Key Performance Indicators

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Key Performance Indicators

• Maria A. Beebe
• NetTel_at_Africa

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Key Performance Indicators Agenda

• Presentation
• Why indicators are useful for regulators?
• Why indicators are useful for consumers?
• What set of indicators to use?
• Discussion points
• Which set of indicators are relevant to WATRA?
• How do we gather and analyse data?
• Who would like to do a pilot test?

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NetTel_at_Africa Citizens are using ICT
Private sector
Public sector
Activists NGOs
Infrastructure
Network for Capacity-Building and Knowledge
Exchange in the Telecoms Sector
Policy
Academics
Regulators
Content and delivery
Peer to peer
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Content development and delivery
UNISA
1) Macro environment and implications
of telecommunications
6) Approaches to regulation Basic
principles Types of regulation Rate of return,
price cap, etc
Fort Hare
2) ICT Technologies Basic Tech
Principles Network planning Convergence/standards
dev
WITS
7) Univ access/quality of service user or univ
service/access consumer protection service quality
Botswana
AFRALTI
8) Service pricing tariffing price
flexibility cost measurement, etc
3) ICT Industry Markets Interconnection Fair
trade competition Licensing approvals
Zambia
9) Policy law and institutions stakeholder roles
respon admin procedures governance, etc
4) Spectrum management
UNISA
W Cape
10) ICT applications e-business e-government e-hea
lth e-education e-.
5) Financial analysis Project analysis cost of
capital accounting statement
DaresSalaam
DaresSalaam
TRASA NARUC
USAID, CTO, DFID, SIDA?, NORAD? ITU, DBSA,
African Connections
Colorado, Florida, Maryland, Washington State,
USTTI, FCC
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Interrelated components

• Training
• Post-graduate diploma
• Masters degree
• Executive development programme
• Peering
• Academic to academic
• Regulator to regulator
• Regulator to academic
• Research
• ICT applications ICT 4D
• policies on ICTs and use of ICTs to implement
  public policy

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Why is NetTel talking about key performance
indicators

• African-led Post-graduate diploma and masters in
  ICT Policy and Regulation
• Peering among regulators
• Researching policy and regulation
• ICT applications

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Why indicators are useful for regulators?

• Provide some yardsticks by which to evaluate the
  success or failure of their competition policies.
  
• Compare the performance of telecommunications
  operators
• Same country
• in other countries
• against certain thresholds
• Shed light on validating and tracking the effects
  of regulation imposed on the market.
• Examine why a competitive market is failing to
  emerge and come up with appropriate policy
  instruments.
• Celebrate the success of their competition
  policies

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Why indicators are useful for consumers?

• Use information to ensure that they get the best
  possible deals for their money

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Which indicators

• WB Benchmarking Regulatory Bodies
• ITU Indicators
• OECD Indicators of Telecommunications Competition

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Benchmarking regulatory bodies

• How were the regulatory authority and its mandate
  established?
• What kind of governing body is the regulatory
  authority?
• How autonomous is the regulatory authoritys
  decision making?
• Does the regulatory authority have enforcement
  power?
• How much job security do commissioners and key
  staff have?
• Does the regulatory authority have financial
  autonomy?
• Does the regulatory authority use transparent
  decision making processes?

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ITU indicators

• The fourth World Telecommunication/ICT indicators
  meeting (Geneva, February 2005) discussed the
  following key indicators
• Fixed telephone network
• Mobile network
• Text data network
• Quality of service
• Traffic
• Tariffs
• Other data tariffs
• Staff
• Revenue Investment
• Community access indicators
• Other indicators

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Effective competition

• focus on a general telecommunications market
• more comprehensive in nature
• emphasis on consumer behavior and benefits

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Indicators for the evaluation of
telecommunications competition

• Market structure
• Supplier behaviour
• Consumer behaviour
• Consumer benefits

Source OECD (2003)
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Telecommunications competition overview of
indicators

• Market structure
• Market share and trends
• Entry barrier/ease of entry
• Supplier behaviour
• Active competition in price and rivalries
• Absence of anti-competitive behavior
• Provision of innovative services
• Profitability and its trends
• Consumer behaviour
• Access to information
• Ability to use information and market
  opportunities
• Costs and barriers to switching suppliers
• Countervailing buying power
• Consumer benefits
• A wide range of competitive services offered
• Consumer satisfaction with price and
  affordability
• Consumer satisfaction with the quality of services

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Indicators

• Market structure
• Market share and trends
• Entry barrier/ease of entry

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Market structure parameters

• Market share and trends
• Volume-based call minutes, number of
  subscribers Value-based revenues
  Capacity-based number of lines installed
• Entry barrier/ease of entry
• Parameters for absolute barriers number of
  firms, regulatory restrictions, control of
  essential facilities, extent of economies of
  scale and scope
• Parameters for strategic barriers advertising
  capital intensity
• Vertical integration / Parameters for
  exclusionary barriers existence of vertically
  integrated firm and its price levels, including
  non-discriminatory access to wholesale products

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Indicators

• 2. Supplier behaviour
• Active competition in price and rivalries
• Absence of anti-competitive behavior and
  collusion
• Provision of innovative services
• Profitability and its trends

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Supplier behavior parameters

• Active competition in price and rivalries
• Rivalry in price competition pricing trends, the
  extent of reaction to a price change, existence
  of price leadership
• Rivalry in non-price competition level of
  marketing advertising costs, coverage of
  services or networks
• Indirect measure the existence of recent entry
  or exit, the extent of such movement in the past

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Supplier behaviour parameters

• Absence of anti-competitive behaviour and
  collusion
• Anti-competitive practices number and time spent
  for agreements on local loop unbundling (LLU) and
  interconnection, percentage of lines for LLU by
  incumbent, existence of carrier pre-selection and
  number portability, number of complaints reported
• Existence and level of collusion (subjective
  assessment according to the context)

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Examples of Anti-competitive behavior

• intended to sustain high profits by deterring
  entry or by disciplining the prices of
  competitors
• Predatory pricing
• Slamming
• Delay in interconnection agreements
• Price squeezing
• Installing large additional spare capacity

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Supplier behaviour parameters

• Provision of innovative services
• Rate of diversification (differentiation) and
  speed for innovative services
• Trends in profits across firms

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Supplier behaviour parameters

• Profitability and its trends
• Trends in profits across firms

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Indicators

• 3. Consumer behaviour
• Access to information
• Ability to use information and market
  opportunities
• Costs and barriers to switching suppliers
• Countervailing buying power

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Consumer behaviour parameters

• Access to information
• Consumer survey, regular information notice to
  customers, quality of websites for information,
  in-time provision of requested information

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Consumer behaviour parameters

• Ability to use market information and market
  opportunities
• Consumer survey possession of correct and
  sufficient information for current services and
  alternatives, clear criteria for comparison

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Consumer behaviour parameters

• Costs and barriers to switching suppliers
• Consumer survey extent and substance of barriers
  to switching suppliers
• Level of switching made compared with level of
  satisfaction on information provided

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Consumer behaviour parameters

• Countervailing buying power
• Number of consumer groups, percentage of large
  users and its portion in revenues, level of
  consumer expenses for services to total income

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Indicators

• Consumer benefits
• A wide range of competitive services offered
• Consumer satisfaction with price and
  affordability
• Consumer satisfaction with the quality of services

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Consumer benefits parameters

• A wide range of competitive services offered
• Churn rate of offered services
• Consumer survey presence of sufficient service
  offers and changes in level of satisfaction

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Consumer benefits parameters

• Consumer satisfaction with price and
  affordability
• Revenues/number of calls (fixed costs),
  revenues/number of calls minutes
• Consumer survey price adequacy, affordability,
  simplicity and ease in rate structure

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Consumer benefits parameters

• Consumer satisfaction with the quality of
  services
• Call completion/congestion/disruption rate, time
  for installation and repair, number of faults,
  number of reported complaints
• Consumer survey level of quality, areas of
  concerns, the reason for low quality service

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Telecommunications competition summary of
indicators

• Market structure
• Market share and trends
• Entry barrier/ease of entry
• Supplier behaviour
• Active competition in price and rivalries
• Absence of anti-competitive behavior
• Provision of innovative services
• Profitability and its trends
• Consumer behaviour
• Access to information
• Ability to use information and market
  opportunities
• Costs and barriers to switching suppliers
• Countervailing buying power
• Consumer benefits
• A wide range of competitive services offered
• Consumer satisfaction with price and
  affordability
• Consumer satisfaction with the quality of services

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For further enjoyment

• Benchmarking Regulation (WB, 2002)
• SCAN ICT Indicators of Information and
  Communication Technologies (ECA, 2003)
• Indicators for the Assessment of
  Telecommunications Competition (OECD, 2003)
• Key Indicators of the Telecommunication/ICT
  Sector (ITU, 2005)
• Check it out http//www.nettelafrica.org

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• Many thanks!
• Merci de votre attention!
• Maria A. Beebe
• beebem_at_wsu.edu