ITU Advocates Infrastructure Sharing to Counter Investment Drought
Published on: 26th Nov 2008
Note -- this news article is more than a year old.
The International Telecomunications Union (ITU) has published a report detailing a set of regulatory strategies designed to lower the costs of telecoms network rollout. The report notes that 2008 has been marked by unparalleled numbers of voice and Internet consumers in both the developing and developed world the result of network growth and expansion.
This year has also seen an unparalleled global financial crisis which may make it more difficult for investors to obtain financing for continuing network development. Sharing strategies, examined in the new ITU report, are seen as conducive for infrastructure development in the telecommunications/ICT sector, particularly in light of the deepening global financial crisis.
"Sharing strategies are increasingly necessary to ensure that operators can deploy their networks at low cost while guaranteeing that consumers have access to affordable services," said Sami Al Basheer, Director of ITU's Telecommunication Development Bureau. "Now, more than ever, sharing strategies make sense as operators are forced to reduce the costs of network deployment as they compete for scarce investment funds. This is a forward-looking perspective in light of the current financial and economic uncertainty."
Sharing strategies include the sharing of civil engineering costs in deploying networks, promoting open access to network support infrastructure (poles, ducts, conduits), essential facilities (submarine cable landing stations and international gateways) as well as access to radio-frequency spectrum and end-user devices.
Sharing infrastructure could counter impact of financial downturn
The "Six Degrees of Sharing" theme was first discussed in Thailand during ITU's 2008 Global Symposium for Regulators last March. Few observers could then have anticipated the rough ride that would be in store for financial markets a few months down the road.
Yet, the guidelines announced in March seem almost prophetic in today's circumstances. Taking a broad and innovative view of sharing, the world's regulators sought to capture the productivity of global networks and use it to expand the scope of opportunities for service and content providers and, ultimately, consumers. Developing countries embraced sharing to make more affordable the expansion of ICT networks to rural and under-served areas. Many developed countries are looking at sharing to reduce the cost of rolling out ultra high-speed broadband networks that reach customers' homes and apartment buildings.
"Sound business and regulatory practices will contribute to extracting the greatest possible value from existing levels of investment in the telecommunication and ICT sectors," said Al Basheer. "ITU is committed to working with Member States and to assist regulators in marshalling the regulatory expertise they need to navigate these rough seas."
The booming volume of digital bits generated by the move to convergence and packet-switching has produced a need for increased network capacity. Regulators have a responsibility to create and maintain an environment in which operators and service providers can maximize network capacity and efficiency by fostering capital investment and market expansion as the sector continues to evolve.
Mobile penetration showed high growth rates through 2008. By year end, mobile networks and subscribers will rise to an all time high, reaching an estimated 4 billion mobile subscribers worldwide. The world also counts over 1.5 billion Internet users, a growing number of which use fixed and mobile broadband services. Dial-up is being replaced by broadband across developed and developing countries alike. In developing countries such as Chile, Senegal and Turkey, broadband subscribers represent over 90 per cent of all Internet subscribers.
A growing array of broadband wireless systems are now available, opening the way for users in developing countries to access the Internet on mobile phones and other handheld devices. At the same time, more developing countries are deploying national fibre backbones and backhaul networks to transport their growing data-rich traffic. In addition, several new international submarine cable networks are set to connect developing countries to the global network of Internet backbones - just as a group of high-tech entrepreneurs are working to revive plans for a constellation of broadband satellites to connect the developing world. The Trends report catalogues efforts by governments, and in particular ICT regulators, operators and service providers to expand the reach of affordable broadband services and meeting universal access goals.
Timely steps for ICT sector
What had been foreseen as ideal strategies to extend broadband network access in developing markets may now be viewed as a prescription for the entire world. If the sources of capital for network investment suffer a temporary drought, policy-makers could take steps to make their markets more amenable to the shrinking pool of investment:
- Lower investment barriers that inhibit capital flows from one country to another
- Reduce regulatory barriers (high licence fees or market-entry bans) that represent hostile environments for capital investment and market growth
- Share essential facilities, such as cable landing stations, local switching centres or fibre backbone networks
- Adopt rules to provide for infrastructure sharing, particularly "passive" sharing of towers, ducts, rights-of-way and other support facilities
- Overhaul and streamline cross-agency processes to create a 'one-stop shop' for various network-related authorizations, such as land management, port access, environmental and safety permits
- Add innovative spectrum management mechanisms that promote increased sharing and efficient use of spectrum
- Amend regulatory frameworks to eliminate discriminatory rules that favour one company or industry over another in a converged services market
- Ensure that government policies and rules maximize the ability of incumbents and market entrants to choose between different opportunities for business plans and long-term strategies, including resale, wholesale, and niche markets
The full report (pdf file, 40 pages) can be downloaded from the ITU website.