3: July - September 2002 English:
In this edition:
1. Upcoming events
2. Internet for a
ICTs in Support of Human Rights, Democracy and Good Governance
Workshop on Competition
Policy in Telecommunications
With the growing
number of countries undertaking major liberalization efforts in their
telecommunication markets, and the growing trend towards industry
consolidation, it has become increasingly important for countries to
ensure that they possess the necessary facilities and know-how to
efficiently and effectively manage telecommunication competition issues
in the public interest. To this end,
the SPU will be organizing a New Initiatives Workshop on the
subject of competition policy in telecommunications in Geneva in
November 2002. For more information, see the Competition
Policy in Telecommunications website
for a Mobile Generation*
ITU Internet Reports 2002: Internet for a Mobile Generation,
prepared by the ITU Strategy and Policy Unit (SPU), is the
fourth in the series “ITU Internet Reports” (previously
known as “Challenges to the Network”). This edition (240
pages) examines the possibilities and challenges emerging from
the convergence of two distinct sectors of the telecommunication
economy, the Internet, and mobile telephony. It includes an
80page annex of Mobile/Internet Statistical Tables, with
data on over 200 economies worldwide.
For information on the contents or on ordering the report, or
to download the Executive Summary, visit the website at: www.itu.int/mobileinternet/
The mobile Internet: the big gamble
“It requires no great leap of the imagination
to believe that the convergence of mobile communications and the
Internet will produce something big… but it may take longer than you
Mobile communications and the Internet were the two major demand
drivers for telecommunication services in the last decade of the
twentieth century. Combine the two — Mobile Internet — and you have
one of the major demand drivers of the first decade of the twenty-first
century. So goes the theory.
As Figure 1 shows, the two industries have exhibited remarkably
similar growth patterns since the start of the 1990s, but with a lag of
about two years. Exploiting the new opportunities offered by the mobile
Internet will require high levels of capital investment, possibly higher
than ever before in the telecommunication industry. Investors want to
see proof that a market for mobile Internet services exists. But
operators cannot provide that proof until they build the networks.
Because of this “chicken and egg” conundrum, the mobile Internet is
potentially the biggest gamble the telecommunication industry has ever
taken on. The lesson so far is that pioneers often get their fingers
burnt: to date, more than USD 100 billion has been invested in
acquiring third-generation (3G) licences, even before network
construction and service roll-out costs are taken into account.
As previous waves of technological convergence have shown, we should
not necessarily expect to see the commercial fruit of the mobile
Internet for some ten or fifteen years yet. It is worth remembering that
the “hype” generated by a particular technological development often
falls flat before market development begins to take off. Consequently,
the popular view is that a particular development has “failed”,
whereas the more accurate explanation is that market development has not
yet taken off properly.
Towards convergence and interoperability
“We have learned from second–generation
(2G) communications that person-to-person messaging, simple interfaces
and timely content delivery will be the key to 3G success… On a
technical level, continued efforts towards the interoperability of radio
interfaces and the evolution to an IP-based core network will be
The combination of mobile and Internet technologies — for instance
in the form of short message service (SMS) — is already transforming
the way people interact and the way business is done. Some 24 billion
SMS messages were sent worldwide in the first quarter of 2002 alone.
Messaging services have also brought information technology closer to
groups that have traditionally had limited access to it, such as
children and the hard-of-hearing. High-speed data services combined with
additional functionality, such as location technologies and improved
security, will further enhance the user experience.
On a technical level, the viability of future 3G services will rely
on continued efforts towards the interoperability of radio interfaces,
the evolution to an Internet protocol-based core network and the
harmonization of formats for content delivery. At the service level,
convergence between the fixed and mobile Internet is already happening,
through services such as mobile instant messaging and fixed-line SMS.
This interoperability will eventually encompass complementary and
alternative network technologies, such as wireless local area networks,
short-range connectivity technologies and fixed broadband networks.
Regulators and industry players alike need to realize that there are a
number of different options for providing mobile Internet services, and
that 3G services must be considered in their global context.
“The mobile Internet should not be considered
as a substitute for the fixed-line Internet…”
There are a number of factors that will enable the rapid and
successful development of the mobile Internet. Firstly, the rapid
deployment of high-speed 3G networks will be crucial in facilitating the
uptake of mobile multimedia services. Secondly, the availability and
affordability of adequate Internet-enabled handsets will be a
prerequisite for users. Thirdly, it will be necessary to foster
unrestricted and non-proprietary mobile Internet content; players should
be discouraged from imposing commercial restrictions on content
providers or establishing “walled gardens” of content. Finally,
simple and transparent billing models will be required, taking into
account the difference between voice and data services and the growing
importance of content. In all cases, the mobile Internet should not be
considered as a substitute for the fixed-line Internet.
With regard to content, the fixed-line Internet established a
tradition of largely free and non-proprietary information access, though
this is now changing. In particular, virtually unlimited messaging
(e-mail) is still available free of charge. Mobile communications, by
contrast, have always come at a premium. Users seem quite willing to pay
per message for SMS, per packet for i-mode** content and premium
rates for voice calls while roaming. Moreover, a direct relationship
exists between the individual user and the mobile operator, facilitating
billing for a variety of add-on services.
|** First introduced in
Japan in 1999, i-mode is a revolutionary packet-based mobile
multimedia service providing users with e-mail and instant
access to a wealth of Internet content. Box 1 — Mobile data in
the Republic of Korea
On the whole, this bodes well for the future of paid digital content
services on mobile devices. Combined with high worldwide mobile
penetration and short-range technologies, it may mean greater success
for mobile business-to–consumer commerce than has hitherto been seen
over the fixed-line Internet.
Regulatory and policy aspects
“Regulators’ first mission is to ensure
fair competition throughout all stages of the licensing process… but
the story does not end with licensing”
Fair competition policy has been what has worked best in the
development of both the mobile and Internet markets. In the mobile
Internet era, it will still be regulators’ first mission to secure
fair competition throughout all stages of the licensing process.
But the story does not end with licensing. After licences have been
awarded, regulators have other crucial roles to play. One of these is
the need to monitor the mobile market structure so as not to allow
dominant operators to abuse their market position over less established
ones. The introduction of Internet access into the mobile market creates
potential new bottlenecks such as portals, and new breeds of billing
system. Mobile operators have a strong potential influence on the market
for Internet platforms, and regulators are responsible for ensuring that
platforms are as open to competition as possible.
Regulators also need to cooperate and harmonize approaches to global
roaming and terminal circulation capabilities internationally. In an
increasingly globalized economy, both these capabilities will be
necessary for the mobile Internet market to flourish. International and
regional organizations have a role to play in guiding regulators in this
Security is also a key issue, both in terms of network
vulnerabilities and of data privacy. As interconnection between
wireless, and wired networks becomes easier, so hitherto controlled and
traceable information becomes more vulnerable to malicious usage.
Furthermore, marketing tools, such as spamming, can overstep the line of
acceptability and become a nuisance to users.
Assuming that most mobile users have little knowledge of mobile
technology and legal issues, it is imperative that consumer rights be
Box 1 — Mobile data in the Republic of Korea
The Republic of Korea has one of the fastest-growing mobile
penetration rates in the Asia-Pacific region: mobile phone
subscribers topped 29 million at the end of 2001, representing
over 56 per cent of total telephone subscribers, with a mobile
penetration of 60.84 per cent. It has also been estimated that
some 59 per cent of Korean mobile subscribers already have
phones equipped with mobile Internet browsers, although,
according to some analysts, actual mobile Internet use may be
lower than these figures suggest. Korea’s experience provides
some valuable insights into the demographics of the mobile
- The first key message is that it is the residential
market, not the business market, which is driving usage.
Although service providers like SK Telecom recognize
business users as a specific market segment, only half of
them use mobile data and their contribution provides just 2
per cent of total revenue.
- By contrast, teenagers are the main market drivers.
Although teenagers have the second lowest (after users aged
over 50) total average revenue per user (ARPU) at USD 27 per
month, more than one-third of this is spent on data
applications. Data ARPU diminishes sharply with age with
20-24 year-olds spending less than a half as much as
teenagers, despite their greater spending power, and by the
age of thirty, users are spending less than USD 1 per month
on average, on data applications.
- A breakdown of content shows that applications designed to
appeal to the teenage market, such as ring tones or cartoon
animations, games and entertainment, form more than
three-quarters of the total. By contrast, information
services aimed at older age groups, such as traffic
information or stock prices, do less well. Of course,
viewing the market by value, rather than by volume, may
produce a different picture, but most mobile content is
available elsewhere (for instance, over the Internet).
- The usage breakdown contrasts markedly with that of other
countries. Compare with China in Figure 2. There, the main
mobile data application is e-mail (41 per cent) followed by
stock transactions (16 per cent) and news (12 per cent).
These three categories account for two-thirds of the market
demand in China, but only 13 per cent in the Republic of
Korea. Once China acquires mobile data networks that run as
fast as those in the Republic of Korea, then the two usage
patterns may converge.
Source: ITU country case study on
broadband in the Republic of Korea.
Towards a mobile information society
“In the future, we may each own dozens of
miniaturized mobile communication devices. A new era of pervasive
computing is dawning with huge implications for our personal lifestyles
The mobile revolution is changing the way we live and work. Mobile
phones are already pervasive in all major developed economies and in an
increasing number of developing ones too. But with the advent of the
mobile Internet, wireless gadgets are set to invade new areas of
personal life and work. The mobile Internet is a powerful enabling
technology that will make possible new services and applications. But it
may also threaten traditional values of privacy, security and courtesy.
In the 1980s and 1990s, the microchip spread from the computer into
hundreds of other devices, from computers to washing machines to cars.
Most families in developed nations already own dozens of microchips
embedded in different devices. The next stage in this process of
pervasive computing is for those microchips to gain the ability to
communicate and to report on their location and status. The technology
to make this happen is already available — for instance,
nanotechnology, cellular communications, cheap processing power,
location-tracking systems — but the networks and the billing systems
are not yet in place. The mobile Internet will make that possible.
In the mobile information society, the amount of data about our
personal lives that could theoretically be collected, stored and traded
will increase dramatically. We may want to use that data ourselves, for
instance for improved health or security, but who else do we want to
have access to it?
The major uses of the 2.5G mobile Internet are likely to be messaging
as is the case in China today (see Figure 2, left chart); but the extra
bandwidth of 3G will allow for download, video streaming and multiplayer
games — the Republic of Korea provides a good example of this (see
Figure 2, right chart). That country’s experience, as described
in Box 1, also provides some valuable insights into the demographics of
the mobile Internet marketplace.
Initial experiences with 3G mobile Internet services, in the Republic
of Korea and Japan for instance, indicate that it is teenagers who are
driving the market. In the Republic of Korea, for example, teenagers are
spending around three times more per user on mobile data services than
older age groups. In Japan, video messaging has proved immensely popular
among young people. What this suggests is that the younger the users,
the more likely they are to be comfortable with the intrusive nature of
mobile communications. Youngsters also have more time for playing games
and sending frivolous or flirtatious messages. The key question is
whether they will continue to use the mobile Internet when they are
older and have more spending power. If they do, then the 3G gamble will
seem like money well spent for the operators. If not, then it is time
for investors to start worrying.
3. ICTs in
Support of Human Rights, Democracy and Good Governance
ground upon which information and communication technologies (ICTs) and
human rights can be analyzed was forged two years ago at the United
Nations Millennium Summit, which resulted in a declaration that affirmed
common global commitments to the protection of the vulnerable, the
alleviation of poverty, and the rectification of corrupt structures and
processes - particularly in those countries in which there is a dearth of
'rule of law'. The world's
leaders resolved to "spare no effort to promote democracy and
strengthen the rule of law, as well as respect for all internationally
recognized human rights and fundamental freedoms, including the right to
current period of preparation for the upcoming World
Summit on the Information Society (WSIS) - in which the International
Telecommunication Union (ITU) has a leading managerial role - offers
an excellent opportunity to address tensions that exist between national,
regional and global models of governance - particularly where hotly
debated topics like human rights draw to the forefront of discussion key
issues like transparency, accountability, and the universality of human
ICTs have proven to be very effective instruments for disseminating
information relating to human rights violations on a worldwide scale.
How governments of the world react to the various claims and
complaints they facilitate does actually now translate to the realm of
international commitments to uphold universally agreed upon principles for
human rights. Violations of
these commitments can no longer be covered by the cloak of national
sovereignty, or even indeed by the suppression of free press.
The instant, asymmetrical nature of digital communication networks
increasingly lends to the subversion of attempts of human rights
transgressors to hide their deeds. Meanwhile,
what remains is again the implementation and application of the
conclusions that are drawn from having seen or learned what images and
information ICTs can convey. Certainly,
as long as NGOs and their civil society counterparts can continue to be an
integral part of strengthening a bottom-up approach to governance, ICTs
will continue to be vitally important tools for democratization and the
formation of the infrastructure and content of the 'information society'.
And despite the fact that the enforceability of UN-sanctioned
mechanisms may still be limited, it appears increasingly valid that in
today's world, the reputations of human rights violators who defy the rule
of law and shirk good governance do indeed matter on the world stage.
includes several case studies showing how ICTs have been applied in a wide
variety of cases and contexts, many of which have positively contributed
to the protection of human rights in a given country by raising
international awareness and mobilizing public opinion accordingly.
for the full report and links to online resources.
|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: email@example.com
. Website: www.itu.int/spu/