Committed to Connecting the World
International gateway
liberalization
WSIS Facilitation Meeting on Action Line C6
ITU Headquarters, Geneva, 20 May 2008
Infrastructure sharing: extending ICT access to all
Vaiva Lazauskaite
vaiva.lazauskaite@itu.int
Regulatory and Market Environment Division, BDT
International Telecommunication Union
International
Telecommunication
Union
Committed to Connecting the World
Trends in Liberalization of ICT markets
Liberalization, which in general refers to fewer government restrictions in
exchange for greater participation of private entities, has become more
widespread, including by percentage of ITU Member States and types of ICTs.
100%
Competition in
International fixed
telephony
90%
Percent of ITU Member States
80%
70%
Competition in
mobile
60%
50%
Competition in
Internet services
40%
30%
Competition in IGW
20%
10%
Monopoly
0%
1998
2007
International fixed
1998
Mobile
2007
1999
2007
Internet services
2004
2007
International
gateways
Note: This figure
reflects what is
legally permissible
ITU World Telecommunication Regulatory database
May 2008
2
Committed to Connecting the World
Promises and Expectations of Liberalization
Telecommunication sector in
general:
¾Increased investment:
¾ Market players are able to take
rational “Buy or build” decisions.
¾Increased competition:
¾New market players.
¾Better and newer services
¾Lower costs and lower prices
¾Faster growth of the market:
¾Increased teledensity;
¾Increased usage of services.
¾Contribution to economic growth
International gateways:
¾ Increased investment:
¾Investing in new gateways;
¾Upgrading existing gateways to meet
increased demand.
¾ Bigger choice of international
connectivity providers.
¾ Lower prices of international
communications.
¾ Increased international bandwidth.
¾Faster market growth:
¾Increased traffic and use.
¾Contribution to economic growth:
¾Decrease in grey markets;
¾Increase in state revenues.
May 2008
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Committed to Connecting the World
Experience: Tanzania (1)
¾ Liberalization of IGW in 2005 together with introduction of converged licensing
framework
¾ By May 2006 four new service providers were licensed that are rolling out
wireless services
Fixed, mobile and Internet markets’ development in Tanzania, 1997-2007
9000
25%
Fixed lines
8000
Liberalization
of IGW
7000
Thousands
6000
20%
Mobile
subscribers
15%
5000
4000
10%
Fixed lines per
100 inhabitants
5%
Mobile
subscribers per
100 inhabitants
Internet users per
100 inhabitants
3000
2000
1000
0
Internet Users
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
ITU World Telecommunication/ ICT Indicators database
May 2008
4
Committed to Connecting the World
Experience : Tanzania (2)
¾ Fixed international tariffs:
¾ From 2000 - 2005 average tariffs of international calls dropped by 38 percent,
¾ From 2005-2006, after liberalization of fixed telephony market and international
gateways, they decreased by 57 percent.
¾Mobile international tariffs:
¾ 2000 - 2005 average tariffs of international calls dropped by 49 percent,
¾ From 2005 - 2006 they decreased by 68 percent.
5
May 2008
Tanzania Communication Regulatory Authority
Committed to Connecting the World
Experience : Tanzania (3)
¾ The cost of connectivity in 1999 was extremely high with a mere 32kbit/s link costing
about USD 16’000. As a result of converged licensing framework and increasing number of
ISPs the bandwidth prices have dropped to about USD 3’000 per Mbit.
¾ In developed countries, however, bandwidth of 1 Mbit is available for as low as USD 300.
¾ Like many other African countries, Tanzania lacks a cheap and high-capacity Internet
connection. All ISPs are connected via expensive satellite connections.
International Internet bandwidth, Mbit/s, 2007
4
Burundi
10
Congo (Dem . Rep.)
37
Zam bia
Malaw i
67
Rw anda
70
Mozam bique
72
100
Tanzania
344
Uganda
759
Kenya
0
May 2008
100
200
300
400
500
600
700
800
ITU World Telecommunication/ ICT Indicators database
6
Committed to Connecting the World
Experience : Thailand (1)
¾Liberalization of IGW in 2006.
¾There are six international gateway operators in Thailand.
¾After liberalization of international gateways, the number of Internet users
increases.
Fixed, mobile and Internet markets’ development in Thailand, 1997-2007
100%
60
Liberalization
of IGW
50
90%
80%
70%
40
Fixed lines
60%
Mobile subscribers
Internet Users
50%
30
40%
20
30%
20%
10
10%
0%
0
Fixed lines per 100
inhabitants
Mobile subscribers
per 100 inhabitants
Internet users per
100 inhabitants
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
ITU World Telecommunication/ ICT Indicators database
May 2008
7
Committed to Connecting the World
Experience : Thailand (2)
Growth of broadband subscribers in Thailand
¾ In line with Internet users, the number
of broadband subscribers was growing.
¾ This means greater required
bandwidth.
Ministry of Information and Communication Technology
¾ In 2007 (right after liberalization of IGW) International Internet bandwidth increased
by more than 2.5 times
Evolution of International Internet Bandwidth in Thailand, Mbit/s
30000
24894
25000
20000
15000
6808
10000
5000
268
642
1011
1438
3006
2000
2001
2002
2003
2004
9909
0
May 2008
2005
2006
2007
ITU World Telecommunication/ ICT Indicators database
8
Committed to Connecting the World
Experience: Botswana (1)
¾ In 2006 - Liberalization of IGW and new licensing framework.
¾ According to the Botswana Telecommunications Authority, during the period of
March 2006 - March 2007, fixed telephony experienced a slight increase. The total
number of subscribers (lines) increased from 132 to 137 thousand.
Fixed, mobile and Internet markets’ development in Botswana, 1997-2007
80%
1500
Liberalization
of IGW
1000
70%
60%
Fixed lines
Mobile subscribers
Thousands
50%
Internet Users
40%
30%
500
Fixed lines per 100
inhabitants
20%
10%
0
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
May 2008
Mobile subscribers
per 100 inhabitants
Internet users per
100 inhabitants
ITU World Telecommunication/ ICT Indicators database
9
Committed to Connecting the World
Experience: Botswana (2)
Mobile penetration, per 100 inhabitants, 2007
¾ From 2006 - 2007 mobile
penetration increased from 47 to 76
percent
Zimbabwe
9
Zambia
22
Namibia
39
76
Botswana
87
South Africa
0
60
40
60
80
100
Mobile tariff, (100 minutes of use per month), USD
50
34.5%
40
USD
¾ Tariffs of mobile services
were decreasing in
neighboring countries. In
Botswana they decreased by
65.9 percent during a threeyear period
20
11.4%
30
39.4%
65.9%
20
10
35
31
33
20
55
36
41
14
1999
2006
1999
2006
1999
2006
2003*
2006
0
Namibia
May 2008
South Africa
Zambia
Bostwana
10
ITU World Telecommunication/ ICT Indicators database
Committed to Connecting the World
Experience : Botswana(3)
¾ 26 licensed ISPs in 2007.
¾ Internet access is very limited:
¾ Half of all households have access to electricity;
¾ Personal computers costs about USD 1,000;
¾ Bandwidth costs are between USD 5,000-8,000 per month for 1 Mbit.
¾ The number of Internet users in the country is about 80’000 with an average bandwidth
of 17 bits/s per capita or 375 bits/s per user.
International Internet bandwidth, Mbit/s, 2007
Botswana
30
Zambia
37
Namibia
56
Zimbabwe
57
3380
South Africa
0
May 2008
500
1000
1500
2000
2500
3000
3500
4000
ITU World Telecommunication/ ICT Indicators database
11
Committed to Connecting the World
Experience : Indonesia
¾Liberalization of IGW in 2004
¾Increase of the traffic (minutes in and out) by 200%.
¾Increase of the total revenue by 94%.
¾Decrease of the price of services.
LIRNEasia research
May 2008
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Committed to Connecting the World
Some other:
Kenya:
¾ Liberalization of IGW in 2005;
¾ Increase of total bandwidth available to the country by almost 700%
in 2006;
¾ Decrease the price of international telephone calls (around 70%)
and Internet connection and charges.
Morocco:
¾ Liberalization of IGW in 2002;
¾ Increase of bandwidth;
¾ Decrease of the price of services (Internet connection and roaming
charges);
¾ 99% of Internet connection in 2007 are broadband;
¾ Broadband prices are the cheapest in Africa, at USD 18 per month
for a 256 kbps package;
¾ Offers highest broadband speeds in Africa (20Mbit/s).
May 2008
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Committed to Connecting the World
Liberalization of International gateways
¾ It is evident from the experience throughout the world that
liberalization of international gateways has brought many benefits to
the sector including the decrease of tariffs and boosting sector
growth:
¾ All analyzed countries to a certain extent experienced some
or all expected benefits.
¾ Liberalization of IGW alone could not address all challenges.
Important challenges remain:
¾ Dominance control;
¾ Interconnection issues;
¾ Cost of access to international bandwidth;
¾ Security issues.
May 2008
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Committed to Connecting the World
Liberalization of International gateways
¾ Monopoly of IGW, however, may cause additional challenges:
¾ IGW monopoly cannot entirely prevent bypass or arbitrage market
practices (call back, illegal VoIP);
¾ Costs and energy to control illegal bypass and grey markets;
¾ Demand for international bandwidth is rapidly growing – is a
single operator able to provide all required demand?
¾ Monopoly of IGW is barely sustainable in the world of convergence,
rapid technological development and globalization. Even if
liberalization of the IGW is just one piece of larger system, it may
significantly influence market development.
May 2008
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Committed to Connecting the World
More Information
¾ GSR 2008 Discussion paper on International
Gateway Liberalization: the Singapore
experience
http://www.itu.int/ITUD/treg/Events/Seminars/GSR/GSR08/papers.html
¾ Trends in Telecommunication Reform 2008
(forthcoming)
May 2008
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Committed to Connecting the World
Thank you!
International
Telecommunication
Union
Committed to connecting the world
May 2008
17