World Trends in
Telecommunications
Eric 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 background
Policy
Privatisation
Regulation
Summary
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?
Retail
Network
Other
Costs
Mobile operator
Retail
Access
Network Core
Network
Other
Costs
Fixed 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)
3,0
2,5
2,0
EU average: 0,96
0,89
2,40
2,61
Not applicable
3,63
1,12
2,14
Not applicable
1,07
Not applicable
0,0
1,62
0,5
0,82
1,0
Not applicable
1,5
BG
CY
CZ
EE
HU
LV
LT
MT*
PL
RO
SK
SI
TR
Fixed-to-mobile lnterconnection charge (€-cents)
20
EU average: 18,94
15
19,48
3,08
11,59
17,58
15,21
13,31
16,80
16,04
17,95
9,56
Confidencial
22,16
Confidencial
10
BG
CY
CZ
EE
HU
LV
LT
MT
PL
RO
SK
SI
TR
5
0
Benchmarking Fixed Networks
Call Termination to Geographic Number Ranges
9.000
8.000
Euro Cents
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0.000
EC
Middle east
Other Europe
Benchmarking Mobile Networks
Call Termination To Mobile Number Ranges
35.000
30.000
Euro Cents
25.000
20.000
15.000
10.000
5.000
0.000
EC
Middle east
Other Europe
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