Nº 4 2015 > Global Symposium for Regulators
Trends in Telecommunication Reform Report 2015
The 15th edition of the ITU flagship report, Trends in Telecommunication Reform, is intended to help stakeholders and information and communication technology (ICT) regulators keep abreast of latest developments and prepare them for the arrival of the digital society.
The 15th edition of the ITU flagship report, Trends in Telecommunication Reform, is intended to help stakeholders and information and communication technology (ICT) regulators keep abreast of latest developments and prepare them for the arrival of the digital society. This year’s report, launched shortly after the 15th Global Symposium for Regulations (GSR-15), held in Libreville, Gabon, introduces new data analysis tools developed by ITU and shows how policies and regulation may impact the uptake of ICT services.
The first chapter charts upcoming opportunities for governments, business players, and consumers alike through the transformations brought about by ICTs. It also considers new challenges for ICT regulators given the additional challenges posed by infrastructure development. It provides an overview of ICT market trends to give some indication of where regulation might be heading. It is now clear that the Internet is driving progress across different economies, and is increasingly invading different spheres of people’s lives and changing economic, social and cultural patterns. However, large disparities remain between those who have access to ICTs and those who do not. In particular, the broadband divide between developed and developing countries remains large, at 82% versus 21% penetration for mobile broadband and 27.5% versus 6% for fixed broadband, respectively. Although 3 billion people worldwide were online and using the Internet by the end of 2014, at least 4.3 billion people were still not online, of whom 90% live in the developing world.
This opening chapter maps continuing and unprecedented growth in many different aspects of telecom/ICTs and the Internet — for example, on a typical day, an average of 1.5 million people start to use mobile telephony for the first time (see Figure 1).
Setting the conditions for ICT markets to flourish by attracting investment and fostering innovation, continues to be a high priority in most countries, alongside expanding universal access to the digital economy. This is why more than 140 countries have adopted national broadband policies, plans and digital agendas recognizing the cross-sectoral and pervasive nature of ICTs on all aspects of the digital economy.
Chapter 1 introduces ITU’s ICT Regulatory Tracker, a new evidence-based tool to help decision-makers and regulators make sense of the rapid evolution of ICT sector regulation. The Tracker reveals that fourth-generation (4G) regulation, characterized by agility and flexibility, has gained momentum rapidly over the past decade. The number of countries with 1G and 2G telecom regulation has halved in only seven years, reducing from three-quarters to just one-third of countries over that period. Indeed, today, one out of four countries surveyed now enjoys a 4G regulatory environment that allows for leveraging of the ICT sector to achieve economic growth and social development across the economy (see Figure 2).
Not all ’4G regulation’ countries have yet fully realized digital opportunities; however, they have opened the door to meaningful change and can expect tangible improvements in their ICT sectors — as well as in the rest of their economy — over the short- to medium-term. Overall, the regulatory environment has steadily enhanced in the great majority of countries worldwide, as countries have introduced reforms and aim for more flexible regulation. This positive outlook reflects the dynamic pace of technological and business innovation faced by telecom/ICT regulators — a reality that challenges them to adapt to the new digital world order.
The Tracker has achieved more than just a historical analysis of regulatory trends — it is a powerful analytical tool that helps pinpoint the strengths and weaknesses of regulatory interventions to provide a learning curve for achieving a vibrant and innovative ICT sector. For example, analysis of countries’ specific regulatory practices shows that a growing number of countries have adopted a National Broadband Plan, and since 2006 have permitted the use of Voice over Internet Protocol (VoIP). Meanwhile, secondary trading of radio spectrum is still only permitted in a small number of countries (see Figure 3).
The Tracker provides insights into what fourth-generation regulation stands for, in real terms. Analysis of mobile-broadband trends in 122 countries using the ICT Regulatory Tracker shows that levels of mobile broadband penetration are higher and grow at a faster pace in countries with fourth-generation regulation (see Figure 4). Comparing the ’high’ and ’low’ performers clearly suggests that growth in services has happened most rapidly where regulatory enablers have been put in place to leverage latest technologies and innovations. Consistent and well-enforced fourth-generation regulation generally provides for a vibrant market and win-win opportunities for both service providers and consumers.
Conversely, slow, patchy or inconsistent regulation may inhibit innovation and business incentives. Further, the time-to-market, as well as the choice of services, are limited — which is the case in countries in the first generation of regulation, which have not yet embarked on reforming the sector.
The Trends in Telecommunication Reform 2015 Report also presents econometric research undertaken by ITU exploring the relationship between regulation (monitored by the ICT Regulatory Tracker) and fixed broadband and mobile cellular. This research suggests that a sound regulatory environment is significantly associated with a positive impact on ICT adoption. Econometric regressions suggest that a 10% increase in the ICT Regulatory Tracker score (corresponding to an incremental enhancement of regulatory frameworks) is associated with an increase of 7.7% in fixed-broadband penetration over the period 2008–2013. A country that has adopted some form of broadband development strategy (such as a national broadband plan or digital agenda including proactive regulatory measures such as infrastructure-sharing, VoIP services or a competitive environment) would have penetration levels 7.7% higher on average than a country without these measures in place, factoring out the impact of other conditions.
In summary, the first chapter of this year’s Trends in Telecommunication Reform Report charts the latest trends in the sector, to help regulators understand the issues, and to be able to respond adequately, to facilitate the future growth of ICT around the world. It presents the most up-to-date research into telecom/ICT regulation based on ITU’s annual survey.