in the CDN space, after acquiring CDN provider EdgeCast Networks for a reported $350 million.
Carriers will also be conscious of the arrival of the next-generation digital video format, 4K HD. Although still some years away from mainstream adoption, 4K Ultra HD is expected to deliver four times the resolution of existing high definition, and, like for like, the technology could quadruple the amount of traffic on networks as a result.
In December last year the Irish government announced that it was significantly increasing the amount of money it will spend on healthcare IT services as part of a seven-year strategy to transform its health services and boost its economy.
“Ireland’s extensive IT and healthcare industry sectors make us very well placed to exploit e-health, not just to radically improve our own health services, but as an emerging area within the wider ICT industry,” says James Reilly, Ireland’s health minister.
E-health services are a growing global phenomenon and Emmanuel Walckenaer, head of enterprise solutions at Sierra Wireless, notes healthcare at home solutions as a particular driver in the vertical.
These solutions are designed to reduce hospital costs by allowing patients to carry out a number of basic tasks at home. “There are distributed applications at home where, for example, you can take your own blood pressure and upload the results to the doctor or the hospital remotely,” he says.
Despite its global uptake, e-health services are still working largely on 2G and 3G networks.
Walckenaer says that LTE services are being used minimally for applications such as video, but he believes this will be the natural next step for connectivity in the sector.
“I don’t see LTE usage in healthcare right now but I am absolutely sure it is going to come,” he says.
