2) Assessment of Regulatory Trends in Key Countries
2.1 The global trend in telecommunications policy is accelerating towards deregulation, both in wireline and wireless services and it is accepted that competition has brought major benefits (see Exhibit 1). Residential and business consumers, new carriers and incumbent operators have all benefitted from the introduction of competition as the telecommunications industry has grown, both in basic traffic terms and also in the proliferation of new and enhanced services. In the US, for example, long-distance tariffs nearly halved with the introduction of competition.
Exhibit 1: Global Trend Towards Increased Competition
COUNTRY
Australia
France
Germany
Japan
New Zealand
Singapore
United Kingdom
United States
WIRELINE
WIRELESS
Local
National
International
Domestic
*
**
** In the form of bypass carriers and Metropolitan Area Network (MAN) operators
Extensive competition
Limited competition
Legend:
No competition
*
- Full competition will exist in near future
SATELLITE
International
OOOO
2.2 This stimulated traffic growth to levels well above the pre-divestiture forecasts (see Exhibit 2). In the UK tariffs fell 15-20% after the launch of Mercury. However, with costs for international facilities continuing to fall faster than tariffs, the Director General of OFTEL (the Office of Telecommunications), Sir Bryan Carsberg, wants the consumer to enjoy even more of these technology cost saving benefits. He has "taken the prospective profits from international telephony into account in proposing the level of the overall price cap of RPI-6.25%." Under official pressure, BT has also agreed to reduce its prices for international calls by 10% as soon as possible. In Japan, the three international service providers have dropped their charges on the major routes by over 20%, and users have migrated between carriers to maximise savings. Traffic volume has increased to the extent that KDD has not suffered decreased revenues,
despite the fact that they have reduced their prices and lost share to IDC and ITJ.