World Trends in Telecommunication

sEric Tyson

Director Commercial Services

InterConnect Communications

Eric Tyson

11 Years with BT, in Regulatory Affairs, Overseas Sales and International Relations

9 years with InterConnect Communications, currently Director of Commercial Services

Recent work has focused on Interconnection, cost allocation and business planning

Developed RIOs and RUOs for operators and interconnection regimes for regulators

Developed cost allocation models for Regulators, Incumbent Operators and New Entrant Operators

Undertaken costing for both fixed and mobile networks

InterConnect Communications

Established in 1984 Focused on providing professional services to

telecommunications operators, equipment suppliers and regulators

Worked in Europe, CEEC, Middle East, Africa and Asia

Multi disciplined staff based in the UK drawn from operational positions within operators, regulators, lawyers and suppliers

Acquired by the Business Optimisation Services (BOS) of Telcordia Technologies in March 2001

Agenda

Economic backgroundPolicyPrivatisationRegulationSummary

Economic background

Telecommunications is an enabler for economic development

Long term investments in network infrastructure have been by the incumbent operators

Customer expectations are for more services at lower prices

Fixed network infrastructure provision no longer seen as attractive

Mobile service tariff regulation is not carried out in the same way as in fixed networks

Is the balance correct between the incentives offered to new entrants and to the existing incumbents?

Policy

Measurement of teledensity in fixed and mobile networks Provision of universal access in countries where telephone

penetration is less than 20% Account separation in fixed networks leads to high monthly

access charges but all mobile network cost is recovered from call charges. Is thus model appropriate?

RetailCore

Network

AccessNetwork Other

Costs

Fixed operator

RetailNetwork Other

Costs

Mobile operator

Policy

Competition in all services, including broadband, seen as the way of maximising customer choice and value

What USO obligation is appropriate, who should provide it and who should pay or it?

Mobile networks seen as the main providers of voice services and are largely unregulated

Fixed networks potentially seen as providing data services but are heavily regulated (especially their voice and ULL services)

Mobile services, particularly 3G, and IP seen as the future way to spread ICT

Is this balance right and does offer an appropriate long term approach?

Privatisation

Private sector involvement has brought significant investment into the telecommunications sector in recent years

Telecoms seen by Governments as a “cash cow”:– 3G licence fees – fee expectations from further GSM licenses in some countries

(e.g. Lebanon, Pakistan, Saudi Arabia, Oman, Cyprus etc) Telecommunications is still highly political and

incumbent fixed line operators still at very different stages to face competition

A new entrant in a country is usually the incumbent in another country

Regulation

Separate regulation of infrastructure and services Regulation still not technology neutral – fixed vs mobile,

2G vs 3G, cable modem vs ADSL Focus on voice telephony but not on voice over IP Regulation being adopted by Benchmark or political

pressure rather than suitability to local circumstances EU expansion countries required to adopt EU Directives

rapidly Development of sector wide “Super Regulators” e.g.

Ofcom – sign of convergence Other sectors (primarily Broadcasting and content) more

central to their activities

Fixed-to-fixed (single transit) lnterconnection charge (€-cents)

0,82

1,62

0,89

2,40

2,61

3,63

1,12

2,14

1,07

No

t ap

plic

able

No

t ap

plic

able

No

t ap

plic

able

No

t ap

plic

able

EU average: 0,96

0,0

0,5

1,0

1,5

2,0

2,5

3,0

BG CY CZ EE HU LV LT MT* PL RO SK SI TR

Fixed-to-mobile lnterconnection charge (€-cents)

11,5

9

17,5

8

15,2

1

9,56

22,1

6

17,9

5

19,4

8

Co

nfi

den

cial

Co

nfi

den

cial

16,0

4

3,08

13,3

1

16,8

0

EU average: 18,94

0

5

10

15

20

BG CY CZ EE HU LV LT MT PL RO SK SI TR

Benchmarking Fixed Networks

Call Termination to Geographic Number Ranges

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

EC Middle east Other Europe

Eu

ro C

ents

Benchmarking Mobile Networks

Call Termination To Mobile Number Ranges

0.000

5.000

10.000

15.000

20.000

25.000

30.000

35.000

EC Middle east Other Europe

Eu

ro C

ents

Summary

Is the regulatory balance right?How appropriate is Western European Regulation in non European countries? e.g.–LRIC costing for interconnection –Local Loop Unbundling–How to achieve tariff rebalancing in low GDP

countries–Ensure balance between fixed and mobile

operators

InterConnect Communications Ltd

Merlin House

Station Road

Chepstow

NP16 5PB

United Kingdom

Telephone: +44 (0) 1291 638400

Fax: +44 (0) 1291 638401

Email: erictyson@icc-uk.com

Website: www.icc-uk.com