Global trends in telecom development Seminar in Niamey, April 2001
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Global trends in telecom development Seminar in Niamey, April 2001 The original document is elaborated by Dr Tim Kelly, ITU/SPU. It has completed by Saburo Tanaka and by Pape-Gorgui Toure. The views expressed in this presentation are those of the authors, a nd do not necessarily reflect the opinions of the ITU or its membership. Authors can be contacted by e -mail at: Tim.Kelly@itu.int saburo.tanaka@itu.int gorgui.toure@itu.int. Global trends in telecom development l The state of the industry ð Fixed-lines ð Mobile ð The Internet l The state of the market ð Increasing competition ð Private sector participation ð Independent regulation l Situation in Africa ð Addressing the digital divide ð Traffic and tariffs trends ð Tariff rebalancing A Mobile Revolution Fixed Lines vs. Mobile Users, worldwide, Million 1'400 Mobile Users 1'200 Fixed Lines 1'000 800 600 400 200 0 1993 1995 1997 Source: ITU World Telecommunication Indicators Database. 1999 2001 2003 The changing pie: Global telecom service revenue, 1998 Other (incl. Internet, leased lines, telex), 10.6% Domestic fixedline revenues, 59.2% Mobile service revenues, 21.2% International revenues, 8.8% 1998 Telecom service revenue. Total = US$724b Source: ITU “World Telecommunication Development Report 1999: Mobile cellular” (forthcoming) Projection of revenue growth (US$bn) 1000 900 Service revenue (US$ bn) 800 700 Actual Projected Other: Data, Internet, Leased lines, telex, etc 600 500 Mobile Int'l 400 300 200 100 Domestic Telephone/fax 0 90 91 92 93 94 95 96 97 98 99 00 01 02 Source: ITU. Internet users, millions Annual rate of change 109% 311 Change 67% 59% 66% 230 55% 149 35% 90 34 1995 Source: ITU. 54 1996 1997 1998 1999 2000 Inter-regional Internet connectivity 0.4 Gbit/s 3G bit /s 56 Gbit/s it /s Gb 0.5 Asia / Pacific 18 /s t i Gb USA / Canada Latin America Africa Europe 0.2 /s t i Gb 0.1 Gbit/s Note: Gbit/s = Gigabits (1’000 Mb) per second. Source: ITU adapted from TeleGeography. The state of the market l Increasing competition ð Around two-thirds of telecom subscribers now have a choice of operator ð More than 99 per cent of mobile and Internet subscribers now have a choice of operator l Dominantly private-ownership ð 19 out of top 20 top public telecom operators are partially or fully private-owned ð Of the top 20 mobile operators, 16 are fullyprivate, 3 are partially private, 1 is state-owned l Independent regulators ð There are currently 89 independent regulators (only 12 in 1990) Degree of competition by service, 1999 (ITU Member States) Monopoly 80% Duopoly Competition 70% 60% 50% 40% 30% 20% 10% 0% Basic services Cellular Source: ITU Telecommunication Regulatory Database. Cable TV ISPs Degree of competition in basic services, 1999, by region 90% Monopoly Duopoly Competition 80% 70% 60% 50% 40% 30% 20% 10% 0% Africa Americas Source: ITU Telecommunication Regulatory Database. AsiaPacific Arab States Europe Increasing competition: By no. of countries, by service, 1995-2005 Countries 100 Local Long distance International 90 80 70 60 50 40 30 20 10 0 1995 1997 1999 Source: ITU Telecommunication Regulatory Database. 2001 2003 2005 Percentage of outgoing international traffic open to competition Monopoly 74% 35% 85% Competition 46% 4 14 29 48 1990 1995 1998 2005 Number of countries permitting more than one operator for international telephony Note: Analysis is based on WTO Basic Telecommunications Commitments and thus presents a minimum level of traffic likely to be open to competitive service provision. Source: ITU, WTO. Recent privatisation transactions 1995 Source: ITU Telecommunication Regulatory Database. Note: Some countries made sales in several tranches (e.g., Spain) 1996 Bolivia Belgium Cape Verde Germany Cuba Ghana Czech Rep. Greece Indonesia Guinea Mongolia Hungary Portugal Indonesia Spain Ireland Korea Peru Portugal Singapore Venezuela 1997 Armenia Australia Cote d'Ivoire France Greece Hungary India (MTNL) India (VSNL) Israel Italy Kazakhstan Panama Portugal Senegal Serbia South Africa Sri Lanka Spain 1998 Brazil Denmark (2) France El Salvador Finland Guatemala Lithuania Malta Poland Puerto Rico Romania Switzerland Ownership status of the incumbent Private Countries State-owned 160 140 120 100 80 60 40 20 0 1991 1993 Source: ITU Telecommunication Regulatory Database. 1995 1999 Separate regulatory bodies, worldwide, 1998 Source: ITU Telecom Regulatory Database. Separate “The future is here, it’s just not evenly distributed” William Gibson Teledensity 1996 27.8 8.6 1.4 0 to 68.3 (46) to 27.8 (45) to 8.6 (47) to 1.4 (48) Source: ITU World Telecommunication Indicators Database. Digital divide = Telecoms divide User distribution, by income group, Jan 2000 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 280 million 490 million 912 million 6 billion 15 % High income Upper-mid income 58 % Lower-mid income 69 % 82 % Low income Internet users Mobile users Telephone lines Source: ITU World Telecommunication Indicators Database. Population The digital divide is shrinking, but also shifting Share of low and lower-middle income countries in: Jan. 1995 Jan. 2000 18% 28% 5% 14% 1.1% 7.6% Telephone main lines Mobile subscribers Estimated Internet Users Source: ITU World Telecommunication Indicators Database. LDCs falling further behind: Share of worldwide Internet Users 10% 8% 6% LDCs Share of world population = 10.6% Share of Internet users = 0.1% Other low & lowermid income 4% 2% 0% 1995 China LDCs 1996 1997 1998 1999 Africa Traffic 1.60% 1.40% 1000 1.20% 800 1.00% 600 0.80% 0.60% 400 0.40% 200 0.20% 0 0.00% 1995 1996 1997 1998 1999 Africa Traffic Percentage of the Africa Traffic in respect of the World Traffic market volume share Millions of minutes 1200 Share of the USA in the International telephone market 29.00% 28.00% 27.00% 26.00% 25.00% 24.00% 23.00% 22.00% 1994 1995 1996 1997 1998 USA market share 1999 Evolution of the Average Settlement Rates 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 1995 1996 Africa Region 1997 1998 World 1999 USA Settlement rates versus Retail prices in the Africa Region 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1995 1996 Retail Price 1997 1998 1999 Settlement rates As competitors gain market share ... NCCs (Japan) Clear (NZ) Optus (Aust.) Long distance market share % share of long distance calls 35% 30% 25% 20% 15% 10% 5% 0% 1991 Japan New Zealand Australia Long distance prices Index, 1993=100 100 1992 1993 1994 1995 1996 95 90 Long distance prices come down ... Source: ITU Asia-Pacific Telecommunication Indicators, 1997. 85 80 75 1993 1994 1995 1996 Rebalancing in action (1): Iceland Telecom, price of 3 minute, peak-rate call, includ. tax 1.6 1.4 Local 1.2 Medium 1 Long distance 0.8 0.6 0.4 0.2 0 Jan- Jul- Jul- Nov- Oct- Feb- Sep- Jun- Aug- Dec- 01- 1188 88 89 90 91 92 93 94 95 96 Nov- Nov97 97 Source: Iceland Telecom, OECD. Rebalancing in action (2): SwissCom, price per minute of local call and call to US Sw iss call prices. US cents per minute. 74 58 Source: ITU. 58 Call to USA 43 28 Local call 7 5 5 4 4 4 4 95 96 97 98 99 00 Rebalancing in action (3): Average trends in 39 major economies, in US$ 12 10 8 6 4 2 300 minutes, local calls 3 mins Int'l call to US Monthly line rental 0 1990 1991 1992 1993 1994 1995 1996 1997 Source: ITU World Telecommunication Indicators Database. Rebalancing in action (4): Trends in Thailand, in US$ 300 mins, local calls 14 Monthly line rental 12 3 mins Int'l call to US 10 8 6 4 2 0 1993 1994 1995 1996 Source: ITU World Telecommunication Indicators Database. 1997 1998 1999 Rebalancing in action (5): Trends in price per minute of an international call to USA Average retail price of one minute call to USA. US$ $2.00 Source: ITU adapted from FCC and national data (34 countries). $1.50 Forecast Mark-up $1.00 $0.50 Settlement $0.00 90 92 94 96 98 00 02 04 International telephony market 35.00% 30.00% 10000 25.00% 1000 20.00% 100 15.00% 10.00% 10 5.00% 1 0.00% 1995 Africa traffic USA traffic USA share 1996 1997 1998 1999 World traffic Africa Region share market volume share Millions of minutes 100000 Degree of competition in cellular services, 2000 by region Monopoly Duopoly Competition •70% •60% •50% •40% •30% •20% •10% •0% •Africa •Americas Source: ITU/BDT Regulatory Database •AsiaPacific •Arab States •Europe Degree of competition in basic services in Africa, 2000 Monopoly Duopoly Competition •90% •80% •70% •60% •50% •40% •30% •20% •10% •0% •Local •Long distance •International •Cellular Separate regulators in the World •102 •84 •53 •30 •22 •12 •1990 •1992 •1994 Source: ITU/BDT Regulatory Database •1996 •1999 •2000 Separate regulators by Region 2000, Total: 102 Organismes séparés par région, 2000 Total: 102 Europe 30% AsiePacifique 13% Etats arabes 6% Afrique 28% Amériques 23% Conclusion and Recommendation l Erosion of traditional system of accounting rates for exchange of international traffic ð Domestic interconnect fees will be dominant mode l Major price cuts in international calls ð Availability of new infrastructures ð Impact of Internet pricing model (distance and duration independent) l Mobiles exceed fixed-line phones worldwide by 2002/03 ð Introduction of “third generation” mobiles after 2001 ð Generational shift, as new users reject fixed-lines “ Interconnection and tariff rebalancing”
