The development of regulation shapes the future of the marketplace. As regulators intervene in markets, they advantage or disadvantage specific players and change market dynamics. At all times they must strike an appropriate balance between maintaining competition while also ensuring that investment in the networks of the future continues and intensifies. In doing so they set rates for interconnection, local loop unbundling, and other forms of network access, which directly impact operator revenues. Understanding current developments and future directions in regulation is critical for success in today’s market.
Ovum’s Regulation research provides you with a deep understanding of the impact of regulatory issues that shape the future of the telecoms marketplace and the effect these have on strategies and revenues. Our regulation research and analysis team has a global track record of providing policy and regulatory advice in telecommunications. Our experts follow the world’s key market regulatory developments and assess their relevance at a regional and local level. We undertake quarterly benchmarking, country profiling, and cross-country regulatory analysis.
Global interconnect benchmarks Ovum’s tried and tested interconnect benchmarking model and methodology are internationally accepted and provide you with the most authoritative comparison and analysis of interconnect charges in the industry. Our quarterly benchmarks (published in March, June, September, and December) cover fixed origination, fixed termination, mobile termination, local loop unbundling, shared access, and a retail/wholesale comparison for Europe, the Americas, Asia- Pacific, and Middle East & Africa. Raw interconnect charge data is also provided to enable you to make your own calculations, as well as substantial historical trend analysis. Data is presented in easy-to-use charts and Excel spreadsheets.
In October 2012, Ovum will publish its annual regulatory scorecard to benchmark the telecoms regulatory framework in a number of “best practice” countries around the world to compare the cost and effectiveness of regulatory activity. It is produced in consultation with NRAs and telecoms operators, and compares the institutional and legislative environment affecting the sector as well as the application of regulation by NRAs in key wholesale access and retail markets.
Interconnect has traditionally accounted for a sizeable proportion of operators’ revenues. However, the use of standardized costing methodologies has exacerbated the familiar downward trend in mobile termination rates, and some NRAs have started to consider what alternative charging principles could be used.
Our core tracking of interconnect will be through our quarterly interconnect benchmarking. We will add new countries and regions during the course of the year to ensure a robust set of data exists from which international comparisons can be made.
Aside from the actual charges, we will also look in depth at how the rates were determined by the NRA and steps that are being taken to reduce and harmonize termination rates between countries. We will also focus on what future charging principles such as bill and keep might look like once the current regimes expire.
NGA (fixed and mobile)
Investment in fixed and mobile next- generation networks continues at speed despite challenging economic conditions. NGA continues to dominate regulatory debate as significant investments are being made by the public and private sectors. How to incentivize investment is still a challenge for many governments looking to bring broadband to all of the population. One of the key challenges facing NRAs is how to strike the appropriate balance between creating competition and supporting investment. Determining how access will be granted to alternative operators and on what basis is central to this.
From a fixed-line perspective we will look at how the migration from copper to fiber is being managed, what access obligations are being imposed, and what regulated pricing exists. Working collaboratively with other practice areas, we will also address the role of government in facilitating and financing rollout. In mobile, significant amounts of spectrum will become available during the next year as operators look to launch next- generation mobile networks. How regulators award this spectrum and what obligations they place on license holders are key regulatory issues. Through developing an internal database of spectrum awards, benchmarks can be made based on the type of award, and by using population data we can make comparisons between countries and regions
Our research in this area feeds into the wider theme of “Exploiting next-generation fixed and mobile access.”
The relationship between regulators and policymakers is crucial to ensuring a dynamic industry that facilitates the entry of new market players and the evolution of existing ones. Whether this is between regulators and governments or regulators and super-national bodies such as the European Commission, there are a number of challenging issues ahead. At the top of the agenda sits universal broadband access, closing the digital divide, reforming ex-ante regulatory frameworks, and tackling cross-border issues such as international roaming.
Our analysis will focus on how regulators are approaching these issues by comparing country case studies from around the world. Analyzing the implementation of regulatory frameworks will be central to this. How regulators engage with stakeholders and the effectiveness of regulatory activity will also be explored through the regulatory scorecard we will develop over the course of the year.
Our research in this area feeds into the wider theme of “Moving down the road to 2020.”
Regulation of content
Introducing rules to ensure net neutrality, tackling illegal peer-to-peer file sharing, and the emergence of exclusive relationships between ISPs and content creators have all made the headlines recently.
NRAs have been tackling these issues in different ways. Some have been proactive in defining rules and obligations, whereas the majority have so far taken a wait-and-see approach. For those in this camp, working out the details remains the challenge and some difficult decisions need to be taken in the very near future. Regulators will need to take a new approach to tackle the regulatory challenges of tomorrow. Our research will compare approaches being taken to create a more sustainable Internet model. This will involve re-examining the basic principles of interconnect and end-user pricing.
Our research in this area feeds into the wider theme of “Profiting from new revenue opportunities.”
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