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Enlightened ICT regulation can play the role of ‘stimulus plan’

Complex challenges of a converging, multimedia world

Geneva, 9 March 2010 — While demand for information and communication (ICT) services like mobile telephony and broadband Internet remains strong, the global economic crisis is jeopardizing ongoing investment in network rollouts and technology upgrades, a new ITU report finds.

The 10th edition of Trends in Telecommunication Reform, ITU’s flagship annual report on the state of ICT regulation worldwide, argues that enlightened ICT regulation can effectively play the role of a ‘stimulus plan’, driving network investment, growth and development. The report draws on the discussions held during ITU’s annual Global Symposium for Regulators (GSR), which was held last November in Beirut, Lebanon and welcomed over 600 regulators from around the world.

The economic crisis has served as a wake-up call on the importance of effective regulation and raised questions about the role of government and the laissez-faire approach that had prevailed — especially in the financial sector. Government and industry are now being forced to reassess their roles and the need for state intervention to ensure, among other things, the development of a new ‘broadband economy’.

ITU argues that regulators and policymakers can proactively address the risk of under-investment in tomorrow’s networks through a two-pronged approach that looks at how governments lend money to the private sector through Public-Private Partnerships, ICT stimulus plans and other funding programmes; and how effective regulatory strategies and policies — both financial and non-financial — can play their part in maintaining the momentum. But to be effective, these strategies must be underpinned by strong regulatory institutions and transparent policies and procedures — the bedrocks of effective regulation.

"With technological convergence now blurring the lines between telephony, broadcasting, and online services, ICT regulators play a key role in fostering ongoing innovation and competition, enabling operators to adopt the latest, most powerful technologies, and ensuring consumers enjoy the very best range of services at the lowest possible prices," said ITU Secretary-General Dr Hamadoun Touré.

The ITU report maintains that, regardless of changes in investment appetite, negative capital market conditions, and financial crises, the size of the investor universe and the diversity of investor objectives will ensure that ICT sector investment remains robust and varied.

"Although the global ICT industry has seen reduced sales in equipment and manufacturing, lower demand and curtailed investment, the sector confronted the crisis more successfully than did many other sectors," said Sami Al Basheer Al Morshid, Director of ITU’s Telecommunication Development Bureau. "Certain markets — namely mobile cellular and Internet — have been buoyant. And because of the business opportunities they represent, developing countries remain attractive — especially those that have embarked on regulatory reform initiatives. But the answers to many of the complex regulatory questions now facing the industry are still far from clear — which is why the GSR has become such a key global event."

Mobile growth continued unabated in 2009, with global mobile subscriptions expected to reach 5 billion in 2010. At the same time, mobile broadband subscriptions topped 600 million, having overtaken fixed broadband subscriptions in 2008, highlighting the huge potential for the mobile broadband Internet industry. The number of Internet users also grew steadily, with some 1.8 billion users worldwide by the end of 2009.

The creation of independent ICT regulators has been one of the main building blocks of regulatory reform. The number of separate telecom/ICT regulatory authorities in markets around the world increased from just 12 in 1990 to 153 at the end of 2009. Regulators have gradually opened fixed line services to competition, so that at end 2009 65% of countries now have competitive markets for basic fixed-line services, and 90% for mobile cellular services. In addition, 124 national fixed-line incumbents have been privatized along the way.

New challenges in a converging world

The report also confirms that converged technologies are boosting competition. Voice over IP (VoIP) services allow broadband, cable modem and wireless service providers to compete directly with one another, as well as promoting competition by enabling new service providers to compete without owning their own network infrastructure.

But changes in technologies and market conditions also raise new consumer protection issues. From a consumer’s perspective, more competition may lead to a bombardment of marketing material, masquerading as information. This is especially the case where access to high-speed broadband connections makes consumers easily accessible, day and night, as advertising targets.

In the ‘always-on’ environment, consumers may also be unaware of how to protect themselves and their families from harmful or offensive content. Meeting the needs of the connected consumer therefore needs to look at potential gaps in current regulatory practices that should be addressed to protect consumers more fully.

This year’s edition of Trends in Telecommunication Reform comprises ten chapters focusing on new market expectations, and identifying the different regulatory approaches taken around the world to stimulate ICT growth and increase access to broadband services.

An Executive Summary of the report is available at: www.itu.int/ITU-D/treg/publications/trends09.html

The report is on sale to ITU members and the general public and can be purchased online at: www.itu.int/publ/D-REG-TTR.11-2009/en

For more information, please contact:

Sarah Parkes
Media Relations and Public Information, ITU
tel +41 22 730 6135
tel +41 79 599 1439
tel sarah.parkes@itu.int
Nancy Sundberg
Regulatory Officer, ITU
tel +41 22 730 6100
tel nancy.sundberg@itu.int


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