CANTO 21 st Annual Conference Session 1 Regulatory and Policy

1. CANTO 21st Annual ConferenceSession 1 Regulatory and Policy OECD EXPERIENCES WITH TELECOMMUNICATION LIBERALISATION Dimitri Ypsilanti OECD dimitri.ypsilanti@oecd.org www.oecd.org/sti/telecom

2. What is the OECD? • A forum in which governments work together to address the economic, social and environmental challenges of interdependence and globalisation • Committees and Working Parties (about 200) • Some 40 000 senior officials from national administrations come to OECD meetings each year • Working Party on Telecommunications and Information Services Policies: www.oecd.org/sti/telecom • A provider of comparative data, analysis and forecasts to underpin multilateral co-operation • Today the OECD has 30 member countries (+BIAC,TUAC) • More than 70 developing and transition economies are engaged in working relationships with the OECD

3. A global outreach OECD Member Countries Countries/Economies Engaged in Working Relationships with the OECD

4. Progressive Liberalisation: Competition in Mobile Markets

5. OECD: Telecommunication Investment1994 -2003

6. Growth in Network Coverage and Access • Increase in access to networks • Discernable shift between platforms • Decrease in fixed lines in 2002 and 2003 from peak in 2001 • Cellular Mobile substitution (741 million mobile subscribers at end 2003) • Broadband substitution (less demand for ISDN and second residential lines) • Overall increase in access: 1.4 billion access paths (fixed + mobile + broadband) in 2003 which is double 1997

7. Increasing Importance of Communication Services Communications remains the fastest-growing consumption sector in the OECD

8. Public Telecommunication Revenue per capita, 1993 , 2003

9. Broadband take-up over first 10 years is faster than previous services across the OECD

10. Broadband penetration rates, 2004

11. Unbundling & Local Competition • Development of local competition slow: (UK 18% of subscriber lines, Denmark 16%, US 14%) • Argument that unbundling can slow down investment in upgrading local loops (leads to service and not facilities competition) • Arguments that direct access has negative implications on investment ignore the fact that without adequate levels of competition the pace of investment in upgrading local loop will likely be much slower. • Direct access provides an incentive to both the incumbent and new entrant to upgrade local loops and invest in new infrastructure. • The slow rate in the provision of ISDN, and high ISDN prices, has borne this latter argument out. • It is It is unlikely that a new entrant will be deterred from making new investment because it has access to an unbundled loop. On the contrary access to that loop increases its customer base, and provides immediate revenue facilitating new investment.

12. Competition and Prices: Residential and Business Charges

13. OECD Composite Residential basket, February 2005USD PPP, VAT included

14. Quality of Service: Faults per line

15. Substitution and Universal Service

16. Towards the NGN: Competition and complementarity among different technologiesHigher cones represent better performance in a given category.