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This report by Ewan Sutherland examines the critical issues facing the telecommunications sector in Cairo as of March 2006. It highlights the monopolistic behaviors regarding infrastructure construction, international gateways, and inefficiencies in both fixed and mobile networks. Despite the clear economic benefits of broadband, many countries suffer from weak policies leading to vast price and service discrepancies, adversely affecting market growth. The analysis includes the impact of mobile operator collusion, along with customer care concerns and the inefficacy of international mobile roaming regulations.
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User issues Ewan Sutherland Cairo 3.iii.06
Introduction • Introduction • Fixed networks • Broadband • Mobile networks • International mobile roaming • Conclusions Cairo 3.iii.06
Multi-national corporations • Global sourcing of goods and services • Looking for telecommunications: • global • failing that, at least continental • Low and falling prices • Service level agreements Cairo 3.iii.06
Fixed networks • Monopoly on infrastructure construction: • Monopoly on international gateways • Monopoly on access to undersea cables • Delays and prohibitions on VoIP • Uncertainty on IP-VPN regulation • Odd regulations on encryption Cairo 3.iii.06
2 Mbps half-circuit Cairo 3.iii.06
Delivery period 64kbps (days) Cairo 3.iii.06
Broadband • Clear economic benefits • Yet many countries have weak policies • Enormous variations in: • prices • speeds • bundles • Causes vast differences in adoption rates • Absence of a mass market delays creation of content industries Cairo 3.iii.06
OECD Broadband Dec. 2005 http://www.oecd.org/sti/telecom Cairo 3.iii.06
Mobile networks • Customers tied to handsets by “discounts” • Handsets locked to one operator • Numbers not portable to other operators • Lack of transparency in tariffs and contracts • Excessive fixed to mobile rates • Excessive prices for SMS • Excessive prices for mobile Internet Cairo 3.iii.06
Collusion • Ireland – ComReg • found joint dominance in mobile call market • Spain – CMT • found joint dominance in mobile call market • France – Conseil de la concurrence • fined the three mobile operators EUR 534 millions • evidence of Yalta-style market sharing agreement • Greece – EETT • fined operators for synchronised SMS price increases Cairo 3.iii.06
Mobile data • Hyped as a technological solution • Seldom delivers anything of interest • Operators are asking too much profit • Unattractive environment for: • corporate users • content owners Cairo 3.iii.06
International mobile roaming • Excessive prices • Inability of European authorities to resolve the problem • Long running DG Competition cases • NRAs given powers to regulate in 2002 • Now, the EC proposes a regulation: • yet this may prove counter-productive Cairo 3.iii.06
Customer care • Most operators show limited interest in customers after making the sale • Unresponsive • Reluctant to: • issue Service Level Agreements (SLAs) • publish statistics • They talk about partnership and strategy, but do little if anything to justify it Cairo 3.iii.06
Conclusions • Still many failings in markets • Too nationalistic • Too little competition • Too much collusion and shadowing • Too much lobbying by operators Cairo 3.iii.06
Ewan Sutherland http://.www.3wan.net/ 3wan [at] 3wan.net ewan [at] gstit.edu.et skype://sutherla +44 141 416 06 66 Cairo 3.iii.06