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January 18, 2013
Turkey: Turkcell submits lowest bid in rural coverage tender
Acccording to a Telecompaper
Europe article, Turkcell submitted the lowest bid (TRY 312.77 million,
excluding VAT) for a tender held by Turkey's Ministry of Transport, Maritime
Affairs and Communications to provide mobile coverage to Turkey's 1,799 unserved
rural locations with a population lower than 500.
The investment and the operating expenses will
be disbursed from the universal service fund of the Ministry. The network
infrastructure resulting from the tender will also be shared by other operators.
The tender process will be finalised after the evaluation of the tender
commission.
Turkcell covers 99.17% of Turkey's population
with about 32,500 base stations.
Intelecon comment: Mobile networks
already cover over 99% of Turkey's population, but the remaining uncovered
areas will receive financing from the universal service fund to ensure they are
covered by mobile networks within three years. Turkey's universal service fund is
financed from a variety of sources: 2% of the authorisation fees collected by the Telecom Authority; 1% of net revenues of
all operators (except GSM); 10% of payments by GSM operators to the Treasury;
20% of administrative fines collected by the Telecom Authority; and, 20% of
what remains in the budget of the Telecom Authority budget after all
expenditures are deducted.
January 15, 2013
Thailand: New interconnection rate to take effect
According to the Bangkok Post, a
new mobile interconnection rate of USD 0.0165 per minute for mobile voice
service will take effect this month.
Mobile operators are currently setting different mobile interconnection
rates ranging from USD 0.0165 to 0.0353 per minute, depending on agreements
between the operators. The new interconnection rate will enable the National
Broadcasting and Telecommunications Commission (NBTC) to start granting
infrastructure-sharing licenses for telecommunications services by September.
Col Settapong Malisuwan, chairman of the NBTC's telecom
committee, said infrastructure-sharing licenses will include mobile towers and
fibre-optic networks. The licenses will offer both voluntary and compulsory features
for infrastructure owners. Col Settapong said the licenses will encourage both
TOT and CAT to share their networks with existing operators and newcomers
alike. It also encourages TOT and CAT to focus on serving as network service
providers rather than operators.
Col Settapong also urged TOT and CAT to discuss future
network cooperation with their concessionaires before their contracts expire. The
two state enterprises will not be allowed to book all concession-related
revenue into their financial statements after December 2013, according to the
Frequency Allocation Act.
Intelecon comment: There is a demonstrated relationship
between mobile termination rates and mobile tariffs. In a 2010 study,
"The Effects of Lower Mobile Termination Rates (MTRs) on Retail Price and
Demand", Growitsch and Wernick looked at data from 61 mobile operators in
16 EU states between 2003 and 2008. The study found that lower MTRs are
associated with lower average retail unit prices, and with greater minutes of
use per month per subscriber. Furthermore, the authors conclude that, "The
overall policy implication, in our view, is that efforts to drive MTRs to lower
levels are appropriate and will tend to increase consumer welfare."
The NBTC's reduction of mobile interconnection charges
should contribute to improved affordability for end-users of mobile voice
services. As the rural population typically has lower incomes than the urban
population, reduced mobile tariffs should be particularly helpful in improving
the affordability of mobile service for people in rural areas of Thailand.
December 14, 2012
Peru: Congress approves mobile banking bill
According to an article
at The
Paypers, Peru's congress approved a bill creating a mobile banking
transaction regulatory framework.
The bill allows only companies overseen by the
financial services regulator SBS to issue e-money. Additionally, the bill
ensures that there will be safeguards to protect the privacy and personal
information of e-money users.
In Peru, mobile banking is considered a potential
means of increasing the low penetration rate of financial services.
Intelecon comment: Peru appears to be
adopting a bank-centric mobile banking model. As outlined in the "IFC
Mobile Money Study 2011", undertaken by Intelecon with the IFC,
"the advantages of this model for the bank are new client acquisition
opportunities; new revenue streams from micropayments; and control over the
system and, therefore, less risk." The disadvantages are that, "there
is no clear incentive for banks to roll out this model, particularly if they
have spent capital setting up a traditional banking infrastructure, including
prepaid, credit, and debit cards."
December 10, 2012
Malaysia: Regulator to charge fee for wireless village broadband
According to a report
from Bernama,
the telecommunications regulator will institute a minimum fee for Wireless
Village broadband by early 2014.
Malaysian Communication and Multimedia
Commission, Industry Development and Resource Planning chief officer, Datuk
Mohd Ali Hanafiah Mohd Yunus said the Commission is determining the rate, likely
in the range of USD 1.65 to USD 3.30 per month.
"At present the service is free. So
the charge will be very minimal and used for maintenance cost," Yunus said.
The Wireless Village initiative began in
2010 as a means to provide collective internet access to villages with
inadequate coverage. It costs USD 13,000 to USD 16,300 to establish service in
each village. Broadband tower construction cost between USD 130,700 and 163,300.
Yunus said between 2010 and 2011, 1,850 Wireless Villages were established and
1,400 were in progress for 2012 and 2013.
MCMC has also developed other initiatives to
enhance the use of broadband, such as Community Broadband Centres, Mini
Community Broadband Centres, Tower (Time 3) and 1Malaysia Computers. Yunus
added that MCMC works with operators to provide affordable broadband packages for
as little as USD 8.15 per month.
Intelecon comment: Sustainability is a
major concern with ICT4D projects around the world. Low income users have
demonstrated a willingness to pay for telecommunications services that are
valuable to them; whether or not the amount that users can afford to pay is
enough to cover operating expenses is another issue. In a 2005
paper, "Integrating Social Development and Financial Sustainability:
The Challenges of Rural Computer Kiosks in Kerala," the authors address
the complexity of rural ICT initiatives by noting, "the implementation of
ICTs for development is not simply a technical process of delivering services
to the poor, but is a highly political process that involves tradeoffs and
prioritization of particular goals to attain sustainability."
December 5, 2012
Brazil: LTE research to get additional support from Funttel
According to a Business
News Americas report, the Brazilian government has allocated USD 16.6
million into the telecommunications technological development fund, Fundo para o
Desenvolvimento Tecnologico das Telecomunicacoes (Funttel).
The resources are intended for existing strategic
projects already supported by Funttel. The amount will be added to the USD 25.6
million allocated to the fund in the country's 2012 budget. According to
Funttel's secretary Eder Alves, the additional funds will be used for research
projects important to the government, such as LTE in the 450MHz band for
serving sparsely populated areas.
"These funds will be very important
for researchers to complete their work and transfer their knowledge to the
Brazilian industry before June 2013, when operators will have to start offering
rural broadband," said Alves.
Telefonica / Vivos CEO Antonio Carlos
Valente said he is optimistic about the development of the technology.
"Worldwide, mobile telephony technology
in the 450MHz band is usually CDMA. This will be a first time for LTE," he
said.
In November, Telefonica signed an MOU with
Sweden's AINMT for the development of LTE technology in the 450MHz band.
TEF / Vivo acquired spectrum in the 450MHz band through a tender in June. The
450MHz band was auctioned specifically for the enhancement of rural broadband
coverage.
Other operators, including TIM, and equipment
manufacturers Huawei and Ericsson also announced plans to work on LTE
technology for 450MHz, and to work with regulatory bodies such as 3GPP on
standardization.
Intelecon comment: Brazil faces
challenges in its efforts to extend broadband services to those living in
remote, rural parts of the country. A significant competitive advantage of the 450 MHz band is that it can potentially provide
services over wide areas at a lower cost than higher frequencies. According to
the CDMA Development Group, there are commercial CDMA450 3G networks deployed
in over twenty countries, and over 100 operators using CDMA450 2G or 3G technologies.
According to the Global Mobile Suppliers Association (GSA), as of November 2, 2012,
there were 113 commercial LTE networks in 51 countries.
November 26, 2012
Kenya: Regulator lowers mobile interconnection fees
According to a Reuters
report, the Communications Commission of Kenya (CCK), Kenya's telecommunications
regulator, lowered mobile interconnection rates by 35%.
Francis Wangusi, director general of the
CCK, said the mobile interconnection rate has been reduced to USD 0.017 (1.44
shillings) per minute from USD 0.026 (2.21 shillings), backdated to July 1,
2012. Wangusi said the regulator planned to further reduce the rate to USD 0.013
(1.15 shillings) in July 2013 and to USD 0.011 (0.99 shillings) in July 2014.
"We're very keen to punish any
uncompetitive behaviours. Any competitors that think they can use this to
undercut others will be punished," Wangusi said.
India's Bharti Airtel triggered a price war
in 2010 when its Kenyan subsidiary reduced tariffs by more than 50% to win
customers from market leader Safaricom. An executive at a Kenyan operator said
that revenues could be increased if none of the operators initiated a price war.
CCK data shows that Kenya had 29.7 million mobile
subscribers and a penetration rate of 75.4% as of June 30, 2012. Safaricom had
a mobile market share of 64%, compared with competitors Airtel, at 16.5%, Orange
(Telkom Kenya) at 10.5% and Yu (Essar) at 9.0%.
Intelecon comment: There is a
demonstrated relationship between mobile termination rates and mobile tariffs. In
a 2010 study,
"The Effects of Lower Mobile Termination Rates (MTRs) on Retail Price and
Demand", Growitsch and Wernick looked at data from 61 mobile operators in
16 EU states between 2003 and 2008. The study found that lower MTRs are
associated with lower average retail unit prices, and with greater minutes of
use per month per subscriber. Furthermore, the authors conclude that, "The
overall policy implication, in our view, is that efforts to drive MTRs to lower
levels are appropriate and will tend to increase consumer welfare."
November 23, 2012
Comoros: Government to privatise Comores Telecom
According to a Telecompaper
article, the government of Comoros has announced its plans to privatise Comores
Telecom (CT), the incumbent telecommunications operator.
CT will be restructured by transferring its
main assets to a new legal entity, Newco. The privatisation of Newco will
entail the sale of 51% of the company's shares to an equity investor. The
government will own 34% and the employees will own 15% of the new entity. The
outside investor will be selected through an international competitive bidding
process.
Intelecon comment: According to the ITU
World Telecommunication/ICT Indicators 2012 database, Comoros had a mobile
penetration rate of 28.7% in 2011, fixed penetration is only 3.1% and broadband
is not widely available. The population of Comoros is around 754,000. In April
2008, a second mobile license was awarded to Comoros Gulf Holding.
With low mobile penetration and
non-existant broadband, evidence suggests that the people and economy of Comoros
would clearly benefit from significant new investment in its telecommunications
sector. For instance, research has suggested that mobile duopolies result in
higher prices for consumers when compared to markets with more competitors
(e.g. this
paper, "Regulation and Market Evolution in 2G
Telecommunications Markets: Some Observations", from Heli Koski and Tobias
Kretschmer of the London School of Economics, 2007).
November 2, 2012
Brazil: Anatel approves competition rules
According to RCR
Wireless, the board of directors of Brazil's telecommunications regulator,
Anatel, has approved the General Plan for Competition (PGMC), aimed at promoting
competition and improving regulation in the telecommunications industry.
The PGMC establishes rules for sharing,
interconnection fees, roaming and market dominance. Market dominance activities
will focus on identifying operators with significant market power who would be
required to share network access with smaller operators. The rapporteur for the
case, Marcelo Bechara, named Telefonica, Oi, America Movil, CTBC and Sercomtel
for the fixed telephony market and Oi, Claro, TIM and Vivo for mobile
termination.
Under the PGMC, Anatel assumes that competition
is the best regulator, but there is a need for measures to encourage
competition, since there are providers possessing significant market power,
which can prevent or hinder the entry of new players into the market. The plan
requires Anatel to periodically evaluate dominant groups holding significant
market power, monitor the necessity and appropriateness of regulatory measures,
permanently oversee competition and intervene, when necessary, in conflicts
between industry players.
Intelecon comment: According to the ICT Regulation
Toolkit, "Competition is held to be the most efficient mechanism
available for organizing, operating, and
disciplining economic markets." In
addition, "Regulation acts as a surrogate for competition where
competitive forces are weak (eg in forcing monopolies to reduce prices and
increase output) or where there are significant externalities."
It appears that Anatel is taking
positive steps towards maximizing the influence of market competition in
shaping the telecommunications sector, only stepping in where there is evidence
of rent-seeking or market failure.
October 11, 2012
Kyrgyzstan: Twelve operators awarded 4G spectrum
According to reports from
TeleGeography
and Tazabek,
Kyrgyzstan's National Communication Agency has allocated spectrum for the
provision of WiMAX and LTE services to twelve companies.
AsiaInfo, Global Telecom Asia, Totel,
Aknet, Kurulush Invest, T-Com, Fraton Plus, Aytel, Foris Telecom, WTT, Saima
Telecom and Intranet have been awarded spectrum.
To accelerate internet development in
Kyrgyzstan, the Agency has simplified procedures for obtaining spectrum permits.
Another digital development thrust is the promotion of advanced wireless
technologies such as WiMax, 3G and LTE. Kyrgyzstan has deployed LTE network
technology and commissioned 58 base stations in Chui oblast. As well, in Chui
oblast, Bishkek, Osh and Karakol there are 65 WiMAX base stations.
Intelecon comment: According to the ITU,
in 2011 Kyrgyzstan had mobile broadband penetration of 4.1% and fixed broadband
penetration of 0.3%. According to Telecompaper Asia and Tazabek, internet penetration
currently totals 43.7% in Kyrgyzstan. At the end of June 2012, mobile
subscribers exceeded 6.3 million, for a 115% mobile penetration rate. There are
six mobile operators in Kyrgyzstan.
According to the Global Mobile Suppliers
Association, there are now 105 commercial LTE networks in 48 countries around the
world. The WiMAX Forum announced that the global WiMAX subscriber based
surpassed 20 million in the middle of 2011.
October 5, 2012
Nicaragua: Seven companies interested in new mobile licenses
According to a TeleGeography
report, Orlando Castillo, the head of Nicaragua's telecommunications regulator
Telcor, says that seven companies have paid the USD 3,000 registration fee to
participate in the upcoming tender for two mobile licenses.
Castillo confirmed speculation that Chinese
company Xinwei Telecom Enterprise Group and Costa Rica's state-owned power and
telecommunications company Grupo Instituto Costarricense de Electricidad (Grupo
ICE) are among the interested parties. The tender is expected to take
place in mid-November.
In September, Telcor launched the tender
for two mobile licenses in the 1785MHz-1805MHz band. Both licenses will allow
the introduction of LTE technology and favour operators prepared to focus on rural
areas. Business News Americas reports that the winners will be required
to invest USD 800 million in building new networks. Today, Nicaragua has two
mobile operators, Claro and Movistar.
Intelecon comment: The move away from
the current mobile duopoly should result in benefits for the people of Nicaragua.
Research has suggested that mobile duopolies result in higher prices for
consumers when compared to markets with more competitors (e.g. this
paper from Heli Koski and Tobias Kretschmer of the London School of
Economics). As well, in a 2008 paper, "Econometric Evidence on
the Impacts of Privatization, New Entry, and Independent Industry Regulator on
Mobile Network Penetration and Expansion", Yan Li analyzed 1991-2006
mobile market data from 29 OECD countries and China. Li found that, "the
third-to-fifth entries are jointly associated with the highest penetration (the
effects start to decline after the fifth entry), and the third entry is also
associated with the fastest network expansion."
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