OECD Communications Outlook

Transcription

1 OUTLOOK.book Page 1 Lundi, 27. juillet :16 16 Information and Communications Technologies OECD Communications Outlook 2009

2 OUTLOOK.book Page 1 Lundi, 27. juillet :16 16 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Also available in French under the title: Perspectives des communications de l OCDE 2009 Corrigenda to OECD publications may be found on line at: OECD 2009 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to rights@oecd.org. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at info@copyright.com or the Centre français d'exploitation du droit de copie (CFC) contact@cfcopies.com.

3 OUTLOOK.book Page 3 Lundi, 27. juillet :16 16 FOREWORD Foreword This report, the tenth in a biennial series, was prepared in the context of the OECD s work on the analysis of communication policy in member countries. This edition of the OECD Communications Outlook was drafted by the staff working in the OECD Directorate for Science, Technology and Industry, including Dimitri Ypsilanti, Sam Paltridge, Taylor Reynolds, Karine Perset, Claudia Sarrocco and Frédéric Bourassa. They are grateful for the contribution of information by telecommunication carriers and to national delegations which responded in 2008 to an OECD questionnaire relating to industry regulation and data. The assistance of Netcraft and the International Telecommunication Union is gratefully acknowledged where they provided data. The pricing comparisons are undertaken in co-operation with Teligen Ltd. and quarterly updates of some pricing indicators using the OECD methodology are available directly from Teligen Ltd. Many of the other indicators in this report are available in electronic format from the OECD Telecommunications Database 2009, covering the period The draft of this report was presented to the OECD Working Party on Telecommunication and Information Services Policy at its meeting on 8-9 December The Committee for Information, Computer and Communications Policy subsequently recommended that the report be made available to the general public. 3

4 OUTLOOK.book Page 4 Lundi, 27. juillet :16 16 This book has... StatLinks2 A service that delivers Excel files from the printed page! Look for the StatLinks at the bottom right-hand corner of the tables or graphs in this book. To download the matching Excel spreadsheet, just type the link into your Internet browser, starting with the prefix. If you re reading the PDF e-book edition, and your PC is connected to the Internet, simply click on the link. You ll find StatLinks appearing in more OECD books.

5 OUTLOOK.book Page 5 Lundi, 27. juillet :16 16 TABLE OF CONTENTS Table of Contents Executive Summary Chapter 1. Main Trends Innovation through convergence The wired upgrade Mobile/wireless growth Transformation of voice Chapter 2. Recent Communication Policy Developments Introduction Trends in competition Platform competition versus local loop unbundling Regulatory issues Local loop unbundling Fixed-to-mobile interconnection (or termination charges) Household expenditures on communications Notes Chapter 3. Telecommunication Market Size Introduction Fixed access lines Mobile revenues Television Voice traffic Research and development Employment trends Notes Chapter 4. Network Dimensions and Development Introduction Fixed-line developments Mobile developments Broadband developments Investment OECD accession countries and China Notes Chapter 5. Internet Infrastructure Introduction Internet hosts Web servers

6 OUTLOOK.book Page 6 Lundi, 27. juillet :16 16 TABLE OF CONTENTS Secure servers The domain name system Address space Networks on the Internet Peering Security Chapter 6. Broadcasting Introduction Traditional broadcasting New broadcasting platforms Notes Chapter 7. Main Trends in Pricing Introduction: prices overall Flat rate vs. usage charging Mobile pricing trends Broadband pricing trends Leased lines Notes Chapter 8. Trade in Telecommunication Equipment and Services Introduction Conclusion Glossary Annex Tables List of boxes 5.1. Creating new TLDs OECD price baskets List of components of the Telecommunications Equipment category according to the HS 1996 and HS 2002 classification systems United Kingdom missing trader fraud, carousel fraud and trade data accuracy Definition of communication services (EBOPS 245) List of tables 1.1. Major public telecommunication operators and Internet service providers in the OECD area Number of operators in service, Fixed subscriber line market share of new entrants (% of total fixed analogue subscriber lines) Number of preselected lines and as a percentage of analogue subscriber lines Market share of mobile network operators in the OECD, Number portability: number of fixed lines and mobile numbers ported Government ownership of public telecommunication network operators

7 OUTLOOK.book Page 7 Lundi, 27. juillet :16 16 TABLE OF CONTENTS 2.7. National treatment for foreign-controlled enterprises: restrictions in telecommunications Local loop unbundling Number of unbundled local loops and as a percentage of analogue subscriber lines Local loop unbundling pricing Fixed-to-mobile interconnection Percentage of final consumption expenditure of households per category in the OECD area Telecommunication revenue in the OECD area Telecommunication revenue as a percentage of GDP Telecommunication revenue ratios Mobile telecommunication revenue Cellular mobile telecommunication revenue per USD cellular mobile subscriber Domestic telephone traffic per fixed telephone access path Total outgoing mobile minutes Cellular mobile traffic per mobile subscriber per year International telecommunication traffic R&D expenditures for PTOs US Patent Office: telecom patents aquired by selected equipment manufacturers US Patent Office: number of patents granted to selected telecommunication operators Telecommunications patent applications filed at the European Patent Office Access trends in the OECD area Total communication access paths in the OECD area Fixed telephone access paths in the OECD area Standard analogue telecommunication access lines in the OECD area ISDN subscriber lines in the OECD area Cable voice telephony subscribers Total broadband subscribers in the OECD area Total broadband subscribers by access technology Total broadband subscribers per 100 inhabitants in the OECD area Total communication access paths per 100 inhabitants in the OECD area Cellular mobile subscribers in the OECD area G cellular mobile subscribers in the OECD area Cellular mobile penetration, subscribers per 100 inhabitants Mobile pre-paid subscription Availability of digital subscriber lines (DSL) in the OECD area Availability of cable modem service in the OECD area Public telecommunication investment in the OECD area Investment in cellular mobile infrastructure in the OECD area Telecommunication investment by region Public telecommunication investment as a percentage of telecommunications revenue Public telecommunication investment as a percentage of gross fixed capital formation Public telecommunication investment per total communication access path Public telecommunication investment per capita Accession countries and China s communications data Internet hosts by domain,

8 OUTLOOK.book Page 8 Lundi, 27. juillet :16 16 TABLE OF CONTENTS 5.2. Web servers by domain, July Secure servers in OECD countries, Domain name registrations under top-level domains, Domain name registrations by top-level domain, January IPv4 addresses allocated by country, yearly basis, Routed IPv4 addresses by country, Annual number of IPv6 prefixes allocated by country and by RIR, yearly basis, Annual size of IPv6 allocations (/32 s) by country and by RIR, Allocated and routed Internet number ressources by country, October Routed Autonomous Systems by country, Average routed IPv4 addresses per AS by country, Top 10 networks defined by number of peers, Bots by country, Attack traffic, originating countries Data on television, cable and home satellite usage, Average household TV viewing time Yearly television licence fee The digital switchover Channel availability Cable television: subscribers, households passed and penetration rate Direct broadcast satellite subscribers Bodies responsible for broadcasting regulation Regulatory definitions of broadcasting Regulatory provisions on ownership Local content requirements and must carry regulations Public service obligations of broadcasters Pricing structures for residential users in the OECD, OECD time series for telephone charges OECD basket of residential telephone charges, low usage, August OECD basket of residential telephone charges, medium usage, August OECD basket of residential telephone charges, high usage, August OECD business fixed-line basket: small office/home office, August OECD business fixed-line basket: small and medium enterprises, August OECD basket of mobile telephone charges, low usage, August OECD basket of mobile telephone charges, medium usage, August OECD basket of mobile telephone charges, high usage, August OECD basket of international telephone calling charges per call, August DSL/fibre offerings changes, September Cable offerings changes, September Broadband pricing for residential users in the OECD area, September Trends in leased line pricing over different distances, OECD basket of national leased line charges, yearly price, August Telecommunication equipment exports, Telecommunication equipment imports, Telecommunication equipment trade balance, Telecommunication equipment total trade, Telecommunication equipment exports as a percentage of all goods exports, Telecommunication equipment exports as a percentage of GDP,

9 OUTLOOK.book Page 9 Lundi, 27. juillet :16 16 TABLE OF CONTENTS 8.7. OECD telecommunication equipment exports and import to/from China Trade in communication and telecommunication services, 2000 and Exports of telecommunication equipment by category Revealed comparative advantages for telecommunication equipment trade Annex Tables A.1. Average annual exchange rates A.2. Purchasing power parities A.3. Gross domestic product A.4. Total population List of figures 1.1. Access growth in the OECD, Subscriber, revenue and investment growth, Net access path growth, Market share of mobile virtual network operators in France Changes in the proportion of households expenditure by category in the OECD, Monthly household expenditures on ICT Monthly household expenditures on communications Trends in harmonised indices of consumer prices for communication, EU Comparing giants: food, telecom and cars Trends in public telecommunication revenue, investment and access paths, Telecommunication revenue as a percentage of GDP for total OECD, Public telecommunication revenue per communication access path, 2005 and Public telecommunication revenue per capita, 2000 and OECD share of mobile and fixed telecommunication revenues, United States: AT&T s revenue trends, 2006 and Share of mobile revenue in total telecommunication revenue Monthly mobile revenue per subscriber, 2005 and Korea: Broadband revenue declines at KT Total fixed, mobile and broadband access paths Percentage growth in communication access paths, by technology, Total communication access paths per 100 inhabitants, Net additions of fixed telephone access paths (analogue + ISDN lines), Australia: Declining local call revenues but subscription revenues hold steady Cellular mobile subscribers in OECD countries Cellular mobile subscribers per 100 inhabitants, G cellular mobile adoption Dial-up and broadband shares of total fixed Internet subscribers, December Average advertised speed, by technology, September Fastest residential broadband download speed advertised by the incumbent telecommunications operator, September Advertised broadband speed ranges, September Observed download speeds, November 2008-January Observed upload speeds, November 2008-January

10 OUTLOOK.book Page 10 Lundi, 27. juillet :16 16 TABLE OF CONTENTS Actual observed download speeds as a percentage of advertised speeds, November 2008-January Comparing two data collections: Advertised vs. observed throughput The prevalence of data caps, Additional traffic price variations before and after reaching the cap, September Public telecommunications investment by region, excluding spectrum fees, Public telecommunications investment per access path Public telecommunications investment per capita Fixed telephone access paths per 100 inhabitants, 2003, 2005 and Total communication access paths per 100 inhabitants, 2003, 2005 and Cellular mobile subscribers per 100 inhabitants, 2003 and Cellular mobile subscribers per 100 inhabitants, by type of subscription, Broadband subscribers per 100 inhabitants, 2003, 2005 and Broadband subscribers by technology, Internet hosts by type of domain, Average annual growth in Internet hosts by domain, Secure servers in the United States and in the rest of the world, 1998 and Secure servers per inhabitants Domain name registrations per type of top-level domain, Average annual growth in domain name registrations by domain, OECD country related cctld registrations per inhabitants, July Shares of gtlds in OECD country-related domain name registrations, August Shares of domain name registrations under cctlds and major gtlds, world, August Domain name registrations per inhabitants, August Domain name registrars market share, Average yearly growth of allocated IPv4 addresses, by country, Percentage of allocated IPv4 address space that is routed, year-end Routed IPv4 addresses per inhabitant, year-end Distribution of IPv6 allocations by the RIRs, year-end Selected large IPv6 allocations Top five countries ranked by allocations, allocated and routed IPv6 addresses, year-end Numbers of IPv6 allocations, top eight OECD countries, Routed autonomous systems and IPv4 addresses, year-end Autonomous systems per inhabitants, November Top ten networks defined by number of peers, Attack traffic, top 10 originating countries Bot-infected machines, top 10 countries, December Growth in bot-infected computers, Percentage of households with a television, Average household television viewing time, hours per day, Breakdown of television access by distribution type Cable: Highest percentages of homes passed and subscribed, Direct broadcast satellite subscribers as a percentage of households with televisions, Time series for residential phone charges, OECD residential fixed-line basket: low use, August OECD residential fixed-line basket: medium use, August OECD residential fixed-line basket: high use, August

11 OUTLOOK.book Page 11 Lundi, 27. juillet :16 16 TABLE OF CONTENTS 7.5. Residential fixed-line baskets: price spread, August Time series for business phone charges, OECD average, OECD business fixed-line basket: small office/home office, August OECD business fixed-line basket: small and medium-sized enterprises, August OECD mobile low-use basket, August OECD mobile medium-use basket, August OECD mobile high-use basket, August Incumbent broadband price and speed changes, ADSL or fibre, September 2006-September Cable broadband price and speed changes, September 2006-September Range of broadband prices for a monthly subscription, September Range of broadband prices per megabits per second of advertised speed, September Average monthly subscription price for very low-speed connections, September Average monthly subscription price for medium-speed connections, September Average monthly subscription price for high-speed connections, September Average monthly subscription price for very high-speed connections, September Average data caps on mobile broadband offers by country, September Average monthly price for low-usage mobile broadband, September Average monthly price for medium-usage mobile broadband, September Average monthly price for higher-usage mobile broadband, September Trends in leased line pricing over different distances, 2 Mbit/s line, Leased line pricing, 2 Mbit/s line, August Growth indices for OECD countries total trade and trade in telecommunications equipment, Trade in telecommunication equipment in OECD, OECD countries worldwide exports of telecommunications equipment OECD countries worldwide imports of telecommunications equipment Telecommunications equipment trade balance, ICT sector total trade, ICT sector exports, OECD accession countries trade in telecommunication equipment, OECD accession countries exports of telecommunication equipment, Comparison of OECD, US and Chinese telecommunication equipment trade Comparison of OECD, US and Chinese telecommunication equipment exports China s export destinations US export destinations US import provenance Korea s export destinations Germany s export destinations Ratio of telecommunications equipment exports to total exports Ratio of telecommunications equipment exports to GDP Finland s export destinations Export value in GDP Export value in total exports

12 OUTLOOK.book Page 12 Lundi, 27. juillet :16 16 TABLE OF CONTENTS Revealed comparative advantages (Lafay index), 1997 and Top four exported telecommunication equipment goods by OECD countries, OECD exported telecommunication equipment goods split into three categories, Total services trade, Services exports, Exports of communication services for 2002 and Imports of communication services for 2000 and Changes in types of trade in telecommunication equipment in OECD member countries between 1996 and

13 OUTLOOK.book Page 13 Lundi, 27. juillet :16 16 ISBN OECD Communications Outlook 2009 OECD 2009 Executive Summary This tenth edition of the biennial OECD Communications Outlook highlights transformations in the sector and investment in next-generation communication networks. It details the strong, steady growth of subscriptions and revenues in the telecommunication sector despite declining prices facing end users. This edition also looks at issues surrounding the expansion of the Internet as well as how broadcasting markets are evolving with respect to high-speed data networks. This edition of the Communications Outlook also looks at key regulatory trends designed to encourage competition and growth. The upgrade to next-generation networks (fixed and wireless) Telecommunication companies which survived the bursting of the dot-com bubble in 2000 generally emerged stronger and more agile than before. This agility has served them well when facing dramatic changes in telecommunication markets. Communication operators continue upgrading their networks in order to stay competitive and increase revenues. Fixed line and cable providers are investing in fibre-optic infrastructure and wireless carriers are paying for new radio-interface upgrades in order to offer higher-speed data services. This transformation has been fueled by investment. Telecommunications investment reached USD 185 billion in 2007, an increase of 9% each year from Investment grew over the past four years, in sharp contrast to the strong investment declines observed between 2000 and Communication infrastructure investment plays an increasingly important role in total investment within a country. In 2007, telecommunication investment grew to 2.2% of the gross fixed capital formation within the OECD and telecommunication operators are commonly among the largest private investors in their respective economies. Despite strong growth through 2007, the global financial crisis evolving in is likely to dampen investment plans of many operators and may slow investment plans in core networks. The crisis may also negatively impact on a number of new entrants who depend on access to capital in order to expand and compete with better-funded incumbents. Some governments, recognising the economic importance of broadband networks within the economy, are investing in extending and upgrading high-speed access as part of fiscal stimulus packages. 13

14 OUTLOOK.book Page 14 Lundi, 27. juillet :16 16 EXECUTIVE SUMMARY Steady revenue growth People increasingly rely on telecommunication services for social and economic interactions. The percentage of household budget assigned to communication services has increased relative to other budgetary areas over the last two decades. Households devote an average of 2.2% of their budgets to communication services, underscoring demand for services even during times of economic downturn. Telecommunications is a USD 1.2 trillion market in the OECD. Telecommunication markets have expanded at a fairly constant annual growth rate of 6% since 1990, even during economic downturns. The fact that operators have been able to maintain historical growth levels in the face of declining per-minute calling prices shows an ability to adapt to quickly changing market conditions and to develop new income streams. Voice remains the largest revenue source for operators despite declines in calling prices for both fixed and mobile. Mobile revenues accounted for 41% of all telecommunication revenues in the OECD in 2007, up from 22% just a decade earlier. Ten countries now have mobile sectors which are larger than the fixed sector in revenue terms. Subscriptions growing There have been two major growth areas in telecommunication services in the previous two years mobile and broadband. Mobile and broadband subscriptions together accounted for 74% of all communication subscriptions in Mobile alone accounts for 61% of all subscriptions while standard phone lines have dropped to 26%. This is a dramatic turnaround from the year 2000 when there were more fixed line subscribers than mobile. The total number of fixed, mobile and broadband subscriptions in the OECD grew to 1.6 billion in 2007 for just over 1 billion inhabitants. To emphasise how our ability to communicate has changed, there are seven access paths in 2007 for every access path in The sheer increase highlights the growth of the telecommunications industry over this time. Mobile subscriptions grew at a compound annual growth rate of 10% over the previous two years to push the number of OECD mobile subscriptions to 1.14 billion by This is an effective penetration rate of 96.1 mobile subscribers per 100 inhabitants. Italy had the highest penetration rate with 151 subscribers per 100 inhabitants and only nine countries had less than one subscription per person. Mobile growth has been strong but transitioning subscribers to third-generation mobile networks has taken longer than originally planned. As of 2007, only 18.2% of reported OECD mobile subscribers were on third-generation networks. The other prominent growth area has been broadband. Broadband is now the dominant fixed access method in all OECD countries. In 2005, dial-up connections still accounted for 40% of fixed Internet connections but just two years later that percentage had fallen to 10%. Dial-up has practically disappeared in Korea where it now only accounts for fewer than two out of every Internet connections. The growth of broadband subscriptions has also helped protect fixed line operators from much more dramatic line losses and has increased the value of cable networks around the world. The number of broadband access paths has grown 31% per year over the previous 14

15 OUTLOOK.book Page 15 Lundi, 27. juillet :16 16 EXECUTIVE SUMMARY four years. DSL remains the leading broadband technology, accounting for 60% of all broadband subscriptions in June Cable represents 29% while fibre-based connections are 9%. The remaining 2% of connections are over fixed-wireless, satellite and broadbandover-power lines. The year 2008 also marked a significant shift in fixed broadband technologies. In June 2008, Japan and Korea became the first two countries to have more fibre-based subscriptions than either DSL or cable. Prices falling The impressive subscription growth between 2005 and 2007 in part reflects more attractively priced offers from operators. Prices have tended to fall for communication services over time on all platforms. Over the previous 18 years, residential users saw the real price of residential fixed-line phone service fall roughly 1% per year while business prices fell 2.5% per year. The widespread availability of voice-over-broadband services continues to push down fixedline calling prices. Many voice-over-broadband plans now offer flat-rate calling plans nationally or internationally. Mobile subscribers also benefitted from declining prices between 2006 and The average prices of the OECD mobile baskets (a set number of calls and messages per year) fell by 21% for low usage, 28% for medium usage and 32% for the highest consumption level over the two year period. Prices may be falling but the composition of voice calls is also shifting. The number of minutes of communication per mobile phone is increasing while the minutes on fixed networks are decreasing. Data between 2005 and 2007 suggest people are making fewer domestic calls on the fixed network in most countries. When people do use fixed networks they are increasingly making calls to users of mobile phones. Broadband prices have fallen as well over the same time. OECD broadband prices declined significantly over the previous three years. Prices declined an average of 14% per year for DSL and 15% for cable between 2005 and Operators have been able to increase broadband revenues through attracting new customers and bundling broadband with other services, particularly voice. The average price of a low-speed connection (advertising downloads at 2 megabits per second or less) was USD 32 per month in September At the other end of the scale, broadband connections with download speeds advertised as faster than 30 megabits per second averaged USD 45 per month. The Internet is expanding but current IPv4 addresses are running short The growth in broadband subscriptions has helped fuel the expansion of the Internet and also been one source of its growing pains. The number of Internet hosts worldwide grew at 33% compounded annually between 1998 and 2008 to reach 540 million hosts in January Over half of all hosts (287 million) had a generic, top-level domain rather than one tied to a country code. 15

16 OUTLOOK.book Page 16 Lundi, 27. juillet :16 16 EXECUTIVE SUMMARY Networks in OECD countries comprise the majority of networks attached to the Internet. As a network of networks, OECD countries accounted for 74% of the networks present in the global routing tables in The United States has the largest share of networks with an autonomous system assignment comprising 43% of the world total at the end of This growth in the number of networks, and devices attached to those networks has led to a shortage of unique Internet addresses used to identify individual devices connected to the Internet. As a result, there is a need for all network operators to upgrade to a new Internet addressing scheme, Internet protocol version 6 (IPv6). Based on allocation trends, experts estimate that the addresses in the current scheme (IPv4) will run out in 2011 or early 2012 (January 2009 projections). Television broadcasting evolving Operators are investing heavily in new, high-speed broadband networks and this allows a much richer audio-visual experience than early broadband connections were capable of transmitting. As a result, the audio visual landscape is rapidly changing with audio and video now delivered over a range of different networks and devices. Television is no longer the sole conduit for diffusion of video data as consumers now watch video content on an array of devices. Broadcasters, telecommunication operators (fixed and mobile), Internet service providers, content aggregators, advertisers and users are all active parts of a new, converged market. Content is repackaged to ensure that it is accessible over all available networks and devices. Many electronic equipment providers, from mobile phones to handheld audio/ video devices are also trying to ensure that their users can access content directly and away from home. Traditional linear diffusion of content maintains an advantage over other media because of the near ubiquity of televisions in households. On average, 95% of all households in the OECD have at least one television. Only six countries have television penetration of less than 90% of households. This provides a strong base for terrestrial, cable and satellite broadcasters. At the same time, it represents a challenge to new media operators who try to attract viewers to other devices. Television has become a lucrative potential market for DSL providers and a historical revenue stream to protect for cable operators. A number of DSL providers have been successful at using television over DSL as a way to boost their revenues. Regulatory changes to support growth Broadband, and with it the Internet, is often viewed as a general purpose technology having a wide impact on a large number of industries, on social interaction and resulting in a range of new innovative services which have diffused rapidly across economies. Broadband is viewed as an enabler of productivity and economic growth, but its impact on economies will depend on broadband being used by business and consumers, which requires access to broadband at low prices and good quality. In turn, these factors are closely linked with competition in the market. 16

17 OUTLOOK.book Page 17 Lundi, 27. juillet :16 16 EXECUTIVE SUMMARY Investments in new fibre networks will allow for much higher speeds for end users but consumer benefits may depend on the competitiveness of markets. The high fixed investment costs for new fibre networks to users means a limit to the number of competing fibre networks a specific geographic area may be able to support. Facilitiesbased competition may be difficult to develop in some markets. Investment in new technology such as next generation access networks, is taking place mainly in urban areas. There are concerns about the implications this may have in creating new digital geographic divides and whether alternative technologies, such as high-speed wireless, are sufficiently adequate to provide rural and remote areas with sufficient capacity for emerging services. With these concerns in mind, regulatory frameworks, which had reached a certain stability and maturity during the last decade, are in many cases being reviewed in order to ensure that competition prevails. 17

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19 OUTLOOK.book Page 19 Lundi, 27. juillet :16 16 ISBN OECD Communications Outlook 2009 OECD 2009 Chapter 1 Main Trends Telecommunication companies which survived the burst of the dot-com bubble in 2000 generally emerged stronger and more agile than before and are well poised to face the unfolding economic downturn and dramatic changes in telecommunication markets. Communication operators continue upgrading their networks in order to stay competitive and increase revenues. Fixed line and cable providers are investing in fibre-optic infrastructure, and wireless carriers are paying for new radio-interface upgrades in order to offer higher-speed data services. 19

20 OUTLOOK.book Page 20 Lundi, 27. juillet : MAIN TRENDS The unfolding of the financial crisis in late 2008 highlights the relative strengths of the telecommunication sector as well as potential challenges for continued growth. Telecommunication markets are relatively resilient to economic shocks. The largest economic downturn in the previous 15 years was between 2001 and 2003, when OECD GDP growth fell below 2% per year. The bursting of the dot-com bubble and subsequent bankruptcies created problems in the telecommunication sector but the number of subscribers continued increasing at a steady pace (Figure 1.1). Figure 1.1. Access growth in the OECD, Analogue ISDN Mobile Cable DSL Fibre Subscribers or access (millions) statlink 2 The economic downturn had only a slight impact on telecommunication revenues between 2001 and Revenues continued growing during the recessionary period in most countries, including the United States (see Chapter 3). Several characteristics of the telecommunication sector such as the increasing view that communication services are increasingly non-discretionary spending items, long contract durations and bundled services help explain why operators are relatively well insulated from economic downturns. Consumer and business users increasingly include telecommunication spending in the non-discretionary category of their budgets. For example, job seekers may view Internet access at home as a key tool for finding new employment. Telecommunication providers also tend to set contract durations at periods of 12 months or longer as a way to recover the costs of the equipment they provide for use when a contract is signed. Mobile phone operators subsidise consumer handsets and recover the costs over the period of the contract, typically months. Broadband providers often have a similar contract structure due to the cost of user premises equipment and installation. Consumers typically face steep penalties if they choose to cancel a subscription before the end of a telecommunication contract. 20