1 / 23

Type III Interconnection: Key to Sustainable Local Network Competition

This study delves into the evolution of Hong Kong's local fixed networks from a monopoly under Hong Kong Telecom to a competitive market post-liberalization, highlighting the roles of Type I, Type II, and Type III interconnections in promoting fair competition. The regulatory framework, market structures, and benefits of competition are analyzed, emphasizing the importance of Type III interconnection in ensuring universal service and consumer choice. Concrete examples and market data are provided to illustrate the impact of interconnection on market dynamics and user experience.

schuyler
Télécharger la présentation

Type III Interconnection: Key to Sustainable Local Network Competition

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Type III Interconnection: Key to Sustainable Local Network Competition Xu Yan, HKUST Business School

  2. Hong Kong’s Local Fixed Networks • Monopoly Operation by former Hong Kong Telecom until 1995 under exclusive franchise • In 1995, in addition to Hong Kong Telecom, three new licenses were issued to Hutchison, New T&T and New World • In 1999, Hong Kong Telecom surrendered its exclusive IDD franchise

  3. Hong Kong’s Local Fixed Networks • In 1999, Hutchison, New T&T and New World get a moratorium with investment commitment • In 1999, five wireless local fixed network licenses were issued. Hong Kong Cable also obtained license for telecom service • Since 1 January 2003, local fixed network market has been fully liberalized

  4. Market Structure of the Local Fixed Network in HK, the UK and the US (By Dec. 2003) Source: FCC (http://www.fcc.gov), OFTA (http://www.ofta.gov.hk), Oftel (http://www.ofcom.org.uk)

  5. Regulator’s Efforts in Facilitating Competition • Operator Number Portability • statutory right of access into buildings • sharing of facilities (cable ducts, etc) • Type I Interconnection • Type II Interconnection

  6. Type I Interconnection - Interconnection between Network Gateways Gateway Network 1 Network 2 POI

  7. Type II Interconnection - the Local Loop Unbundling Network 2 Network 1 TBE Room MDF B Block-wiring Distribution Point A C Local Exchange of Network 1 Building Street

  8. Equipment Collocation in TBE Room

  9. Deployment of Type II Interconnection:The Cut-over of Jumper Line Customer Building Incumbent’s Exchange Main Distribution Frame (MDF) Incumbent’s Switching Equipment Equipment Side Line Side Cable Lead-in 2N Collocation Room Blockwiring in TBE Room LAL Tie Circuits (4) (3) Incumbent’s ExternalCable MDF (5) To 2N’s Host Exchange (Backhaul process) 2N’s Fiber Cable

  10. Universal Service Contribution: Subsidies from IDD HKTI HKTC International Destination New FTNS Mobile Service

  11. Price Squeezing Retail Price Interconnection Payment

  12. Starting from 1/8/1996 1/8/1997 1/9/1999 22/1/2001 1/1/2002 Business $104.6 $108.8 $108.8 $128 No price control Residential $67 $68.9 $90 $110 No price control Price Rebalancing

  13. More Exchange Opened for Type II Interconnection • 50% residents have choice among operators, new entrants are committed for more investment for moratorium Source: http://www.ofta.gov.hk

  14. Accelerated Market Share of New Entrants

  15. The Case of Wharf T&T • By the end of 2002: • Profit: HK53 million, 5.5 times comparing to 2001 • Revenue from fixed network: HK$833 million • Total lines: 340,000 • Market share: 9% (business 15%)

  16. Backbone Network of Hutchison Global Communication in Hong Kong

  17. Benefits of Competition is no Longer Just Limited to Corporate Users

  18. Type III Interconnection? Network 2 Network 1 TBE Room MDF B Block-wiring Distribution Point A C Local Exchange of Network 1 Building Street

  19. Reasons for Change • Regulation at different points are different • A: collocation, cut-over • B: Rights of way • C: building access • Different points represent different development strategies • A: Indirect access • C: Direct access • Bottleneck at point C may no longer be controlled by the incumbent • Property developers holding class license • New entrants affiliated with the property developers • Experience of success: the case of Korea

  20. Explicitly structured regulatory framework Type I: any-to-any communication; Type II: deployment of cut-over; Type III: subscribers access in buildings. Flexibility in regulation: Direct access vs. Indirect access Respond to market change From overall asymmetric regulation to site-specific asymmetric regulation Advantages of Change

  21. Conclusions • Type II interconnection (local loops unbundling) is efficient in facilitating local fixed network competition as long as there is no market distortion; • It is necessary to review type II interconnection timely in order to respond to the market change; • Type III interconnection is essential in guaranteeing universal choice so as to guarantee sustainable universal service

  22. Q &. A

  23. Thank You and welcome to Hong Kong Mobility Roundtable 2005!(http://www.hongkongmobility.ust.hk)

More Related