Issue
1: January - March 2002
In this edition:
1. Upcoming
events
2. Reinventing Telecoms
3.
Improving IP connectivity in the least developed
countries
4. ITU
New Initiatives Workshop: Questionnaire on possible topics for 2003
Welcome to the latest news from the
ITU Strategy and Policy Unit
The
Strategy and Policy Unit (SPU) of the International Telecommunication
Union (ITU) is pleased to introduce the first edition of the SPU News
Update: Policy and Strategy Trends. This first edition was prepared in
collaboration with the Telecommunication Data
and Statistics Unit of the ITU Telecommunication Development Bureau
(BDT), and
provides an overview of the new World
Telecommunication Development Report: Reinventing Telecoms,
which was released at the World Telecommunication Development Conference
held in Istanbul in March 2002.
PDF
format
1. Upcoming
events
May 20-22 2002 (Seoul, Korea): Workshop on Creating Trust in
Critical Network Infrastructures
2. Reinventing
Telecoms: The new telecommunication world: At
a new crossroads
By the beginning of 2002, more
than half the countries in the world had fully or partially privatized their
incumbent telecommunication operator (see Figure 1). Competition has spread
widely, although a majority of countries still retain monopolies in fixed-line
services, such as local and long distance calls. However, an overwhelming
majority of countries now allows competition in the mobile and Internet market
segments, which increasingly substitute for fixed-line voice.
Mobile:
raising access to communications
With just short of one billion
subscribers at the end of 2001, mobile is poised to take over from fixed lines
in the early part of 2002 as the network with the most users (see Figure 2). By
the end of 2001, over 90 per cent of countries had a mobile network, almost one
in every six of the world’s inhabitants had a mobile phone and almost 100
countries had more mobile than fixed telephone subscribers (see Figure 3).
Mobile has raised access to communications to new levels. In developing
nations, and particularly in the least developed countries (LDC), mobile is
increasing telephone access surprisingly rapidly. The mobile revolution in
developing countries is easily explained by the ease with which mobile networks
can be installed. But another key element is the availability of prepaid cards.
Among populations which would not meet the financial criteria for
subscription-based services, prepaid can bring communication to the masses.
Even in developed countries mobile is
gradually substituting fixed — primarily among the lower-income segment of the
population. This trend implies that mobile, rather than fixed, is the key to
achieving universal access goals and other social policy objectives.
The new digital divide
In 1991, total telephone
penetration (fixed-line plus mobile telephones) stood at 49.0 in developed
nations, 3.3 in emerging nations and just 0.3 in the LDCs. A decade later, the
corresponding levels stood at 121.1, 18.7 and 1.1. However, while the ratio
between developed nations and emerging ones has halved, between emerging nations
and LDCs it has actually grown (see Figure 4). The new digital divide is
expressed in the growing gap between these countries and the LDCs, especially in
terms of access to Internet (see Improving IP Connectivity in LDCs).
Note: In the left
chart, 1982–2001 is based on real data and 2002–2005 on projections.
In the right chart, the 97 countries
that are shaded had more mobile users than fixed lines, as at year-end
2001. |
The new digital divide is harder to
measure because it is not just about access to the Internet, but also about the quality
of the experience. For instance, international Internet bandwidth (or IP
connectivity), which is a determining factor in response times, is a good
measure of users’ experience with the Internet. The 400 000 citizens of
Luxembourg between them share more international Internet bandwidth than Africa’s
760 million citizens. The reality is that high-speed (broadband) Internet
access, which has become fashionable in many parts of the developed world, is
still a long way off in most developing countries. The new digital divide is
about quality, not just quantity.
However, the Internet is of little use
to people who are unaware of how access to electronic information can improve
their lives, or who do not know how to use the equipment. Training and locally
relevant content will therefore be key factors in bridging the divide. Moreover,
there is a shortage of compelling research and examples of how ICTs can
transform the development process. Effective solutions will require a
triumvirate pact between governments, development agencies and the private
sector.
Recipe for reform: privatization,
competition and independent regulation
Although many different recipes for
reform have been followed, most countries have included three basic ingredients
in their reform programme: private sector participation, market competition and
creation of an independent regulatory body. Table 1 shows those economies that
experienced the greatest change in ranking (up or down) for total teledensity
(the sum of fixed lines and mobile users per 100 inhabitants) between 1990 and
2000. Among those that succeeded in improving their status are many economies
that began reforms early in the decade, like Chile, Hungary or the Philippines,
as well as several that started more recently, like Botswana or Morocco. The
stand-out cases are China and Viet Nam, which both followed a strategy of
encouraging competition between different government ministries as well as
private sector investment in their mobile sectors. When a government is truly
committed to telecommunications investment, it can make a big difference
relatively quickly.
The industry in 2000 was worth almost a
trillion US dollars in terms of service revenues, but the acceleration in
telecom growth rates was reversed in 2001, notably in key market segments such
as mobile and Internet. Share prices declined precipitously, and expected
profits turned to losses for many of the new market entrants. The sector was
left reeling, and wondering what went wrong.
While the recent diagnosis might be one
of doom and gloom, the phenomenal growth of the late 1990s should be seen in a
historical context, as a wave of change which only happens every fifty years or
so (see Figure 5). It was the result of the confluence of rapid technological
change with a shift in market expectations, in this case associated with mobile
overtaking fixed-line networks, with data overtaking voice, and with widespread
implementation of sector reform.
The gale of creative destruction
currently blowing through the industry will bring misery to some, but
opportunity to many more. Above all, for telecommunication users, who will soon
form the majority of mankind, a new age is dawning in which scarcity is being
replaced by plentiful and ubiquitous supply. That is telecoms reinvented!
3. Improving IP connectivity in the least developed
countries
Breaking the vicious circle of poverty and high
prices
ITU is currently looking at ways to improve Internet
penetration in the least developed countries
Despite the fact that some 264 countries now have Internet access, the Internet is still a rare privilege in
the least developed countries, where just two in each thousand members of the
population has Internet access — far less than the average of one in twenty
for other developing countries and, as might be expected, way below the one in
four citizens who have Internet access in some major economies.
The reasons for this disparity lie not
only in the extreme poverty of LDCs, but also in the scarcity of economic,
institutional and human resources, often compounded by geophysical factors. The
Internet, with its requirement for high-quality, high-speed connections, places
heavy demands on infrastructure. In most of these countries however —
especially in landlocked territories or remote islands — national and
international Internet connectivity is in short supply: optical fibres may not
be available, satellite links are limited and expensive, and internal
telecommunication infrastructures are typically concentrated in a few main
cities and present severe shortcomings in rural areas. These obstacles, together
with lack of clear telecommunication policies and regulations and an internal
market that is often closed to competition, result in a lack of investment and
highly-priced services, all of which impede Internet penetration.
ITU
is currently considering a project to enhance Internet connectivity in the LDCs,
as a practical step towards bridging the digital divide. One of the main
objectives of the project is to increase the bandwidth capacity of Internet
service providers (ISP) in the LDCs through the use of satellite technology
(e.g. very small aperture terminals, or VSAT). This is to be achieved by “pooling”
demand for Internet bandwidth among the countries concerned, and helping to
finance the purchase of satellite capacity by ISPs to enable them to provide
lower-cost access to end-users, schools, hospitals and other entities. The ISPs
would undertake to respect certain conditions and requirements (e.g. number of
communities covered, reduced price of services for non-commercial end-users and
cybercafés, etc.). In the longer term, connectivity should be self-financing
after the project has terminated.
Establishing a reliable infrastructure
that can enable access to international Internet capacity at low cost could be
the first step towards breaking the “vicious circle”, and creating a “virtuous
[Internet] circle” in LDCs. For further information, visit the website at: www.itu.int/ipdc.
4. ITU New
Initiatives Workshop: Questionnaire on possible topics for 2003
Reminder: All member states and sector
members are reminded that the deadline for sending in your responses to the ITU
New Initiatives questionnaire on possible topics for 2003 is May 30 2002.
For further information on Policy
and Strategy Trends, please contact: ITU Strategy and Policy Unit,
International Telecommunication Union, Place des Nations, CH-1211 Geneva 20
(Switzerland). Fax: +41 22 730 6453. E-mail: spumail@itu.int
. Website: www.itu.int/spu/ |
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