MarketLineIC_Global Internet Access Market Supply Chain Analysis_170922.pdf

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1、Global Internet Access Market:Supply Chain Analysis-MLVC001-054Global Internet Access MarketSupply Chain AnalysisMLVC001-054Global Internet Access Market:Supply Chain Analysis-MLVC001-054Table of Contents2Complete Supply Chain:OverviewComplete Supply Chain:Overview(contd)Infrastructure:OverviewInfra

2、structure:AnalysisInfrastructure:Burning Issue Indian infrastructure expansionISP:OverviewISP:AnalysisISP:Burning Issue Improving CompetitionDevices:OverviewDevices:AnalysisDevices:Burning Issue Smartphones overtake PCsEnd-User:OverviewEnd-User:AnalysisEnd-User:Burning Issue Internet under strain am

3、id COVID-19AppendixGlobal Internet Access Market:Supply Chain Analysis-MLVC001-054Complete Supply Chain:Overview3InfrastructureFiber-opticMicrowaveRouting EquipmentSatelliteWi-Fi MastISPAccessMailboxHostingVirtualTransitFreeDevicesPersonal ComputersTabletsSmartphonesLaptopsEnd-UsersIndividualsBusine

4、ssesOrganizationsThe global internet access market can be broadly split into four stages:infrastructure,ISP,devices and end-users.Global Internet Access Market:Supply Chain Analysis-MLVC001-054Complete Supply Chain:Overview(contd)4The global internet access market can be broadly split into four stag

5、es:infrastructure,ISP,devices and end-users.Due to the scale of the supply chain,each segment is dominated by very large companies,but many maintain popularity in one or a few georgraphical marketsInfrastructureSSLBT OpenreachHFCLCiscoOptralISPAT&TComcastChina TelecomTelefonicaOrangeComputersAppleMi

6、crosoftSamsungLenovoAcerEnd-UsersIndividualsBusinessesOrganizationsGlobal Internet Access Market:Supply Chain Analysis-MLVC001-054Infrastructure:Overview5Infrastructure can be divided between physical and remote.Most people,businesses and organizations will have access to the internet via fiber-opti

7、c cables,but for remote areas microwave or satellites become viable options.InfrastructurePhysicalFiber-opticRouterRemoteMicrowaveSatelliteWi-Fi MastSome ISPs own and operate an extensive physical network themselves,such as BT throughOpenreach.Global Internet Access Market:Supply Chain Analysis-MLVC

8、001-054Infrastructure:Analysis6Internet infrastructure can be divided between physical and remote.Each requires very specialist equipment whichvaries wildly in cost and is subject to different government rules and subsidies.Physical infrastructure mainly takes the form of lines laid into the ground.

9、Much of the internet infrastructure around theworld still exists in the form of broadband cables that replaced dial-up connections in which internet and phone use tookplace on the same line.Fiber-optic broadband is becoming increasingly common and internet providers are increasingly using connection

10、speeds as a sales point,even promoting it above cost.The amount of fiber-optic accessibility around the world varies alot.Countries such as South Korea have invested heavily into upgrading the internet network,whilst the likes of theUnited Kingdom have so far failed to match the same degree of inves

11、tment.Remote internet access is becoming more common partly thanks to reductions in cost but also intent from governmentsto ensure even isolated areas are able to enjoy fast internet speeds.Subsidies have encouraged companies toexamine rural areas as well as focussing attention on major built-up are

12、as.Remote internet can be achieved primarily through one of two means:satellites or microwaves.Both are expensivecompared to conventional internet access,limiting their use to only the hard-to-reach locations.A significant amount internet infrastructure around the world still exists in the form of b

13、roadband cables;however the fiber optic segment is the largest.Global Internet Access Market:Supply Chain Analysis-MLVC001-054Infrastructure:Burning Issue 7Expansion of internet use in India reveals developing countries can take an alternative infrastructure pathcompared to that taken by developed c

14、ountries,but major infrastructure holes remain.Considering that internet penetration in India stands atonly around 36%at present,the potential for growth in thismarket is huge.Despite the fact that internet penetration islow in India,this figure has been rising along with thevolume of internet subsc

15、ribers.India has overtaken theUS in terms of subscriber numbers and is now onlysecond to China.Growth in the Indian market in recentyears has been fuelled both by increased investment intheinfrastructureandnetworksupportingwirelessconnectivity,and the rising popularity of smartphones.Indian infrastr

16、ucture looks very different to that found inwestern nations.Almost all access is gained wirelessly;only 4%of access is through fixed-line.Domination bywireless shows the infrastructure development route tofulfil customer demands is possible with Wi-Fi hotspots.However,this can only take India so far

17、.To improve,moretraditional infrastructure is planned.The Indian government is planning on constructing much moreextensive internet networks.Plans include buying one millionkilometres of optical fiber to connect the 239,000 village-leveladministrative units.Telecom companies will be provided withtar

18、iffs 75%lower than would normally be the case.Moreover,it was announced in 2020,that India plans to launch highthroughput satellites that can beam high-speed internet atmore than 300 gigabytes per second into remote corners,according to the Indian Space Research Organisation(Isro).Global Internet Ac

19、cess Market:Supply Chain Analysis-MLVC001-054ISP:Overview8ISPs come in six different forms:access,mailbox,hosting,transit,virtual and free.Most consumers will only use an access ISP and mailbox ISP.ISPAccessMailboxHostingTransitVirtualFreeMost consumers of the internet will use access ISPs and mailb

20、ox ISPs.However,as more personal computing is done on the cloud,hosting ISPs are increasing in demand.Global Internet Access Market:Supply Chain Analysis-MLVC001-054ISP:Analysis9ISPs can be broken down into six sub-types,but for most people they will only ever come into contact with two the remainde

21、r have specialist uses.Access ISPs is how most internet users will access the internet.When someone connects to the internet through abroadband service,they will be using just such an ISP.Mailbox ISPs are available through the access ISP.These are used for sending and receiving emails as well as fil

22、ehosting services such as dropbox.Hosting ISPs are most commonly used by businesses but the rise of cloud computing means more individual users areusing these providers.Greater numbers of people wish to access large files on devices that would not normally besuitable,but cloud computing has no such

23、barriers.Consequently this type of ISP is becoming subject to higherdemand.Transit ISPs are not normally known to ordinary people accessing the internet but they are an important part of theinternet infrastructure through which information flows.These provide large amounts of bandwidth needed to con

24、necthosting ISPs and access ISPs together.Virtual ISPs(VISP)purchase services from another ISP that allows customers to access the internet through more thanone point of presence(PoP).These are important for the ability of groups to remain in contact with one another.Global Internet Access Market:Su

25、pply Chain Analysis-MLVC001-054ISP:Analysis10Some developing markets are dominated by state-owned ISPs,leading those in competitive markets tocompete ever harder to win over customers.Even though the number of people in the world that do not currently have internet access is vast(China for instance

26、has 60%penetration rate,suggesting the number of people to gain internet access in the near future will continue to balloon),competition for many ISPs is due to become tougher.Even large ISPs such as Comcast,which has more than 20 millioncustomers in the United States,is limited in the number of cou

27、ntries the company operates in.Fast growing markets such asChina are beyond the reach of private companies the leading players are all state-owned,a situation that is somewhatunlikely to change any time in the near future.Consequently leading access ISPs must concentrate on the core markets,butthis

28、has forced down margins as competition rises.With limited scope for differentiation on connection speeds,leadingcompanies advertise heavily on price competitiveness.IfclaimsfromtheFederalCommunicationsCommission(FCC)in the United States that netneutrality prevents smaller ISPs from growing turnout t

29、o be correct,the ending of net neutrality in theUS will enhance competition in a market which hasbeen accused of not having enough.For leadingISPs the impact which competition has on productoffering could very well be about to intensify.Global Internet Access Market:Supply Chain Analysis-MLVC001-054

30、Devices:Overview 11Devices used to access the internet remain dominated by personal computers and laptops,but larger numbers of people in developing countries are using smartphones in the absence of full broadband networks.DevicesTabletsLaptopsPersonal ComputersSmartphonesDue to the density of mobil

31、e penetration all over the world,wireless internet access has grown rapidly.Global Internet Access Market:Supply Chain Analysis-MLVC001-054Devices:Analysis12Devices used to access the internet remain dominated by personal computers and laptops,but larger numbers of people in developing countries are

32、 using smartphones in the absence of full broadband networks.Personal Computers(PCs)remain the primary means by which many people access the internet despite the rise ofalternative options.However,increasingly the use of such devices is being constrained to tasks that are easier toperform on a PC th

33、an on other devices such as tablets or smartphones.Although sales have suffered due to greateruse of tablets for internet video viewing,the death of the PC is predicted to be some way off yet.Laptops have become more popular thanks to improved performance,reliability and durability compared to previ

34、ousgenerations.The ability to use them in similar fashion to a tablet but also perform many of the same tasks a PC wouldhas helped to sustain these devices as a popular means of accessing the internet.Smartphones have proved to be popular in countries such as India,which does not have the same advan

35、cedbroadband network that many advanced economies do.Low costs of purchase and relatively cheap access to data hascaused their popularity to soar around the world and propel the devices to a leading means of accessing the internet.Tablets have been declining in popularity as many people use smartpho

36、nes for the purposes(such as watching video)that tablets are primarily designed for.Sales have been in decline for years and few expect that section of theconsumer electronics market to recover quickly.Global Internet Access Market:Supply Chain Analysis-MLVC001-054Devices:Burning Issue13In many coun

37、tries smartphones are now the leading means of accessing the internet,demoting PCs and laptops.In August 2015 it was first reported that smartphones had overtaken PCs and laptops as the most popular device for accessing theinternet in the United Kingdom.UK regulator Ofcom found people to be using sm

38、artphones twice as much for internet accesscompared to the alternatives and the amount of people using their phones to access the internet has increased from 20%nearly adecade ago,to 73%in 2018(the latest available study).Moreover,people in the UK now check their phone on average every 12minutes dur

39、ing the waking day.Smartphones are now used by 78%of the population compared with just 17%in 2008,the yearafter the first iPhone was launched.Wireless access dominates globally,accounting for over three-quarters of the market.Expanding use has been aided by the rise of internet shopping.Being able t

40、o buy products online without needing to log into acomputer is an important point of convenience which has increased the appeal of such devices.The creation of large data contractswhich are affordable to most people removed a stumbling block,allowing the smartphone to become the most convenient opti

41、on forinternet access.Large data allowances enable users to watch lengthy videos,helped by ever more sophisticated and reliabletouchscreens.Whilst the demise of PCs and laptops has been predicted before,therise of smartphones has had a profound impact upon tablets.Increased computing power has negat

42、ed the need for consumers,many of whom still own a PC or laptop,to buy another device.Smartphones show little sign of slowing down any time soon,possiblycondemning tablets to niche status.Global Internet Access Market:Supply Chain Analysis-MLVC001-054End-User:Overview14End-Users largely comprise ind

43、ividuals.Although most businesses and organizations will have access to the internet,the amount of time spent accessing the internet will be somewhat less than for individuals.End-UserIndividualsBusinessesOrganizationsGlobal Internet Access Market:Supply Chain Analysis-MLVC001-054End-User:Analysis15

44、Whilst custom from businesses and organizations is sizeable,individuals dominate end-users simply by being a large group.End-users are dominated by individuals,the number of which accessing the internet continues to rise at a very fastpace in the developing world.Just over half of those living in Ch

45、ina have access to the internet,and many more areexpected to follow soon.However,in such countries brand loyalty is not a relevant factor because the leading playersare state-owned.Maintaining an internet connection is essential for businesses to communicate with one another and for employeeswithin

46、that business.The formalization of the informal economy in countries such as India should result in morebusinesses having an online presence;although progress towards this has been slow,the government program toincrease broadband coverage should prove fruitful.Organizations have much less of a need

47、for internet access but in developed countries most have come to dependupon file sharing systems and social media to organize and promulgate information.Whilst these end-users are notespecially valuable to the other sections of the supply chain,they are important in getting individuals online.Indivi

48、dual end-users spend more time online thanks the amount of social interaction which now takes place throughsocial media.Online shopping has also radically increased the amount of time the average person spends online,helping to encourage more people to pay for an internet connection.Global Internet

49、Access Market:Supply Chain Analysis-MLVC001-054End-User:Burning Issue16The internet comes under strain amid COVID-19 overuse.According to the European Commission,The EUs internetinfrastructure is under strain and a series of measuresshould be implemented by online streaming platforms as ameans to mi

50、tigate the higher demand for bandwidth amidthecurrentcoronavirusquarantineperiod.Duetolockdowns,there has been a greater reliance on theinternet,with work,school and university all movingonline.Video calling service Zoom took offdue toincreased demand.This move of business and educationto the intern