Telecom Market Highlights Regulatory Perspectives

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1 Telecom Market Highlights Regulatory Perspectives Dr. Amr Badawi Executive President Outline Convergence Re-Structuring Broadband Challenges of Restructuring Broadband WiMAX VOIP Market Overview Fixed Lines Mobile Lines Internet 1

2 Convergence Roadmap Convergence pillars: Technical Side: 1. Digitalized Infrastructure Broadband; Wireless and mobile technologies; High-speed backbone networks; 2. Digitalized Media Content DRM DAM Convergence Roadmap Cont d From the Regulatory Side: 1. Conducive Market Conditions (supply, demand, competition); 2. Technological Neutrality; 3. Intellectual Property Rights and GATS agreement From the Business Side: 1. Encourage investment; 2. More service providers; 3. Diverse services; options; 4. Digital content creators 2

3 Impact of Converged Telecom Gradual shift to VoIP and VOB (Voice over Broadband CATV systems offering video on demand, broadband access and voice telephony. CATV operators are now competing with telecom operators. Trend offer triple play service bundles in inclusive packages Steady growth in 3G networks and wireless broadband services Threat on the industry Impact of Convergence on Regulation Implications: Rise in the number of wireless services raises the need for spectrum management reform. Revisiting current licensing regimes & favors regimes that are technologically neutral. Broadening market definitions, with the possibility of replacing several narrowly defined markets by a single more broadly defined market. 3

4 Issues for Debate Regulatory and legislative issues: The need to : encourage investment lower market entry barriers Policy should: ensure competitive markets encourage the provision of better and cheaper services be responsive to market changes; updated upon need Avoid regulatory arbitrage and gamesmanship Reducing the digital divide: Universal Service Issues for Debate cont d Is the trend of institutional convergence (the example of Ofcom) really the best way to address Convergence? Are current telecom or ICT regulators competent to regulate content? Can content regulation be avoided? What is the most effective role for national telecom regulators? 4

5 Re-Structuring Broadband Increasing broadband penetration Promoting ADSL higher speeds by getting their prices down (starting from USD 16 per month) Paving the road for econtent market by availing high speed connections Providing special services for buildings as an alternative to ADSL line sharing Considering WiMax technology as a possible solution to BWA in Egypt Evolution of ADSL Subscribers May04 Oct06 180, , , , ,000 80,000 60,000 40,000 20,000 0 May-04 Jun-04 Jul-04 Total number of subsribers 170,093 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 5

6 Challenges of Restructuring Broadband Impact on Free Internet market ADSL business model and pricing scheme ADSL line sharing and unlicensed service providers WiMAX Traditional Technologies can deliver WiMAX Will Meet Emerging Customer Demand Broadband, but Fixed Mobile, but Narrowband Fixed & Nomadic Data, Voice, Video 6

7 Consultation Procedures First Phase April 05 Hearing Session Second Phase within June Publishing a Consultation Paper (draftframework) Third Phase within July Workshop discuss the Consultation Paper and feedback and adopt final framework BWA Hearing Session Discussed different applications Nationwide Network Backhauling Last-Mile Access Network Scenarios for Regulatory Models Nationwide Service Provider Regional Service Provider Network Operator Licensing issues Concentrated on WiMax technology 7

8 Food for Thought It is expected that WiMAX becomes the dominant standard for Wireless LAN in the world market, at least, in fixed broadband networks Focus is too often on technologies: Subscribers pay for services, not technologies Technologies enable services, but should not be a burden on users Broadband capabilities are important, but bandwidth is not the only meter to assess service. VOIP: Introduction Transformation in Internet technologies Transition from circuit switched services to digital, Internet, packet-based networks and technologies such as VOIP VOIP offers rich communications service at lower cost Uncharted legal, financial and technological challenges Ways to fit the new technology into existing regulatory frameworks. 8

9 VOIP Regulatory Framework How to Handle Security Issues in VOIP Networks How to measure factors that affect voice quality in VOIP Networks Interconnection Requirements for VOIP networks How may VOIP Service Providers provide emergency Services Contribution of VOIP in Universal Service Relationship Between VOIP and NGN Compatibility & Interoperability between VOIP Operators; Compatibility & Interoperability between VOIP Operators and PSTN Operators Numbering in Nomadic and non-nomadic VOIP services Market Overview 9

10 Fixed Line Market Fixed Network Unbundling of the Local Loop TE Licensing Market Access permitted for Domestic payphones Domestic value-added services allowed (e.g. PPCC) Domestic Voice Eliminated the monopoly in fixed telephony Resale of Telecom Egypt s domestic service allowed International Voice International gateway has been liberalized Resale of Telecom Egypt s international voice and data services has been allowed Fixed Line Market cont d Telecom Egypt has privatized 20% of its shares. Telecom Egypt may continue the privatization up to 49% of its shares in subsequent stages. All licensees must be companies registered in Egypt All companies must train local human resources Telephone main lines in operation 10.6 Million Lines Total Public Pay phones Cabins 10

11 Mobile Market Increase in mobile subscribers Usage of mobile phones surpassed the usage of fixed telephone lines Prices decrease gradually, especially with a third operator entering the market Services offered by both mobile operators are very similar to each other 3rd Mobile Network NTRA issued an RFP for 3rd mobile network in February 2006 It will use both 2G & 3G technology 11 consortia from international companies in partnership with Egyptian companies applied NTRA formed a high-level committee to conduct the technical evaluation of bids Financial bidding process Consortium of Etisalat of Emirates, Egypt Post, and CIB won the bid with 16.7 billion Egyptian Pounds 11

12 Steady Increase in Fixed Lines & A Boom In Mobile Phone Users mobile fixed Mobile penetrati on Rate 18.5% Fixed Line penetration 14.8 % Internet Market Enabling Internet access on all fixed phone lines without monthly fees Same cost as a local call since Jan 2002 Provided by Telecom Egypt in conjunction with 210 Egyptian ISPs Beneficiaries: > 6 million users International Bandwidth: 8.3 Gbps Data Backbone Providers: 7 Target within a year Linking 1.7 million households to the Free Internet service Getting 7 million users online while doubling the international capacity 12

13 Major Increase in the number of Internet Users internet Broadband Initiative Launched May 2004 by H.E. President Hosni Mubarak during Telecom Africa Initial Target: 50,000 ADSL subscriber during first Year Later Phases to Include other Broadband Technologies 3-Year Initiative through Public-Private-Partnership First Objectives: Increase ADSL Penetration Promote WiFi Hotspots 13

14 Evolution of International Capacity May04 Apr06 Mbps 6,000 5,000 4,000 3,000 2,000 1,000 0 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 THANK YOU 14

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