No business can ignore the change taking place due to the global telecoms revolution. Every business in the world is involved in contract negotiation and formation and increasingly this takes place using phones and other telecommunications devices. This affects business models, operations, value chains and law.
The latest global data is recorded in the 8th edition of “Trends in Telecommunication Reform: the Road to NGN“. This September 2007 publication is from the telecommunications specialist authority of the United Nations, the International Telecommunications Union (ITU).
Mobile devices are at the head. They are disruptive developments for the traditional business models of telcos and content publishers. They are an opportunity for our clients and others who capitalise on the change they make to business operations and the value chain linking suppliers and customers.
All businesses should keep a watching brief and one way of doing it is appreciating the scale of the change taking place. The ITU report states the end 2006 position:
- 4 billion subscribers, with 1.27 billion fixed lines and 2.68 billion mobile accounts.
- Four fold increase in the number of “phone” subscribers between 1996 and 2006.
- Six out of 10 mobile phone subscribers are in developing countries. Some 61% of the world’s mobile subscribers are in developing countries, fuelled by countries like Brazil, China, India and Russia.
- Technology is not spread evenly. Only 22 of the 50 “least developed countries” offered broadband service in 2006. Nonetheless, the report states: “Today’s fibre backbones coupled with wireless access technologies offer developing countries a far richer diet of ICT services than legacy Public Switched Telephone Network (PSTN) and 2G mobile networks ever could and at lower cost. Some developing countries, such as Argentina, Bangladesh, Bulgaria and Pakistan are already experiencing NGN (next-generation networks) migration by focusing on cost-effective solutions to enable affordable access to the widest base of end-users possible.” The above map illustrates “mobile phone usage”, the darker the green the higher the use. Credit: Big Mouth Media.
- Regulatory changes accompany the transition from circuit-switched telephony to also voice over Internet Protocol (VoIP), Internet Protocol television (IPTV) and high speed broadband. The report states: “Those countries that are witnessing the greatest explosion of ICT growth and investment have designed regulatory frameworks that enable and promote ICT development.”
Global statistics on fixed line, mobile and internet users
Figure 1.1 (right) from the report illustrates world growth in billions from 1996 to 2006 in fixed lines, mobile cellular subscribers and Internet users. The source of the underlying data is the ITU’s World Telecommunication and ICT Indicators Database.
The Executive Summary of the report states: “By the end of 2006, there were a total of nearly 4 billion mobile and fixed-line subscribers and over 1 billion Internet users. This includes 1.27 billion fixed-line subscribers and 2.68 billion mobile subscribers (61 per cent of which are located in developing countries) as well as some 1.13 billion Internet users.”
Mobile phone technologies
Figure 1.4 (right) is part of a full world map in the report. This portion illustrates mobile phone technologies commercially launched as at May 2007 in East Asia.
For some countries where more than one technology has been commercially deployed, the most advanced technology is represented in the colour scheme *. Colour scheme legend:
- Yellow: 2G = Second-generation wireless telephone technology
- Olive: CDMA2000 1x = Code Division Multiple Access
- Green: CDMA2000 1x EV-DO = Code Division Multiple Access Evolution-Data Optimized
- Light Blue: WCDMA = Wideband Code Division Multiple Access
- Navy Blue: HSDPA = High-Speed Downlink Packet Access
- * This approach creates an advanced technology impression, especially for the navy blue regions. To drill down see the report, Communications Infrastructure and Service Availability in Australia 2006-07 by the Australian Communications & Media Authority.
A key question considered in the eighth edition of the report is the degree to which regulation of access and interconnection will be necessary in the emerging world of next-generation networks. It is noted that the major innovation associated with next-generation networks is packet-based transport level (generally based on Internet Protocol) that is separate from the network control layer.
The report notes that with VoIP deregulation is the trend. But even in 2006 VoIP was explicitly banned in at least 23 countries and that there are range of other regulatory responses until you get to the other end of the spectrum where VoIP is explicitly legal in over 57 countries.
Relevant to interconnection, a noteworthy fact is that the European Commission “in a watershed measure, has decided to regulate roaming charges in the 27-country European Union block.”
This 2007 “EU Roaming Regulation” applies a “Eurotariffs” cap to roaming charges and was broadly supported by representatives of the 27 EU Member States. The GSM Association, which represents nearly 700 mobile phone operators, pushed for less restrictive regulation. For consumers this means Eurotariffs will decline over time. Starting at €0.49 per minute before VAT for outgoing calls within Europe and €0.24 for calls received within Europe. In 2009 calls will be capped at €0.43 and €0.19 per minute.
According to the European Commission data roaming currently covers less than 1% of EU telco revenues. The EU Roaming Regulation will not apply to SMS, text or value added data services such web surfing.
Interestingly, as regards the role of regulation, the ITU report states: “The establishment of a separate regulator is one of the most visible signs of sector reform. Separate regulatory agencies lay the groundwork for a favourable investment climate and the promotion of market opportunities.” It also states the world has 148 national ICT-sector regulators (Figure 1.7, above). Over 75% of ITU Member States have established a separate regulator.
The report is available for sale, email: email@example.com.
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