INTERNATIONAL TELECOMMUNICATION UNION TELECOMMUNICATION DEVELOPMENT BUREAU

Document: 28 GLOBAL SYMPOSIUM FOR REGULATORS Geneva, Switzerland, 8-9 December 2003

FOR PRESENTATION:Mini-Case Studies in Latin America

Gustavo TamayoJose Lloreda Camacho & Co, Colombia

BRAZIL BRAZIL MULTIMEDIA COMMUNICATION SERVICE: MULTIMEDIA COMMUNICATION SERVICE:

A NEW SERVICE CATEGORY TO PROMOTE A NEW SERVICE CATEGORY TO PROMOTE CONVERGENCECONVERGENCE

l On August 2001 CONATEL issued Resolution 272 regulating a new service category: Multimedia communication services (Portuguese language acronym SCM).

l This service was defined as a telecom fixed service which may be rendered throughout the country and internationally, subject to private regime, which provides transmission, emission, and reception of multimedia information, through any technological means.

BRAZIL BRAZIL MULTIMEDIA COMMUNICATION SERVICE: MULTIMEDIA COMMUNICATION SERVICE:

A NEW SERVICE CATEGORY TO PROMOTE CONVERGENCEA NEW SERVICE CATEGORY TO PROMOTE CONVERGENCE

l Multimedia information is: audio, video, data, voice (corporate voice) and other sound, image, text and related signals.

l SCM was devised by ANATEL to accommodate the growing need for convergence of telecommunication services and to conform to technologies recently developed.

l Most important applications under SCM: broad band access to Internet, data communications, audio and video, tele-medicine, and tele-education and transmission of signals between producers and tvbroadcasters.

BRAZILBRAZILMULTIMEDIA COMMUNICATION SERVICE: MULTIMEDIA COMMUNICATION SERVICE:

A NEW SERVICE CATEGORY TO PROMOTE CONVERGENCEA NEW SERVICE CATEGORY TO PROMOTE CONVERGENCE

l SCM regulations avoids the need for multiple authorizations and covers a wider range of information transmission means.

l SCM license does not authorize its holder to provide (i) public fix telephony service, (ii) free live tv and radio broadcasting and (ii) paid tv.

l SCM license success: More than 150 companies have obtained an SCM license.

l The possibility to send and receive multimedia content to subscribers throughout Brazil and internationally has become more expeditious for the Brazilian telecom sector.

VENEZUELAVENEZUELASHORT MESSAGE SERVICE (SMS) SHORT MESSAGE SERVICE (SMS)

INTERCONNECTIONINTERCONNECTION

l MOVILNET VS. DIGITEL: These operators failed to reach to an agreement for the connection of their SMS platforms.

l In consequence, CONATEL initiated administrative proceedings to establish terms and conditions for required interconnection.

l DIGITEL alleged technical limitations in its network prevented immediate interconnection because invoiced platform was not capable of applying different tariffs to the same service (MOVILNET charged USD$0.025 per message while DIGITEL charged USD$0.05 per message).

VENEZUELAVENEZUELASHORT MESSAGE SERVICE (SMS) SHORT MESSAGE SERVICE (SMS)

INTERCONNECTIONINTERCONNECTIONl DIGITEL also argued it was temporarily unable to

generate Call Detail Register required for the specific interconnection.

l CONATEL ordered the interconnection but the parties failed to provide information towards the economical arrangement. Additionally, there was no information on the flow of traffic among these two operators.

l CONATEL decided that the best solution was to apply the “Bill and Keep System”, initially and once interconnection was established the parties would have better elements to reach to another arrangement, if needed.

VENEZUELAVENEZUELASHORT MESSAGE SERVICE (SMS) SHORT MESSAGE SERVICE (SMS)

INTERCONNECTIONINTERCONNECTION

l Under the Bill and Keep method MOVILNET and DIGITEL are not required to pay each other use expenses for terminating messages on each others network.

l SMS interconnection is a novel regulatory issue. CONATEL which has been in the lead in Latin America regarding mobile cellular telephony has also taken the lead in ordering the interconnection of SMS platforms.

COLOMBIACOLOMBIACAPACITYCAPACITY--BASED INTERCONNECTION CHARGES BASED INTERCONNECTION CHARGES

TELECOM vs. TELEFONICA DE PEREIRATELECOM vs. TELEFONICA DE PEREIRAl Interconnection tariffs were still too high and so

CRT issued RUDI “Regimen Unificado de Inter-conexión” on 2002: Seeks to intervene as little as possible, facilitating interconnection negotiations, stimulating convergence and efficient use of existing infrastructure.

l RUDI introduced capacity based interconnection charges under which the operator receives the interconnection service, pays a flat charge, mainly linked to its anticipated peak traffic; and it is measured in terms of capacity: numbers of E-1.

COLOMBIACOLOMBIACAPACITYCAPACITY--BASED INTERCONNECTION CHARGES BASED INTERCONNECTION CHARGES

TELECOM vs. TELEFONICA DE PEREIRATELECOM vs. TELEFONICA DE PEREIRAl This capacity based approach is unique in Latin

America and responds to a need for efficient and economic access charges towards lower tariffs for consumers.

l The amount of the interconnection access tariffs was set by CRT focussed on operational costs of the local companies and not on political considerations.

l Telecom, LD operator, requested Telefonica de Pereira TDP, local operator, to modify previous interconnection arrangements replacing per-minute tariffs with capacity based tariffs.

COLOMBIACOLOMBIACAPACITYCAPACITY--BASED INTERCONNECTION CHARGES BASED INTERCONNECTION CHARGES

TELECOM vs. TELEFONICA DE PEREIRATELECOM vs. TELEFONICA DE PEREIRAl Telecom had originally reduced its previous

interconnection requirements from 90 E-1s to 36-E1s. TDP alleged that its amount of E-1s required were much higher (more than 50). Finally, CRT, based on expert advised, decided 47 E-1s to be the adequate required capacity.

l This decision led the way for subsequent enforcing of capacity base interconnection charges.

l It is expected that the reduction in interconnection tariffs will result in tariff reduction for the final consumers, in voice and data services, but mostly in the latter case where packaged information and flat tariffs were needed.