Speech from Mr Houlin Zhao, ITU Deputy Secretary-General
Communication Turkey 09
Media and Communication Summit: Convergence of Media and Communication
Istanbul , Turkey
9 July 2009

Distinguished colleagues,
Ladies and gentlemen,

I am honoured to be here with you this morning to discuss such a vitally important subject as convergence in media and communications, a powerful trend which is reshaping the communications industry as we know it.

I am also very pleased to be back here in Istanbul, a city I last visited two years ago for the World Telecommunication and Information Society Day, at the kind invitation of the Telecommunications Authority. ITU holds the Turkish Administration in the highest of regard, and we are always pleased by any opportunity to collaborate, and any opportunity to convey our high esteem for your country and for our long and distinguished relationship – since ITU’s inception.  In fact, Turkey was one of the founding members of the International Telegraph Union in 1865 and ITU had the WRC-2000, RA-2000, WTDC-2002, PP-2006 in this Millennium.

Turning to the subject of my speech, convergence, for such a simple word, it can be deceptive. ‘Convergence’ has different meanings in different contexts, but generally speaking, it can be defined as the provision of different services (including voice, video and data) over core infrastructure allowing the use of a range of devices - by mobile means, wireline infrastructure, computers or even television.

Today, the communications industry finds itself at the confluence of different forces and different technologies, which are coming together with powerful implications for the way we communicate, transmit information and interact.

We do not have only to look back far to find examples of how convergence is reshaping our industry. When the telephone was first invented in 1876 by Graham Alexander Bell, it enabled one-to-one communications or a conversation between people. Developments such as radio and teleconferencing enabled a one-to-many “group” conversation between people in different locations.

Now, however, new media such as the Internet are enabling many-to-many communications – allowing communities united by common interest to both access and produce content for massive, even global, distribution. The same basic access equipment can be used for phone conversations, posting or “printing” in the modern-day meaning the webpages of a virtual book or “broadcasting” real-time news or views over Twitter, blogs, online news columns or personal webpages.

The Internet is combining all the historical capabilities we are familiar with, over a single medium. Phonecalls, video and movies can all now be carried over the Internet, with massive implications for both the industry and for the media landscape around us.

The ITU Standardization Sector ITU-T has been active in establishing many of the global standards underpinning converged communications capabilities. For example, many of today’s VoIP phones and software run over H.323. ITU-T Recommendation H.264 permits the video messages on the mobile phones.

This has mixed consequences for the digital divide – if people in developing countries can afford a 3G Internet-enabled mobile phone, they may no longer need to afford the much higher cost of a computer. Based on ITU’s International Mobile Telecommunication (IMT) standards, a mobile can enable access to the Internet and partially substitute for much more expensive forms of wireline Internet access.

Conversely, if access over broadband networks (fixed or mobile) is driving convergence, then the massive investments by OECD countries in fibre FTTx networks offering speeds of up to 100 Mbps, or even 1 Gbps in some cases, threaten to open up a new digital divide delineated in terms of speed and bandwidth, rather than just basic penetration rates.  Convergence, in this sense, is a double-edged sword.

From another angle, from the perspective of operators, convergence may also allay fears about the erosion of fixed line revenues. To date, according to ITU statistics, over the last decade, the world has witnessed the phenomenon of fixed-mobile substitution, which has been taking place in many different countries around the world. Operators in a range of countries have seen stagnation, if not erosion, in their fixed line subscriber base and fixed line revenues.

Conversely, ITU has monitored massive growth in the number of mobile subscribers, with some 4 billion mobile terminals today. Between the end of 2005 and the beginning of this year, the global number of mobile cellular subscriptions has grown at a stunning rate of over 20% year-on-year.

All the time mobiles have been perceived as “substituting” for fixed line access, traditional telecom operators saw first mobile, and now VoIP, as both a threat and an opportunity, depending on their ability to access mobile licenses and their involvement and investments in mobile subsidiaries. Now that fixed-mobile convergence is becoming the norm, however, the boundaries between these separate industries are being erased.

Yes, traditional telecom operators are upgrading their core networks to IP, and many incumbent operators are investing in both wired and wireless technologies to upgrade their broadband access networks, particularly for rural areas where fibre networks are not commercially viable.

Telecom operators may also have to invest in content, through alliances with content providers to enhance their standing in a new converged industry.  It will no longer be sufficient just to run the pipes over which content is carried, telecom providers will have to develop new business models based around content. The boundaries between old and new, fixed and mobile, voice and data, are increasingly blurred, and increasingly irrelevant.

The implications for regulation are just as significant. In a converged environment, do regulatory principles for telecommunications still apply to the largely unregulated world of the Internet? Should telecommunication regulatory authorities be converged with broadcasting regulators, just as the industry is doing?  Some countries have already converged whereas others are still debating the issue.

This year’s Global Symposium for Regulators (GSR-09) will examine regulation in a converged environment, with the theme: “Hands on or hands off? Stimulating growth through effective ICT regulation”. It will consider the delicate balance regulators need to adopt between a hands-on and hands-off approach to regulation to meet the expectations of key ICT stakeholders and stimulate growth in a converged environment, especially during this time of economic uncertainty.

The single word convergence therefore has sweeping consequences that are redefining the communications industry and media landscape as we know them.  I look forward to the debates and discussions here at this conference, Communication Turkey’09, to shed further light on how convergence is transforming the communications landscape here in Turkey.

Last but not least, I would like to advise you that ITU will be holding TELECOM World in October this year in Geneva.  The underlying theme of the event is Open Networks – Connected Minds.  This is not just a platform to technology development, but also an opportunity to focus on the modes of dialogue that bring peoples of the world together to address many issues such as ICT for sustainable development, climate change, ICT regulatory environment, WSIS implementation, MDG implementation etc.  I am very pleased that Turkey will organize a national pavilion to show their telecom development.  A number of Heads of States of Member countries and many Ministers and Heads of Regulatory Agencies have confirmed to join the Event.  I very much hope that we will see you in Geneva for TELECOM World.

Thank you.