Challenges and Opportunities for Telecommunications Reforms in the MNA Countries Trade and Knowledge Economy: Focus on MNA Countries Samia Melhem - PowerPoint PPT Presentation

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Challenges and Opportunities for Telecommunications Reforms in the MNA Countries Trade and Knowledge Economy: Focus on MNA Countries Samia Melhem

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Title: Challenges and Opportunities for Telecommunications Reforms in the MNA Countries Trade and Knowledge Economy: Focus on MNA Countries Samia Melhem


1
Challenges and Opportunities for
Telecommunications Reforms in the MNA
Countries Trade and Knowledge Economy Focus on
MNA Countries Samia Melhem
2
Outline
  • Status of telecom reforms in MENA countries
    mobile duopoly
  • The need for a second phase of telecom reforms in
    MENA countries the competitiveness agenda
  • A possible way forward organic growth of the
    access and production of information and
    knowledge services

3
Mobile networks are rapidly overtaking fixed
networks for the provision of access to voice
services
4
Overview of telecommunications sector
liberalization status in selected MNA countries
Table 2.2 Overview of telecommunications sector
liberalization status in selected MNA countries  
   
5
MNA countries are lacking the international
connectivity to realize their economic ambitions
6
Data suggests that fixed line penetration is the
key driver of Internet usage
7
Low fixed line penetration has inhibited Internet
use
8
Limited liberalization of ISPs in the MNA region
may also explain the low level of Internet
penetration
9
Lack of competition in the provision of leased
lines is inhibiting the development of the leased
line market
10
The Textile Supply Chain
11
Challenges
  • First phase of reforms took place is specific
    circumstances maturity of GSM technology and
    friendly capital markets.
  • Second phase of reforms will have to focus on
    fixed and data services to address the
    competitiveness gap. Data and corporate services
    remain largely untapped.
  • These reforms (licensing strategies and
    regulations) will have to be designed in a way
    that takes into account local specificities and
    new technological and business conditions in the
    IT sector (convergence, innovation in services,
    risk management). Attempts to re-create past
    successes have failed (SNO licenses).

12
Licensing Approaches
  • Mobile agenda GSM3 (2G? 3G?)
  • Fixed agenda
  • SNO? Focus on voice or data?
  • WLL? Nationwide or local WLL licenses?
  • Unlicensed spectrum (WiFi) policyinteraction
    with WLL
  • Rural licenses? Regional licenses?
  • International gateways international licenses

13
International Experience
  • No single model for introducing competition
  • Licensing strategies are built on various
    distinctions and concepts (Fixed/Mobile
    LDI/local Basic services/Enhanced services)
  • The requirement to provide competitive services
    to the business community (corporate networks)
    has been a major driver of reforms (exceptions
    MNA and AFR)
  • Objective was to introduce innovation and
    competition in services without destabilizing
    incumbent

14
A Global Telecoms Crisis
Last Mile includes Verizon, BSC, US West/Qwest,
Bellsouth, Comcast, ATT Broadband, Cox,
Cablevision, Adelphia, Charter, Rhythms
Netconnections, Covad, Northpoint. Access
includes AOL, Earthlink, MSN. Carriers
includes Qwest, ATT Business, Sprint FON, Level
3, Worldcom, Cable Wireless, Global Crossing,
Genuity.
15
With Significant Impact on Traditional LDC
Telecoms Investors
16
Distinctions between data network infrastructure
and service providers new business model value
in service innovation
  Source Analysys
17
A Dynamic Growth Cycle Investment in
Infrastructure and Innovation  
18
Corporate Network Provision in Selected MNA
countries
Table 2.2 Overview of telecommunications sector
liberalization status in selected MNA countries  
   
19
The provision of private data networks in
selected MNA countries
 
 
20
Blocked Growth Cycle
21
Corporate Network Provision in MNA Mostly
provided by incumbent
Table 2.2 Overview of telecommunications sector
liberalization status in selected MNA countries  
  • No infrastructure sharing
  • High cost of leased local, national and
    international lines for service provider
  • Take-up of broadband slow and expensive
  • Chicken and egg issue Impact on content

   
22
Competition increases takeup of basic ICT services
New ICTs go hand in hand with competition Percenta
ge of countries worldwide allowing competition,
for selected ICT services, 2002
Source ITU World Telecommunication Regulatory
Database.
23
.. in particular, cross-ownership between the
incumbent and broadband providers appears to hurt
broadband penetration
  • Countries where incumbent telecommunication
    operators have stakes in companies offering
    competing broadband services have significantly
    reduced levels of broadband penetration.

Source Reproduced from OECD, Broadband Access
for Business, 2002.
24
How does competition occur ? Competitors buy some
services from the incumbent
IP Transit
Internet
IP Router
Wireless Access (LMDS, Microwave, WiFi etc.)
ISP server
SDH ADM
SDH ADM
SDH ADM
SDH ADM
SDH ADM
IP Router
IP Router
SDH ADM
SDH ADM
Fixed Access (leased line, fiber etc.)
End-user computers
25
Common access technology alternatives
26
What are useful indicators ?
  • Retail prices (lagging indicator low price
    usually indicates competition, high take-up, and
    good regulation)
  • population taking service
  • /Mbps
  • Cost of monthly broadband cost/monthly income
  • Broadband cots/GDP/bit/sec (alternative)

27
Broadband Demand is growing strongly in the
developed world...
(Source Analysys)
28
Opportunity Creation of new markets for
providers (attached is subscribers total numbers)
  • Japan  9,228,000 USA  8,243,000 China  7,817,000 S
    outh Korea  7,069,000 Germany  4,252,000 France  2
    ,429,000 Taiwan  2,374,000 Canada  2,027,000 Italy
      1,672,000 Spain  1,433,000 UK  1,414,000 Brazil 
    837,000 Belgium 706,000 Hong Kong  660,000 Nethe
    rlands  643,000 Sweden  508,000 Denmark  416,000 S
    witzerland  383,000 Israel  358,000 Australia  333
    ,000
  • (Source Point Topic/DSL Prime)

29
Even if the price of broadband is quite similar
in many countries, income disparities are as wide
as ever
Country Subscription/ month Price per 100kbps Subscription as of monthly income 100kbps as of monthly income
Japan 24.19 0.09 0.87 lt0.01
S. Korea 49.23 0.25 5.95 0.03
Belgium 34.41 1.15 1.78 0.06
H. Kong 38.21 1.27 1.85 0.06
USA 33.18 2.21 1.92 0.13
Jordan 49.72 4.86 14.59 1.42
Chile 106.10 41.44 11.44 4.47
Bahrain 57.46 22.44 11.67 4.56
Peru 88.17 17.22 40.69 7.95
S. Arabia 80.00 31.25 23.41 9.15
Source ITU Internet Reports Birth of Broadband
(Sep 2003) - only selective countries shown,
based on lowest broadband price offering
30
Market Player Chessboard
31
Towards a Dynamic Growth Cycle a win-win game  
32
Policy Recommendations
  • Giving service providers a telecom status
  • Extending rights of service providers
    (conditional bypass sharing)
  • Alternative infrastructure holders (second mobile
    utilities)
  • Flexible closed user groups

33
Regulatory Recommendations
  • Revenue sharing regulatory leverswholesale
    regime
  • Access regulatory leversRewarding infrastructure
    deployment

34
Licensing Recommendations Priming the Pump
Tailor opportunities to local players, regional
operators, private equity players
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