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Competition in the International Connectivity

Competition in the International Connectivity. Muhammad Aslam Hayat Director PIRRC. 26 Nov 2012 PacINET , USP, Suva, Fiji. International Gateway.

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Competition in the International Connectivity

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  1. Competition in the International Connectivity Muhammad Aslam Hayat Director PIRRC 26 Nov 2012 PacINET, USP, Suva, Fiji

  2. International Gateway • ITU defines an international gateway as any facility through which electronic communications (voice, data and video) can be sent between domestic networks of one country and another • IGW provide links either to an international cable system, or to a satellite through an earth station • International gateways are also potential bottlenecks that may restrict traffic flows and thus cause artificially high prices ANS subscriber ANS POI IGW Undersea Cable VSAT International subscriber

  3. Is it natural monopoly? • Traditionally, voice and data transmissions via submarine cables were seen as natural monopoly of incumbent operators, due to high costs of investment in infrastructure and its maintenance • Natural monopoly argument no longer held true • Technological advances had greatly reduced cost of infrastructure • Deployment of VoIP services and VSATs have substantially lowered cost of entry in provision of international services • Entry into international sector is now an irresistible force which regulatory restrictions are unlikely to prevent • In countries which have attempted to maintain IGW monopolies, illegal bypass can account for 30-60% or more of traffic

  4. Cables in the Pacific http://www.submarinecablemap.com/

  5. Benefits of IGW liberalization • A monopoly provider has no sufficient incentive to satisfy increasingly diverse demand for services • Liberalization necessary in order to • enable competition, • reduce retail prices, • Improve quality of service, • increases in international bandwidth and lower costs in the provision of international services • increase choice for consumers, • stimulate greater market efficiencies, • Improve investment climate in telecom, • Creates service sector jobs and exports through Business Process Outsourcing, • lowering cost of business and facilitating trade and investment and thereby raising overall employment and living standards

  6. Regulatory role in liberalization • Regulatory frameworks are needed to introduce • Remove monopoly, • encourage competition through lowering barriers to new market entrants, • introduce sharing and collocation at landing/earth stations at cost-based or cost-oriented rates, • require dominant licensee to provide a RIO to its competitors, • encourage landing of multiple submarine cable systems

  7. Various models • Individual license for IGW (BD, FJ, WS) • Separate licenses for voice & data IGW (BD) • ILD/LDI (IN, PK) • Unified license (VU, NG) • Converged license (PG, MY) • Facility & non-facility based licenses (SG, LK) • International Calling card license (WS*) * Interconnection with ANS is yet to take place

  8. IGW competition status in Pacific * IUS-N has own gateway for data ** IGW competition is yet to take off

  9. International DD – Fixed Line(Rates in USD)

  10. International DD – Mobile(Rates in USD)

  11. Open access to IGW ICT for Greater Development Impact, World Bank Group Strategy for ICT 2012-2015 “Huge differences among countries in the price per unit of bandwidth are often explained by variations in wholesale market competition and bottlenecks in the supply of international bandwidth, especially in landlocked countries. To address these problems governments need to promote open access to international gateways and greater competition in the supply of international bandwidth, with targeted interventions to stimulate the market as necessary.”

  12. Some selected references • ICT for Greater Development Impact, World Bank Group Strategy for ICT 2012-2015 • Telecommunications in the Pacific: Background Paper for Pacific Economic Survey 2008, prepared by World Bank Jakarta, Indonesia • Competition in International Voice Communications by Carlo Maria Rossotto, BjörnWellenius, AnatLewin, Carlos R. Gomez (World Bank Working Paper # 42) • Trends in Telecommunication Reform 2006 by ITU • Liberalizing international gateways: Singapore’s experience: http://www.itu.int/itunews/manager/display.asp?lang=en&year=2009&issue=01&ipage=26&ext=html • Lessons from an international gateway liberalization by RohanSamarajiva, LIRNEasia: http://lirneasia.net/wp-content/uploads/2008/06/rs_int_liberalization.pdf • TRAI regulation on international telecommunication access to essential facilities at cable landing stations, 2007 • Gateway Liberalisation: Stimulating economic growth, GSM Association, 2007

  13. Thank You For more information please visit: www.pirrc.org

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