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The role of mobile in delivering universal service. Dan Lloyd Vodafone. European Ministerial Conference on the Information Society Ljubjana 4 June 2002. Key themes. Importance of telecoms and mobile
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The role of mobile in delivering universal service Dan Lloyd Vodafone European Ministerial Conference on the Information Society Ljubjana 4 June 2002
Key themes • Importance of telecoms and mobile • Importance of investment, competition & regulatory environment - more important than universal service • Universal service mechanisms can’t make, but can break, a competitive telecoms market • Focus on the specific problems involved in the digital divide, not specific traditional solution - universal service • Mobile is already addressing the digital divide commercially - question the need for mobile inclusion in universal service schemes
Importance of telecoms and mobile • Large and increasing contribution to GDP • Enabler of commerce, e-commerce services • Key contributor to innovation and productivity growth in services • Increasingly important to international competitiveness • Approach to universal service, and regulation generally can have a substantial impact • Mobile increasingly vital to telecoms sector - global mobile penetration: 1991 - 1%; 2001 - 18.75%; 2008 - 36% (est)
Digital divide • But access to telecoms services not spread evenly within or between countries • Certain services considered so basic to social and economic inclusion - should be universally available • Generally driven by desire to foster social and economic inclusion, not economic efficiency • (But network externalities should also be taken into account in regulatory decision making) • Sometimes leads to regulation of universal service obligation (USO)
Digital divide • Designed to address 3 basic categories of exclusion: • Poor - customers too poor to buy • Uneconomic - to expensive to serve (often geography) • Special needs - disabled, deaf, poor dexterity • Excluded from what? • Telephony - fixed, pay phone, directory, emergency • QOS • Mobile? • Internet? • Broadband?
Let the market work where it can • Key to maximising access to communications services is not USO • Stable environment for investment - regulatory accountability, transparency, independence and predictability • Removal of artificial barriers to investment and to providing universal services • Effective competition law regime • Which enables a competitive telecommunications market
Mobile is already delivering Influence of mobile Digital divide / potential USO Services delivered commercially Theoretical 100% penetration
Mobile is already delivering - UK • Mobile clearly minimising the telephony digital divide without regulation. In the UK: • Leaving less than 1% unphoned - probably practical limit of universal service
Mobile is already delivering • Mobile advantages: • pre-pay • often low/no connection and/or monthly access charges • often network coverage beyond fixed line • often averaged connection and call charges even for those in uneconomic areas • often geographically insensitive • benefits of price competition in the most competitive areas are received by all even where only one network • social inclusion - voting • Mobile addresses poor and uneconomic commercially
Mobile is already delivering • Remaining challenges • Disabled customers • hard of hearing - hearing aid compatible neck loop, vibrating alert, SMS • poor sight - directory connect services, voice-activated dialling • Under-developed areas • Community Mobile as payphone substitute • But must retain control over pricing • So question the utility of mobile universal service
Universal service scheme design • Guiding principles of EU legislation to be supported: • Least market distortion • Dynamic approach • Incentives for efficiency • Transparency • Non-discrimination • Competitive neutrality • Not more burdensome than necessary
Universal service scheme design Consider removing adverse regulation Scope of services Internet? Eligibility test Who receives? General taxation Recovery mechanism Burdensome Industry fund Cost/benefit Tech. neutrality Pay or play
Universal service fund design Transparent, efficient costing Universal service fund Including intangible benefits Transparency on customer bills Regular independent audit of fund
Conclusions • Focus on general environment, not universal service • Focus on the problem (access for poor, uneconomic and special needs) not a particular solution • Examine carefully whether problem being resolved by commercial mobile services • Examine critically whether regulation will produce better results than market forces • Design of any regulated universal service scheme critical