BELTUG Update on Global Communications Issues - August 2011

In a filing to the FCC, INTUG expressed concern at the proposed merger as follows:

“Efficient and cost-effective business use of communications is an essential enabler to economic recovery, improved productivity, job creation and improved social inclusion. The AT&T/T-Mobile USA merger will have a profound impact on business users of telecommunications services and it therefore needs very careful assessment to avoid damaging not only the competitiveness of the communications industry but the ability of multinational businesses to leverage communications in new and innovative processes.

In a recent OECD report comparing its 34 members, the USA is one of the most expensive home countries for international data roaming at around twice the OECD average price.

The absence of a competitive home market for national roaming services (which will be the case in the GSM/HSPA market in the USA after an AT&T/T-Mobile merger) also allows, and indeed encourages, high prices domestically, with little scope for customer choice.

The direction that the USA mobile broadband market is taking seems to be following a path in which international data roaming between the USA and the rest of the world is becoming less, and not more, practical at a time when demands and expectations for access to mobile broadband services are growing rapidly on both sides of the Atlantic.

This is becoming even more prevalent in many developed Asia Pacific countries also.
Even if unintended, this trend is not only harmful to USA residents travelling abroad, but also penalises international visitors to the US. Neither consequence is desirable.

INTUG therefore respectfully urges the Federal Communications Commission to give very serious weight to the impact on business users of telecommunications services, especially when assessing the implications of the AT&T/T-Mobile USA transaction. Attention should be given particularly to the extent to which it will create impediments to the availability of international mobile broadband roaming services to business travellers coming to visit the USA, and to the limitations imposed on USA business representatives travelling abroad by continued high international mobile roaming prices, due to lack of competition at home.”

INTUG is working with representatives of other organisations to end the stranglehold on access services. The NoChokePoints coalition represents public interest groups, educational organisations, MNCs and competitive broadband providers that rely on high-capacity “special access” lines. Since the consolidation of the US market with the mergers of RBOCs and long distance providers, a similar issue to NGA in Europe and non-discriminatory wholesale broadband access is affecting the US and services to European and US multinationals seeking to build transatlantic business processes. 

As INTUG, OECD and many other groups continue the campaign for eventual elimination of international roaming charges, the European Commission has just published its recommendations for retail price caps for voice, text and data roaming. In welcoming this further recognition of the unjustified charges on customers, INTUG supported the aim of Vice President Neelie Kroes to reduce charges to near zero as part of Europe’s Digital Agenda. Long term, INTUG believes that the LTE/4G environment should be used to completely eliminate the concept of roaming charges domestically and internationally.

Under the new proposals, there will be a new retail price cap for data roaming of EUR0.90 per Megabyte (MB) from 1 July 2012, falling to EUR0.50 cents by July 2014. Prices will actually be charged per Kilobyte. It currently costs consumers an average of EUR2.23 per MB when downloading abroad on another mobile group’s network and in some cases is as high as EUR12 per MB. Roaming voice calls will fall to EUR0.28 per minute in 2013 and EUR0.24 per minute in July 2014. Text roaming will reduce to EUR0.10 from EUR0.11 currently.

The European Commission has sent requests for information to 20 Member States who have not notified measures to implement in full new EU telecoms rules into national law.

The new rules give businesses and consumers new rights regarding phones, mobile services and Internet access. These include the right for customers to switch telecoms operators in just one day without changing their phone number, the right to more clarity about the services customers are offered and better protection of personal data online.

While legislative processes are ongoing in all EU Member States and a majority of them have informed the Commission of some implementation measures, only Denmark, Estonia, Finland, Ireland, Malta, Sweden and the UK have notified the Commission that they have implemented the new rules in full. The other 20 Member States are due to reply to the ‘letters of formal notice’ within two months. If these states fail to reply, or if the EC is not satisfied with their answer, it can send them a formal request to implement the legislation, and ultimately refer them to the EU Court of Justice.

The new organization called BEREC, bringing together the National Regulators of the EU Member States is based in Latvia. The office will have 28 staff, including some recruited from NRAs, some secondments and some international recruits. Their work is supported by Expert Groups who will largely meet in Brussels in the old IRG office for convenience.

BEREC has a busy working programme for 2011 including the main hot topics of NGA, Universal Service, Network Neutrality and Roaming. They are currently seeking input on barriers to the Single Market which INTUG will provide. The Chairman of BEREC for 2012, Georg Serentschy from Austrian regulator RTR, is drafting the 2012 programme.

INTUG will again be arguing for a major work item on international business services.

There is increasingly rapid development of Internet businesses in China as their digital economy takes shape. The pace of development has escalated as more of the population gain access to the Internet. Chinese based online enterprises can target consumers like no western company has been able to, with numerous successful IPOs on the New York Stock Exchange in 2011 as testament to this. These companies have embraced the phenomenal growth of e-commerce and various e-services such as on-line shopping, advertising and banking. Underpinning the digital economy is an internet infrastructure that still only reaches 40% of the population. More provinces and municipalities are moving into the first echelon of Internet development with a noticeable shift to instant messaging and blogging, and increased use of the Internet for currency transactions.

The dynamic Indian telecommunications market has one particularly compelling feature, the very large number of significant operators. As the market constantly adjusts to the changing pressures and demands, takeovers and mergers ensure that some level of equilibrium is maintained, despite significant shifts in market share among the players. Three major private players, Bharti, Reliance and Vodafone, with a formidable 54% share of the market between them, lead a field of 14 mobile operators. State-owned enterprises BSNL and MTNL have also been making their presence felt with a combined 12% share.
Although the fixed-line telephony market in India has seen little growth of late, it remains an important segment of the overall market. It is the two state-owned operators that still deliver the overwhelming majority of fixed-line services.

As Australia pursues its key political objectives for a National Broadband Network (NBN), mobile broadband using the 3G networks has expanded rapidly. Australians are adopting new and alternative communication methods and media services, and adapting usage patterns to meet their lifestyle needs.

In the last year growth in mobile broadband was over 70%, and the percentage of broadband subscriptions
on mobile continued to rise. The expansion rate in Australia closely mimics the global uptake of mobile broadband, where four billion subscriptions may be exceeded by 2015. In the longer term with the increase in connected devices and increased availability of devices like tablets and smart phones, mobile data downloaded is likely to exceed 600 petabytes by 2020 in Australia.

The fixed wireless market has expanded over the past year too. The use of 4G fixed wireless in the National Broadband Network rollout across regional and rural Australia will also increase uptake of mobile broadband usage.

New INTUG Chairman, Danielle Jacobs from the Belgian User Group, BELTUG, was presented with a Ten Year Anniversary Certificate by the ITU in Geneva on July 1, in recognition of INTUG’s support for the work of ITU. INTUG has been actively engaged in ITU work since its formation in 1974, but only achieved official observer status (the same as the European Commission!) in 2001.

INTUG is updating its network of contacts with public relations and press organizations to enhance its public profile and visibility, and improving its internal communications to enhance benefits and value for members. This will be driven by a consultation process on needs of members, led by the new Chairman. INTUG received coverage in the New York Times for its comments on the new roaming regulation proposals mentioned above.

INTUG’s position paper on International Mobile Services, and the current dysfunctional market is being updated and contributions have been invited for incorporation in the revised version.

Check INTUG’s web site regularly.  It is a valuable source of current information and activities.  All BELTUG members can sign up for access to the restricted area, and can receive an alert service based on selected topics.