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Media convergence issues in EGYPT and the region and prospects for the future. Introduction. Egypt possesses a number of comparative advantages which positively positions it as a promising market for ICT and Media convergence: infrastructure talented ICT professionals

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Presentation Transcript
introduction
Introduction
  • Egypt possesses a number of comparative advantages which positively positions it as a promising market for ICT and Media convergence:
  • infrastructure
  • talented ICT professionals
  • efficient service providers
  • empowering regulatory framework.
  • Content is a key word in the convergence game.
  • Egypt has always been, and continues to be, the leading source of culture and entertainment in the Arab world.
  • Egypt could become an exporter of content to the Arab world; consequently economies of scale could be achieved.
characteristics of 21 st century economies
Characteristics of 21st Century Economies
  • Driven by the services sectors
  • Founded on information/communication networks – next generation Internet
  • Dependent on effective reforms in the telecom sector – information infrastructure
  • Strengthening links among local, national, regional, internatonal networks and markets
stages of telecom information sector reform
Stages of Telecom/Information Sector Reform
  • Telecom Liberalization (Participation, Univ. Access)
  • Expanding Network Capacity (Broadband)
  • Preparing the Network Foundation for New Services
  • Developing New Services - “killer applications!”
  • Applying Services Productively in Different Sectors
  • Telecom Reform & Regulation – Key Driver for Implementing Policy Reforms for the e-economy
criteria for economic growth

Technologies

Markets

Applications

Services

Regulations

Policies

Criteria for Economic Growth

Policy & Regulation: Catalyst for, or Constraint upon Growth?

a review of technological change
A Review of Technological Change
  • Transmission, Switching and Memory: laser and spectrum, microprocessor, digital storage
  • Impacts on network architectures: less switching, more transport, caching nearer the user
  • Impacts on Functionality: portability, functional integration, communicability
  • Erosion of natural monopoly
  • End user empowerment
  • Erosion of Intellectual Property Protection
change in technology brings change in economics
Change in Technology brings change in Economics
  • Falling cost levels
  • Changes in Relative Costs: Switching, Transmission, Storage
  • Spectrum Abundance replaces Spectrum Scarcity
  • Signal transport is free at the margin
  • Content becomes relatively scarce; network capacity becomes relatively abundant
  • Intellectual Property protection eroded
  • Mass markets become fragmented
  • Competition replaces monopoly
change in economics brings change in markets
Change in Economics brings change in Markets
  • Sole providers yield to competition
  • Mass markets yield to segmentation
  • Features and functions more important than price
  • Cost of churn increases focus on retention
  • Customer service becomes competitive differentiator
the dimension of convergence

Markets

Technology

Law

Applications

The Dimension of Convergence
convergence at a glance
Convergence at a Glance
  • So what is convergence?
  • In a nutshell, it is the ability to provide a range of services (voice, data, and broadcasting) over a single network (‘triple play’).
  • Examples:
  • Voice over IP, which makes very low and flat rate calling plans possible.
  • Television over IP, which provides much more flexible access
  • Radio over IP, which enable users to listen in real time or on demand
  • Convergence is being applied to many fields; commerce, education, health, publishing, and manufacturing, etc.
convergence at a glance cont
Convergence at a Glance (cont.)
  • It has changed many aspects of our everyday life: the way we communicate, the way we access content and entertainment, the way we make our purchases, even our own mobility.
  • A phone is no longer used for merely exchanging conversations, but also for watching movies, listening to MP3s or even watching and listening to the finals of the World Cup, live.
  • The NTRA has been active in convergence:
  • Cooperation between MCIT and RTU (Radio and Television Union)
  • VoIP
  • BGAN
slide12

Finance/ Banking

Regional Development

Disaster Management

Media & Cultural Sectors

Manufacturing

Travel & Tourism

Health/Medical

Education/Training

Government Services

Applications

Content

Broadcast

Media

Film

Libraries

Software

etc

Interactivity

(Instant & Delayed)

Voice

Data

Sound

Graphics

Video

Electronic Services

(Pay TV, VAS, Internet)

Multimedia, etc.

(Public, User group, Private)

Telecommunication

Facilities Network

(Information Superhighway)

Computing / Information

Technology

Telecommunication

Equipment Manufacturing

INFORMATION INFRASTRUCTURE

steps toward ict convergence
Steps Toward ICT Convergence
  • Digitalization of the network
  • Mobility
  • Next Generation Internet (Broadband)
  • Media integration (Internet Protocol)
  • E-commerce (QoS)
  • Restructuring of industries
  • Reshaping Policy and Regulation
the converged telecom scene
The ‘Converged’ Telecom Scene
  • Since its introduction, convergence has had a profound impact on the telecommuncation field and media sector, dramatically changing its infrastructure, services and overall environment.
  • Infrastructure:

- digitalized

  • Competition:
    • diversity of service providers and offers
    • low and affordable prices
    • wide range of complementary services
  • Innovation:
    • new services
    • new business models
    • new devices
    • content creation industry to support demand
    • local loop unbundling
the converged telecom scene cont
The ‘Converged’ Telecom Scene (cont.)
  • Examples:
  • Gradual shift to VoIP and VOB (Voice over Broadband); now almost 15% of voice traffic is through VoIP.
  • CATV (cable TV) systems are now offering video on demand, broadband access and voice telephony. Consequently, CATV operators are now competing with telecom operators.
  • The current trend in several parts of the world is for service providers to offer triple play service bundles in inclusive packages (ex. monthly)
  • There is a steady growth in 3G networks and wireless broadband services
regulatory convergence
Regulatory convergence ?
  • Signatories of the GATS Agreement and the Reference Paper have agreed to a more-or-less common policy of liberalization of traditional wireline and wireless telecom.
  • The GATS agreement has no recognition of convergence.
  • Most countries have separate regulators for telecommunications, broadcasting and cable TV, financial services, software and applications
the impact of convergence on regulation
The Impact of Convergence on Regulation
  • Convergence is reshaping regulation and policy and raising several implications:
  • Convergence is leading to a rise in the number of wireless services, which in turn raises the need for spectrum management reform.
  • Convergence entails revisiting current licensing regimes and favors regimes that are technologically neutral.
  • Convergence might lead to the broadening of certain market definitions, with the result that several narrowly defined markets are replaced by a single more broadly defined market.
  • Convergence may pose a threat on the industry if it induces mergers of large scale operators and drives out small local operators.
the impact of convergence on regulation cont
The Impact of Convergence on Regulation (cont.)
  • Access to communication channels and access to content
  • New issues of competition and monopoly
  • Privacy, security, IPR
  • A transition from monopoly/oligopoly direction to maximizing participation via open access
  • Target is not technological neutrality, but maximum development of all technology & services advantages
  • Maximum opportunities for competing firms to achieve public interest goals
  • Maximum stimulation to market development through both private and public participation
convergence is really about competition
“Convergence” is really about “Competition”
  • Voice over IP: bypassing the PSTN undermines tariffs, international settlements structures; cross-subsidies.
  • Mobile networks are competing with fixed networks especially in developing countries.
  • Cable-HFC and Satellite are displacing Broadcast networks.
  • Competing technologies (Fixed lines, Wireless, Cable, Broadcast) offer overlaping, competing services.
unresolved network market issues
Unresolved Network Market Issues
  • Public Resource Infrastructures for Telecom Networks - Rights of Way, Spectrum, Numbers, Names
  • Interconnection
  • Termination Number Monopolies
  • Access Limitations in the Face of Positive Externalities
  • Leverage Opportunities for Monopoly Nodes in the Network
  • Achieving Faster Infrastructure Network Development
significance of network unbundling for convergence
Significance of Network Unbundling for Convergence
  • Industry Sectors - Equipment, Operator Networks, Services
  • Fixed and Mobile
  • Basic Network Layers
  • *Content *Communication Services *Network Protocols, OSS & Management *Equipment & Facility Capability
how must regulation change investment investment investment
How Must Regulation Change? Investment, Investment, Investment
  • Regulation is too focused on short term abuse of dominance. More of a problem in developed markets, but stifles investment in developing markets.
  • In the long term, dominance will only be eliminated by the emergence of competing networks.
  • Competition requires investment.
  • Investment responds to Price, Cost and Profit expectations.
  • Price, Cost and Profit signals come from regulatory policy.
  • Incorrect signals encourage both overinvestment (i.e. long distance) and underinvestment (i.e. local networks).
  • Overinvestment causes lost capital (ask Global Crossing, Level 3); underinvestment causes lost opportunities (ask the 95% of the world who have no telephone.)
the convergence roadmap
The Convergence Roadmap

For any country to successfully integrate convergence into its communication and media sector, it must develop the following convergence pillars:

  • Technical:

1) Digitalized Infrastructure ( Broadband , Wireless and mobile technologies , High-speed backbone networks )

2) Digitalized Media Content ( DRM , DAM )

  • Regulatory:

- Conducive Market Conditions (supply, demand, competition)

- Technological Neutrality

- Intellectual Property Rights and GATS agreement

  • Business: ( Encourage investment , More service providers , Diverse services; options , and Digital content creators )
convergence challenges
Convergence Challenges
  • Political and Legal
    • Law restrictions
    • National security considerations
    • Politically acceptable
  • Business
    • Must find feasible business models:
    • Revenue: from customers and advertisers
    • Evidence of demand is still very unclear
    • Which firms have the expertise to make profits in these areas? (telecom co. vs. content providers)
  • Social
    • Socially acceptable content
    • Literacy (traditional and ICT literacy)
convergence challenges cont
Convergence Challenges (cont.)
  • Economy
    • Income levels:

low GDP per capita

misdistributions of wealth within countries

    • Spending capacity:

Are people willing to spend on entertainment? And if so, how much?

  • Infrastructure
    • which networks are best and cheapest?
    • availability of electricity
    • availability of computers
    • availability of telecommunications networks
    • availability of investment
issues for debate
Issues for Debate
  • Convergence is raising a wide array of regulatory and legislative issues that should be addressed by both policy makers and regulators
  • The need to :

- encourage investment

- lower market entry barriers

  • Policy should:
    • ensure competitive markets
    • encourage the provision of better and cheaper services

- be responsive to market changes; updated upon need

  • Need to avoid regulatory arbitrage and gamesmanship
  • Reducing the digital divide: Universal Service
issues for debate cont
Issues for Debate (cont.)
  • Is the trend of institutional convergence (the example of Ofcom) really the best way to address Convergence?
  • Are current telecom or ICT regulators competent to regulate “content”?
  • Can content regulation be avoided?
  • What is the most effective role for national telecom regulators?