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20081016 Fcs Conference (2)

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David Stewart's presentation on Ofcom's Mobile Sector Assessment to the FCS Comms Provider 08 event

David Stewart's presentation on Ofcom's Mobile Sector Assessment to the FCS Comms Provider 08 event

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  • Transcript

    • 1. Mobile Sector Assessment: Mobile citizens, mobile consumers David Stewart 16 October 2008
    • 2. What did we look at Primary questions Principal question Should Ofcom revise its approach to regulation of the mobile sector, in order to respond to the changing market environment? What are the implications of market change for mobile and wireless services? How are consumers and citizens affected by developments in the mobile sector? What is the scope for deregulation, competition and innovation in the mobile sector? What are the purposes of mobile regulation, and where should its focus lie? Our consultation focuses on these three questions
    • 3. Our vision for the UK mobile and wireless sector
      • A wide choice of networks and a wide choice of services on those networks
      • Easy and safe switching
      • A mobile internet that is as open and flexible as technology allows
      • Diverse content and applications (including protection from harmful content)
      • Coverage
      • Consumer protection from mis-selling, scams and new risks including personal information
    • 4. We have “gone mobile” Fixed and mobile call volumes Source: Ofcom / operators. Note: Includes estimates where Ofcom does not receive data from operators
    • 5. Outbound SMS volumes Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; excludes H3G; figures have been restated from the 2007 Communications Market Report to reflect more accurate data SMS usage is soaring and data continues to grow
    • 6. Mobile broadband growth is accelerating New mobile broadband connections Source: GFK
    • 7. As a result, the mobile sector has grown UK telecoms industry retail revenue 7.3 9.9 Source: Ofcom / operators
    • 8. Mobile overall satisfaction and VfM, over time Most consumers are content with their mobile service, but a sizable minority, 1.4m, are not Source: Ofcom research
      • Ofcom OAT data:
        • Rising complaints (as witnessed by other agencies)
        • Respond to persistent consumer issues as appropriate
      • Consumers’ main areas of concern are:
        • Tariffs,
        • Poor customer service, and
        • Bill errors.
    • 9. Not all citizens benefit from mobile to the same degree 2G and 3G Mobile coverage
      • Citizen issues for consideration include:
        • ‘ not spots ’
        • involuntary exclusion :
        • privacy and security ;
        • access to mobile phones by children .
    • 10. Examples of entrants across the mobile value chain Network Equipment Vendor Tower & Backhaul Mobile Network Operator Mobile Service Provider Device Vendor Content Provider Distributor Geo
    • 11. New technologies may change market dynamics User Traditional ‘Mobile’ Femtocell ‘Mobile’ UMA phone (at home) UMA phone (out of home) VoIP (at home) Traditional ‘fixed’ Fixed Mobile Mobile phone Dual mode Mobile phone PC POTS handset GSM / 3G WiFi DECT/Analogue Mobile Network Operator radio access network DSL network Twisted Copper Mobile Network operator core network IP backbone and internet BT exchange network PSTN / internet Conventional ‘mobile’ Conventional ‘fixed’ User Equipment Carrier Type Access Network Core Network How might the mobile termination rate regime need to evolve? Examples of different voice transmission methods
    • 12. The context and case for change
      • The context
      • Debate within European
      • Mobile termination rates are a key aspect of the MSA. Ofcom is also looking at other termination rates - fixed line network charge controls, NGN interconnection
      • The case for change
      • We see increasing pressure on the termination rate regime after 2011 from:
        • Fixed mobile convergence
        • Competition in a more diverse and complex mobile market
        • Regulatory burden and growing risks of regulatory failure
    • 13. What might the future regime look like?
      • Options include:
        • Incremental costs only (e.g. the European Commission’s draft Recommendation)
        • Reciprocity between fixed and mobile (similar to the US model)
        • Bill and keep : set termination charges to zero by regulation
        • Deregulate mobile termination : no regulation of mobile termination rates after 2011
        • Deregulate all termination: full deregulation would allow both fixed and mobile networks to freely negotiate two-way traffic exchange.
      • All these approaches carry important risks and transitional challenges
      • A non-exhaustive list of options is in the consultation: “Mobile citizens, mobile consumers” http://www.ofcom.org.uk/consult/condocs/msa08/msa.pdf
    • 14. Next steps
      • Consultation period
      • Stakeholder meetings September to November
      • MSA Conference at Westminster Media Forum 25 September
      • Other external events (speaking events, conferences) September to November
      • Consultation Close 6 November
      • Ofcom International Conference 21 and 22 November
      • MSA Phase II
    • 15. MSA II aims to address five key issues Stakeholder responses to MSA I may add additional issues Strategic approach to mobile Formulation of Ofcom’s strategic priorities for the mobile sector Consumer protection Creation of a principles-based approach to consumer protection in the mobile sector based on existing Consumer Policy work Coverage Formulation of a potential policy approach to be taken address coverage issues that are acting as a barrier to usage FoTPAs Analysis of the options for the future of termination rates and participation in the EU level debate on this issue Adapting regulation Examination of what regulation can be simplified or removed Setting criteria under what circumstances could regulation be removed Competition issues Conclusion of our analysis of the competitive nature of the market
    • 16.
      • Consultation document:
      • http://www.ofcom.org.uk/consult/condocs/msa08/
      • Interactive Executive Summary:
      • http://comment.ofcom.org.uk/msa_summary/
      • Blog:
      • http://comment.ofcom.org.uk/mobileblog/