The role of mobile in delivering universal service
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The role of mobile in delivering universal service. Dan Lloyd Vodafone. European Ministerial Conference on the Information Society Ljubjana 4 June 2002. Key themes. Importance of telecoms and mobile

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The role of mobile in delivering universal service

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The role of mobile in delivering universal service

Dan Lloyd

Vodafone

European Ministerial Conference on the Information Society

Ljubjana 4 June 2002


Key themes

  • Importance of telecoms and mobile

  • Importance of investment, competition & regulatory environment - more important than universal service

  • Universal service mechanisms can’t make, but can break, a competitive telecoms market

  • Focus on the specific problems involved in the digital divide, not specific traditional solution - universal service

  • Mobile is already addressing the digital divide commercially - question the need for mobile inclusion in universal service schemes


Vodafone’s international experience


Importance of telecoms and mobile

  • Large and increasing contribution to GDP

  • Enabler of commerce, e-commerce services

  • Key contributor to innovation and productivity growth in services

  • Increasingly important to international competitiveness

  • Approach to universal service, and regulation generally can have a substantial impact

  • Mobile increasingly vital to telecoms sector - global mobile penetration: 1991 - 1%; 2001 - 18.75%; 2008 - 36% (est)


Digital divide

  • But access to telecoms services not spread evenly within or between countries

  • Certain services considered so basic to social and economic inclusion - should be universally available

  • Generally driven by desire to foster social and economic inclusion, not economic efficiency

  • (But network externalities should also be taken into account in regulatory decision making)

  • Sometimes leads to regulation of universal service obligation (USO)


Digital divide

  • Designed to address 3 basic categories of exclusion:

    • Poor - customers too poor to buy

    • Uneconomic - to expensive to serve (often geography)

    • Special needs - disabled, deaf, poor dexterity

  • Excluded from what?

    • Telephony - fixed, pay phone, directory, emergency

    • QOS

    • Mobile?

    • Internet?

    • Broadband?


Let the market work where it can

  • Key to maximising access to communications services is not USO

  • Stable environment for investment - regulatory accountability, transparency, independence and predictability

  • Removal of artificial barriers to investment and to providing universal services

  • Effective competition law regime

  • Which enables a competitive telecommunications market


Mobile is already delivering

Influence of mobile

Digital divide /

potential USO

Services delivered commercially

Theoretical 100% penetration


Mobile is already delivering - UK

  • Mobile clearly minimising the telephony digital divide without regulation. In the UK:

  • Leaving less than 1% unphoned - probably practical limit of universal service


Mobile is already delivering

  • Mobile advantages:

    • pre-pay

    • often low/no connection and/or monthly access charges

    • often network coverage beyond fixed line

    • often averaged connection and call charges even for those in uneconomic areas

    • often geographically insensitive

    • benefits of price competition in the most competitive areas are received by all even where only one network

    • social inclusion - voting

  • Mobile addresses poor and uneconomic commercially


Mobile is already delivering

  • Remaining challenges

    • Disabled customers

      • hard of hearing - hearing aid compatible neck loop, vibrating alert, SMS

      • poor sight - directory connect services, voice-activated dialling

    • Under-developed areas

      • Community Mobile as payphone substitute

      • But must retain control over pricing

  • So question the utility of mobile universal service


Universal service scheme design

  • Guiding principles of EU legislation to be supported:

    • Least market distortion

    • Dynamic approach

    • Incentives for efficiency

    • Transparency

    • Non-discrimination

    • Competitive neutrality

    • Not more burdensome than necessary


Universal service scheme design

Consider removing adverse regulation

Scope of services

Internet?

Eligibility test

Who receives?

General taxation

Recovery mechanism

Burdensome

Industry fund

Cost/benefit

Tech. neutrality

Pay or play


Universal service fund design

Transparent, efficient costing

Universal

service

fund

Including intangible benefits

Transparency on customer bills

Regular independent audit of fund


Conclusions

  • Focus on general environment, not universal service

  • Focus on the problem (access for poor, uneconomic and special needs) not a particular solution

  • Examine carefully whether problem being resolved by commercial mobile services

  • Examine critically whether regulation will produce better results than market forces

  • Design of any regulated universal service scheme critical


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