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World Regulatory Trends and World Regulatory Trends and Challenges for Caspian and Challenges for Caspian and Black See RegionBlack See Region
Jaroslaw K. PonderJaroslaw K. PonderStrategy and Policy Unit
International Telecommunication Union
Advancing in Telecommunications Regulation- 1st Black Sea and Caspian Regulatory Conference –
25-27 May 2006, Istanbul, Turkey
Note: The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU. Jaroslaw K. Ponder can be contacted at [email protected]
25 May 2006 [email protected] 2
AgendaAgenda
• Trends: The ICT sector• Trends: Regulatory environment• Necessary actions• ICTs: Caspian and Black See Region • Policy and Regulatory Challenges• Conclusions
25 May 2006 [email protected] 3
Trends: ICT SectorTrends: ICT Sector
• Progressing regulatory reform: Pro-competitive policy / Universal
service/access… • Expansion of mobile
industry and the Internet • High innovation dynamics• Falling prices of the ICTs:
Hardware / Software / Services • New requirements:
Bandwidth Generalized mobility Convergent solutions Open character
25 May 2006 [email protected] 4
Trends: Broadband AccessTrends: Broadband Access
Evolution in Pricing Strategy
133143
166
0
20
40
60
80
100
120
140
160
180
2004 2005 2006
Num
ber
of c
ount
ries
Data TimeBoth Flat-rate
75%68%
81%
Number of countries with broadband commercially available
81
113
133145
166
0
20
40
60
80
100
120
140
160
180
2002 2003 2004 2005 2006
T
Median price and speed, 2004-6
0
200
400
600
800
1'000
1'200
1'400
1'600
1'800
2004 2005 2006
Sp
ee
d (
kb
ps
)
0
2
4
6
8
10
12
14
16
Pri
ce
(U
SD
pe
r 1
00
kb
ps
)
Median speed
Median Price inUSD/100 kbps
Growth in max. broadband speeds
0
5
10
15
20
25
30
35
40
Speed (kbps)
2003 2005 2006
2005
2003
2006
25 May 2006 [email protected] 5
Trends: Broadband AccessTrends: Broadband Access
Table 1: Broadband prices for the cheapest fifteen economies.
Speed Price per US$ per Change Economy Company kbit/s month US$ 100 kbit/s 2005-06
Japan Yahoo BB 51'200 14.2 0.07 -12.5%Korea (Rep.) Hanaro 51'200 40.59 0.08 --Netherlands Internet Access Ned. 20'480 27.97 0.14 -81.3%Taiwan, China Chunghwa 12'288 22.67 0.18 --Sweden Bredbandsbolaget 24'576 56.08 0.23 -6.5%Singapore StarHub 30'720 73.17 0.24 -85.0%Italy Libero 12'288 37.23 0.30 -73.8%Finland Elisa 24'576 85.64 0.36 -51.4%France Free 10'240 37.29 0.36 -90.1%United States Comcast 4'096 20.00 0.49 --Germany Freenet.de 6'016 30.95 0.52 --United Kingdom Pipex 8'128 50.89 0.63 -53.6%Hong Kong, China Netvigator 6'144 51.17 0.83 -0.1%Portugal Sapo 8'128 75.82 0.93 -0.8%Canada Bell 4'096 41.26 1.01 -3.93%Average 18'278 44.33 0.43 -45.5%Best practice (top 20%) 40'960 27.59 0.10 -46.9%
Broadband prices for the cheapest fifteen economies
25 May 2006 [email protected] 6
TeleCommunication Sector in TeleCommunication Sector in TransitionTransition
• Meaning and character of communications Voice, Video, Data, SoD
• New sell and prices strategies coming from IP-enabled flexibility on the operational level NGS: N-play services Falling prices of communication services and
access Traditional services lose strategic meaning Personalization and customization
• Regulation Less regulation / blurred boundaries Migration from vertical to horizontal approach Technological neutrality becomes meaningful
25 May 2006 [email protected] 7
Trends: ICT SectorTrends: ICT Sector
• Migration to the IP-environment Fixed telecommunications
Incumbents: British Telecom, DT AG, KPN Newcomers: Dialog, Metropolitan Networks
Wireless communications Mobile telecommunications: from 2G to 4G WiFi, WiMax
Cable TV Broadcasting Service and content providers
• Strengthened process of convergence Technology Market Services Institutional
FMC?Regulatory Implications
Mul
ti-fa
cilit
y co
mpe
titio
n
Servicecompet.
25 May 2006 [email protected] 8
NGNs as a global issue NGNs as a global issue Technical aspects Technical aspects
ITU-T SG 13: Rec. Y.2001ITU-T SG 13: Rec. Y.2001A NGN is a packet-based networkpacket-based network able to provide telecommunication services and able to make use of multiple broadbandmultiple broadband, QoS-QoS-enabledenabled transport technologies and in which service-relatedservice-related functionsfunctions are independentindependent from underlying transport-related technologiestransport-related technologies. It enables unfettered accessunfettered access for users to networks and to competing service providers and/or services of their choice. It supports generalized mobilitygeneralized mobility which will allow consistent and ubiquitous provision of services to users.
ChallengesChallenges Multimedia Generalized mobility Convergence Integrity Multi-layer orientation Open character
FG NGN
SG: 11, 13, 19, 2, 12, 16, 17
AsiaAmerica
Europe
ITUNGN
Africa
25 May 2006 [email protected] 9
IP-enabled NGNsIP-enabled NGNsA global issueA global issue
Regulatory considerations • Three background papers
Rulling new and emerging marekts Interconnection in an IP-enabled NGN
Environment Universal Service in an IP-enabled NGN
Environment
• Regulatory proceedings National, Regional, International level
http://www.itu.int/osg/spu/ngn/http://www.itu.int/osg/spu/ngn/
AsiaAmericas
Europe
ITUNGN
Africa
Study Group 1
• Tariff policies, tariff models and methods of determining the costs of services on national telecommunication networks, including next-generation networks
• Regulatory impact of next generation networks on interconnection
25 May 2006 [email protected] 10
NGNs as a national issue NGNs as a national issue Multi-stakeholder approach Multi-stakeholder approach
• Broad framework on interconnections and general regulatory framework United Kingdom: Interconnection and Developing India: Recommendations on Issues pertaining to Next
Generation Networks USA: Hearing on network neutrality
• Focused approach Germany: e.g. IP Interconnection Netherlands: e.g. Emerging markets
• Advisory forums Australia: Industry Forum to Advise on
Convergence Issues Japan: Next Generation Network promotion forum UK: NGN Industry Body India: Joint Consultative Committee &
NGN Coordination Committee
25 May 2006 [email protected] 11
Needs for a new regulatory paradigm Needs for a new regulatory paradigm under regional and intl. discussionunder regional and intl. discussion
• ERG: 2006 Common Positions Principles for IP interconnection Regulatory principles for NGNs
• CEPT Consultations on interconnection model Many activities related to non-economic regulation
• CITEL and APEC-TEL Convergence, NGN, VoIP
• OECD Studies on IP related issues
• WTO First considerations on Agreement on Basic
telecommunications • ITU
Global discussion / What rules on the IP-enabled NGNs? (March 2006) / Future of Voice (January 2007)
25 May 2006 [email protected] 12
New and Emerging marketsNew and Emerging markets
• SMP concept Fundamental regulatory questions
confronted with long term goals of the economic and industrial policy
Discussion on implications of the regulatory holidays
• Relevant markets Wholesale – New access technologies do
influence in particular broadband definitions Retail – all market may be redefined
• New balance between ex-ante regulations and ex post remedies
• Effectiveness of self correcting forces in a competitive marketplace
25 May 2006 [email protected] 13
Interconnection in IP environmentInterconnection in IP environment
• Distinctions in periods Transitional and mature
• Competition oriented regulation It is possible that in NGN environment the
intervention in setting the interconnection agreements will be smaller
• New model? Conflict between technology independence,
cost based regulation, and significant market power. For the migration phase zero or low rate model for call termination may be advantageous. In the long term new model (see ECC 2005) with full separation of services provision and connectivity.
25 May 2006 [email protected] 14
Open character and realityOpen character and reality
• Telco Model versus Internet Model • Similar to the internet
NGN offers horizontally integrated model with separated NGN services and NGN Transport layer
• Market structure Very different
• Who determines the openness Vertically integrated services and network
operators together with regulatory obligations
• Meaning of the contnet providers still underestimated in the discussion
25 May 2006 [email protected] 15
Next Generation Universal ServiceNext Generation Universal Service
• Definition of the universal service and the scope of the services to be included Inclusion of the broadband in Europe
triggered very difficult debate • Possible change of approach
Migration to the universal access approach • Unified prices and affordability• NGN is much more efficient
CAPEX and OPEX up to 40% lower More services on the network
• Universal service funds Possible sources of financing
• Customer protection
25 May 2006 [email protected] 16
Customer interests protectionCustomer interests protection
• Universal service and access • Consumer emergency calls (E112/E911)• Consumer protection and privacy (e.g.
SPAM, SPIM)• Quality of services• Authenticated caller or sender
identification• Disability assistance• Data protection and privacy issues
25 May 2006 [email protected] 17
Conclusions Conclusions
We all build the Information We all build the Information Society togetherSociety together!!
25 May 2006 [email protected] 18
ConclusionsConclusions
• NGN will bring significant changes for the regulatory framework
• The changes will be implemented rather in a way of natural evolution then drastic revolution
• Competition is key to the NGN; on the other hand NGN fosters competition new entrance opportunities for operating
companies as well as newcomers / NGN creates new markets and reinforce position of some market players
• New balance between ex-ante regulations and ex post remedies
25 May 2006 [email protected] 19
ConclusionsConclusions
• Effectiveness of self correcting forces in a competitive marketplace
• The tempo of the NGN deployment depends on the effective regulation
• Regulatory proceeding determine incentives to invest for both new entrants and incumbents
• Regulatory policy should take into account the dynamic efficiencies dynamic efficiencies to be achieved in the ICT sector
• BalanceBalance between facility based competition and service based competition should be preserved
25 May 2006 [email protected] 20
Implications for the regionImplications for the region
• NGNs may develop much faster develop much faster in countries with poor infrastructure
• Regulatory harmonization harmonization and pro-active pro-active participation participation in the debate on the future regulatory paradigme is crucial
• It diminishes investment risk that is very high in transition economies anyway
Please do not wait and give your voice to this debate!
25 May 2006 [email protected] 21
Information and Communication Information and Communication Technologies in Caspian and Technologies in Caspian and
Black See RegionBlack See Region
We all build the Information We all build the Information Society togetherSociety together!!
25 May 2006 [email protected] 22
Measuring Measuring Opportunities Opportunities
1/3 1/3
1/3
DOIDOI
OpportunityOpportunity UtilizationUtilization
Infrastructure
Digital Opportunity Index
WISR 2006WISR 2006New ITU’s SeriesNew ITU’s Series
25 May 2006 [email protected] 23
Digital Opportunity Digital Opportunity IndexIndex
DOIDOI
percentage of population covered by mobile cellular telephony
percentage of population covered by mobile cellular telephony
internet users per 100 inhabitants
Proportion of households with fixed line telephone
mobile cellular tariffs as a percentage of per capita income
mobile cellular tariffs as a percentage of per capita income
internet access tariffs as a percentage of per capita income
internet access tariffs as a percentage of per capita income
ratio of broadband internet subscribers to
internet subscribers
ratio of broadband mobile subscribers to
mobile internet subscribers
mobile cellular subscribers per 100 inhabitants
proportion of households with Internet access at home
mobile internet subscribers per 100 inhabitants
proportion of households with a computer
Opp
ortu
nity
Opp
ortu
nity
Utilization
Utilization
Infrastru
cture
Infrastru
ctureInfrastructure
Infrastructure
25 May 2006 [email protected] 24
Digital OpportunityDigital OpportunityIndexIndex
New ITU’s Series New ITU’s Series
25 May 2006 [email protected] 25
Digital Opportunity Digital Opportunity IndexIndex
WISR 2006WISR 2006New ITU’s SeriesNew ITU’s Series
25 May 2006 [email protected] 26
DOI: In-depth analysisDOI: In-depth analysis
Opportunity Infrastructure Use DOI Rank
Bulgaria 0.96 0.34 0.22 0.51 46
Romania 0.93 0.26 0.20 0.46 53
Turkey 0.97 0.30 0.08 0.45 58
Russia 0.96 0.25 0.13 0.45 60
Iran 0.89 0.16 0.03 0.36 95
Georgia 0.92 0.12 0.13 0.39 84
Kazakhstan 0.94 0.17 0.02 0.38 89
Ukraine 0.91 0.17 0.02 0.37 93
Azerbaijan 0.90 0.15 0.02 0.36 99
Moldova 0.68 0.14 0.07 0.30 115
Turkmenistan 0.72 0.07 0.00 0.26 127
Kyrgyzstan 0.55 0.09 0.01 0.22 134
Armenia 0.70 0.15 0.02 0.29 120
Tajikistan 0.53 0.05 0.01 0.20 140
Czech Republic 0.98 0.42 0.13 0.51 43
Poland 0.98 0.39 0.19 0.52 39
Hungary 0.98 0.43 0.24 0.55 34
25 May 2006 [email protected] 27
DOI: UseDOI: Use
Internet per 100 inhab.
Fixed broadband to total Internet subs.
Mobile broad-band to total mobile
Bulgaria 0.24 0.42 0.00
Romania 0.21 0.39 0.00
Turkey 0.09 0.14 0.00
Russia 0.12 0.27 0.00
Iran 0.07 0.02 0.00
Georgia 0.04 0.34 0.00
Kazakhstan 0.07 0.00 0.00
Ukraine 0.07 0.00 0.00
Azerbaijan 0.05 0.00 0.00
Moldova 0.09 0.13 0.00
Turkmenistan 0.00 0.00 0.00
Kyrgyzstan 0.03 0.00 0.00
Armenia 0.07 0.00 0.00
Tajikistan 0.01 0.02 0.00
Czech Rep. 0.29 0.08 0.00
Poland 0.22 0.36 0.00
Hungary 0.22 0.49 0.00
25 May 2006 [email protected] 28
Digital OpportunityDigital OpportunityUtilizationUtilization
WISR 2006WISR 2006New ITU’s SeriesNew ITU’s Series
25 May 2006 [email protected] 29
DOI: OpportunitiesDOI: OpportunitiesMobile population
coverageInternet
affordabilityMobile
affordability
Bulgaria 0.98 0.97 0.92
Romania 0.97 0.87 0.96
Turkey 0.96 0.96 0.98
Russia 0.95 0.96 0.98
Iran 0.70 0.99 0.98
Georgia 0.95 0.89 0.92
Kazakhstan 0.94 0.92 0.97
Ukraine 0.91 0.93 0.90
Azerbaijan 0.97 0.87 0.86
Moldova 0.92 0.58 0.54
Turkmenistan 0.50 0.68 0.98
Kyrgyzstan 0.40 0.57 0.68
Armenia 0.81 0.43 0.87
Tajikistan 0.30 0.47 0.83
Czech Republic 0.99 0.98 0.98
Poland 0.98 0.98 0.98
Hungary 0.99 0.98 0.98
25 May 2006 [email protected] 30
DOI: InfrastructureDOI: Infrastructure
% households with fixed line
Mobile per 100 inhab.
% households with Internet
Mobile Internet per 100 inhab.
% households with PC
Bulgaria 0.83 0.59 0.10 0.03 0.15
Romania 0.62 0.47 0.06 0.04 0.12
Turkey 0.82 0.51 0.07 0.01 0.11
Russia 0.60 0.51 0.05 0.00 0.11
Iran 0.65 0.06 0.04 0.00 0.07
Georgia 0.33 0.23 0.00 0.00 0.06
Kazakhstan 0.61 0.16 0.02 0.00 0.05
Ukraine 0.53 0.27 0.01 0.00 0.03
Azerbaijan 0.53 0.18 0.02 0.00 0.04
Moldova 0.53 0.14 0.01 0.01 0.03
Turkmenistan 0.35 0.00 0.01 0.00 0.01
Kyrgyzstan 0.33 0.06 0.01 0.00 0.04
Armenia 0.67 0.05 0.02 0.00 0.02
Tajikistan 0.20 0.02 0.00 0.00 0.01
Czech Rep. 0.62 1.00 0.19 0.01 0.30
Poland 0.75 0.60 0.26 0.01 0.36
Hungary 0.71 0.86 0.14 0.09 0.33
25 May 2006 [email protected] 31
Challenges for the Countries in Challenges for the Countries in Caspian and Black See RegionCaspian and Black See Region
We all build the Information We all build the Information Society togetherSociety together!!
25 May 2006 [email protected] 32
ChallengesChallenges
• Progress in regulatory reform• Pro-competitive policy approach • Enabling regulatory environment
Infrastructure development, modernization…
Voice over Internet Protocol… • Mobile telecommunications
Dissemination of 2.5G / 2.75G / 3G Mobile Virtual Network Operators Licensing: Emerging technologies
25 May 2006 [email protected] 33
Thank you very much Thank you very much for your attention!for your attention!
Jaroslaw K. Ponder International Telecommunication UnionStrategy and Policy Unit E-mail: [email protected] http://www.itu.int/spu Tel: 00 41 22 730 60 65
We all build the Information We all build the Information Society together!Society together!
25 May 2006 [email protected] 34
Resources Resources
• Full version of this presentation and others focusing on regulation: www.itu.int/osg/spu/presentations/
• NGN regulatory and policy resources:http://www.itu.int/osg/spu/ngn/ngn-policy-regulatory-resources.html
• ITU activities on NGN:www.itu.int/spu/ngn
25 May 2006 [email protected] 35
International International Telecommunication Telecommunication
UnionUnion
We all build the Information We all build the Information Society togetherSociety together!!
25 May 2006 [email protected] 36
ITU - International ITU - International Telecommunication UnionTelecommunication Union
• The oldest specialized UN agency with more than 140 years of experience in communication sector
• Headquarters in Geneva plus regional offices
• ITU staff: more than 750 from more than 80 countries
• 189 member states, more than 640 sector members
• ITU Agenda for Change• Structure of the ITU
ITU-T – Telecom Standardization ITU-R – Radio-communications ITU-D – Development Bureau
25 May 2006 [email protected] 37
ITU – InternationalITU – InternationalTelecommunication UnionTelecommunication Union
25 May 2006 [email protected] 38
ITU’s Strategy and ITU’s Strategy and Policy Unit (SPU)Policy Unit (SPU)
http://www.itu.int/spuhttp://www.itu.int/spu
• New Initiatives Programme Digital Bridges (2005) Ubiquitous Network Societies (2005) Today’s Networks Tomorrow (2005) What Rules for IP-enabled NGNs? (2006) Digital Transformations in the Information
Society (2006) Regulatory Environment for Future Mobile
Multimedia Services (2006)• Many other activities…