Trade in Telecommunications and Barriers to it
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1 Trade in Telecommunications and Barriers to it OECD Experts Meeting on Telecommunications Services Paris 10 December 2008 Tilmann Kupfer Head of Trade Policy & International Public Affairs BT Group plc
2 ICT and the Global Economy Global Networked Economy ICT key driver of growth and productivity Increase investment in new networks Level playing-field, fully open to competition Responding to Financial Crisis Needs concerted and coordinated action, EU and Global No retreat to protectionism, nationalisation Keep focus on competition, open markets Pursue WTO deal and EU FTAs with key markets, more Internal Market 2
3 BT - Incumbent and New Entrant with Global Reach North America Over 3,000 employees Over 3,500 customers 8,000 connections UK Over 16,000 employees Over 2,500 major Customers 9,000 connections Western Europe Over 8,500 employees Over 6,700 major customers 46,000 connections Russia / CEE Over 400 employees Over 350 customers 1,000 connections Latin America Over 1,000 employees Over 500 major customers 2,000 connections MEA Over 250 employees Over 600 customers 3,000 connections Asia Pac Over 7,500 employees 650 customers 11,000 connections Over 37,000 in Global Services delivering service to more than 170 countries 8,500 major, multi-site government and private sector customers Over 3,000 local network access points worldwide 80,000 customer connections to the global MPLS network Global MPLS generates $1bn annual revenue (07/08) 3
4 Meeting the needs of Enterprise Customers Globalisation is increasingly driving companies to expand operations around the world and to diversify manufacturing, services and research bases Highly demanding customers require services to be delivered to multiple sites, across international boundaries by a single communications service provider in exactly the same way and in a manner which enables them to focus on their core business Customers look to service providers to integrate their diverse end-to-end communications functions, including fixed, mobile, , voic , LAN access, etc. 4
5 EU Level: achieve a competitive Internal Market EU Regulatory Framework in place since 1998 and under its 2nd review Current Internal Market a success in many areas EU is a world leader in mobile and several of its Member Sates also in broadband But changes are needed: facilitating investment in NGA without re-creating monopolies; encouraging cross-border, pan-european services; building a real level playing-field 5
6 Global Level: confronted with similar issues Telecommunications is a capital intensive market and growth therefore will often depend on outside investment Foreign investment can take many forms Investment in existing operators Investment in new infrastructure Provisioning of new services over existing infrastructure (services based competition) Research and development BT own experience is to follow the customer so our own decisions are closely tied also to the investment decisions of our customers Investment decisions depend on an acceptable business case with acceptable risks and this is directly tied to regulatory environments Key regulatory factors which influence the decision are: Regulatory and legal certainty Low barriers to entry which recognise different business models Cost effective supply with non-discrimination: the ability to compete fairly! 6
7 Key elements for a level playing field in all markets Foreign Direct Investment limitations: Some progress, but many countries still prohibit 100% foreign owned or even majority controlled Regulatory certainty: clear and consistent regulatory policies and Rule of Law Competitive safeguards: Competition law should be effective and apply to all sectors incl. telecoms; Should apply also to state-owned players; Enforced non-discrimination and compliance through ex ante regulation and ex post competition law Truly independent regulator: needs to be both independent and effective Mandated access to bottleneck facilities Clear and efficient mechanism for appeals and dispute resolution to enable effective regulation and without delays Public available licensing criteria and the allocation of scare resources to be fair, simple, transparent, and at reasonable cost Universal service obligations applied in a transparent, non-discriminatory and competitively neutral manner and no more onerous than necessary to deliver well defined objectives Regulation must be targeted at enduring bottlenecks; investment in NGA or other network must not become an excuse for re-monopolisation 7
8 Meeting the needs of Global Telecoms Service Providers Many regulatory policies are focussed on the consumer market and forget the enterprise customer market as a key area of growth and development and which can have significant flow through impact to consumers; The regulatory framework needed to attract such customers include: A framework which supports new investment and innovation in Telecoms and IT services Consistency and harmonisation to the extent possible to enable simplicity in contracting and comparable service levels across national boundaries Low cost access and international capacity - which can be delivered through a robust competitive market; To be able to deliver such services across boundaries, Global Telecoms Service providers will almost always require input from local carriers. 8
9 Thank you 9
10 10
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