Global trends in telecom development Seminar in Niamey, April 2001
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1 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, and do not necessarily reflect the opinions of the ITU or its membership. Authors can be contacted by at:
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 Africa Addressing the digital divide Traffic and tariffs trends Tariff rebalancing
3 1' A Mobile Revolution Fixed Lines vs. Mobile Users, worldwide, Million 1'400 Mobile Users 1'200 Fixed Lines Source: ITU World Telecommunication Indicators Database.
4 The changing pie: Global telecom service revenue, 1998 Other (incl. Internet, leased lines, telex), 10.6% Mobile service revenues, 21.2% Domestic fixedline revenues, 59.2% International revenues, 8.8% 1998 Telecom service revenue. Total = US$724b Source: ITU World Telecommunication Development Report 1999: Mobile cellular (forthcoming)
5 Projection of revenue growth (US$bn) Service revenue (US$ bn) 1000 Source: ITU Other: Data, Internet, Leased lines, telex, etc Domestic Telephone/fax Actual Int'l Projected Mobile
6 Internet users, millions Annual rate of change 109% Change % 67% 90 66% % 35% Source: ITU
7 Inter-regional regional Internet connectivity 0.4 Gbit/s Asia / Pacific 18 Gbit/s 3 Gbit /s Latin America USA / Canada 0.5 Gbit/s 56 Gbit/s Africa 0.2 Gbit /s Europe 0.1 Gbit/s Note: Gbit/s = Gigabits (1 000 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 fullyprivate, 3 are partially private, 1 is state-owned Independent regulators There are currently 89 independent regulators (only 12 in 1990)
9 Degree of competition by service, 1999 (ITU Member States) 80% Monopoly Duopoly Competition 70% 60% 50% 40% 30% 20% 10% 0% Basic services Source: ITU Telecommunication Regulatory Database. Cellular Cable TV ISPs
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- Pacific Source: ITU Telecommunication Regulatory Database. Arab States Europe
11 Increasing competition: By no. of countries, by service, Countries Local Source: ITU Telecommunication Regulatory Database. Long distance International
12 Percentage of outgoing international traffic open to competition 74% 85% 35% 46% Monopoly Competition 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.
13 Source: ITU Telecommunication Regulatory Database. Note: Some countries made sales in several tranches (e.g., Spain) Recent privatisation transactions Bolivia Belgium Armenia Brazil Cape Verde Germany Australia Denmark (2) Cuba Ghana Cote d'ivoire France Czech Rep. Greece France El Salvador Indonesia Guinea Greece Finland Mongolia Hungary Hungary Guatemala Portugal Indonesia India (MTNL) Lithuania Spain Ireland India (VSNL) Malta Korea Israel Poland Peru Italy Puerto Rico Portugal Kazakhstan Romania Singapore Panama Switzerland Venezuela Portugal Senegal Serbia South Africa Sri Lanka Spain
14 Ownership status of the incumbent Countries Private State-owned Source: ITU Telecommunication Regulatory Database.
15 Separate regulatory bodies, worldwide, 1998 Separate Source: ITU Telecom Regulatory Database.
16 The future is here, it s just not evenly distributed William Gibson Teledensity to 68.3 (46) 8.6 to 27.8 (45) 1.4 to 8.6 (47) 0 to 1.4 (48) Source: ITU World Telecommunication Indicators Database.
17 100% 90% Digital divide = Telecoms divide User distribution, by income group, Jan % 70% 60% 50% 40% 30% 20% 10% 0% 280 million 82 % Internet users 490 million 69 % Mobile users 912 million 58 % Telephone lines Source: ITU World Telecommunication Indicators Database. 6 billion 15 % Population High income Upper-mid income Lower-mid income Low income
18 The digital divide is shrinking, but also shifting Share of low and lower-middle income countries in: Telephone main lines Jan Jan % 28% 5% 14% Mobile subscribers 1.1% 7.6% Estimated Internet Users Source: ITU World Telecommunication Indicators Database.
19 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% China 4% 2% 0% Other low & lowermid income LDCs
20 Africa Traffic % Millions of minutes % 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% market volume share % Africa Traffic Percentage of the Africa Traffic in respect of the World Traffic
21 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% USA market share
22 Evolution of the Average Settlement Rates Africa Region World USA
23 Settlement rates versus Retail prices in the Africa Region Retail Price Settlement rates
24 Long distance market share % share of long distance calls 35% 30% 25% 20% 15% NCCs (Japan) Clear (NZ) Optus (Aust.) As competitors gain market share... 10% 5% 0% Long distance prices Index, 1993= Japan New Zealand Australia 90 Long distance prices come down Source: ITU Asia-Pacific Telecommunication Indicators, 1997.
25 Rebalancing in action (1): Iceland Telecom, price of 3 minute, peak-rate call, includ. tax Local Medium Long distance Jan- 88 Jul- 88 Source: Iceland Telecom, OECD. Jul- 89 Nov- 90 Oct- 91 Feb- 92 Sep- 93 Jun- 94 Aug- 95 Dec Nov Nov- 97
26 Rebalancing in action (2): SwissCom, price per minute of local call and call to US 74 Swiss call prices. US cents per minute Source: ITU. Call to USA 43 Local call
27 Rebalancing in action (3): Average trends in 39 major economies, in US$ minutes, local calls 3 mins Int'l call to US Monthly line rental Source: ITU World Telecommunication Indicators Database.
28 Rebalancing in action (4): Trends in Thailand, in US$ mins, local calls Monthly line rental 3 mins Int'l call to US Source: ITU World Telecommunication Indicators Database.
29 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 $1.50 $1.00 Mark-up Source: ITU adapted from FCC and national data (34 countries). Forecast $0.50 $0.00 Settlement
30 International telephony market % Millions of minutes % 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% market volume share Africa traffic USA traffic USA share World traffic Africa Region share
31 Degree of competition in cellular services, 2000 by region Monopoly Duopoly Competition 70% 60% 50% 40% 30% 20% 10% 0% Source: ITU/BDT Regulatory Database Africa Americas Asia- Pacific Arab States Europe
32 Degree of competition in basic services in Africa, % 80% 70% 60% 50% 40% 30% 20% 10% 0% Monopoly Duopoly Competition Local Long distance International Cellular
33 Separate regulators in the World Source: ITU/BDT Regulatory Database
34 Separate regulators by Region 2000, Total: 102 Organismes séparés par région, 2000 Total: 102 Europe 30% Afrique 28% Asie- Pacifique 13% Etats arabes 6% Amériques 23%
35 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
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