16,612 research outputs found

    International roaming in the EU : current overview, challenges, opportunities and solutions

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    As technology evolves and globalization continues, the need for reasonably priced roaming services has never been higher. In 2007, the European Commission (EC) introduced a first set of regulatory decisions to cap the maximal roaming fee end users have to pay for voice services. In the years after, additional price caps have been introduced for SMS and data, initially only for end users, in a later stage also for the wholesale tariff. The final step, Roaming Like at Home (RLAH), will start to take effect in June 2017; from then on end users will pay the same price (for voice, SMS and data) when roaming like in their domestic country. The effect of RLAH on the business case of each mobile operator is hard to predict, as the different national markets are extremely heterogeneous and operators face large discrepancies in terms of roaming usage and network costs due to different travelling patterns and various other reasons that cannot be harmonized (geography, economics, working force, usage history, etc.). Furthermore, competition in the telecom market will no longer be a purely national matter, as the decision to abolish roaming tariffs will fully open up cross-border competition. This paper aims at providing insights in the effect of RLAH for both the end user as well as the mobile operators. Following a literature survey approach, including an overview of the roaming regulation process from 2007 up to now, the paper discusses possible effects the RLAH initiative might trigger, going from lower wholesale prices for mobile operators to higher retail prices for end Users. Additionally, as the European Commission strives for a digital single market, this paper presents a number of technical solutions (carrier portability, software-based SIMs, cross-border IMSI, Roaming like a Local, Wi-Fi offloading) that may pose a - partial or full - alternative for roaming and explains how these may impact cross-border competition both positively and negatively. The solutions are assessed against two axes: (1) generating the best possible outcome for the end customers (in all countries) and (2) ensuring the best level playing field for (virtual) mobile operators in Europe, which will of course involve trade-offs on different levels

    Price Regulation in Telecommunications Sector and Its Implications

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    Telecommunication facility has been provided in most countries as a user pay public service managed, typically, through the Post, Telegraph and Telephone departments or by some government-owned monopoly. The tradition has been to regard it as a natural monopoly to be supplied by the public sector.1 This perception has changed. Telecommunication is now increasingly recognised as a prime mover of the modern day economy. It is opening to participation by the private sector. The economic benefits of telecommunications are enormous, both as a growth industry in its own right and in terms of its impact on economic development. It has a significant social role in transforming how people communicate, become informed or do business. Additionally, it is also environment-friendly because it disseminates information without shifting goods or people. The practice now in vogue is to establish a regulatory agency with a high degree of independence from both operator and government. The regulator’s task is to implement government policy, ensure performance accountability by the operators and other players in respect of economic and social policy objectives, resolve disputes between competitors, monitor changing industry conditions and advise government on developments bearing on policy. The regulatory agency acts as a buffer between telecom operators and government, helping to ensure the separation of functions. Of late governments have increasingly been pursuing the policy of privatisation, liberalisation and de-regulation of telecommunication services. Pakistan has also made an advance in this direction with the promulgation of the Pakistan Telecommunications (Reorganisation) Act 1996. The main objectives are the promotion of rapid development, modernisation and diversification of telecommunication services and protection of consumer interest. In this paper an attempt has been made to answer the question as to why there is need to regulate telecommunication. Determining reasonable prices for a monopoly public service is an important area in telecom sector.

    Is America Exporting Misguided Telecommunications Policy? The U.S.-Japan Telecom Trade Negotiations and Beyond

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    Global telecommunications markets have traditionally been closed to foreign trade and investment. Recent World Trade Organization negotiations resulted in a Basic Telecommunications agreement that sought to construct a multilateral framework to reverse that trend and begin opening telecom markets worldwide. Regrettably, this new WTO framework is quite ambiguous and open to pro-regulatory interpretations by member states. In fact, during recent bilateral trade negotiations with Japan, U.S. government officials adopted the position that the new framework allowed them to demand that the Japanese government adopt very specific regulatory provisions regarding telecom network interconnection and pricing policies. The Office of the U.S. Trade Representative argued that Japanese officials should require their domestic telecom providers to share their networks with rivals at a generously discounted price to encourage greater resale competition. Those interconnection and line-sharing rules were borrowed directly from the U.S. Telecommunications Act of 1996, a piece of legislation that remains the subject of intense debate within the United States. Good evidence now exists that those rules generally retard net-work investment and innovation by encouraging infrastructure sharing over facilities-based investment. Consequently, the USTR has generated resentment on the part of Japan and other trading partners as it has attempted to force them to adopt heavy-handed telecommunications mandates that have very little to do with legitimate free-trade policy. The USTR must discontinue efforts to impose American telecommunications regulations on other countries as part of free-trade negotiations and should instead focus on reforming or eliminating the most serious barriers to foreign direct investment both here and abroad

    Mandatory Unbundling and Irreversible Investment in Telecom Networks

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    This paper addresses the impact on investment incentives of the network sharing arrangements mandated by the Telecommunications Act of 1996, with a focus on the implications of irreversible investment. Although the goal is to promote competition, the sharing rules now in place reduce incentives to build new networks or upgrade existing ones. Such investments are irreversible -- they involve sunk costs. The basic framework adopted by regulators allows entrants to utilize such facilities at prices reflecting what it would cost a new, efficient, large-scale network to be built. Such sharing opportunities are extensive, covering virtually the entire suite of network services provided, and extremely flexible, as the entrant can rent facilities in small increments for short duration, with no long-term contracts required. Because the entrant does not bear the sunk costs, this leads to an asymmetric allocation of risk and return that is not properly accounted for in the pricing of network services, which creates a significant investment disincentive.

    The Impact of "Deregulation" on Regulator Behavior: An Empirical Analysis of the Telecommunications Act of 1996

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    This paper examines how regulators set local prices in response to the changes brought on by the Telecommunications Act of 1996 (“Telecom Act”). We are particularly interested in the extent to which state regulators set prices that promoted efficiency or were influenced by private-interest groups who had secured rents under a regime of regulated monopoly. Using regional Bell operating company (RBOC) data, our empirical results indicate that private interests continue to influence the structure of retail and wholesale prices, although their influence appears to be waning. We find that changes to the regulatory structure, as measured by federal approval of RBOC Section 271 applications that open up markets to competition and universal service subsidies, resulted in a re-balancing of retail prices and lower overall price levels.competition, political contributions, private interest, public interest, regulation, telecommunications, universal service

    Analysis of WIMAX/BWA Licensing in India: A real option approach

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    Indian Internet and broadband market has experienced very slow growth and limited penetration till now. The introduction of Broadband Wireless Access (BWA) is expected to aid in increasing the penetration of internet and broadband in India. The report sheds light on the guidelines and procedure used in 4G/BWA spectrum auction and presents comparative analysis of the competing technologies, providing the information about suitability of each technology available. Recently held 4G/ BWA spectrum auction saw enthusiastic participation by the industry and even saw some new entrants in Indian broadband market. Government benefited by Rs, 385bn that it earned as revenue from the auction of the spectrum and projected it as successful auction. However, the question remains if the auctions were efficient and whether they led to creation of value or will it prove to be burden to the telecom operators and will depress their balance sheet for years to come. The report uses both traditional valuation methods such as Discounted Cash Flow as well as Real Option approach to answer such questions. Using DCF analysis, the broadband subscribers have been forecasted to grow from present 13.77mn to 544mn by the end of 2025. The wireless subscribers are forecasted to be 70% of the total broadband subscribers after 5 years of roll out as it will be difficult to replace all wireline subscribers with wireless subscribers in India due to the high cost of wireless broadband and new technology. WiMAX is expected to increase its presence with time and reach 90mn subscribers from meager 0.35mn subscribers by 2025. Using industry wide cost of capital as 12.05%, the Net Present Value has been found Rs 221bn aggregate with an IRR of 17.1%. Using Real option approach, the value of license has been calculated as Rs 437bn which is 13.5% more than the spectrum fees paid by the operators. This mismatch, between the auction value and the correct value that should have been discovered by supply-demand dynamics, can be due to limited participants in BWA spectrum auctions and companies such as TATA and Reliance opting out of the auction process midway as well as uncertainty about acceptance of new technology with Indian subscribers.WiMAX, broadband, 3G spectrum, 4G,broadband wireless access, valuation, licensing, real option

    A 10-Point Agenda for Comprehensive Telecom Reform

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    Changing committee chairmanships in Congress and a leadership shakeup at the Federal Communications Commission have once again opened a window of opportunity for comprehensive telecommunications policy reform. While new faces are taking over within Congress and at the FCC, however, old issues continue to dominate the telecom policy landscape. This is largely due to the fact that, when Congress last attempted to address these matters five years ago by passing the historic Telecommunications Act of 1996, legislators intentionally avoided providing clear deregulatory objectives for the FCC and instead delegated broad and remarkably ambiguous authority to the agency. That left the most important deregulatory decisions to the FCC, and, not surprisingly, the agency did a very poor job of following through with a serious liberalization agenda. The Telecom Act, with its backward-looking focus on correcting the market problems of a bygone era, has been a failure. Instead of thoroughly clearing out the regulatory deadwood of the past, legislators and regulators have engaged in an effort to rework regulatory paradigms that where outmoded decades ago. In short, it was an analog act for an increasingly digital world. The new leadership in Congress and the FCC should adopt a fresh approach based on deregulation and free markets
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