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Voice over Internet Protocol regulation in Japan. Michiko Fukahori United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). VoIP regulation in Japan. What is VoIP? Overview of the Japanese market VoIP regulation in Japan VoIP number (050) Fixed telephone number

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voice over internet protocol regulation in japan

Voice over Internet Protocol regulation in Japan

Michiko Fukahori

United Nations Economic and Social Commission for Asia and the Pacific

(UNESCAP)

voip regulation in japan
VoIP regulation in Japan
  • What is VoIP?
  • Overview of the Japanese market
  • VoIP regulation in Japan
    • VoIP number (050)
    • Fixed telephone number
    • Others
  • Perspective
what is voip 1
What is VoIP? (1)

Voice communication realized on

IP network

  • Type of IP network
  • Private managed network
  • Operator’s network
  • Internet
  • Packet-base
  • Best effort
what is voip 2
What is VoIP? (2)

Difference from PSTN

  • Quality of Service (QoS)
    • IP technology is packet-based & best-effort (not always good for real-time communication)
    • Constant band width, latency and packet loss within certain range, packets arriving at the same interval, etc.
    • Methods to measure and evaluate quality:
      • R value based on E-model (ITU-T Rec.G.107)
    • End-to-end quality (simple network & intelligent terminal)
what is voip 3
What is VoIP? (3)
  • Call routing
    • PSTN: telephone number on signaling network (SS7)
    • VoIP: IP address on IP network (SIP, H.323)
  • Terminal location and emergency call
    • PSTN: bound to the subscriber’s line
    • VoIP: could exist anywhere on the network (nomadic)

> could impede realization of emergency call

what is voip 4
What is VoIP? (4)
  • Interoperability
    • Not always guaranteed (standardization)
  • Interconnection
    • Telephone number is essential to receive call from PSTN
  • Others
    • Power supply
    • Congestion control
    • Security and lawful intercept
    • Various services (toll-free, directory service, etc.)
overview of the japanese market 1
Overview of the Japanese market (1)
  • Competition was introduced in 1985 (privatization of NTT)
  • Competition policy
    • Market size has increased
    • Price has lowered largely
  • Current major trends:
    • “Fixed to mobile”
    • “Telephony to IP”
overview of the japanese market 2
Overview of the Japanese market (2)
  • Telephony to IP
    • The number of ISPs: 9,111
    • The number of Internet user: 79 million (62% of population)
  • Broadband
    • ADSL has become common in many areas (high-speed at low price)
    • Recently FTTH is growing in urban area
overview of the japanese market 3
Overview of the Japanese market (3)
  • Transition of the legacy networks
    • KDDI

Replace all the networks to IP by the end of 2007

    • NTT

Replace 30 million metal subscriber’s lines (half of all the subscriber’s lines) by FTTH by 2010

>> Total cost would decrease by providing both data and voice on the same IP network

overview of the japanese market 4
Overview of the Japanese market (4)
  • Reform of the Telecommunications Business Law
    • From ex-ante to ex-post
    • Relaxation of market entry/withdrawal (from approval to registration/notification)
    • Abolishment of the classification of telecommunications carriers by facilities
    • Strengthening of rules for user protection
voip regulation in japan 1
VoIP regulation in Japan (1)
  • Rapidly increasing VoIP

Telephone number used for VoIP :

10.6 million (December 2005)

      • VoIP number (050): 97.5 million
      • Fixed phone number: 8.5 million
    • Light-touch regulation
    • Mainly regulated by numbering
voip regulation in japan 2
VoIP regulation in Japan (2)
  • Classification of VoIP service

1. Telecommunications service

    • Fixed telephone number
    • VoIP number (050)
    • Without telephone number

2. Non–telecommunications service

    • P-to-P application on the Internet
voip regulation in japan 3
VoIP regulation in Japan (3)
  • VoIP number (050-XXXX-XXXX)
    • Since September 2002
    • Receiving call from PSTN was realized
    • Minimum QoS
      • R value>50, latency <400ms, controlled network
    • Minimum facilities installation
      • Installation of facility and network being controlled by service provider
    • Interconnection with PSTN dominant carriers (NTT regional)
    • No constraint on terminal location
    • No duty to provide emergency call
voip regulation in japan 4
VoIP regulation in Japan (4)
  • 050 VoIP market
    • Provided as adjunct service of ADSL
    • Mainly used as secondary telephoneservice (not as a substitute for PSTN)
    • 29 carriers (March 2006)
    • Some providers offer free call service among users
    • However, impact on PSTN is limited
      • Incomplete interconnectivity
      • Lack of emergency call
voip regulation in japan 5
VoIP regulation in Japan (5)
  • 050 VoIP market
    • Light touch regulation > smaller investment to start business
    • Increased competition in ADSL market
      • World fastest and cheapest ADSL service for users
      • Less profit for carriers (some carriers move to FTTH market for profit)
    • New innovative service using nomadic nature is expected
voip regulation in japan 6
VoIP regulation in Japan (6)
  • VoIP with fixed phone number
    • Since September 2004
    • Service equivalent to PSTN
      • PSTN equivalent QoS (R value>80, latency<150ms)
      • Installation of facility and network being controlled by service provider
    • Interconnection with PSTN dominant carriers (NTT regional)
    • Location-fixed
    • Emergency call
    • Facsimile sending and receiving, etc.
voip regulation in japan 7
VoIP regulation in Japan (7)
  • Fixed phone number VoIP market
    • Provided as adjunct service of FTTH
    • Used as primary telephone(as a substitute for PSTN)
    • 13 carriers (March 2006)
    • Becoming popular lately as FTTH expands
    • So-called “triple play” service
      • Primary telephone service
      • High-speed Internet connection
      • Video streaming (television program)
voip regulation in japan 8
VoIP regulation in Japan (8)
  • Major difference from 050 VoIP
    • PSTN equivalent telephone service (including emergency call, facsimile sending and receiving)
    • Number portability (allows users to change service provider while retaining number)

>> Enable users to switch from PSTN plus ADSL to FTTH

voip regulation in japan 9
VoIP regulation in Japan (9)
  • Users
    • PSTN equivalent telephone service (without changing number)
    • Higher speed Internet connection (than ADSL)
    • Reasonable cost by canceling existing PSTN (price of FTTH is decreasing gradually through competition)
  • Operators
    • Seek profit in FTTH market by integrating plural services (ADSL market becomes competitive)
voip regulation in japan 10
VoIP regulation in Japan (10)
  • VoIP service without number

1. Telecommunications Business

      • PC-to-phone or PC-to-PC service without number

>> Common duties of telecommunication serviceare applied

2. Non-telecommunications Business

      • P-to-P application on the Internet (Skype)

>> Announcement (to caller) in case of forwarding call from public network to P-to-P

perspective 1
Perspective (1)
  • VoIP
    • VoIP could provide voice communication at a much lower cost than PSTN
      • VoIP could largely enhance socio-economic development
    • VoIP has a potential to give a large impact on the current telecom market and to change the market structure drastically
      • However, transition of the existing network to IP is a global trend and would be required in future eventually
perspective 2
Perspective (2)
  • Light-touch regulation
    • It took many years to develop PSTN with various different features
      • Technical nature (location-fixed)
      • Social requirement (universal service provision, congestion control, intercept, etc.)
    • VoIP is not mature technology compared to PSTN (under development)

>> Light touch regulation seems reasonable to enhance the development of VoIP technology and market

perspective 3
Perspective (3)
  • Importance of regulation
    • On the other hand, certain level of regulation is essential for orderly development of market and customer protection
    • Especially regulation for primary telephone service would require careful consideration
    • In case of Japan, regulation of VoIP with fixed number is based on technological neutrality as substitute for PSTN
perspective 4
Perspective (4)
  • From legacy network to IP
    • Transition is challenge for many countries
    • VoIP might take on important position
    • Infrastructure deployment and maintenance of legacy network during transition is required
      • Various financing options including public private partnership
      • Financial capacity of PSTN carriers or assistance from Universal Service Fund
perspective 5
Perspective (5)
  • ICT market trend
    • Competition is useful to increase productivity
    • However, considerable amount of investment is required for network transition
    • ICT is a network industry with the characteristics of network externality and economy of scale
      • Consolidation of telecom carriers is taking place in the world
perspective 6
Perspective (6)
  • ICT: socio-economic infrastructure
    • Reliable, affordable and universal ICT access is important for balanced socio-economic development
    • Adequate balance between market economy and government policy would be necessary
      • Effective national dialogues
      • Cooperation among stakeholders (government, private sector, civil society, etc.)
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