1. AFRINET 2000 IP Telephony Regulatory Issues International Telecommunication Union The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU or its membership. M.Evora Sagna

2. Introduction Internet and IP based networks are being used as alternatives to the high priced public switched telephone networks Next Generation Telcos are building vast Global Net works to carry voice on top of data IP Telephony is pushing telecom liberalization faster then the policy makers had planned Telecom regulatory frame work in Africa is incomplete or does not exist in most of the Countries

3. 3 Definition of IP Telephony Rapid changes in Technologies make definition of IP Telephony controversial. Based on terminal devices, location of gateways and means of transmission following definitions have been accepted: IP Telephony: Voice, and related services transmitted over packet- switched IP-based networks. There are two main subsets: “Internet Telephony”: using the public Internet; “Voice over IP”: using private, managed IP- based networks, in addition to the Public Internet

4. IP Telephony Evolution 1- PC-to-PC over IP (early stage around 1994) 1- PC-to-PC over IP (early stage around 1994) PC similarly equipped with IP telephony software, both logged-on simultaneously talk at reduced charges. Very poor speech quality (no global standards). Internet Phone Computer

5. 2 - PC to phone (or fax) (since 1996) Internet users with multimedia PC call any phone or fax user The IPSPs do routing negotiations and interconnection payments Phone Gateway Computer TelephonePublic Switch Internet Fax Desktop PC

6. 3- Phone to Phone (fax to fax), over IP(since 1997) Fixed phone/fax/mobile phone users communicate to each other through Internet at reduced rates Telephone Public Switch Internet Phone Gateway Computer Fax

7. 7 Enhanced IP Telephony Internet users with multimedia PC browse Website and choose voice/video connection options ISP can interact directly with potential clients, via voice or video, freephone access. Limitless possibilities for “anything” over IP.

8. 8 E.164 number 878 878 has been allocated to IP Telephony for trials. Recent ITU decisions (CMR) IMT 2000 increase of bandwidth for mobile communications IP Global Standards made market increase and the forecast is that VoIP traffic will be around 2.7trillion minutes by 2006, representing 25% of all telephone traffic. ITU Global Standards legitimate VoIP

9. 9 IP Telephony Traffic Estimation In 2000 Year IP Telephony international traffic is estimated in 16 billion mins By 2004, VOIP traffic 135 billion mins.And will be 40 % of all int’l calls. By 2006, 2.7 Trillion mins of IP Telephony traffic, representing 25% of all telephone traffic.

10. 10 IP Telephony Traffic Estimation in billions minutes

11. 11 Impact of IP telephony on the Public Telecom Operators For public telecom operators is likely to be loss of income from international callings Some say that even without IP telephony International traditional traffic calls will fall. Other ways of international calls are spread every were… VoIP made Internet more popular. To compensate loss of income focus should be on the local networks and tariffs rebalancing. The use of the Local Loop for telecom services will be needed

12. 12 Some of the more frequent regulatory questions Is IP Telephony voice or data? Is it a service or an application? Is IP Telephony real-time communication? Is IP Telephony a Telecom Service or a Value Added Service? Should IP Telephony Service Providers be licensed and regulated? If so, should the regulation be focused on services, operators, technologies or consumers? Should ISPs and IPSPs contribute to Universal Access funds?

13. 13 Telecom Policy and Regulation have been different according to level of liberalization and competitiveness in markets. Three broad categories: 1.High-price Markets 2.Falling-price Markets 3.Low-price Markets IP Telephony Policy and Regulation in the world

14. 14 Monopoly operators, high IDD rates, (internal cross- subsidies) Not signatories to WTO Agreement on Basic Telecommunications Non existence of rules for Internet Telephony Or Internet Telephony prohibited “High-price” Markets “High-price” Markets

15. 15 Countries on the road to liberalization: IDD rates coming down, tariffs being rebalanced Regulators seeking to increase consumer benefits adopt creative interpretations of laws and licences to permit incoming and outgoing IP Telephony “Falling-price” Markets “Falling-price” Markets

16. 16 IDD rates very low, intense price competition Price of local and long distance calls nearing parity, flat-rate pricing Interworking and convergence between IP-based and circuit-switched networks. Technology-neutral regulatory treatment (underlying technology is irrelevant – focus is on services). “Low-price” Markets

17. 17 Countries on the road to liberalization: IDD rates coming down, tariffs being rebalanced Regulators seeking to increase consumer benefits adopt creative interpretations of laws and licences to permit incoming and outgoing IP Telephony “Falling-price” Markets “Falling-price” Markets

18. 18 Traffic in Minutes, Country X, Low-price market: IP telephony is permitted if real- time and with light restrictions (notification/registration may be required)

19. Ip Telephony and Universal Access In countries were International calls subsidies domestic calls and basic local access, any other form of originating and terminating International calls may reduce revenues for int voice. Asymmetric regul of voice and data may develop capability to treat voice as data This may be negative for Universal Access Obligations

20. Universal Access Concept “Telecommunication for everybody at reduced prices” technology-neutral regulated. Is this the Universal Access Challenge? Do developing countries need to updated the Universal Access concept?

21. Convergence and interconnection policy IP telephony may appears as the unifying platform for all forms of electronic communication Convergence demands coherent cross platform for voice policy technologically neutral Transparent, fair and non-discriminatory rules for interconnection among all local service providers, and priced on a cost oriented bases will militate in favor of an harmonized telecommunication development

22. Who is Taking Advantage of IP Telephony in Developing Countries ? IP Telephony is experienced in developing Countries primarily as incoming service Foreign carriers and foreign users from developed countries are taking all advantages of IP services How to regulated it in developing countries to make Users and Telcos happy ?

23. 23 Clear Telecom Policy and Regulation is not in place in most of African Countries Regulatory Bodies increased in last years but still 46% of African Countries do not have an independent Telecom Regulatory Body There is lack of expertise in regulatory matters in most of African Countries IP telephony is not regulated or is prohibited Nevertheless Voice/fax and other kinds of IP related communications bypass the telecom service providers every day What is happening in Africa

24. 24 IP Telephony is being used World Wide New ITU Global Standards legitimated IP Telephony Nevertheless IP Telephony is prohibited or not regulated in most of the African Countries Telecom Operators, Internet Service Providers and Users are not taking advantage of the new technologies. For Users IP telephony is an alternative for high telephone/fax pricing For Regulators there are still many difficult IP Telephony questions Clear Telecom Policy and Regulation is an urgent need for sustainable development of Africa. Conclusions:

25. 25 Transparent, fair and non-discriminatory rules for interconnection among all local service providers, and priced on a cost oriented bases will militate in favor of an harmonized telecommunication development and will contribute for Universal Access Clear Telecom Policy and Regulation is an urgent need for sustainable development of Africa.

26. 26 http://www.itu.int/iptel