Competition in the International
Connectivity
Muhammad Aslam Hayat
Director PIRRC
26 Nov 2012
PacINET, USP, Suva, Fiji
International Gateway
• ITU defines an international gateway as any
facility through which electronic
communications (voice, data and video) can
be sent between domestic networks of one
country and another
ANS
subscriber
ANS
POI
• IGW provide links either to an international
cable system, or to a satellite through an
earth station
IGW
VSAT
• International gateways are also potential
bottlenecks that may restrict traffic flows
and thus cause artificially high prices
Undersea
Cable
International
subscriber
Is it natural monopoly?
• Traditionally, voice and data transmissions via submarine
cables were seen as natural monopoly of incumbent
operators, due to high costs of investment in infrastructure
and its maintenance
• Natural monopoly argument no longer held true
– Technological advances had greatly reduced cost of infrastructure
– Deployment of VoIP services and VSATs have substantially lowered
cost of entry in provision of international services
• Entry into international sector is now an irresistible force
which regulatory restrictions are unlikely to prevent
• In countries which have attempted to maintain IGW
monopolies, illegal bypass can account for 30-60% or more of
traffic
Cables in the Pacific
http://www.submarinecablemap.com/
Benefits of IGW liberalization
• A monopoly provider has no sufficient incentive to satisfy
increasingly diverse demand for services
• Liberalization necessary in order to
–
–
–
–
–
–
–
–
–
enable competition,
reduce retail prices,
Improve quality of service,
increases in international bandwidth and lower costs in the provision
of international services
increase choice for consumers,
stimulate greater market efficiencies,
Improve investment climate in telecom,
Creates service sector jobs and exports through Business Process
Outsourcing,
lowering cost of business and facilitating trade and investment and
thereby raising overall employment and living standards
Regulatory role in liberalization
• Regulatory frameworks are needed to introduce
– Remove monopoly,
– encourage competition through lowering barriers to new market
entrants,
– introduce sharing and collocation at landing/earth stations at costbased or cost-oriented rates,
– require dominant licensee to provide a RIO to its competitors,
– encourage landing of multiple submarine cable systems
Various models
• Individual license for IGW (BD, FJ, WS)
– Separate licenses for voice & data IGW (BD)
• ILD/LDI (IN, PK)
• Unified license (VU, NG)
• Converged license (PG, MY)
• Facility & non-facility based licenses (SG, LK)
• International Calling card license (WS*)
* Interconnection with ANS is yet to take place
IGW competition status in Pacific
Monopolies
• Cook Islands
• FSM
• Kiribati
• Niue*
• RMI
• Tuvalu
Competition
• Fiji
• Nauru
• Palau
• PNG
• Samoa
• Solomon Islands**
• Tonga
• Vanuatu
* IUS-N has own gateway for data
** IGW competition is yet to take off
International DD – Fixed Line (Rates in USD)
Calling from
Country
Cook
Islands
Fiji
FSM
Calling to
Kiribati
Cook
Islands Fiji
Marshall
Solomon
FSM Kiribati Islands Nauru Niue Palau PNG Samoa Islands Tonga Tuvalu Vanuatu
0.41 1.95
2.76
1.50
-
1.97 0.99
1.39
0.38
1.01
0.84
2.46
1.64
1.75
2.76
1.50
-
1.97 0.35
1.39
0.37
1.01
0.39
1.53
0.44
2.76
1.50
-
2.28 0.99
1.39
0.37
1.01
0.56
2.46
0.66
1.50
-
1.97 0.35
1.39
0.37
1.01
0.84
2.46
1.64
-
2.28 0.35
1.39
0.37
1.01
0.56
2.46
0.66
1.97 1.50
1.39
0.37
1.01
2.23
2.46
1.64
0.99
1.39
0.38
1.01
1.11
2.46
1.64
1.39
0.37
1.01
0.84
2.46
0.66
0.38
1.01
1.11
2.46
1.64
1.01
0.39
2.46
0.44
1.11
2.46
1.64
2.46
0.66
1.26
1.54
0.41
1.54
0.41 1.75
Marshall
Islands 1.54
Nauru
1.54
Niue
1.54
Palau
1.54
PNG
1.54
Samoa
1.53
Solomon
Islands 1.54
Tonga
1.54
Tuvalu
1.54
Vanuatu
1.54
0.41 1.75
2.76
0.41 2.50
2.76
1.50
0.41 2.70
2.76
1.50
-
0.41 1.75
2.76
1.50
-
2.28
0.41 2.00
2.76
1.50
-
1.97 0.99
0.41 1.75
2.76
1.50
-
1.97 0.99
1.39
0.41 3.20
2.76
1.50
-
1.97 1.50
1.39
0.77
0.41 1.75
2.76
1.50
-
1.97 0.35
1.39
0.37
1.01
0.41 2.50
2.76
1.50
-
1.97 0.99
1.39
0.38
1.01
0.84
0.41 2.40
2.76
1.50
-
1.97 1.50
1.39
0.37
1.01
0.84
1.64
2.46
International DD – Mobile (Rates in USD)
Calling from
Country
Cook
Islands
Fiji
FSM
Calling to
Kiribati
Cook
Islands Fiji
Marshall
Solomon
FSM Kiribati Islands Nauru Niue Palau PNG Samoa Islands Tonga Tuvalu Vanuatu
0.81 1.80
2.96
1.50
1.48
1.97 2.00
0.85
0.75
1.01
0.49
2.46
0.68
1.50
2.96
1.50
0.69
1.97 0.99
0.85
0.25
1.01
0.35
1.53
0.48
2.96
1.50
1.48
2.28 0.99
0.85
0.75
1.01
0.49
2.46
0.68
1.50
1.48
1.97 2.00
0.85
0.75
1.01
0.49
2.46
0.68
0.69
2.28 2.00
0.85
0.25
1.01
0.35
2.46
0.68
1.97 5.00
0.85
0.25
1.01
0.35
2.46
2.17
5.00
0.85
0.75
1.01
0.49
2.46
2.17
0.85
0.75
1.01
0.49
2.46
0.68
0.25
1.01
0.49
2.46
2.17
1.01
0.35
2.46
0.48
0.49
2.46
2.17
2.46
0.48
1.26
1.54
0.49
1.54
0.81 1.50
Marshall
Islands 1.54
Nauru
1.54
Niue
1.54
Palau
1.54
PNG
1.54
Samoa
1.53
Solomon
Islands 1.54
Tonga
1.54
Tuvalu
1.54
Vanuatu
1.54
0.49 1.50
2.96
1.61 1.75
2.96
1.50
0.81 2.30
2.96
1.50
1.48
0.81 1.40
2.96
1.50
1.48
2.28
0.81 1.80
2.96
1.50
1.48
1.97 2.00
0.49 1.50
2.96
1.50
0.69
1.97 2.00
0.85
1.61 2.55
2.96
1.50
1.48
1.97 2.00
1.64
0.75
0.81 1.50
2.96
1.50
1.48
1.97 2.00
0.85
0.25
1.01
0.81 2.00
2.96
1.50
1.48
1.97 2.00
0.85
0.75
1.01
0..49
0.81 2.30
2.96
1.50
1.48
1.97 2.00
0.85
0.75
1.01
0.49
0.68
2.46
Open access to IGW
“Huge differences among countries in the price per unit
of bandwidth are often explained by variations in
wholesale market competition and bottlenecks in the
supply of international bandwidth, especially in
landlocked countries. To address these problems
governments need to promote open access to
international gateways and greater competition in the
supply of international bandwidth, with targeted
interventions to stimulate the market as necessary.”
ICT for Greater Development Impact, World Bank
Group Strategy for ICT 2012-2015
Some selected references
• ICT for Greater Development Impact, World Bank Group Strategy for ICT
2012-2015
• Telecommunications in the Pacific: Background Paper for Pacific Economic
Survey 2008, prepared by World Bank Jakarta, Indonesia
• Competition in International Voice Communications by Carlo Maria
Rossotto, Björn Wellenius, Anat Lewin, Carlos R. Gomez (World Bank
Working Paper # 42)
• Trends in Telecommunication Reform 2006 by ITU
• Liberalizing international gateways: Singapore’s experience:
http://www.itu.int/itunews/manager/display.asp?lang=en&year=2009&iss
ue=01&ipage=26&ext=html
• Lessons from an international gateway liberalization by Rohan Samarajiva,
LIRNEasia: http://lirneasia.net/wpcontent/uploads/2008/06/rs_int_liberalization.pdf
• TRAI regulation on international telecommunication access to essential
facilities at cable landing stations, 2007
• Gateway Liberalisation: Stimulating economic growth, GSM Association,
2007
Thank You
For more information please visit:
www.pirrc.org