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Trends in international telecom traffic, costs and prices Dr Tim Kelly, International Telecommunication Union (ITU) Closing Workshop on the costing and.

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Presentation on theme: "Trends in international telecom traffic, costs and prices Dr Tim Kelly, International Telecommunication Union (ITU) Closing Workshop on the costing and."— Presentation transcript:

1 Trends in international telecom traffic, costs and prices Dr Tim Kelly, International Telecommunication Union (ITU) Closing Workshop on the costing and pricing of telecom services in the Arab States, Tunis, 29 Nov - 2 Dec 1999 Note: The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU or its membership. Dr Tim Kelly can be contacted by e-mail at Tim.Kelly@itu.int.

2 2 Trends in intl traffic, costs and prices Agenda Trends in international traffic Worldwide Arab States Regional breakdown of traffic Market shares Competitive markets Cost and price trends FCC benchmarks ITU Focus Group, indicative target rates Conclusions

3 143 124 108 94 72 62 54 48 44 38 30 82 0 200 400 600 800 1'000 1'200 199019911992199319941995199619971998199920002001 Fixed lines and mobile subscribers worldwide (millions) 0 20 40 60 80 100 120 140 160 Billions of minutes of international telephone traffic Fixed main lines Mobile subscribers Total int'l traffic Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes. Trends in subscribers and international traffic, Worldwide

4 Trends in subscribers and international traffic, Arab States Source: ITU World Telecommunication Indicators Database. 4.9 4.3 3.7 3.3 2.7 2.3 2.0 1.8 1.6 0 5 10 15 20 25 199319941995199619971998199920002001 Subscribers (millions) 0 1 2 3 4 5 6 Int'l traffic (billion mins) Fixed lines Mobile Int'l outgoing

5 0500,000,0001,000,000,0001,500,000,000 S. Arabia UAE Morocco Egypt Lebanon Algeria Kuwait Tunisia Jordan Syria Bahrain Qatar Oman Yemen Incoming Outgoing Minutes of international traffic, outgoing and incoming, Arab States, 1998 Source: ITU World Telecommunication Indicators Database. Note: Excluding States with <100000 minutes.

6 Trends in subscribers and international traffic, Egypt Source: ITU World Telecommunication Indicators Database. 0 1 2 3 4 199319941995199619971998 Subscribers (millions) 0 100 200 300 400 500 600 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

7 Trends in subscribers and international traffic, Lebanon Source: ITU World Telecommunication Indicators Database. 0.0 0.2 0.4 0.6 0.8 199319941995199619971998 Subscribers (millions) 0 100 200 300 400 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

8 Trends in subscribers and international traffic, Morocco Source: ITU World Telecommunication Indicators Database. 0 0.5 1 1.5 2 199319941995199619971998 Subscribers (millions) 0 100 200 300 400 500 600 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

9 Trends in subscribers and international traffic, Saudi Arabia Source: ITU World Telecommunication Indicators Database. 0 1 2 3 199319941995199619971998 Subscribers (millions) 0 200 400 600 800 1,000 1,200 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

10 Trends in subscribers and international traffic, Tunisia Source: ITU World Telecommunication Indicators Database. 0.0 0.2 0.4 0.6 0.8 1.0 199319941995199619971998 Subscribers (millions) 0 50 100 150 200 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

11 Trends in subscribers and international traffic, UAE Source: ITU World Telecommunication Indicators Database. 0.0 0.2 0.4 0.6 0.8 1.0 199319941995199619971998 Subscribers (millions) 0 200 400 600 800 1,000 Traffic (million minutes) Fixed lines Mobile Int'l outgoing Int'l incoming

12 Trends in outgoing traffic, bn minutes - 10 20 30 40 50 60 19901991199219931994199519961997 Developed countries Developing countries Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes.

13 Trends in incoming traffic, bn minutes Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes. 0 10 20 30 40 50 60 19901991199219931994199519961997 Developed countries Developing countries

14 0 5 10 15 20 199319941995199619971998 PaymentsReceiptsNet settlement Trends in settlement payments and receipts, Developing countries, US$bn Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes.

15 35% 46% 74% 85% 1990199519982005 Mono- poly Compe- tition 4142948 Number of countries permitting more than one operator for international telephony Percentage of outgoing international traffic open to competition Note: Analysis is based on WTO Basic Telecommunications Commitments and thus presents a minimum level of traffic likely to be open to competitive service provision. Source: ITU, WTO.

16 Level of competition in international services in WTO basic telecoms agreement Competition Monopoly Source: ITU Telecommunication Regulatory Database.

17 Countries permitting intl competition 19901998 20Israel 1Japan1Australia21Italy 2New Zealand2Austria22Japan 3UK3Belgium23Korea (Rep.) 4USA4Brunei D.24Malaysia 1995 5Canada25Mexico 1Australia6Chile26Netherlands 2Canada (partial)7Colombia27New Zealand 3Colombia8DPR Congo28Norway 4Chile9Denmark29Peru 5Denmark10Dominican Rep.30Philippines 6Finland11El Salvador31Russia 7Japan12Finland32Somalia 8Korea (Rep.)13France33Spain (after Dec. 1998) 9Malaysia14Germany34Sweden 10New Zealand15Ghana35Switzerland 11Philippines16Guatemala36Uganda 12Sweden17HK-China (after Dec 1998)37Ukraine 13UK18Indonesia38UK 14USA19Ireland (after Dec. 1999)39USA

18 Top 10 PTOs by outgoing intl traffic Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes.

19 1.1% 21.2% 0.6% 2.2% -14.3% -16.4% -17.3% -2.7% BT FT Sprint MCI WorldCom AT&T Telecom Italia SwissCom DT 4.5% 9.7% 0.5% 8.2% 5.9% -2.9% -2.1% 17.6% % change in traffic % change in intl rev. Selected PTOs, performance 1997/98 Note:Based on 1998 international outgoing traffic and revenue from international operations. For Sprint, MCI WorldCom and AT&T, data relates to 1997. The definition of international revenue (gross, net or retail) is tat used by each individual operator. Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes.

20 Note:Traffic shares relate to minutes of outgoing traffic from members of each alliance. Source: ITU/TeleGeography Inc. Direction of Traffic, 1999: Trading Telecom Minutes AT&T/BT, 17.2% GlobalOne, 14.3% MCI WorldCom, Telefonica, TP, 11.1% Cable & Wireless, 4.7% Others, 47.3% Total, 1997: 81.2 bn minutes Unisource, 5.4% Emerging global alliances, shares of intl traffic market

21 21 Trends in intl traffic, costs and prices Emerging global alliances: Recent developments WorldCom merges with MCI, bids for Sprint Following collapse of BT/MCI merger, BT & AT&T join forces in Concert AT&T and Telefonica withdraw from Unisource GlobalOne on point of collapse following purchase of Sprint by WorldCom Deutsche Telekoms bid for Telecom Italia fails; Olivettis succeeds Cable & Wireless re-positioning itself as supplier of data services Telia and TeleNor merge

22 0 0.2 0.4 0.6 0.8 1 878889909192939495969798 1987-92, -2% p.a. 1992-96, -4% p.a. 1997-98, -14% p.a. D.140 approved D.140 revised Global average settlement rates, US$ per minute Source: ITU/TeleGeography Inc. Direction of Traffic 1999: Trading Telecom Minutes.

23 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1993199519971999 Italy France UK Germany Convergence: Accounting rate to US in US$ per minute, four European countries Source: FCC. Data for year-end except 1999 = September 1999

24 Accounting rates with USA, US$ per minute, 1 Nov 1999 Source: FCC (Ken Stanley). 2.00 1.75 1.72 1.38 1.36 1.10 1.00 0.90 0.89 0.84 0.41 0.30 UAE Lebanon Mauritania Oman Syria S. Arabia Bahrain Egypt Jordan Algeria Tunisia Morocco World Ave. Kuwait

25 Trends in accounting rates, US$ per min Source: FCC (Ken Stanley). 1999 is 1 November 1999 data. 0.00 0.50 1.00 1.50 2.00 2.50 19921993199419951996199719981999 Saudi Arabia Kuwait World Average Oman Qatar, UAE Bahrain

26 Trends in accounting rates, US$ per min Source: FCC (Ken Stanley). 1999 is 1 November 1999 data. 0.00 0.50 1.00 1.50 2.00 2.50 19921993199419951996199719981999 Morocco Algeria World Average Mauritania Egypt Tunisia

27 Two alternative scenarios: Source: ITU Focus Group Report, FCC. ITU Focus Group targets, by teledensity (T), to be achieved by 2001 (2004) FCC Benchmarks, by income group

28 0 2 4 6 8 10 12 19901991199219931994199519961997 300 minutes, local calls 3 mins Int'l call to US Monthly line rental Tariff rebalancing trends, in US$ Average of 39 major economies Source: ITU World Telecommunication Indicators Database.

29 29 Trends in intl traffic, costs and prices International traffic trends: Conclusions Voice traffic continuing to grow, but the main action is now elsewhere Mobile and the Internet will be the major demand drivers for the future Competitive markets will be the norm, monopolistic markets the exception in the future, in most regions of the world Alliances will continue to be formed, but partnerships are still unstable Settlement rates in most countries of the region are well above indicative target rates


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