Photo credit: #puppetsontour during Puppet Animation Festival 2013 by Puppet Animation Scotland
The Korean animation industry is one of the largest in the world, coming in behind the animation industries of Japan and the United States. At present, there are well over 260 animation studios in the country, with countless free-lance animation specialists who will provide material for the animation studios, many of whom do not have the computational capacity to produce feature-length animation films in-house.
In the past, animation was mostly geared towards children, however, as computers have become more and more sophisticated, animated films are now geared towards adults as well, some of whom have become fans of Korean produced anime-type shows.
The major animation markets are the United States, Canada, Japan, China, France, Korea, Germany, and the United Kingdom. Animation companies in those countries are increasingly taking advantage of the talent that is available in Korea and outsource their work to highly skilled freelancers.
Another reason why companies are choosing to outsource animation work to Korea is the availability of inexpensive computer animation platforms such as cloud computing-capable supercomputers. Making the case for outsourcing animation work to Korea even more interesting is the fact that workers in the animation industry receive lower wages than their counterparts in the United States and Europe.
Opportunities for Mexico in the Korean animation industry
Thanks to the tremendous computing capacity that’s available in Korea and necessary for modern, cutting edge animation, many companies from the U.S. and Europe will outsource their animation work to artists and animation specialists in Korea. While at first glance a person might think that there would be no opportunity for Mexicans in this arena, the truth is that there are possibly infinite opportunities.
The first opportunity is for Mexican animation specialists. Because the animation industry in Korea is so decentralized with even the main animation producers using cloud computing rather than in-house hardware and software, most of the outsourced work from abroad gets “re-outsourced” – some sections of a project will be given to local freelancers, and other sections of a project may be given to animators from India or China. If a Mexican freelance animation company has the skills a Korean producer wants, chances are highly likely that he or she will get hired.
The second opportunity for Mexico in the Korean animation industry is for local Mexican work to be outsourced to Asia. In other words, if a Mexican broadcaster wants an animated television show, they can hire a Korean company to do it. Along with all of the technical expertise in the hands of a Korean animation firm, they’ll also get the internationally recognized talent of Korean animation specialists.
The third opportunity for Mexico in the Korean animation industry is providing the necessary computational power. At the moment, there are several supercomputers operating in Asia such as the EKA computer that provide cloud computing capabilities, which eliminate the need for expensive hardware. If Mexican companies can provide the same levels of cloud computation and provide the same animation talent, they could very well take over all of the outsourcing work from the United States and Japan that is currently going to Korea.
Finally, Mexico has recently passed the telecom reform to open free-to-air TV to foreign investment and increasing caps on CATV and data networks. Competitive content, like Korean animation, will be needed. Licensing, production-on-demand, localization, VOD and broadcasting businesses will be on the rise.
Photo credit: Cut down to size by Adrian Nier
Last April 30, Mexican Congress finally approved the Constitutional Reform on telecom (and anti-trust). Now it is time for the 31 State Congresses to review and approve. If any 16 Congresses approve the Reform, it will become a finished Reform. State of Mexico was first. Jalisco and Querétaro are on their way.
Then, what is next? The secondary regulation, meaning discussing/approving amendments to Telecom Law, Radio and TV Law, CATV Regulations, Satellite Regulations, Regulations to Telecom Law and many other. As has been discussed in the fora, making a uniform Telecom legislative body comprising and putting together all segments of the market. Yes, this is because every telecom service is convergent and data-driven, and yes, law is for regulating these trends.
Some of my next posts will address the hottest topics on secondary regulation. I will write on topics that media or specialists have not discussed enough or at all.
Can´t wait? Want to suggest something? Let me know … #TelecomReformMX
Photo credit: VIA Telecom Booth by VIA Gallery
Maybe you have been following my latest posts on the approval process for amending the Mexican Constitution in relation to Telecom (and anti-trust). If not, I suggest you read How I Learned to Stop Worrying about Telecom and Love the Pact or Don´t Panic: The First-Mover Guide to the New Mexican Telecom Bill.
House of Representatives delivered the Bill with amendments to the Senate for second time, and Senate will vote minor revisions by April 30, 2013. If approved, it will go for approval to all 31 States of Mexican Republic. A minimum of 16 States will be required, and then Congress will declare the Constitutional Amendment going for publishing at the Federal Official Gazette.
Along will come secondary laws and regulations to update the regulatory framework and catch up with new technologies, which is expected to happen during next 6 months. This is the major overhaul on telecom regulation since early 1990´s, when Telmex was privatised and a Telecom Law was published for first time.
However, while our eyes are all over the Telecom Bill, there are other events shaping already the telecom industry like:
1. MVS is got a major victory at the Supreme Court versus recall of spectrum for 2.5 GHz band. Mexican Government, must likely, will negotiate a license to use a part of this band to MVS. Could MVS pitch Intel and Clearwire to launch its broadband project?
2. Digital TV is arriving earlier to Tijuana (May 28). While this will not move the calendar for other cities, it will certainly be an incentive for independent producers of HD content to hurry up. Also, a part of 700 MHz band will be recovered.
3. Comisión Federal de Telecomunicaciones (COFETEL) started public consultation on satellite services. Mexico has already launched Satellite “Bicentenario” last December 19, to become first of three satellites in the MexSat Fleet. Connectivity is on the rise.
4. COFETEL is retaking the project for consolidating 397 long-distance areas to 173. While this will hit the long-distance business, it will certainly open opportunities for local services.
5. COFETEL has finished the process for approving the Regulations for the Telecom Registry. These Regulations will simplify the process for acts to be registered (i.e. tariffs).
6. The Service Level Interconnection Agreement is in process of being discussed and approved. The approval will mean certainty for new entrants to the market.
Mexican telecom industry grew 15.1% during 2012 (in relation to 2011), so I am thrilled to see how these Reform and secondary regulation will soar this growth. How about you? Let me know what you think.
Photo credit: Telecom Antenna by Alberto Esenaro
I believe it was Winston Churchill who said “He who fails to plan, plans to fail”. Telecom business is no different. For that, it is important to consider all events related to the industry. November, final month of Calderon´s Administration, events on the telecom industry have happened, and could open many opportunities.
1. Federal Telecommunications Agency (COFETEL) resolved to recommend before Ministry of Communications (SCT) the granting of satellite license to Tangerine Electronics for public telecom network, private telecom network and value added services. Satellite “Bicentenario” will be launched next December 19, to become first of three satellites in the MexSat Fleet. One of the objectives of MexSat will be to connect isolated and low-income areas of Mexico.
2. Sigma Networks México, Megacable, Metronet, NII Digital, IP Matrix and Corporación Universitaria para el Desarrollo de Internet (CUDI) announced the formation of an association for operating the first Internet Exchange Point (IXP) in Mexico, in order to reduce cost of traffic exchange and data latency. This is a private project, but will have full back from Ministry of Communications (SCT) and Federal Telecommunications Agency (COFETEL). The modest investment of $200,000 USD will make more cost-wise the transport of big data (if other IXP are successfully set up).
3. SCT freed spectrum frequencies from 5,470 to 5,600 MHz and 5,650 to 5,725 MHz, to be used by general public without need of license, permit or registration, and for setting up local area networks. However, devices must still be certified before COFETEL, for preventing interference with other frequencies. There are some restrictions of maximums of 250 mW broadcasting power and 1 W equivalent isotropically radiated power.
4. Currently, many telecom licenses contain different obligations and rights, depending upon the time they were granted. This is because the original Telecom Law was not technology neutral and had excessive controls from Government. Last months, SCT has been working on making a standard telecom license for operators that do not use the spectrum. Likewise, SCT has just made official a new proceeding for requesting a telecom license.
5. Sales of Mexican telecom industry grew up 15.1% during third quarter of 2012 (in relation to 2011). In same quarter, mobile broadband grew up 56.4% and prices to internet service dropped 13%. These figures are announcing a bigger demand of bandwidth in the near future: the mobile broadband future.
Many other events and regulations will come with new administration of Mr. Peña Nieto, who has been very emphatic that will open the telecom market for telephony and free-to-air TV. Let´s see what open means.
Photo credit: The first European antenna for ALMA is handed over to the observatory by European Southern Observatory
It was the best of times for MVS in 1989, now forth largest telecom operator in Mexico. By then, it was awarded with a part of the 2.5 Ghz band of the spectrum. With time, it negotiated and obtained 90% of the band that nobody wanted. Originally planned for microwave CATV, MVS pioneered in pre-wimax technology partnering with Intel and Clearwire on 2003.
By 2005 its first concession titles started to expire and engaged into negotiations with Ministry of Communications (SCT), and on 2008, MVS launched Dish in Mexico. With billing help from Carlos Slim, this project successfully targeted low-income segment. On 2010, negotiations with SCT failed.
On 2011, MVS pitched to SCT a project called “Broadband for Everyone” (Banda Ancha Para Todos) teaming up Clearwire, Intel and Alestra (former Mexican Partner of ATT) to offer broadband under a carrier-of-carriers model. MVS had an estimate of 55 million of users. The Project was upheld on negotiations until 2012, but received the approval from Anti-trust Commission (COFECO) and at first by Telecom Commission (COFETEL), which thereafter revoked.
It was the worst of times for MVS on August 8, 2012. SCT started the recovery of 2.5 Ghz band from all concessionaires, even those that expire on 2020. This action would affect 11 telecom operators, heavily to MVS, owner of 190 Mhz. The arguments were the low use of that band from MVS. Thereafter, SCT argued consideration. Supposedly, Government set price of renewal for $2 Billion USD and MVS offered $860 Million USD returning 50 Ghz. MVS further argues that it will pay a consideration adjusted to income per capita of Mexican consumer.
Aside from legal and technical arguments, MVS made serious accusations to Government on favouring Televisa with the recovery proceeding and future re-auction, but Government denied them. Furthermore, MVS escalated this proceeding associating the recovery with the firing/rehiring scandal of radio journalist Mrs. Carmen Aristegui during February 2011, adding up a freedom of speech element to the story.
Leaving aside scandals, the recall proceeding is on its way. SCT has even declared that might resolve on making a partial recovery or not making it at all. A Federal Court has already denied an injunction on the grounds of public interest of recovery for implementing new technologies, but there is still one pending to be resolved. Mr. Vargas and his lawyers have anticipated a 5-year litigation with an uncertain outcome. Other concessionaires have presented constitutional injunctions.
On the other side, we have the 700 Mhz band or “digital dividend”. COFETEL already started works to segment that band. Currently, Mexico uses most of that band for free-to-air TV, being Televisa a main player on that. Supposedly, a document is being prepared by the Regulatory Prospective Unit and will be presented to COFETEL Commissioners for approval. From official documents, it appears that the band will be used for mobile broadband, but timeframes, auction and recovery, if any, are yet to be determined. When digital TV is fully deployed by 2015, this band would be freed and re-auctioned.
Calderon Administration is leaving on December 2012, and there is not enough public information to foresee the outcome, but one thing is certain: if parties follow the way of the court, victory will be pyrrhic for either of them.
However, no matter what path SCT and COFETEL will follow, five key resolutions from Supreme Court will play main role on their forthcoming decisions on those bands:
- Government has the right to recover spectrum for implementing new technologies. Will Government have the right timing and resources to overhaul telecom regulation before we face spectrum scarcity, and then price increases? Is carrier of carriers a feasible model for broadband? Again, Calderon administration is handing over to next one, and this process might affect the pace of telecom agenda.
- Government has the right to receive a consideration for spectrum use. Under official information, Government followed rules for setting up consideration based on average OECD income per capita. However, as MVS argues that such adjustment must be according to Mexican income. Economists have wide debates over spectrum valuation and there is not a fair market price on that, so Mexico needs to develop its own valuation method rather than importing or referring to other countries auctions.
- Renewals of concession titles are not automatic for radio and TV. Right holders must participate in an auction against other competitors, but will have the right of first refusal on a tie-in. Certainly, this criterion may be applied to other spectrum-based services, but it is a grey area whether or not could be applied to recovery proceeding.
- Authorities must not privilege economic terms over benefits to society in spectrum auctions. And here is where MVS, having a relatively small market share on CATV and barely any on broadband, may benefit its cause.
- Internet is a basic service necessary for the development of the Country. In this resolution, Supreme Court makes a small cameo on declaring right to internet access. This basic service status does not automatically translates into a universal service policy, but certainly, is a basis for supporting the need of expediting development of broadband infrastructure before mobile internet users breaks down operators backbones, again.
There seems a groom outlook going around believing that Mexican telecom industry is a war between a telephone tycoon and a media mogul. I believe it is more than that. It is certainly a contact sport with a political show on half time.
However, nobody is acknowledging three factors that are moving this industry ahead. The first, NGOs and organized citizens are demanding updates on regulation of telecom and media. The second, technology is not static and disruptive technologies, such as IP solutions, will eventually break the status quo. The last one, cost for content production has been dramatically reduced, and traditional media does not longer monopolize popular and marketable content.
Bottom line, the big data age is just a tool for the ideas age. Now, content is king. Think of that before you build your next business.