Unión Internacional de Telecomunicaciones
Broadband Access development.
A multidimensional focus project
Regional seminar on costs and tariffs for LAC countries
February 2008, Trinidad & Tobago
Omar de León, omar.deleon@teleconsult.us, www.teleconsult.us
Agenda
• Brief introduction to Convergence and Broadband (C&B).
• ITU Project Framework.
• New technologies for Convergence and Broadband.
• New business models.
• Relevant ITU documentation on Broadband development.
• Regional analysis on current situation.
– Technologies
– Regulation
– Broadband teledensities
– Economics
• Conclusions
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Convergence and Broadband (C&B)
Development correlation
The telecommunications industry has recently
entered into a totally new development model,
characterized by a highly dynamic structure that
includes value constellations instead of value
chains, linking several industries such as content,
IT, advertising and so on, around to thirsty
customers from the Top to the Base of the Pyramid.
These new models are embedded in a Convergence
Building founded on Broadband Access.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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ITU Project Framework
Brief description
• This project was coordinated by the ITU Regional Office for the
Americas, the Telecommunications Technologies and
Networks Development Unit and the area office in Honduras.
• Its scope is rooted in and aligned with the regional initiatives
approved at the ITU World Telecommunication Development
Conference, held in Doha in March 2006.
• In particular, under Regional Initiatives in the Americas
Region, Resolution 17 (Rev. Doha, 2006), “Implementation of
regionally approved initiatives at the national, regional,
interregional and global levels”, includes in Annex 1, Section 3
“Support to administrations in the design and implementation
of policies and programs for large-scale development of
broadband access, with a view to meeting national universal
service objectives”.
• It focuses on residential broadband as this is the main
reference service for ICT development and Universal Service.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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New technologies for C&B I
Cabled technologies.
• Copper Pair. Several known technologies can be applied to this
physical access, including, among others, ADSL (up to 8 Mbps.
and 3 Kms.), ADSL2 (12 Mbps.), ADSL2+ (24 Mbps.) and VDSL
(up to 100 Mbps. as fibre extension to the premise). It forms the
basis of several broadband services such as IPTV.
• Broadband on the Power Line. This technology can reach
from about 2 to 80 Mbps. but is not currently well developed.
• Fibre Optics. : Fibre to the Cabinet (FTTCab), Fibre to the Curb
(FTTC), Fibre to the Building (FTTB) and Fibre to the Premise /
Home (FTTH). Each one extends the fibre closer to the CPE
(Customer Premise Equipment). Up to the highest TX
hierarchies are used.
• Hybrid Fibre Cable (HFC). This is an extended kind of access
that uses the Cable TV network through the use of Cable
modems. 27 to 38 Mbps. are obtained for 6 MHz channeling.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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New technologies for C&B II
Fix and mobile
Wireless.
WiMax 802.16 2004
WiMax 802.16e, mobile
WiFi 802.11 a, b, g
3G
Mobiles
Fix
Mobile PHS
CDMA 450 - fix
TD-SCDMA
CDMA2000
1xRTT
1x EV-DO
1x EV-DV
UMB
EDGE
W/CDMA
HSDPA
HSUPA
LTE
Evolution
ITU Seminar – Costs and Tariffs, LAC – February 2008
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New technologies for C&B III
Specific for Convergence. Main examples.
• IMS, MMD y TISPAN. Architectures for Convergence.
• Parlay. It enables the development of applications that operate
across converged networks, through technology-independent
application programming interfaces (APIs). It is a secure,
measured, and billable interface.
• UMA – 802.21. It allows seamless Multi media Independent
Handover (MIH) through different wireless technologies networks
such as GSM, WiFI, WiMax, Bluetooth, etc.
Applications Layer: PoC, Media Servers, SE, AS,
Third Parties applications
IMS Control Layer: P/I/S CSCF, SG, HSS, etc.
Transport Layer: Full IP
New layer structure
for Convergence
Acces Layer: xDSL, Cable, WiMax, 2G, 3G, PSTN
ITU Seminar – Costs and Tariffs, LAC – February 2008
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New business models
Main development vectors
• The telecommunication market is competitive and changes
continuously. This includes close business relationships between
traditional telecommunication operators, broadcasting and cable
TV operators, and companies from different industries.
• These relationships result in a review of the traditional value
chain, as long as different companies are developing new
business models in which the traditional access and transmission
services are merging and driving operators into progressive
revenue sharing with other operators or companies, mainly from
the IT and content industries.
• Under this umbrella a lot of new services are offered: IPTV over
Fibre or xDSL, mobile telephony roaming across different
networks, context-sensitive mobile services (nearer preferred
restaurants, etc.), interactive television, unified communications,
seamless enterprise – mobile communications, niche mobile TV
content providers, Mobile Virtual Network Operators (MVNO),
mobile applications (sales force support, etc.)
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Relevant ITU documentation and
efforts on Broadband development
These are the latest documents produced by ITU, in addition to a
large number of reports, results and recommendations, in its
effort to develop broadband, and as the foundation for the
Access to the Information Society. This documentation was used
as a basis for this project, in conjunction with other ITU and
documentation from regional associations.
• The World Telecommunication Development Conference (Doha,
2006) Final Report.
• Birth of Broadband. ITU Internet Reports. ITU. September 2003.
• Seventh edition of Trends in Telecommunication Reform,
Regulating in the Broadband World. ITU. 2006.
• Eighth edition of Trends in Telecommunication Reform, Road to
Next-Generation Networks. ITU. 2007.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation I
Technologies
• Cable modem and xDSL are widely deployed and
competing.
• WiMax is mainly entering into the fixed access
niche.
• Fibre Optics is still a commercial service with
almost no residential users.
• 3G and 3,5G are well developed and most countries
have either one technology or the other (EDGE, EVDO, HSDPA and so on).
• Satellite and LMDS, among others, are scattered
throughout the region with no prevalence in the
broadband market.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation II
Regulation Trends and Region 1
• In an environment of rapidly changing market conditions,
telecommunication policies and regulation play an important role in the
promotion or restriction of convergence and broadband development.
• Being well aware of this situation, countries with the most advanced
regulation frameworks have made further profound changes, through the
following main drivers.
• For each we briefly present the general situation in the region.
• Access to the Information Society.
• General Regulation:
• Prospective and competition-oriented regulation frameworks are the
main principles to be applied to all issues of regulation. There is a
general though weak trend toward the application of both principles.
• New Access and IX rules taking into account convergence and the
layered structure of the market. No changes perceived in this issue.
• Follow up on markets that are evolving into competitive markets, for
instance the “Local Access Market”. No country was found to be
following up these changes.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation II
Regulation Trends and Region 2
• Grandfathering. There is a strong respect for the acquired rights.
• Consider the merging of different industries into the traditional
telecommunication industry. No formal issues about this.
• Symmetrical regulation between telecommunications and
broadcasting and Cable TV operators. Strong trend towards this
unless restrictions applied to IPTV in several countries.
• Light Touch Regulation. No trend towards this was noted.
• Widely applied cost orientation on regulated prices, regulation
fees, etc. Most countries apply this orientation.
• New structures for National Regulatory Authorities oriented to new
market structures and behaviors. Not perceived yet.
• Regional harmonization oriented toward traditional issues (avoid
interference, same technical standards, etc.) and new issues such
as those that strengthen economies of scope and scale in the
“regional market”. Strong harmonization through ITU and CITEL
but no perceived trend toward looking for economies of scale in
the regional market.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation II
Regulation Trends and Region 3
• Spectrum management specific issues:
• Spectrum liberalization general principle. Some movement towards
this principle.
• Progressively leaving the “Command and Control” model moving
towards competition oriented models of “Exclusive Rights” and
“Common and Open Access”. Not at all. A few countries allow the
transfer of use of a band and some countries analyzing it.
Exceptions are El Salvador and Guatemala.
• Spectrum Trading in secondary markets. Not at all. It seems to be
far from full spectrum trading that allows the right of use as a kind
of property right. Exceptions are El Salvador and Guatemala.
• Technology and Services neutrality. Technology neutrality is a
generalized situation. Service neutrality is still generally restricted.
• Progressively leave Spectrum Cap conditions. This is a complex
issue in the region that is being maintained even with highly
competitive markets with HHI as those of the most competitive
markets.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation III
a) Broadband Latam Teledensity ITU-ICT statistics
End of 2006. Broadband vs. Narrowband teledensity varies greatly
among countries.
7
5,94
5,73
5
4,01
4
3,4
3,14
2,96
3
3,07
2,95
2,72
2,6
2,55
Pais e s
ITU Seminar – Costs and Tariffs, LAC – February 2008
Accesos BA
la
La
Ve
n
ez
ue
ay
u
gu
ru
U
y
ua
0,82
Pe
r
a
ag
am
Pa
r
a
Pa
n
ra
gu
ic
o
N
ic
a
s
M
ex
ra
du
m
al
on
H
El
Sa
l
a
r
or
.
ad
R
ep
ub
a
C
D
om
in
ic
an
ta
R
ic
a
bi
a
C
os
om
hi
le
ol
il
C
C
az
Br
iv
ia
Bo
l
en
ti n
a
0
te
0,14
0
0,12
ua
0,74
0,56
1,24
1,03
0,84
0,78
0,61
0,54
0,36
0,34
0,25
0,22 0,2
0,2
0,19
0,08
va
do
0,7
0,66
Ec
u
1
1,3
G
1,36 1,34
1,97
1,91
1,71
ta
m
2,01
2
Ar
g
nº de accesos / 100 habitantes
6
A ccesos BE
14
Regional analysis on current situation III
b) Broadband World Regions Teledensity ITU-ICT statistics
End of 2006. Broadband regions teledensity shows big differences
between them.
35
25
20
15
10
nº de accesos / 100 habitantes
30
32
19,6
13,69
8,93
5
2,6
2,73
Latam
A sia
11,19
4,33
0,12
0
A frica
M edia
mundial
A mericas
Regiones
ITU Seminar – Costs and Tariffs, LAC – February 2008
Euro pa
Oceania
Regio nes
avanzadas
P aises
lideres
15
Regional analysis on current situation III
c) Broadband Teledensity Growth Rates ITU-ICT statistics
50
50
40
28
Ec
ua
do
r
M
ex
ico
om
Co
l
3,4
20
3,07
0,2
bi
a
1,36
12
Paises
ITU Seminar – Costs and Tariffs, LAC – February 2008
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1,97
10
0
Ur
ug
ua
y
Ve
ne
zu
el
a
15
Ch
i
Br
as
i
5,94
le
18
3,14
l
22
4,01
30
26
Penetracion
Crecimiento
16
tasa de recimiento (%)
60
a
20
18
16
14
12
10
8
6
4
2
0
Ar
ge
nt
in
accesos /100 habitantes
By the end of 2006 our region shows high growth rates that
demonstrate that it is moving towards teledensity values of well
developed countries. These rates continue during 2007.
Regional analysis on current situation IV
Economics 1 – Main trends in the Region
• This analysis was undertaken using the latest primary sources
from the web pages of all the operators in all the countries
analyzed.
• Prevalent technologies, xDSL and Cable Modem, are competitors
on prices and commercial conditions. They can be considered in
the same “Relevant market”.
• WiMax is entering the same market but through an unstable
relation between price and conditions.
• Mobile broadband is an extremely variable market from the point
of view of technologies, peak rates, average rates and so on. In
this project we consider all broadband access as comparable
because mobility is its main characteristic.
• Other technologies have no significance in the broadband market.
• Following comparisons are made on the basis of the nearest to
512 Kbps. downstream broadband service.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 2 – Lowest Prices comparison on USD per 100 Kbps.
USD por Tecnologías
40,00
35,00
30,00
USD
25,00
ADSL
CM
WiMAX
20,00
15,00
10,00
5,00
0,00
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 3 – ADSL – USD / 100 Kbps vs. GNI and % GNI PPP
ADSL
Argentina
El Salvador
Bolivia
Guatemala
Brasil
Honduras
Dominicana
Uruguay
Venezuela
Chile
Mexico
Colombia
Nicaragua
Costa Rica
Panamá
Cuba
Paraguay
Ecuador
Perú
25
20
15
10
5
0
0
200
400
600
800
1000
1200
1400
1600
INB (PPP)
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 4 – ADSL – USD / 100 Kbps as a % GNI PPP
%INB (PPP)-ADSL
Hondur as
Cuba
Mexico
Argentina
Panamá
CostaRica
Ur uguay
Chile
Colombia
Br asil
Dominicana
Guatemala
Venezuela
Per ú
El Salvador
Nicar agua
Par aguay
Bolivia
Ecuador
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
ITU Seminar – Costs and Tariffs, LAC – February 2008
3,00%
3,50%
4,00%
4,50%
5,00%
20
Regional analysis on current situation IV
Economics 5 – CM – USD / 100 Kbps vs. GNI and % GNI PPP
CM
Argent ina
El Salvador
Bolivia
Guat emala
Brasil
Honduras
Dominicana
Uruguay
Venezuela
Chile
Mexico
Colombia
Nicaragua
Costa Rica
Panamá
Cuba
Paraguay
Ecuador
Perú
40
35
30
25
20
15
10
5
0
0
200
400
600
800
1000
1200
1400
1600
INB (PPP)
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 6 – WiMax – USD / 100 Kbps vs. GNI and % GNI PPP
WiMAX
Argentina
El Salvador
Bolivia
Guat emala
Brasil
Honduras
Dominicana
Uruguay
Venezuela
Chile
Mexico
Colombia
Nicaragua
Costa Rica
Panamá
Cuba
Paraguay
Ecuador
Perú
25
20
15
10
5
0
0
200
400
600
800
1000
1200
1400
1600
INB (PPP)
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 7 – Unlimited 3G – USD vs. GNI and % GNI PPP
3G
Argent ina
El Salvador
Bolivia
Guat emala
Brasil
Honduras
Dominicana
Uruguay
Venezuela
Chile
Mexico
Colombia
Nicaragua
Cost a Rica
Panamá
Cuba
Paraguay
Ecuador
Perú
125
100
75
50
25
0
0
200
400
600
800
1000
1200
1400
INB(PPP)
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Regional analysis on current situation IV
Economics 8 – Unlimited 3G – USD as a % GNI PPP
%INB (PPP)-3G
Dominicana
Perú
Par aguay
Panamá
Nicaragua
Honduras
El Salvador
Cuba
CostaRica
Bolivia
Argentina
Colombia
Ur uguay
Chile
Mexico
Venezuela
Guatemala
Br asil
Ecuador
0,00%
5,00%
10,00%
ITU Seminar – Costs and Tariffs, LAC – February 2008
15,00%
20,00%
25,00%
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Regional analysis on current situation IV
Economics 9 – Conclusions
• xDSL, Cable Modem and WiMax prices are roughly in
the order of USD 5 -10 per 100 Kbps.
• Analyzing these prices as percentages of Gross
National Income (GNI) per country, gives a better
understanding of regional affordability differences.
• Those countries with lower GNI are in a weaker
position to access broadband services, as a basis for
Access to the Information Society.
• Mobile access to 3G and 3.5G is in a weak position as
prices for unlimited access are several times higher
than those for fixed technologies on a USD per 100
Kbps. basis. Nevertheless these services have
mobility plus.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Conclusions
Technologies
Market forces
All the most advanced
technologies are being
widely used in the
Region, except Fiber
Optics as FTTx.
Trends are toward a
faster increase of
teledensities. Operators
are prepared to invest
and users are “hungry”.
Economics
xDSL / CM / WiMax are
competitive access at
similar/higher prices than
in developed countries.
Different GNIs produce
affordability problems.
Conclusions
Regulation and Public Policies
On these issues the Region is behind the more forward-looking
countries but is moving toward more advanced regulations.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Conclusions
•The Region is ready to expand its broadband
infrastructure: operators and users are
prepared for it.
•Prices are close to being internationally
aligned but GNIs are challenging affordability.
• Stronger policies for Information Society
seems to be required.
•Regulation should align as soon as possible
with those of the more advanced countries.
ITU Seminar – Costs and Tariffs, LAC – February 2008
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Thank you for
your attention
omar.deleon@teleconsult.us, www.teleconsult.us
ITU Seminar – Costs and Tariffs, LAC – February 2008
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