Trade in Telecommunication Services
Telecommunication Liberalization Telecommunications as a producer service Services liberalization in general results in:
Trade in Telecommunication Services
Increased competition, including through
FDI
Falling prices Increased efficiency
Patrick Low Director, Economic Research and Statistics Division, WTO
Better access and better quality
But Avoidance of network monopolies
ITC Round Table on Trade in Services Geneva, 8 December 2006
Need for regulatory principles
(interconnection rights, universal service) 2
Telecommunication Liberalization
Telecommunication Liberalization
Table: Global Telecom Indicators for the Telecommunication Service Sector 1994
1998
2000
2004
Main telephone lines (millions)
643
846
983
1'207
Mobile cellular subscribers (millions)
56
318
740
1'758
International telephone traffic minutes (billions)
57
89
118
145
Internet users (millions)
21
183
399
863
Table: Global telecom services revenue breakdown (current prices and exchange rates), US$ billion 1994
1998
2000
Telephone
386
456
477
Mobile
50
172
278
2004 552 454
Source: ITU, 2006
Source: ITU, 2006 3
4
Telecommunication Services: Nigeria •
Telecommunication Services: Nigeria
Liberalization began in the 1990s: •
1994: opened mobile and payphone markets
•
1996: private operators licensed in fixedtelephone market (17 operators by 2004)
•
2004: ISP operators numbered 40 (only 18 in 1999)
•
2000/01: second national operator and four GSM operators licensed 5
•
By 2003, mobile subscribers surpassed fixed telephone subscribers
•
Telecoms sector became the second largest after oil and gas; private investment jumped from $50m in 1999 to $6,000m in 2004
•
GSM service created new opportunities for small and medium businesses in franchises, dealerships and retailer-ships
•
GSM resale has provided access and given lowincome Nigerians an avenue for entrepreneurship 6
1
Telecommunication Services: Egypt
Telecommunication Services: Nigeria Figure: Fixed and mobile subscribers growth
•
1999: Initiated liberalization efforts, leading to privatization of national monopoly and substantial market opening by 2005
•
Fixed mainlines increased to 12 million by 2004
•
Three million Internet users by 2005
•
Internet costs among the lowest in the world, at US18 cents per hour
Source: ITU 2004 7
8
Telecommunication Services: Egypt
Telecommunication Services: Uganda
Figure: Growth in fixed lines and no of subscribers in Egypt No. of f ixed lines
No. of subscribers
14 11.3
12
million
9.5
9.7
2004
May 2005
8.7 7.44
8
6.53 4.21
4.87
•
2000:Privatization of Uganda Posts and Telecommunications Corporation
3.21
8.8
5.62
•
2005: Effective competition in the market with three providers, two of whom also provide fixed line services
•
Significant new opportunities for small businesses and better rural access
•
Licenses waived for small operators of telephone kiosks and Internet cafés
7.75 6.75 5.86
4 2
12.2
1993: Licence granted to first mobile service provider
10.3
10
6
12
•
3.74
4.32
4.94
0 1996
1997
1998
1999
2000
2001
2002
2003
Source: Ministry of Communications and Information Technology 2005
9
Telecommunication Services: Uganda
10
Telecommunication Services: Uganda •Competition pressure has also reduced tariffs. •Overall liberalization and entry of FDI has benefited the poorer sections of society in Uganda
Figure: Growth in fixed and mobile subscribers in Uganda, 1996-2004
Figure: Connection and monthly fees, 1993-2003
Source: Uganda Communication Commission 2004 11
Source: Uganda Communications Commission 2004
12
2
Telecommunication Services: Czech Republic
Telecommunication Services: Kenya
1998: Lagged behind W. Europe in mobile phone use 2003: Second only to Italy and Sweden in cell phone use per 100 inhabitants Number of internet users per 100 inhabitants: 1998: Bottom of ranking 2003: Middle position above Greece, Spain and Portugal
•
2000: Fixed-line services monopoly and cellular phone market duopoly
•
2006: Second national operator (SNO) introduced
•
Over 350 enterprises now specialize in the sale, installation, maintenance, and wiring
•
Sixty ISPs in the country
•
Cellular subscribers 50/1000 in 2003, 135/1000 in 2005
•
But inefficient fixed-line monopoly resulted in teledensity falling from 1 in 2003 to 0.9 in 2004
13
14
Telecommunication Services: China •
Prior 1994: Ministry of Posts and Telecommunications (MTP) provided telecom services through China Telecom
•
1999: First restructuring split China Telecom in to three functions (fixed-line, mobile, and satellite)
•
1999:China mobile and China Satcom created to run mobile and satellite sectors, however China Telecom continued state monopoly in fixed-line services
•
•
Telecommunication Services: China •Geographical restrictions on services liberalization has concentrated economic activities regionally, resulting in disparities. Table: Inter-Regional divides in fixed and mobile phone penetration (as of June 2005)
2001: China’s accession to the WTO. Commitment schedule included geographic restrictions for domestic fixed, mobile/cellular, paging & VAS phased out by 2007, 2006 & 2003 respectively 2002: Split of China Telecom in to North and South
• • •
• • •
References
Arnold, Javorcik and Mattoo. 2005. The productivity Effects of Services. China Statistics Yearbook. 2005. CNNIC report 2005. http://www.cnnic.net.cn/en/index/index.htm IDRC. 2005. The context of ICTs in Africa: The cases of Kenya, Senegal, South Africa, and Uganda. http://www.idrc.ca/en/ev-54413-201-1-DO_TOPIC.html ITU. 2006. Key Global Telecom Indicators for the World Telecommunication Service Sector http://www.itu.int/ITUD/ict/statistics/at_glance/KeyTelec om99.html ITU. 2004. “Bridging the Digital Divide” Briefing Note. Geneva. ITU. 2004. Uganda Internet Case Study. http://www.itu.int/ITU-D/ict/cs/ Ministry of Communications and Information Technology of the Government of the Arab Republic of Egypt. 2004. “Egypt Projects for Regional Cooperation: IT Clubs for Africa”. http://www.mcit.gov.eg/
Average mobile penetration
Eastern China
38.7%
44.7%
Central China
20.8%
20.2%
Western 18.4% 20.2% China Source: Ministry of Information Industry, 2005.
15
•
Average fixedphone penetration
16
References •
•
•
•
17
Ministry of Communications and Information Technology of the Government of the Arab Republic of Egypt. 2005. ICT Sector in Egypt: A model for Reform. http://www.mcit.gov.eg/ Ministry of Information Industry China. 2005. http://www.mii.gov.cn/mii/hyzw/tongji/yb/tongjiyue bao200506.htm Uganda Communications Commission. 2004. Uganda’s Approach to Universal Access and Communications Development Funding: A Guidebook for Policy-Makers and Regulators. UNCTAD. 2004. Africa’s Technology Gap: Case Studies on Kenya, Ghana, Tanzania and Uganda. 123 p. UNCTAD/ITE/IPC/Misc.13 18
3
Trade in Telecommunication Services
Increased competition, including through
FDI
Falling prices Increased efficiency
Patrick Low Director, Economic Research and Statistics Division, WTO
Better access and better quality
But Avoidance of network monopolies
ITC Round Table on Trade in Services Geneva, 8 December 2006
Need for regulatory principles
(interconnection rights, universal service) 2
Telecommunication Liberalization
Telecommunication Liberalization
Table: Global Telecom Indicators for the Telecommunication Service Sector 1994
1998
2000
2004
Main telephone lines (millions)
643
846
983
1'207
Mobile cellular subscribers (millions)
56
318
740
1'758
International telephone traffic minutes (billions)
57
89
118
145
Internet users (millions)
21
183
399
863
Table: Global telecom services revenue breakdown (current prices and exchange rates), US$ billion 1994
1998
2000
Telephone
386
456
477
Mobile
50
172
278
2004 552 454
Source: ITU, 2006
Source: ITU, 2006 3
4
Telecommunication Services: Nigeria •
Telecommunication Services: Nigeria
Liberalization began in the 1990s: •
1994: opened mobile and payphone markets
•
1996: private operators licensed in fixedtelephone market (17 operators by 2004)
•
2004: ISP operators numbered 40 (only 18 in 1999)
•
2000/01: second national operator and four GSM operators licensed 5
•
By 2003, mobile subscribers surpassed fixed telephone subscribers
•
Telecoms sector became the second largest after oil and gas; private investment jumped from $50m in 1999 to $6,000m in 2004
•
GSM service created new opportunities for small and medium businesses in franchises, dealerships and retailer-ships
•
GSM resale has provided access and given lowincome Nigerians an avenue for entrepreneurship 6
1
Telecommunication Services: Egypt
Telecommunication Services: Nigeria Figure: Fixed and mobile subscribers growth
•
1999: Initiated liberalization efforts, leading to privatization of national monopoly and substantial market opening by 2005
•
Fixed mainlines increased to 12 million by 2004
•
Three million Internet users by 2005
•
Internet costs among the lowest in the world, at US18 cents per hour
Source: ITU 2004 7
8
Telecommunication Services: Egypt
Telecommunication Services: Uganda
Figure: Growth in fixed lines and no of subscribers in Egypt No. of f ixed lines
No. of subscribers
14 11.3
12
million
9.5
9.7
2004
May 2005
8.7 7.44
8
6.53 4.21
4.87
•
2000:Privatization of Uganda Posts and Telecommunications Corporation
3.21
8.8
5.62
•
2005: Effective competition in the market with three providers, two of whom also provide fixed line services
•
Significant new opportunities for small businesses and better rural access
•
Licenses waived for small operators of telephone kiosks and Internet cafés
7.75 6.75 5.86
4 2
12.2
1993: Licence granted to first mobile service provider
10.3
10
6
12
•
3.74
4.32
4.94
0 1996
1997
1998
1999
2000
2001
2002
2003
Source: Ministry of Communications and Information Technology 2005
9
Telecommunication Services: Uganda
10
Telecommunication Services: Uganda •Competition pressure has also reduced tariffs. •Overall liberalization and entry of FDI has benefited the poorer sections of society in Uganda
Figure: Growth in fixed and mobile subscribers in Uganda, 1996-2004
Figure: Connection and monthly fees, 1993-2003
Source: Uganda Communication Commission 2004 11
Source: Uganda Communications Commission 2004
12
2
Telecommunication Services: Czech Republic
Telecommunication Services: Kenya
1998: Lagged behind W. Europe in mobile phone use 2003: Second only to Italy and Sweden in cell phone use per 100 inhabitants Number of internet users per 100 inhabitants: 1998: Bottom of ranking 2003: Middle position above Greece, Spain and Portugal
•
2000: Fixed-line services monopoly and cellular phone market duopoly
•
2006: Second national operator (SNO) introduced
•
Over 350 enterprises now specialize in the sale, installation, maintenance, and wiring
•
Sixty ISPs in the country
•
Cellular subscribers 50/1000 in 2003, 135/1000 in 2005
•
But inefficient fixed-line monopoly resulted in teledensity falling from 1 in 2003 to 0.9 in 2004
13
14
Telecommunication Services: China •
Prior 1994: Ministry of Posts and Telecommunications (MTP) provided telecom services through China Telecom
•
1999: First restructuring split China Telecom in to three functions (fixed-line, mobile, and satellite)
•
1999:China mobile and China Satcom created to run mobile and satellite sectors, however China Telecom continued state monopoly in fixed-line services
•
•
Telecommunication Services: China •Geographical restrictions on services liberalization has concentrated economic activities regionally, resulting in disparities. Table: Inter-Regional divides in fixed and mobile phone penetration (as of June 2005)
2001: China’s accession to the WTO. Commitment schedule included geographic restrictions for domestic fixed, mobile/cellular, paging & VAS phased out by 2007, 2006 & 2003 respectively 2002: Split of China Telecom in to North and South
• • •
• • •
References
Arnold, Javorcik and Mattoo. 2005. The productivity Effects of Services. China Statistics Yearbook. 2005. CNNIC report 2005. http://www.cnnic.net.cn/en/index/index.htm IDRC. 2005. The context of ICTs in Africa: The cases of Kenya, Senegal, South Africa, and Uganda. http://www.idrc.ca/en/ev-54413-201-1-DO_TOPIC.html ITU. 2006. Key Global Telecom Indicators for the World Telecommunication Service Sector http://www.itu.int/ITUD/ict/statistics/at_glance/KeyTelec om99.html ITU. 2004. “Bridging the Digital Divide” Briefing Note. Geneva. ITU. 2004. Uganda Internet Case Study. http://www.itu.int/ITU-D/ict/cs/ Ministry of Communications and Information Technology of the Government of the Arab Republic of Egypt. 2004. “Egypt Projects for Regional Cooperation: IT Clubs for Africa”. http://www.mcit.gov.eg/
Average mobile penetration
Eastern China
38.7%
44.7%
Central China
20.8%
20.2%
Western 18.4% 20.2% China Source: Ministry of Information Industry, 2005.
15
•
Average fixedphone penetration
16
References •
•
•
•
17
Ministry of Communications and Information Technology of the Government of the Arab Republic of Egypt. 2005. ICT Sector in Egypt: A model for Reform. http://www.mcit.gov.eg/ Ministry of Information Industry China. 2005. http://www.mii.gov.cn/mii/hyzw/tongji/yb/tongjiyue bao200506.htm Uganda Communications Commission. 2004. Uganda’s Approach to Universal Access and Communications Development Funding: A Guidebook for Policy-Makers and Regulators. UNCTAD. 2004. Africa’s Technology Gap: Case Studies on Kenya, Ghana, Tanzania and Uganda. 123 p. UNCTAD/ITE/IPC/Misc.13 18
3
