9th World Telecommunication/ICT Indicators

Meeting (WTIM-11) Mauritius, 7 - 9 December 2011

Contribution to WTIM-11 session Document C/17-E 8 December 2011

English

SOURCE: OECD

TITLE: Overview of investment and revenue measurement of the telecom sector in the OECD

countries

Overview of

investment and revenue

measurement of the telecom sector

in the OECD countries

Frédéric Bourassa, OECD DSTI/ICCP

9TH WORLD TELECOMMUNICATION/ICT INDICATORS MEETING (WTIM)

7-9 December 2011, Mauritius

Content of the presentation

• 1. Introduction

• 2. OECD Data collection

• 3. The definitions

• 4 . The sources

• 5. Issues in collecting the data

• 6. Future developments

1.1. Introduction

• The importance of evaluating Revenues and Investment in Telecom sector to address policies

• Mobile revenues and investment will be surpassing Fixed lines revenues soon

• The sector revenue is very stable and represents 2.8% of GDP in the OECD countries

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Revenue (left scale)

Investment (left scale)

Total communication access paths (analogue lines +ISDN lines + DSL + cable modem + fibre + mobile) (rightscale)

Subscriber, revenue and investment growth in the OECD area, 1980-2009

1.2. Introduction

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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fixedrevenues

Mobilerevenues

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% of telecommunication

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Telecommunication revenue as a percentage of

GDP for total OECD, 1985-2009

OECD share of mobile and fixed

telecommunication revenues, 1998-2009

2. The OECD Data collection

• The OECD collects data on Revenues and Investment in the Telecommunications sectors for 20 years.

• This data collection is done every second year, to be used in the publication OECD Communications Outlook and then the data are included in the Telecom database.

• We collect :

– Revenues : • Total revenues *

• Fixed lines services

• Mobile telecommunication services*

• Mobile data services (incl. SMS)

• Revenue from cable services

• Revenue from fixed (wired) broadband services

• Revenue from wireless broadband services

– Investement : • Total Investment in telecommunication*

• Investment in cellular mobile infrastructure*

3.1. The Definitions

• We used an ad hoc definition of revenues and investment which is closer and more compatible with Operators Financial reports than with the System of National Accounts (SNA).

• Why ? We think this sector is more easily defined by its basic actors, who are the operators.

• Operators are most of the time joint stock companies which have to publish financial reports under very strict rules.

• Industrial / product classifications (ISIC / CPC) are not always detailed enough to isolate the telecommunications services.

• Nevertheless, the most recent revisions (ISIC rev 4/CPC Rev 2) are developing the Telecom services description.

3.2. The Definitions : CPC/ISIC ICT products

Telecommunications services

CPC Ver. 2 ISIC Rev. 4 Product description (CPC subclass title)

84110 6110, 6120 Carrier services

84121 6110 Fixed telephony services – access and use

84122 6110 Fixed telephony services – calling features

84131 6120, 6130 Mobile telecommunications services – access and use

84132 6120, 6130 Mobile telecommunications services – calling features

84140 6110, 6120, 6130, 6190 Private network services

84150 6110, 6120, 6130, 6190 Data transmission services

84190 6110, 6120, 6130, 6190 Other telecommunications services

84210 6110 Internet backbone services

84221 6110, 6120, 6130, 6190 Narrowband Internet access services

84222 6110, 6120, 6130, 6190 Broadband Internet access services

84290 6110, 6120, 6130, 6190 Other Internet telecommunications services

Source: OECD (2011), OECD Guide to Measuring the Information Society 2011, OECD Publishing.

3.3. The Definitions : Revenues

• Total telecommunications revenue*

– Revenue (turnover) consists of telecommunications service earnings during the financial year under review. This should not include: revenues from non-telecommunications services; monies received in respect of revenue earned during previous financial years; monies received by way of loans from governments or other external investors; nor monies received from repayable subscribers' contributions or deposits.

• Revenue from mobile telecommunication services*

– Revenues from the provision of mobile communications services including all voice and data services.

3.4. The Definitions: Investment

• Total Investment in telecommunication (Fixed, cellular mobile and other wireless)*

– The expenditure associated with acquiring the ownership of property (including intellectual and non-tangible property such as computer software) and plant. These include expenditures on initial installations and on additions to existing installations where the usage is expected to be over an extended period of time. Excludes expenditures on research and development and fees for operating licenses and for the use of radio spectrum. Also referred to as capital expenditure.

• Investment in cellular mobile infrastructure*

– The expenditure associated with acquiring the ownership of property (including intellectual and non-tangible property such as computer software) and plant in order to conduct cellular mobile telecommunication activities. These include expenditures on initial installations and on additions to existing installations where the usage is expected to be over an extended period of time. Excludes expenditures on research and development and fees for operating licenses and for the use of radio spectrum. Also referred to as capital expenditure.

4. The Sources

• The sources are official data mainly from Regulators or from Industry/ Communications Ministries. The data are later confirmed by the OECD Member countries experts

• We cross check with the Annual reports of all operators of member countries, in which we collect: Revenue, Net income, Long-term debt, Capital expenditures, Mobile revenue, R&D spending, etc.

5. Issues in collecting the data

• Issues in collecting the data :

– Confidentiality (national laws / few operators on the market);

– Fiscal year reporting (March, June);

– Transnational groups / Holding companies (no breakdown of activities by country available)

– Spectrum fees exclusion

– Investment data are difficult to collect

6. Future developments

• Better time series will be available in the future for revenue and investment data, especially for :

• Fixed (wired) broadband services

• Wireless broadband services

• Investment in cellular mobile infrastructure

• Need for more transparency from the operators on their revenues of telecom activities (breakdowns by activity and country)

• Need for a better cooperation with countries on financial data collection

Thank you !