ITU report confirms: dramatic growth in data volumes and globalized
services create new ICT regulatory challenges
Geneva, 18 April 2013 — The 2013 edition of ITU’s flagship
regulatory report ‘Trends in Telecommunication Reform’, released today,
highlights the increasingly global nature of information and communication
regulation and the crucial link between effective regulation of the ICT sector
and the range, quality and affordability of ICT services available to consumers
and business users alike.
Focusing on ‘Transnational Aspects of Regulation in a Networked Society’,
this year’s report reveals an increasingly complex and interlinked legal and
regulatory environment in which decisions taken in one market can have a major
impact on neighbouring countries and even markets far away.
The report confirms continued rapid expansion of tech markets worldwide.
Rapid growth of broadband has seen global IP traffic skyrocket from around one
petabyte 20 years ago to an estimated 44,000 petabytes (44 exabytes) at end
2012. As an indicator of the sheer volume this represents, that amount of data
would take 1,100 years to download over a 10Mbps broadband link – or more than
200,000 years over a dial-up connection. In 2013 alone, IP traffic is expected
to grow by around 14 exabytes per month – the monthly equivalent of twice total
cumulative global traffic for the whole decade from 1994 - 2003.
Traffic volumes are being driven by the ever-growing number of connected
people and connectable devices, the trend toward multiple device ownership, an
abundance of highly diversified and mostly free online content, and increasingly
widespread consumer access to fixed and mobile broadband networks capable of
supporting high-bandwidth services like streaming video. The total number of
people connected to the Internet is expected to surpass 2.7 billion in 2013,
while the total number of applications downloaded over all types of devices will
exceed 50 billion.
Data continues to generate of 90% of all consumer traffic, with the largest
volumes associated with file sharing, video streaming, video calls and online
gaming. New mobile devices providing a higher quality user experience are
driving faster uptake of gaming and video calling, both of which are expected to
continue to notch up over 40% year-on-year growth between 2010-2015.
For regulators striving to create a level playing field and ensure
non-discriminatory practices and transparency of market information, this period
of transition to a truly transnational market for ICT services is creating a
need for stronger cross-border, regional and international cooperation.
“These are interesting times for regulators, with the full impact of the
long-term trend towards globalization of services now beginning to be felt,”
said Dr Hamadoun I. Touré, Secretary-General of ITU. “The challenge every
regulator faces is to create the right environment for service development and
competition that ensures the best quality services and best-value offerings
succeed, and that consumers ultimately reap the benefits.”
Snapshot of a fast-changing market
The most comprehensive annual study available on the current state of
regulatory frameworks and technological developments worldwide, this year’s
Trends in Telecommunication Reform opens with a concise overview of the
‘megatrends’ reshaping the ICT landscape.
Topics covered in depth include net neutrality, emerging spectrum policy
management models, mobile roaming prices, and the challenges and opportunities
raised by widespread adoption of cloud services.
The report notes that the net neutrality debate continues to be muddied by
the fact that there is no agreed definition of the term among regulators
themselves. The report goes on to make recommendations about what types of
traffic management are acceptable, and what types could be considered
In the area of spectrum policy, the constant pressure on spectrum
availability caused by the mobile boom shows no sign of abating, with analysts
predicting an 18-fold growth in mobile traffic between 2011-2015, driven by
machine-to-machine communications, ‘over-the-top’ (OTT) services like VoIP, and
new types of cloud service.
Current spectrum management best practice favours re-farming, re-use, and
liberalization of current management frameworks. To ensure that frequencies are
put to their most efficient and highest-value use, spectrum licensing is
increasing moving towards market-based policies such as auctions, in-band
migration, spectrum sharing and spectrum trading, to supplement or even supplant
older, slower bureaucratic processes.
Mobile roaming charges were a key issue during the renegotiation of the
recent International Telecommunication Regulations (ITRs) in Dubai last
December. Trends in Telecommunication Reform 2013 notes that studies around the
world confirm that at present, retail prices for international mobile roaming
remain high, have no linkage to domestic mobile prices, and do not reflect the
actual cost of delivering the service. High retail prices are often linked to
underlying wholesale prices in visited countries, but, as competition is
relatively weak in the international roaming market, market forces alone may not
be sufficient to rectify the situation, the report notes. Empowering consumers
through greater pricing transparency is one suggested remedy.
Finally, the fast-growing field of cloud computing is giving rise to a number
of new regulatory challenges, such as ensuring privacy and affirming clear
ownership of personal and corporate data, dealing with unauthorized third party
use of stored data, determining legal jurisdictions (if data is stored on
servers in different locations), and avoiding anti-competitive lock-in of users
of different types of cloud services. Cloud-based traffic continues to grow
strongly, and is expected to represent at least two thirds of all network
traffic flows by 2016.
Shifting revenue streams
Growth in number of users, applications and high-bandwidth traffic is pushing
revenues in the ICT sector ever-higher, but traditional operators look set to
continue to lose ground to new players, with up to 6.9 per cent of cumulative
voice revenues (representing USD 479 billion) forecast to move to OTT VoIP
services by 2020, and total OTT revenues estimated to grow from around USD 8
billion last year to as much as USD 32 billion by 2017.
At the same time, however, the position of OTT players is itself being
challenged; a recent case of one OTT player compensating a traditional telco for
traffic generated over its network is an example. Such developments could create
a significant precedent for other operators around the world, the report says.
New services and devices are creating new usage patterns and revenue models.
Multiple players are now operating in the same markets, but under different
regimes – for example, traditional voice providers in competition not just with
players in adjacent markets, such as ISPs and cable operators, but also with
content and application providers, such as OTTs. Competition- and market-based
approaches to the regulation of broadband are being balanced by ‘universal
service’ concerns, as broadband access is increasingly viewed as a right, rather
than a luxury.
Independent regulators have now been created in 160 countries; the next trend
seems likely to be towards converged regulators that straddle the traditional
telecoms, data services and broadcasting domains. The report also encourages ICT
regulators to extend their remit into new policy areas, such as data protection
and privacy, climate change and e-waste, where they could play a valuable role
in ensuring national and regional coordination and formulation of appropriate
strategies and rules.
“The issues involved in the regulation of the networked society are becoming
increasingly complex. As more networks are deployed and connect to each
other, the character of the services carried over those networks is becoming
more and more transnational. And as broadband applications and services
become further deeply entwined in a wider range of social, economic and
governmental functions, the need for a consistent regulatory approach, at all
levels, to common issues such as data protection and privacy in a cloud
environment will become more critical,” said Brahima Sanou, Director of ITU’s
Telecommunication Development Bureau, which produces the annual Trends in
Telecommunication Reform report as a key output of the
Global Symposium for Regulators conference (GSR) it organizes each
“Regulators will need to ensure they are flexible enough to adapt to this
fast-changing market, and equipped with the expertise to help them navigate
uncharted terrain as the complexity of infrastructure ownership and multi-play
service offerings increases. This is one area where ITU’s GSR can play a very
important role, giving regulators from around the world the change to share
experience with their peers, to learn from the successes of others and create a
pool of globally accessible best practice from which all can draw, and benefit.”
of the report in English is available online.
Media may obtain a full copy of the report from the ITU Press Office by
contacting firstname.lastname@example.org. The report
is initially available in English, with other language versions to follow in the
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