Global trends in telecom development & new challenges for - PowerPoint PPT Presentation

Global trends in telecom development & new challenges for developing countries Saburo TANAKA Seminar in Buenos Aires, June 2005 The original document is elaborated by Dr Tim Kelly, ITU/SPU. It has completed by Saburo Tanaka. 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@itu.int saburo.tanaka@itu.int

Agenda Agenda � Market trends � Network evolution � Paradigm shift � Tariff evolution � Challenges for developing countries � IP Telephony � Mobile service � Internet issue

A Mobile Revolution 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.

Calling opportunities worldwide Calling opportunities worldwide 5.0% 5.0% 0.3% 7.5% 89.7% 19.9% 1993 52.7% 23.4% 26.7% Fixed-to- Mobile-to- 19.9% fixed mobile 1998 Mobile-to- Fixed-to- fixed mobile 25.0% 25.0% 2003 Source: ITU Fixed-Mobile Interconnect website: http://www.itu.int/interconnect

Impact of new technologies Impact of new technologies 1600 25 Mobile subscribers 1400 20 Internet subscribers 1200 Mobile penetration 1000 15 Internet penetration 800 10 600 400 5 200 0 0 5 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 5

Asia- -Pacific international Pacific international Asia communications capacity, Gbit Gbit/s /s communications capacity, 70 65 60 Internet Telephone 50 40 31 30 30 26 23 20 20 18 16 14 11 10 9 8 8 3 2 0 0 0 0 0 0.1 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Growth In DSL Subscribers-Regional Division (000s) 1999-2003 20,000 19,000 18,000 17,000 16,000 15,000 14,000 13,000 Asia-Pacific 12,000 North America 11,000 10,000 Western Europe 9,000 South & South East Asia 8,000 Latin America 7,000 Eastern Europe 6,000 5,000 Middle East & Africa 4,000 3,000 2,000 1,000 0 1999 2000 2001 2002 2003

International voice traffic International voice traffic (in billions of minutes) (in billions of minutes) 180 VoIP 160 PSTN 140 120 As % of total 100 11.8% 13.1% 80 60 7.4% 40 4.8% 20 1.6% 0.2% 0 0.01% Source: ITU / TeleGeography 1997 1998 1999 2000 2001 2002 2003

Changing mix of int ’ l circuits Changing mix of int ’ l circuits Rise of international private lines Rise of international private lines Availability and status of international circuits from the 8 United States (64 kbit/s equivalents, in millions) 7 Other 2002, total = 6.7m circuits of which 6 IPL = 29.4% Idle circuits 5 4 3 1995, total = 0.26m circuits of which 2 International IPL = 10.6% Private Lines Source: ITU, 1 adapted from FCC Circuit PSTN circuits Status Report. 0 9 2002 1995 9

International voice traffic trends International voice traffic trends Revenue (US$bn) and price per min ( cents) Revenue (US$bn) and price per min ( cents) 70 60 50 68 63 58 40 51 44 30 39 33 20 Revenue (US$bn) 10 Price per minute (US cents) Source: ITU 0 World Telecom Indicators Database. 1997 1998 1999 2000 2001 2002 2003 1 10 0

Sources of telecom revenue Sources of telecom revenue Worldwide, in US$ billions Worldwide, in US$ billions 1'200 Service revenue (US$ bn) 1'000 19% Other: Data, Internet, leased 800 line, etc. 38% Mobile 600 4.5% 400 International fixed telephone 200 Domestic fixed telephone 38.5% Source: ITU 0 World Telecom Indicators Database. 1993 95 97 99 01 2003

Selected rates for call termination Selected rates for call termination In Euro cents per minute In Euro cents per minute 0.150 Mexico 0.08 Settlement/RIO 0.08 Skype, Mobile 0.140 Skype, Fixed China 0.022 0.022 Note: Mobile 0.180 and fixed rates are for India 0.138 SkypeOut. 0.151 Settlement is from US and Reference 0.019 Interconnect Germany 0.251 Offer is for double tandem. 0.017 Source : Skype, FCC, Analysys. 0.016 France 0.164 1 0.017 12 2

The “ third coming ” ” of IP Telephony of IP Telephony The “ third coming � 1995-1999: � “ Internet phone ” , offered primarily over the public Internet (e.g. FreeWorld Dial-up, DialPad) � 2000-2002 � “ VoIP ” , offered as discounted telephony over IP-based networks (e.g. Net2Phone, iBasis) � Collapse of dot.com bubble left many VoIP companies struggling as incumbent PTOs also offered VoIP services or acquired VoIP operators (e.g. China Telecom, Teleglobe) � 2003-present � “ Voice over broadband ” , offered as free or flat-rate chat plus discounted calls to PSTN/mobile users (e.g. Vonage, Skype) � “ Corporate IP ” , as users shift both data and voice to a unified IP platform 1 13 3

Annual growth rates Annual growth rates International voice traffic, in % International voice traffic, in % 10 ’ 000% 1 ’ 000% VoIP 100% 10% Note: Vertical PSTN scale is logarithmic. Source: ITU / 1% TeleGeography 1998 1999 2000 2001 2002 2003 1 14 4

Regulatory status of IP Telephony Regulatory status of IP Telephony By region, 2003 By region, 2003 100% 1 2 No policy for 6 2 IP Telephony 8 80% 3 9 Full 6 4 Competition 60% 29 4 Partial 8 Competition 40% 6 4 Prohibited 1 5 20% 2 14 5 6 7 Restricted 0% Africa Americas Arab States Asia-Pacific Europe/CIS Note: Based on responses from 132 economies. “Prohibited” means no service is possible. “Restricted” means only licensed PTOs can offer the service. “Partial competition” means non-licensed PTOs may use either IP networks or the public Internet. “Full competition” means anyone can use or offer service. Source: ITU (2005, forthcoming): General Trends in Telecom Reform”

Regulatory dilemmas Regulatory dilemmas Examples of regulatory confusion or inconsistency in Examples of regulatory confusion or inconsistency in regulation of IP Telephony regulation of IP Telephony Non-licensed Users are able to Licensed PTOs are All PTOs are allowed to PTOs may offer IP make IP phone calls, allowed to offer IP offer IP Telephony, but Telephony, but not but no company is Telephony, but users users are not allowed licensed PTOs licensed to provide it are not allowed to use it to use it Brazil Barbados Aghanistan Bhutan Sri Lanka Algeria Congo DR Suriname Antigua & Barbuda Kyrgyzstan TYFR Macedonia Indonesia Togo Malawi Mali Morocco Oman Pakistan Paraguay Rwanda Uganda Note: Based on responses to 2003/04 questionnaire from 132 economies. Only selected responses are shown. “PTO” = Public Telecommunications Operator. Source: ITU World Telecommunication Regulatory Database.

IP Telephony in five year ’ s time IP Telephony in five year ’ s time Major technological and regulatory trends Major technological and regulatory trends � IP-based traffic indistinguishable from PSTN � Around 100 bn minutes of IP-based international traffic in 2008, or >50% of total � Many carriers will have all IP-networks � A majority of voice traffic will originate on wireless networks and much of it will be IP-based � Numbering convergence � ENUM will allow calls to and from IP voice on multiple different devices � Numbering plan will allow for non-geographic and device- indendent VoIP numbers � Voice over IP over mobile � Voice will increasingly travel over data channel in mobile networks to provide discounted calling prices 1 17 7

Mini case study: IP Telephony in Mini case study: IP Telephony in Japan Japan � In 2000, Japanese Ministry (now MIC) introduced new rules on unbundling local loop and co-location � Rapid rise of DSL connections � Very low prices (<US$20 per month) � Service speeds in excess of 26 Mbit/s � Yahoo BB! Entered marked in September 2001 with bundled DSL and VoIP � MIC defined numbering plan (prefix 050) for VoIP, allowing calls to be received on PCs � November 2002, >7m VoIP numbers allocated to ISPs � VoIP development consortium worked with MIC to establish standards for QoS, interconnection, tariffs, number allocation etc. 1 18 8