Revisited Sector Paper Telecommunication Services ISIC J 61

1. Revisited Sector PaperTelecommunication Services ISIC J 61 32nd Voorburg Group Meeting New Delhi, 23-27 October 2017 Christian Puchter Statistics Austria

2. Telecommunication VBG History • Mini presentations in 2008 • Sector Paper by Benjamin Camus in 2009 • Updated Sector Paper by Liam Murray in 2012 • 2017 RevisitedSector Paper due tonewdevelopmentsand a new CDF (based on the Updated Sector Paper out of 2012)

3. Content accordingtothenew CDF • Descriptionsandcharacteristics of theindustry • Turnover/outputmeasurement • Measurement of SPPI • Evaluation of measurement • International Progress

4. Descriptions and characteristics of the industry: Classifications • Nochanges in theclassificationstructure • Secondaryproductionis an issue

5. Descriptions and characteristics of the industry: Market conditions • Significantamount of turnoverandtherefore an important • serviceindustry • Highlyconcentratedwithonlyfewdominatingmajorplayers • Worldwide number of internetusersisgrowingcontinuously

6. Descriptionsandcharacteristics of theindustry: Market conditions EU 28 turnover

7. Descriptions and characteristics of the industry: Market conditions Retail telecommunicationrevenues (Ofcom 17) Development of mobile datavolume in Austria

8. Descriptionsandcharacteristics of theindustry:Market conditions/industrytrends • Share on B2B vs. B2C differswithinthe 4 ISIC codes • Export and non domesticservices (export vs. import; roaming) • Primary andsecondaryproductioncomplicatethe • appropriateclassificationandsampling • Monopoly/oligopolymarketsarereplacedbycompetition • provokedbyderagulation • Trends: • Net neutrality • Roaming • Internet of things

9. Descriptionsandcharacteristics of theindustry: Specific characteristics • Nature of selling depends on ISIC code • Bundling is omnipresent • Strong trend to bundles in the wired telecom in the US • Wired bundles include telephony, TV and internet • Bundles in the wireless telecom include minutes, SMS and data • Plans with no phones is a new trend • Shifting consumer trends have to be followed by SPPI: • Frequent revisions • Frequent reweighting

10. Turnover/outputmeasurement: General framework • Not muchnewinformation • Welldeveloped due to SBS (annually) and STS (quarterly) • regulations • Administrative data (enterprisereports, regulatordata) reduce • respondentburden • Collection of invoicedsales of goodsandservicestothirdparties • hastobesurveyed • Administrative datacouldleadtooverestimation • (includessales of fixedassets) • Secondaryproductionis also an issue (shouldbeexcluded) • Turnovershouldbecollected at least annually

11. Measurement of SPPI:General framework • Scope B2B vs. B2All • Currently B2B • But fordeflation of total output a B2All isneededfor NA • Under FRIBS (Framework Regulation of Integrating Business • Statistics) B2All ismandatory • Extension of coverageaswell • New ISPs whichhavetobedeflatedby SPPIs

12. Measurement of SPPI:Measurement issues • Enterprise (SBS) vs. KAU (SPPI) couldcauseinconsistencies • Productbasedindicesarefavoured (secondaryactivity) • Weightsshouldberebasedfrequently • Data sources: • Survey • Administrative regulatordata • Internet listprices • Target coverage: • B2All = B2B + B2C (like the US) • Surveyeddisaggregatedcustomer type indicesresult in B2All index • Ortousealreadyexistingadjusted CPI (at constanttaxes) • Varioussamplingmethodssuitable

13. Measurement of SPPI:Measurement methods • Services beingpriced: • Type of contract: old (singleservice) vs. new (bundle) • Price determiningcharacteristics (minutes, sms, data, etc.) • End of roamingcharges (but newcontracttypesarise) • Pricingmethods: • Componentpricing (bill – /rate method) • Unit values • Directuse of prices of repeatedservices • Consumer profiles • Use of CPI proxies

14. Measurement of SPPI:Issues • Weightsbysurveyorregulator (unitvaluemethod) • Pricing of bundledservices (seperateservices vs. bundle) • The latterislessburdensome • Quality adjustment (newexperiencesbythe US using • a hedonicapproach) • Frequency (quarterlyisprevailing, but monthly ISPs)

15. Measurement of SPPI:Issues • Comparabilitypricewithoutputdata: • Collection ofturnoverdata at industrylevelonly. Raisechallengesforcalculations of SPPI at productlevel • At 2-digit leveldegree of comparability larger, due tothestructure in theindustry • Turnoveris not collecteddirectlyforbundledservices. Isit a problemwithregardtocomparabilitytoprices? • Different samplesusedformeasuringturnover and SPPI • Turnover iscollected B2All in Europe. SPPI, at themoment, onlyfor B2B

16. Evaluation of measurement • A horizontal integration of telecomwith IT is observable • Bundles areprevalentandaretriedtobesurveyed • Administrative regulatorturnoverandprice (unitvalues) • datacanminimiserespondentburden • Data arealreadycheckedforplausibility etc. • But noinfluence on coverage (AUT)

17. International Progress

18. International Progress • Increasingcountrydescriptions (POL, FIN, IT) • Used methods for collecting price data • Regulator data • List prices • Survey • Unit valueinformation • Country descriptionsavailable: • VBG • SPPI Guide • CIRCABC (Eurostat)

19. Please address queries to: Christian Puchter Contact information: Guglgasse 13, 1110 Vienna phone: +43 (1) 71128-7647 fax: +43 (1) 718 07 18 Christian.puchter@statistik.gv.at Thank you! Questions?