20-23 July 2015Islamabad,

PakistanSameer Sharma, Senior Advisor

ITU Regional Office for Asia and the Pacific

Overview of ICT licensing regime

frameworks

ICT Development Trends

Regulatory Trends

Licensing Framework & Migration

International Best Practices

Conclusions

Agenda

ITU-D: ITU’s Development Sector fosters international cooperation and solidarity in the delivery of technical assistance and in the creation, development and improvement of telecommunication/ICT equipment and networks in developing countries.

ITU: A Brief Overview

193 Member States 567 Sector Members 159 Associates

60 Academia

ITU-R: ITU’s Radio-communication Sector globally manages radio-frequency spectrum and satellite orbits that ensure safety of life on land, at sea and in the skies.

ITU-T: ITU's Telecommunication Standardization Sector enables global communications by ensuring that countries’ ICT networks and devices are speaking the same language.

Headquartered in Geneva, 4 Regional Offices 7 Area Offices.

A specialized agency of the UN with focus on Telecommunication / ICTsFounded in 1865

A Day in Digital World

ICT Services Uptake

- Almost 3 billion people online (individuals using the Internet)

Mobile cellular subscriptions:- Almost 7 billion

Mobile broadband penetration: - 84% developed countries - 21% developing countries

Who’s online? By region, 2014

Fixed broadband penetration:- 27.5 % developed countries - 6 % developing countries

Global, 2014

Source: ITU World Telecommunication/ICT Indicators database

Broadband now affordable in 111 countries MBB less expensive than FBB

3 G Mobile Broadband Coverage: Extending in Rural Areas

MDGs 2000-2015:ICT Revolution and Remaining Gaps

Digital Divide in 2015

Mobile Broadband Subscribers % Individuals using Internet

Fixed BB across regions of the world

Fixed (wired) Broadband subscriptions per 100 inhabitants 2014*

Active users by social platform : Jan’ 2015

Regulatory Trends

Connect 2020 Agenda

For Global Telecommunication/ICT Development

Enable and foster access to and increased use of

telecommunications/ICTs

Bridge the digital divide and provide broadband for all

Manage challenges resulting from telecommunication/ICT

development

Lead, improve and adapt to the changing

telecommunication/ICT environment

www.itu.int/en/connect2020

ICT Market Trends

Challenges to Traditional Service Providers

Licensing Framework

Regulating Fixed Line Services

Regulating Mobile Services

Broadband Plans

Financing: Public-private partnerships and Government funding are the main means of financing broadband deployments in the region

19

Source: ITU Telecommunications/ICT Regulatory Database

Over 140 governments worldwide have adopted a national broadband policy

Financing Means

Africa Arab States

Asia & Pacific

CIS Europe Americas0

5

10

15

20

25

30

35

40

45

Broadband plans, 2014

plan adopted planning to adopt one

Num

ber o

f cou

ntrie

s

What Are The Goals of the Broadband Plans?

Operators/ service providers required to contribute to USF

Operational USO Funds

Maturity of Regulation

Source: ITU.

G4: Integrated regulation – led by economic and social policy

G3: Enabling investment, innovation and access – dual focus on stimulating competition in service and content delivery, and consumer protection

G2: Basic reform – partial liberalization and privatization across the layers

G1: Regulated public monopolies– command and control approach

Beginning of 2014

Better Regulation – Greater Growth?

Note: Based on data for 122 countries over the entire period.Source: ITU.

Evolution of mobile broadband penetration, by generation of regulation, 2009-2013

Licensing Framework & Migration

Changing Institutional Frameworks

Legislations embracing the power of convergence as well as addressing concerns such as Cybersecurity on the rise.

Institutional convergence including Telecom, Broadcasting, IT and in some cases even beyond on ground: e.g., Australia, China, India, Republic of Korea, Malaysia, Converged policy & regulatory frameworks evolving: e.g., Converged Licensing (Malaysia), Authorization (European Union), Unified Access License (India). Digital Signature, etc.

General Drivers of MigrationNew services and revenue increase with multimedia services

– Compensate voice revenue reduction and increase BB related business

– Providing Service innovation (e.g. VPN)– Decreased time to market

Cost reductions by sharing network infrastructure and systems

– Savings are a function of network scenario, equipment modernization status and customers grow speed

– Evolving legacy networks to NGN: Reduced OPEX and streamline operations

Simplification of O&M– Integrated operation platforms, maintenance and

training– Centralized Management and Control

New Services & NGN Applications

Drivers of Migration: Operators Perspective

• Business continuity required to maintain ongoing dominant services and customers that require carrier-grade service • Flexibility to incorporate existing new services and react

quickly to the ones that appear on real time (main advantage of IP mode)• Profitability to allow feasible return on investments and in

the best practices market values• Quality of Service to guarantee the Service Level

Agreements for different traffic mixes, conditions and overload.• Interoperability across networks to allow to carry end to

end services for flows in different network domains

Which licensing model to adopt?

• Think long-term• Consider the administrative burden• Mix and match– Different arrangements for different segments

• Consider what terminology will be usedIndividual licence• Indivi

dually approved

• Specific rights and obligations

Class licence• Gener

al system of rights and obligations

• Simple award process

Registration• A

formality

Notification• File

notification then commence

• No need to wait for approval

Open entry• Not

regulated

What Could be the Licensing Models?

Simplification of Licenses

Models for Reduction of Administrative Requirements

Source: Report from ITU-D Study Group 1, Question 10-2/1

Differences in license fees (one time & annual)

Key issues in license migration

Differences in the level of rights: Service scope, Spectrum, Numbering, Right of way. License period, Service area etc.

Differences in the level of obligations: USO, Roll out, Emergency services etc.

Others: impact on competition rules, interconnection etc.

Policy

Legislation

Regulation

License

Whether to regulate?

What to regulate?Choice between commercial

negotiation and regulation

How to regulate?Choice between the level of detail

to be inserted in each of these instruments

Regulatory Instruments

Simplification of licenses

Lowering the entry barriers (including administrative and procedural) to promote competition

Move towards service and technology neutrality

More flexible frameworks to enhance access

Fostering technology neutrality;

Principles to consider in migration

Ensuring flexibility to allow the new licensing regime to accommodate future technological and market changes;

Simplifying the number of license categories;

Reducing administrative burdens and fees on market players;

Applying incentive mechanisms that encourage existing operators to transition to the converged licensing framework;

Ensuring transparency with regard to converged licensing responsibilities;

Fostering close collaboration amongst appropriate entities;

Source: Draft Report ITU-D Question 10-2/1: Regulation for licensing and authorization of converging services

International Best Practices

2015 Survey on the National Broadband Policy/Plan

[Description of the survey]

• In June 2015, ITU conducted a survey on the latest progress on implementing broadband policy/plans

- 15 selected countries which requested the ITU assistance on national broadband policy/plans or recently updated the policy including,

- Bangladesh, Bhutan, Brunei Darussalam, Cambodia, Fiji, Indonesia, Lao PDR, Myanmar, Nepal, Pakistan, Philippines, Vanuatu (Papua New Guineas, Samoa, Vietnam)

• In the last three years, many countries reported to have made considerable progress in reviewing or simplifying the licensing regime based on convergence

- High progress: Brunei Darussalam, Fiji, Indonesia, Vanuatu - Some progress: Cambodia, Nepal, Lao PRD - No or Low change: Bangladesh, Bhutan, Pakistan, Philippines

Bangla

desh

Bhutan

Brunei D

.

Cambodia Fij

i

Mya

nmar

Nepal

Indonesia

Pakist

an

Philippines

Lao PRD

Vanuatu

1

2

3

4

5

Review of current licensing regime

Simplifying licensing based on convergence

2015 NBP Survey: Improving Licensing Regime

No Change

High Progress

Average

2015 NBP Survey: Spectrum allocation

Bangla

desh

Bhutan

Brunei D

.

Cambodia Fij

i

Mya

nmar

Nepal

Indonesia

Pakist

an

Philippines

Lao PRD

Vanuatu

1

2

3

4

5

Improving spectrum ef-ficiency

Introducing market-based approach to spectrum al-location

No Change

High Progress

• Most countries (except Nepal and Lao PDR) reported to have made good progress in improving spectrum efficiency in the last three years

• These countries also made some progress in adopting market-based approaches to spectrum allocation such as auction or beauty contest

Average

2015 NBP Survey: Licensing Practices

• Currently, variations exist in licensing practices between different countries

- Brunei, Myanmar, Pakistan and Philippines have taken a more flexible and dynamic approach to spectrum/licensing management that can easily accommodate convergence

- Bhutan, Cambodia and Lao PRD still maintain a relatively rigid spectrum/licensing practices

Bangladesh

Bhutan Brunei D.

Cambodia

Fiji Indonesia

Lao PRD

Myanmar

Nepal Pakistan

Philippines

Vanuatu

Unified Licensing Spectrum Allocation by Auction Spectrum Allocation by Beauty Contest Spectrum sharing Secondary Trading of Spectrum In-band Migration

2015 NBP Survey: Infrastructure Sharing

No Change

High Progress

• The majority of the studied countries (except Nepal and Philippines) worked hard on establishing or enforcing infrastructure sharing rules on the licensees

Bangla

desh

Bhutan

Brunei D

.

Cambodia Fij

i

Mya

nmar

Nepal

Indonesia

Pakist

an

Philippines

Lao PRD

Vanuatu

1

2

3

4

5

Developing or enforcing in-frastructure sharing rules

Average

2015 NBP Survey: Consumer rights and QoS

No Change

High Progress

• Regarding consumer rights and broadband quality of services, there exist considerable variations in the degree of progress made by each country

- High progress: Brunei, Cambodia, Pakistan, Vanuatu - Low progress: Bangladesh, Bhutan, Fiji, Nepal, Philippines

Average

Bangla

desh

Bhutan

Brunei

D.

Cambodia Fij

i

Myanmar

Nepal

Indonesia

Pakist

an

Philippines

Lao PRD

Vanuatu

1

2

3

4

5

Protecting consumer rights and broadband quality of service

Example 1: General authorization in theEuropean Union

• A general authorization instead of individual licenses . All electronic communication services and networks will be covered under a general authorization regime, with individual rights-of-use being confined to the assignment of radio frequencies and numbers only.

• A maximum set of conditions to be attached to general authorizations . The Directive introduces a strict separation between:(a) conditions under general law, applicable to all undertakings in all economic sectors;(b) conditions under the general authorization applicable to all telecommunication services and networks; and(c) conditions attached to rights of use for radio frequencies and numbers.

Example 2: Multi-service authorization in SingaporeFacilities-based operator. (FBO) licensesIn general, operators that install or operate any kind of network infrastructure require an FBO license. This includes international and domestic wireless transmission or switching facilities; public cellular mobile networks; paging networks; public mobile data and trunked radio services; and local multipoint distribution services. Wireless services are licensed separately, pursuant to spectrum-management policies.

Service-based operator (SBO) licenses

Individual SBO licenses are required for international simple resale; resale of leased circuits; virtual private network services; managed data network services; Internet access; Internet exchange services; mobile virtual networks; and live audio-text services.SBO class licenses cover simple resale of public switched telephony; international call-back services; Internet-based voice or data services; and international calling card services. Class licensees may offer their services without obtaining a specific authorization, but they are subject to all relevant codes of practice and service-quality standards.

Source: IDA (http://www.ida.gov.sg/) Trends in Telecommunication Reform 2004/05

Example 3: Multi-service authorizations in Malaysia• Network Facility Providers (NFPs), which include owners of satellite earth stations, fibre optic

cables, communications lines and exchanges, radio communication and transmission equipment, mobile communication base stations and broadcasting towers and equipment;

• Network Service Providers (NSPs) for entities that provide basic connectivity and bandwidth to support a variety of applications;

• Application Service Providers (ASPs) for licensees that provide particular functions such as voice services, data services, Internet access services, IP telephony and other transmission services; and

• Content Applications Service Providers (CASPs): A special subset of applications service providers . including traditional broadcast services and services such as online publishing and information services.

The services falling under these categories are further subdivided into individual, class and exempt services. A total of 56 categories of licensed services and 24 categories of licensed facilities were reorganized into the four generic licensing classifications established by CMA.

Source: MCMC (http://www.mcmc.gov.my/).

Example 4: Unified access service licensing in India

In October 2003, India adopted an Universal Access Service Licensing (UASL) regime:

• Technology and Service Neutral Regime;• Long distance, Internet Services etc. licensed separately• Within a service area, license does not distinguish between types of

access e.g. fixed, mobile, WLL;• Basic Service operators had to pay a fees to enter UASL at

benchmarked levels of fees paid by cellular mobile operators; • Licenses to be allocated on first cum first served basis;• 2G mobile spectrum (limited quantity) still a part of the license;• 3G mobile spectrum auctioned separately.

Understand framework

How will the new licensing framework be

implemented?What licensing rules are

needed for implementation?

Who will administer licensing and manage

migration?

What other regulatory instruments are needed?

Migration period

Will the transition be quick or gradual?

Is compensation necessary?

What happens on the expiry of existing

licences?

Licence mapping

To which licences will existing licences be

migrated ?

Are the migration rights clear and agreed?

Is the migration process clear and publicised?

What opportunity will stakeholders have to

comment?

Migration process

Are incentives needed?

What will happen to the existing licence

conditions?

Is the administrative burden reasonable?

How will licence fees be managed during

transition period?

A migration process

GSR 2009 and 2007 Best Practice Guidelines

2009 - In order to stimulate investment to grow converged markets, regulators need to further: Build an adaptive regulatory framework by adopting a technology neutral approach, administratively simplified and flexible licensing regime providing for easy market entry of new players, such as through general authorizations and multiservice/unified licences.

2007 - Authorization: We encourage regulators to simplify procedural requirements to obtain a license by introducing registrations, notifications, and in certain instances, deregulation and to secure rights of way in order to facilitate the roll-out of NGN access networks. This will ultimately allow market players to make use of NGN to access global markets and consumers to benefit from such global competition in the provision of services.

Conclusions

ICT development is taking at phenomenal pace posing challenge to conventional ways of regulation

Regulatory Authorities need to be agile and to be an agent of change to create proactive enabling environment

Technology / service neutral licensing regime based on convergence framework

License migration to converged approach is complex but essential requirement to fully harness the benefits in networked society

Building human and institutional capacity of regulatory agencies

ITU : I Thank U

Trends in Telecommunication Reform 2004/05 provides a comprehensive overview on licensing in an era of convergence.

http://www.itu.int/pub/D-REG-TTR.7-2004

ITU-D Study Group 1 QUESTION 10-2/1:Regulation for licensing and authorization of converging serviceshttp://www.itu.int/pub/D-STG-SG01.10.2-2010

ICT Regulation Toolkit Module on Authorisation of Telecommunication/ICT Services.

http://www.ictregulationtoolkit.org/en/Section.507.html.

ITU Publications