Opening Forum Speech

1
Global trends in telecom development Saburo
TANAKACouncellor ITU/TSB
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, and
do not necessarily reflect the opinions of the
ITU or its membership. Authors can be contacted
by e-mail at Tim.Kelly_at_itu.int
saburo.tanaka_at_itu.int gorgui.toure_at_itu.int.
2
Global trends in telecom development

• The state of the industry
• Fixed-lines
• Mobile
• The Internet
• The state of the market
• Increasing competition
• Private sector participation
• Independent regulation
• Situation in the Regions
• Addressing the digital divide
• Traffic and tariffs trends
• Tariff rebalancing

3
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
1999
2001
2003
Source ITU World Telecommunication Indicators
Database.
4
The changing pie Global telecom service revenue,
1998
Domestic fixed-
Other (incl. Internet, leased lines, telex),
10.6
line revenues,
59.2
Mobile
service
revenues,
21.2
International
revenues, 8.8
1998 Telecom service revenue. Total US724b
Source ITU World Telecommunication Development
Report 1999 Mobile cellular (forthcoming)
5
Projection of revenue growth (USbn)
1000
Actual
Projected
900
800
Other Data, Internet,
Leased lines, telex, etc
700
600
Mobile
500
Int'l
Service revenue (US bn)
400
300
200
Domestic Telephone/fax
100
0
90
91
92
93
94
95
96
97
98
99
00
01
02
Source ITU.
6
Internet users, millionsAnnual rate of change
Source ITU.
7
Inter-regional Internet connectivity
0.4 Gbit/s
USA / Canada
56 Gbit/s
18 Gbit/s
Europe
Asia /Pacific
3 Gbit/s
0.5 Gbit/s
0.2 Gbit/s
LatinAmerica
Africa
0.1 Gbit/s
Note Gbit/s Gigabits (1000 Mb) per
second. Source ITU adapted from TeleGeography.
8
The state of the market

• Increasing competition
• Around two-thirds of telecom subscribers now have
  a choice of operator
• More than 99 per cent of mobile and Internet
  subscribers now have a choice of operator
• Dominantly private-ownership
• 19 out of top 20 top public telecom operators are
  partially or fully private-owned
• Of the top 20 mobile operators, 16 are
  fully-private, 3 are partially private, 1 is
  state-owned
• Independent regulators
• There are currently 102 independent regulators
  (only 12 in 1990)

9
Degree of competition by service, 1999 (ITU
Member States)
Monopoly
Duopoly
Competition
80
70
60
50
40
30
20
10
0
Basic
Cellular
Cable TV
ISPs
services
Source ITU Telecommunication Regulatory
Database.
10
Degree of competition in basic services, 1999, by
region
90
Monopoly
Duopoly
Competition
80
70
60
50
40
30
20
10
0
Africa
Americas
Asia-
Arab
Europe
Pacific
States
Source ITU Telecommunication Regulatory
Database.
11
Increasing competition By no. of countries, by
service, 1995-2005
Countries
100
Local
90
Long distance
80
International
70
60
50
40
30
20
10
0
1995
1997
1999
2001
2003
2005
Source ITU Telecommunication Regulatory
Database.
12
Percentage of outgoing international traffic open
to competition
Mono-
poly
Compe-
85
74
tition
46
35
Number of countries permitting more than one
operator for international telephony
4
14
29
48
1990
1995
1998
2005
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.
13
Recent privatisation transactions
Source ITU Telecommunication Regulatory
Database. Note Some countries made sales in
several tranches (e.g., Spain)
14
Ownership status of the incumbent
Private
State-owned
Countries
160
140
120
100
80
60
40
20
0
1991
1993
1995
1999
Source ITU Telecommunication Regulatory
Database.
15
Separate regulatory bodies, worldwide, 1998
Source ITU Telecom Regulatory Database.
16
The future is here, its just not evenly
distributed William Gibson
Teledensity
1996
(46)
(45)
(47)
(48)
Source ITU World Telecommunication Indicators
Database.
17
Digital divide Telecoms divide User
distribution, by income group, Jan 2000
490
912
280
6 billion
million
million
million
100
15
High income
90
Upper-mid income
58
80
70
Lower-mid income
69
60
82
50
Low income
40
30
20
10
0
Mobile users
Telephone lines
Popul-ation
Source ITU World Telecommunication Indicators
Database.
18
The digital divide is shrinking, but also shifting
19
LDCs falling further behind Share of worldwide
Internet Users
10
LDCs Share of world population 10.6Share of
Internet users 0.1
8
China
6
Other low
4
lower-
mid
2
income
0
LDCs
1995
1996
1997
1998
1999
20
Share of the USA in the International telephone
market
21
(No Transcript)
22
Settlement rates versus Retail prices in the TAS
Region
23
As competitors gain market share ...
Long distance prices come down ...
Source ITU Asia-Pacific Telecommunication
Indicators, 1997.
24
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-
11-
88
88
89
90
91
92
93
94
95
96
Nov-
Nov-
97
97
Source Iceland Telecom, OECD.
25
Rebalancing in action (2) SwissCom, price per
minute of local call and call to US
26
Rebalancing in action (3) Average trends in 39
major economies, in US
12
10
8
6
4
300 minutes, local calls
3 mins Int'l call to US
2
Monthly line rental
0
1990
1991
1992
1993
1994
1995
1996
1997
Source ITU World Telecommunication Indicators
Database.
27
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
1997
1998
1999
Source ITU World Telecommunication Indicators
Database.
28
Rebalancing in action (5) Trends in price per
minute of an international call to USA
29
International telephony market
30
Degree of competition in cellular services, 2000
by region

• 70

• 60

• 50

• 40

• 30

• 20

• 10

• 0

• Africa

• Americas

• Asia-

• Arab

• Europe

States
Pacific
Source ITU/BDT Regulatory Database
31
Degree of competition in basic services in
Africa, 2000

• 90

• 80

• 70

• 60

• 50

• 40

• 30

• 20

• 10

• 0

• Local

• Long

• International

• Cellular

distance
32
Separate regulators in the World

• 102

• 84

• 53

• 30

• 22

• 12

• 1990

• 1992

• 1994

• 1996

• 1999

• 2000

Source ITU/BDT Regulatory Database

33
Separate regulators by Region 2000, Total 102
34
Conclusion and Recommendation

• Erosion of traditional system of accounting rates
  for exchange of international traffic
• Domestic interconnect fees will be dominant mode
• Major price cuts in international calls
• Availability of new infrastructures
• Impact of Internet pricing model (distance and
  duration independent)
• Mobiles exceed fixed-line phones worldwide by
  2002/03
• Introduction of third generation mobiles after
  2001
• Generational shift, as new users reject
  fixed-lines
• Interconnection and tariff rebalancing