Fostering Policy Drivers to Promote Harmonious Development of Telecommunications

1. Presentation by Office of the Telecommunication Authority,The Government of the Hong Kong Special Administrative RegionITU Seminar on Policy and Regulation25 July 2007Shanghai, China

2. Fostering Policy Drivers to Promote Harmonious Development of Telecommunications in an Era of Transformation

3. In an Era of Transformation • Fundamental changes to the industry the how, the what, the how again, to whom, and what next…? • Harmonious development dependent on a market environment conducive to growth and investment

4. Main Drivers for Transformation • Liberalisation and competition in telecommunications sector • Dynamic change and market-driven industry • Emergence of new technologies: VoIP, IPTV, Broadband Wireless Access, Mobile TV etc • Provision of multi-media services, of video, voice and data • Migration to NGN

5. Transformation of the Market • Change of demand structure User demand for new services boosting new revenue streams and bandwidth requirements • Convergence of services Integration of segments - telecom (fixed and mobile), broadcasting, internet access, broadcasting etc • Change of industry structure From monopolistic to multi-operator environment with full competition, not solely on price but variety of service and contents, and quality of service

6. Impacts of Transformation • Regulator to facilitate a regulatory framework and market environment conducive to growth and investment • Operator to invest in new technologies, to cope with user-demanded change, to adapt to the new market landscape • User to acquire information and knowledge on changes in technologies, to demand better consumer protection and customer care

7. Operators to Manage Transformation (1) • Network evolved from voice-data to integrated service transmission (voice-data-multi-media services) - In Hong Kong – fast uptake of IPTV services eg NOW • From legacy communications network to NGN - Operators are in the pipeline for migration • Enhancement of mobility and ubiquitous wireless access - Seamless and territory-wide coverage

8. Operators to Manage Transformation (2) Change in business models • From focus on facility-management to customer-oriented service provision • From competition of network efficiency to service quality, contents, integration of services, added values • New teams, new marketing approaches, new alliances

9. Users to Adapt to Transformation In the light of technological change and new service provision, users need: - Transparency of service standards to enable informed choice - Security and privacy protection (e.g. against spam and intrusion on privacy) - Comprehensive service coverage and accessibility to emergency services

10. Regulatory Regime for Transformation OFTA’s regulatory regime • Pro-liberalisation, pro-competition and pro-consumer, providing a regulatory framework which ensures availability of the widest range of quality telecoms services at reasonable prices • Technology-neutral, proactive and react promptly and effectively to the rapidly changing market and new demands on the regulatory framework

11. Policy and Regulatory Objectives (1) As a Facilitator • To facilitate the introduction of new services - to re-examine current policy and regulation • To lower market entry barriers for new players • To support growth by allocating new resources • To seek to protect consumer interests - help consumers make informed choices

12. Policy and Regulatory Objectives (2) As a Regulator • To develop policy and regulation to meet the changes in the nature of services • To provide a level-playing field • To adopt a market-driven approach • To enhance transparency • To seek to protect consumer interests and address social concerns

13. Regulatory Approach • Move from ex ante to ex post regulation - when the market is effective • Market-driven approach, competitive environment • Investment to be undertaken by the private sector • Regulator to provide conducive environment

14. Some Policy and Regulatory Initiatives • Fixed Mobile Convergence and NGN - Unified Carrier Licence - Interconnection charges • Resources for Enhanced Access - Municipal Wi-Fi Services, Broadband Wireless Access, Mobile TV etc • Converged Regulator

15. Fixed-Mobile Convergence (1) Unified carrier licence (UCL) • To replace existing fixed and mobile carrier licences • Consultation conducted in 2005 • UCL planned to be available in 2008

16. Fixed-Mobile Convergence (2) Interconnection charges • Currently –“mobile party’s network pays” • Asymmetric approach probably no longer relevant with FMC and NGN • Proposed to deregulate and let the market decide • No evidence of failure if deregulated • The TA reserves the power to intervene

17. To Enhance Accessibility To facilitate introduction of new technologies and services and smooth migration into NGN • Mobility, access, reliability • Make available spectrum resources required for Mobile TV, Broadband Wireless Access • Make licensing and regulatory arrangements

18. Addressing Consumer and Social Issues • Sustainable and harmonious industry development dependent on a foundation of users’ trust and confidence in services available, which are useful, beneficial and reliable • Provision of information to help make informed choices • Security and privacy issues • Unsolicited Electronic Messages Bill enacted on 1 June 2007 to combat spam • Fixed-Mobile Number Portability • Policy to support consumers making choices

19. “Harmonious development is dependent on a market environment conducive to growth and investment.” Thank you.