Committed to Connecting the World Regional Seminar on the Economic and Financial aspects of Telecommunications Study Group 3 Regional Group for Latin America and the Caribbean (SG3RG-LAC) Asunción, Paraguay, 13-14 March 2012 Tariff Policies Trends Carmen Prado-Wagner Regulatory and Market Environment Division IEE Department/Telecommunication Development Bureau International Telecommunication Union Committed to Connecting the World Reaching the next billion 125 years to reach the first billion of fixed (wired) broadband subscriptions Source: ITU World Telecommunication/ICT Indicators Database 30 years for reaching 6 billion mobile cellular subscriptions Only 9 years to reach the first billion active mobilebroadband subscriptions Committed to Connecting the World 5.9 billion Mobile cellular subscriptions in 2011* 2.4 billion Internet users in 2011* 3 Committed to Connecting the World The Global situation of Broadband 4 Committed to Connecting the World Availability of Mobile broadband, 2010 Source: ITU. Committed to Connecting the World Fixed Broadband Prices drop by over 50% in just two years in developing countries The ITU ICT Price Basket 1 shows that between 2008 and 2010 ICT services have become more affordable and relative prices came down by an average of 18%, globally. Source: ITU Measuring the Information Society (2011) 1 The ITU ICT Price Basket is a composite measure based on three tariff sets — fixed-telephone, mobile-cellular and fixed-broadband Internet services — and computed as a percentage of average GNI per capita. 6 Committed to Connecting the World Internet is growing… but one third of the population isn’t connected in 2011 Usuarios de Internet por cada 100 habitantes 7 Committed to Connecting the World The bad news is that developing countries pay more…. ICT price basket, 2008 ICT price basket, 2010 Developed countries Developing countries Source: ITU ICT Indicators database Note About the IPB ITU’s ICT Price Basket (IPB) is a composite affordability measure based on three sub-baskets – fixed telephone, mobile cellular and fixed broadband Internet services – and computed as a percentage of average Gross National Income (GNI) per capita. As a comprehensive benchmarking tool, the IPB monitors the relative price of ICT services and provides an indication of how affordable services are across countries, and over time. www.itu.int/ITU-D/ict/ www.itu.int/atlas Committed to Connecting the World 9 Committed to Connecting the World What about costs and tariffs regulation…? Regulators in charge of price regulation, 2011 37 34 number of countries 27 24 13 5 Africa Europe Americas Asia-Pacific Arab States CIS 10 Source: ITU World Telecommunications/ICT Regulatory Database Committed to Connecting the World What about tariffs and price regulation…? Who is responsible for price regulation? World, 2011 Regulatory Authority 140 Sector Ministry Not regulated 25 18 More than one entity or another body involved 14 Operator 13 Other Ministry or Government body 12 Americas, 2011 Regulatory Authority 27 Not regulated 5 More than one entity or another body involved 4 Operator 1 Sector Ministry 1 Other Ministry or Government body 0 11 Source: ITU World Telecommunications/ICT Regulatory Database Committed to Connecting the World How are the wholesale tariffs of services regulated? Wholesale Services - World, 2011 70% 60% 50% 40% 30% 20% 10% 0% Price ceiling set by the Cost orientation (using Benchmarking of tariffs Retail minus approach State cost models) Africa Source: ITU Tariff Policies Survey – ICTEye Arab States Asia & Pacific Europe & CIS Rate of return regulation The Americas Price cap Committed to Connecting the World How are the wholesale tariffs of services regulated? Wholesale Services - Americas, 2011 Price cap Rate of return regulation Retail minus approach Benchmarking of tariffs Cost orientation (using cost models) Price ceiling set by the State 0% Source: ITU Tariff Policies Survey – ICTEye 5% 10% 15% 20% 25% 30% 35% 40% Committed to Connecting the World Type of cost on which cost models are based Retail services America and Africa are mostly using current cost for retail services 80% 70% 60% 50% 40% Wholesale services 30% 20% 10% 80% 0% Africa Arab States Asia & Pacific Historical costs Current costs Europe Other Source: ITU Tariff Policies Database, www.itu.int/icteye The Americas 70% 60% 50% 40% 30% 20% 10% 0% Africa Arab States Asia & Pacific Historical costs Current costs Source: ITU Tariff Policies Database, www.itu.int/icteye Europe Other The Americas Committed to Connecting the World Which concept is used as the basis for calculating telecommunication service tariffs? Retail telecommunication services The Americas Europe & CIS Asia & Pacific Arab States Africa 0% 20% 40% 60% LRIC Source: ITU Tariff Policies Database, www.itu.int/icteye 80% Wholesale telecommunication services 100% FDC The Americas Europe & CIS Asia & Pacific Arab States Africa 0% 10% 20% 30% 40% LRIC 50% FDC Source: ITU Tariff Policies Database, www.itu.int/icteye 60% 70% 80% 15 90% Committed to Connecting the World www.itu.int/icteye 16 Committed to Connecting the World Join us at: GSR12: Why regulate in a global networked society? When: Where: Who: 2-4 October 2012 Colombo, Sri Lanka ITU & TRC Sri Lanka www.itu.int/gsr12 Committed to Connecting the World Broadband Universe – New ITU portal www.itu.int/broadband Committed to Connecting the World ITU Reports Trends in Telecommunication Reform 2010-2011: Enabling Tomorrow’s digital world Coming Soon! Trends in Telecommunication Reform 2012 : Smart Regulation in a broadband world (To be released in 2012) Setting national broadband policies, strategies and plans Open access regulation in the digital economy Strategies for financing universal broadband access The regulatory landscape for mobile banking Broadband Enabled Innovation Intellectual Property Rights in today’s digital economy Confronting The Social Media Regulatory Challenge e-Waste: whose responsibility? www.itu.int/ITU-D/treg/publications/index.html Broadband Thematic reports in 2011: 19 Regulation of global broadband satellite communications Exploring the value and economic valuation of spectrum Understanding the impact of broadband on national and global economies Regulating broadband services pricing www.itu.int/ITU-D/finance/ Committed to Connecting the World MUCHAS GRACIAS! prado[at]itu.int 20