Oecd Communications Outlook 2003

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© OECD, 2003. © Software: 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. You must treat the Program and associated materials and any elements thereof like any other copyrighted material. All requests should be made to: Head of Publications Service, OECD Publications Service, 2, rue André-Pascal, 75775 Paris Cedex 16, France.

OECD Communications Outlook 2003

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).

Publié en français sous le titre : Perspectives des communications de l’OCDE : 2003

© OECD 2003 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel. (33-1) 44 07 47 70, fax (33-1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France.

FOREWORD This report, the seventh in a series of biennial Communications Outlooks, was prepared in the context of the OECD’s work on the analysis of communication policy in member countries. The report was drafted by the staff working in the OECD’s Directorate for Science, Technology and Industry, including Dimitri Ypsilanti, Sam Paltridge and Frédéric Bourassa as well as John Houghton from Victoria University. They are grateful for the contribution of information by telecommunication carriers and national delegations that responded in 2002 to an OECD questionnaire relating to industry regulation and data. When noted, the assistance of Netcraft and the International Telecommunication Union in providing data is gratefully acknowledged. The pricing comparisons are undertaken in co-operation with Teligen Ltd., and quarterly updates of some pricing indicators using the OECD methodology are available directly from Teligen. Many of the other indicators in this report are available in electronic format in the OECD Telecommunication Database 2003, covering the period 1980-2001. The draft of this report was presented to the OECD Working Party on Telecommunication and Information Services Policies at its meeting of 2-3 December 2002. The Committee for Information, Computer and Communications Policy subsequently recommended that the report be made available to the general public. It is published on the responsibility of the Secretary-General of the OECD.

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© OECD 2003

TABLE OF CONTENTS Introduction .....................................................................................................................................................

11

Policy and regulatory outlook............................................................................................................................................. The telecommunications market ....................................................................................................................................... Telecommunication market structure................................................................................................................................ Telecommunication crisis.................................................................................................................................................... Gradual transition or future shock .....................................................................................................................................

12 13 14 17 19

Recent Communication Policy Developments ...........................................................................................

27

Trends in competition ......................................................................................................................................................... Regulatory safeguards ......................................................................................................................................................... Foreign ownership ............................................................................................................................................................... Interconnection .................................................................................................................................................................... Number portability and carrier selection ......................................................................................................................... Local loop unbundling ........................................................................................................................................................ Regulation and the Internet ............................................................................................................................................... CATV development.............................................................................................................................................................. Household expenditures on communication...................................................................................................................

28 29 29 29 30 30 30 30 31

Telecommunication Market Size .................................................................................................................

59

Mobile communications...................................................................................................................................................... International communications............................................................................................................................................ Leased lines ......................................................................................................................................................................... Research and development ...............................................................................................................................................

63 65 67 68

Chapter 1.

Chapter 2.

Chapter 3.

Network Dimensions and Development .....................................................................................................

85

Mobile access ....................................................................................................................................................................... Digitalisation......................................................................................................................................................................... Investment ............................................................................................................................................................................

89 91 91

Chapter 4.

Chapter 5.

Internet and Broadband Infrastructure...................................................................................................... 119

Internet subscribers............................................................................................................................................................. Broadband access ................................................................................................................................................................ Internet hosts........................................................................................................................................................................ Web sites............................................................................................................................................................................... Secure servers ...................................................................................................................................................................... Links to secure servers........................................................................................................................................................ E-commerce access and supply......................................................................................................................................... Web hosting .......................................................................................................................................................................... Domain names...................................................................................................................................................................... Regional development of the Internet.............................................................................................................................. Chapter 6.

120 122 125 125 126 128 130 131 132 135

Main Trends in Pricing................................................................................................................................... 151

Dial-up Internet access pricing .......................................................................................................................................... Internet access pricing time series .................................................................................................................................... DSL pricing............................................................................................................................................................................ Residential and business telecommunication baskets .................................................................................................. Trends in residential and business rates..........................................................................................................................

© OECD 2003

154 154 157 158 158

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OECD Communications Outlook 2003

International rates................................................................................................................................................................ Mobile communications...................................................................................................................................................... Leased lines ......................................................................................................................................................................... Local loop unbundling ........................................................................................................................................................ Chapter 7.

Quality of Service............................................................................................................................................ 191

Connections .......................................................................................................................................................................... Payphones ............................................................................................................................................................................ Network faults and maintenance ....................................................................................................................................... Directory assistance ............................................................................................................................................................ Answer seizure ratios........................................................................................................................................................... Chapter 8.

161 163 164 166

192 193 194 195 195

Employment and Productivity....................................................................................................................... 207

Employment ......................................................................................................................................................................... 208 Productivity........................................................................................................................................................................... 211 Skills and occupational change in telecommunications ................................................................................................. 216 Chapter 9.

Trade in Communication Equipment .......................................................................................................... 227

Exports of communication equipment.............................................................................................................................. Imports of communication equipment ............................................................................................................................. Balance of trade in communication equipment .............................................................................................................. Composition of trade in communication equipment...................................................................................................... Direction of trade in communication equipment ............................................................................................................ Recent trends .......................................................................................................................................................................

228 231 232 234 236 238

Glossary ................................................................................................................................................................................ 251 Annex..................................................................................................................................................................................... 253 List of Boxes 5.1. 5.2. 5.3. 6.1. 8.1. 9.1. 9.2.

Mobile Internet .......................................................................................................................................................... The language of e-commerce ................................................................................................................................... Factors affecting the apparent location of Web content....................................................................................... Local telephony zones in Canada............................................................................................................................ Restructuring: the case of TPSA Poland .................................................................................................................. Notes on trade data................................................................................................................................................... Communication equipment in US merchandise trade, 1999-2001 ......................................................................

120 130 132 153 216 229 236

List of Tables

6

1.1. Major public telecommunication operators and Internet service providers in the OECD area with revenues greater than USD 1 billion, 2001..................................................................................................... 1.2. PTOs having spent more than USD 1 billion on UMTS spectrum fees ............................................................... 2.1. Number of operators in service, 2002 ..................................................................................................................... 2.2. Access line market share of new entrants .............................................................................................................. 2.3. Cable communications.............................................................................................................................................. 2.4. National long distance market shares of new operators ...................................................................................... 2.5. International market share of new market entrants .............................................................................................. 2.6. Cellular mobile competition in the OECD area, 2001 ........................................................................................... 2.7. Government ownership of public telecommunication network operators ........................................................ 2.8. Foreign ownership restrictions in telecommunications........................................................................................ 2.9. Fixed to mobile interconnection ............................................................................................................................. 2.10. Carrier number portability and carrier preselection............................................................................................. 2.11. Local loop unbundling .............................................................................................................................................. 2.12. Treatment of national and international voice telephony services provided over the Internet .................... 2.13. Final consumption household expenditure in the OECD area ........................................................................... 3.1. Telecommunication revenue in the OECD area .................................................................................................... 3.2. Telecommunication revenue as a percentage of GDP.......................................................................................... 3.3. Globalisation of selected telecommunication carrier revenues ......................................................................... 3.4. Mobile telecommunication revenue .......................................................................................................................

21 24 35 36 37 38 39 40 41 45 47 50 52 55 57 70 71 72 74

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Table of Contents

3.5. 3.6. 3.7. 3.8. 3.9. 3.10. 3.11. 3.12. 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. 4.10. 4.11. 4.12. 4.13. 4.14. 4.15. 4.16. 4.17. 4.18. 4.19. 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 5.9. 5.10. 5.11. 5.12. 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. 6.9. 6.10. 6.11. 6.12. 6.13. 6.14. 6.15. 6.16.

Telecommunication revenue ratios ......................................................................................................................... Cellular mobile telecommunication revenue per cellular mobile subscriber................................................... International telecommunication revenue ............................................................................................................. International telecommunication traffic.................................................................................................................. Leased line revenue, selected incumbents/countries.......................................................................................... R&D expenditures for PTOs and telecommunications equipment manufacturers ........................................... United States Patent and Trademark Office (USPTO): Number of patents granted to selected telecommunication operators .................................................................................................................................. Electric communication technique patents granted by the USPTO, filed to the European Patent Office (EPO) and the Japan Patent Office (JPO)...................................................................................................... Telecommunication channels in the OECD area ................................................................................................... Standard analogue telecommunication access lines in the OECD area............................................................. ISDN subscribers in OECD area............................................................................................................................... Residential lines ........................................................................................................................................................ Telecommunication channels per 100 inhabitants in the OECD area................................................................. Cellular mobile subscribers in the OECD area ...................................................................................................... Cellular mobile penetration, 2001 ........................................................................................................................... Mobile prepaid subscriptions.................................................................................................................................. Percentage of population coverage of mobile networks ...................................................................................... Digitalisation in the OECD area ............................................................................................................................... Availability of digital subscriber lines (DSL) in the OECD area .......................................................................... Public telecommunication investment in the OECD area (excluding spectrum fees)...................................... Licensing revenues in the OECD area..................................................................................................................... Telecommunication investment by region ............................................................................................................. Public telecommunication investment as a percentage of revenue ................................................................... Public telecommunication investment as a percentage of gross fixed capital formation (GFCF)................... Public telecommunication investment per access channel ................................................................................. Public telecommunication investment per access path ....................................................................................... Public telecommunication investment per capita................................................................................................. Internet subscribers to fixed networks, 1999-2001 ................................................................................................ Broadband access, 2000-2001................................................................................................................................... Broadband access to end June 2002........................................................................................................................ Leased lines connected to internet, 2000-2001 ..................................................................................................... Internet hosts by domain, 1998-2002 ...................................................................................................................... Web sites (servers) by country, 2000-2002.............................................................................................................. Secure servers in OECD countries, 1998-2002........................................................................................................ References to secure servers by domain, August 2002......................................................................................... References to secure servers by country, August 2002 ......................................................................................... Web pages by domain and country, August 2002 .................................................................................................. Domain name registrations under top level domains, 2000-2002....................................................................... Regional development of the Internet, 2000-2002 ................................................................................................ Pricing structures for residential users in the OECD area, 2002 .......................................................................... OECD Internet access basket for 20 hours at daytime discounted PSTN rates, September 2002 .................. OECD Internet access basket for 20 hours at evening discounted PSTN rates, September 2002 .................. OECD Internet access basket for 40 hours at daytime discounted PSTN rates, September 2002 .................. OECD Internet access basket for 40 hours at evening times discounted PSTN rates, September 2002........ OECD Internet access basket for 20 hours using discounted PSTN rates, 1998-2002....................................... OECD Internet access basket for 40 hours using discounted PSTN rates .......................................................... Internet access by DSL in OECD member countries, September 2002.............................................................. OECD basket of residential telephone charges, August 2002.............................................................................. OECD composite basket of residential telephone charges, August 2002 .......................................................... OECD basket of business telephone charges, August 2002................................................................................. OECD composite basket of business telephone charges, August 2002 ............................................................. OECD time series for telephone charges ............................................................................................................... OECD basket of international telephone charges, August 2002 .......................................................................... OECD basket of low user mobile telephone charges, August 2002 .................................................................... OECD basket of medium user mobile telephone charges, August 2002............................................................

© OECD 2003

75 76 77 78 79 80 82 83 97 98 99 102 103 104 105 106 107 108 109 110 111 113 114 115 116 117 118 137 138 139 140 141 142 143 144 145 146 148 149 168 170 171 172 173 174 175 176 178 179 180 181 182 183 184 185

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OECD Communications Outlook 2003

6.17. 6.18. 6.19. 6.20. 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 8.1. 8.2. 8.3. 8.4. 8.5. 8.6. 8.7. 8.8. 9.1. 9.2. 9.3. 9.4. 9.5. 9.6. 9.7. 9.8. 9.9. 9.10. A.1. A.2. A.3. A.4. A.5. A.6.

OECD basket of high user mobile telephone charges, August 2002................................................................... OECD basket of national leased line charges, August 2002................................................................................. Trends in leased line pricing over different distances, 1992-2002...................................................................... Monthly prices for LLU and retail price for PSTN line rental (as of April 2002)................................................. Network access: waiting time for new connection ................................................................................................. Payphones in the OECD area ................................................................................................................................... Quality of service: payphones.................................................................................................................................. Quality of service: fault incidence ........................................................................................................................... Quality of service: repair time.................................................................................................................................. Directory assistance charges .................................................................................................................................... Answer seizure ratios ................................................................................................................................................ Employment in telecommunications, 1991-2001................................................................................................... Employment in mobile communications, 1995-2001 ............................................................................................ Telecommunications employment as a share of national employment, 1992-2001 ......................................... OECD telecommunications employment and revenue per employee, 1990-2001........................................... Telecommunications revenue per employee, 1991-2001..................................................................................... Mobile employment and productivity indicators, 1999-2001 .............................................................................. PTO labour productivity by company, 1999-2001 .................................................................................................. US telecommunications employment by occupation, 2000, and projected change to 2010 ........................... Communication equipment exports, 1991-2001 .................................................................................................... Communication equipment imports, 1991-2001.................................................................................................... Balance of trade in communication equipment, 1991-2001 ................................................................................. Composition of communication equipment exports, 2001 .................................................................................. Composition of communication equipment imports, 2001.................................................................................. Direction of communication equipment exports, 1991-2002 ............................................................................... Direction of communication equipment exports, 1996-2001 ............................................................................... Source of communication equipment imports, 1991-2002 ................................................................................... Source of communication equipment imports, 1996-2001 ................................................................................... US communication equipment trade, 1999-2001................................................................................................... Average annual exchange rates................................................................................................................................ Purchasing power parities ........................................................................................................................................ Gross domestic product............................................................................................................................................ Total population......................................................................................................................................................... Gross fixed capital formation ................................................................................................................................... Households ................................................................................................................................................................

186 187 188 189 198 199 200 201 202 204 206 218 219 220 221 222 223 224 225 240 241 242 243 244 245 246 247 248 249 254 255 256 257 258 259

List of Figures

8

1.1. 1.2. 1.3. 1.4. 2.1. 2.2. 2.3. 2.4. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 4.1. 4.2. 4.3. 4.4.

Access growth in the OECD area.............................................................................................................................. Competition in fixed network................................................................................................................................... Competition in mobile infrastructure ..................................................................................................................... Telecommunication sector defaults ........................................................................................................................ Changes in the proportion of communication in disposable household income ............................................. Monthly household expenditure on communications.......................................................................................... Trend of harmonised indices of consumer prices (HICP) for communication for the EU-15............................ CPI all items and CPI telephone services ............................................................................................................... Trends in public telecommunications revenue, investment and access paths, 1980-2001 ............................. Telecommunication revenue as a percentage of GDP for total OECD, 1985-2001 ............................................ Public telecommunication revenue per access path, 2000 and 2001 ................................................................. Mobile telecommunication revenue in OECD countries, 2001............................................................................ Public telecommunication revenue per capita, 1991 and 2001 ........................................................................... Cellular mobile telecommunication revenue per cellular mobile subscriber, 1998 and 2001 ........................ Share of mobile revenue in public telecommunication revenue, 1998 and 2001 ............................................. Minutes of outgoing international telecommunication traffic (MiTT), 2001 ....................................................... Access channels per 100 inhabitants in OECD countries, 1992, 1997 and 2001................................................. Mobile subscribers in OECD countries................................................................................................................... Cellular mobile subscribers per 100 inhabitants, 2001......................................................................................... Public telecommunications investment by region, 1990-2001 (excluding spectrum fees) ..............................

13 14 14 16 31 32 33 33 60 61 62 63 64 65 66 67 86 89 90 93

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Table of Contents

4.5. 4.6. 4.7. 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 5.9. 5.10. 5.11. 5.12. 5.13. 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8a. 6.8b. 6.9. 6.10. 6.11. 6.12. 6.13. 7.1. 7.2. 7.3. 8.1. 8.2. 8.3. 8.4. 8.5. 8.6. 8.7. 8.8. 8.9. 8.10. 9.1. 9.2. 9.3. 9.4. 9.5. 9.6. 9.7. 9.8. 9.9. 9.10. 9.11.

Public telecommunication investment as a percentage of PTO revenue and GFCF, 2001............................... Public telecommunication investment per capita................................................................................................. Public telecommunications investment per access path ..................................................................................... Internet subscribers per 100 inhabitants, December 2001 .................................................................................. Broadband access per 100 inhabitants, June 2002 ................................................................................................ Leased line connections per 100 000 inhabitants, December 2001.................................................................... Web sites per 1 000 inhabitants, July 2002 ............................................................................................................. Secure servers per 100 000 inhabitants, July 2002................................................................................................. References to secure servers by domain, August 2002......................................................................................... References to secure servers by country, August 2002 ......................................................................................... References to secure servers by language, August 2002 ...................................................................................... Internet subscribers and secure servers................................................................................................................. Share of Web pages hosted within domestic ISP IP address space, August 2002............................................. Share of Web pages that are gTLDs, August 2002 ................................................................................................. Growth in domain name registrations by domain, 2000-2002.............................................................................. Regional share of routes announced to the Internet, July 2002 ........................................................................... OECD Internet access basket for 40 hours at daytime using discounted PSTN rates, September 2002........ OECD Internet access basket for 40 hours at evening using discounted PSTN rates, September 2002 ....... OECD Internet access basket for 20 hours per month, using discounted PSTN rates, 1998-2002................... OECD residential tariff basket, August 2002 .......................................................................................................... OECD composite basket of residential telephone charges, August 2002 .......................................................... OECD business tariff basket, August 2002.............................................................................................................. OECD composite basket of business telephone charges, August 2002 ............................................................. Time series for residential telephone charges ...................................................................................................... Time series for business telephone charges.......................................................................................................... OECD basket of international telephone charges for business and residential users, August 2000.............. OECD basket of low user mobile telephone charges, August 2002 .................................................................... OECD basket of average user mobile telephone charges, August 2002............................................................. OECD basket of high user mobile telephone charges, August 2002................................................................... Trends in leased line pricing over different distances (2 Mbit/s), 1992-2002 .................................................... Payphones per 100 inhabitants in the OECD area, 1995 and 2001...................................................................... Answer seizure ratios, 2001....................................................................................................................................... Answer seizure ratio, 1990-2001 ............................................................................................................................... OECD telecommunications employment trends, 1989-2001 ............................................................................... US telecommunications employment, January 1992 to July 2002 ........................................................................ US communications equipment manufacturing employment, January 1992 to July 2002 ................................ US telecommunications employment, 1992-2002.................................................................................................. Access paths per employee, 1990-2001 .................................................................................................................. Telecommunications revenue per employee, 2001 .............................................................................................. Mobile subscribers per employee, 2001 ................................................................................................................ Mobile revenue per employee, 2001 ...................................................................................................................... PTO revenue per employee, 2001 ........................................................................................................................... Staff education levels, TPSA Poland........................................................................................................................ Communication equipment and merchandise trade, 1991-2001......................................................................... Communication equipment share of merchandise exports, 2001 ....................................................................... Communication equipment export growth, 1991-2001 ......................................................................................... Communication equipment share of merchandise imports, 2001....................................................................... Communication equipment import growth, 1991-2001......................................................................................... Communication equipment trade surplus/deficit per capita, 2001..................................................................... Composition of communication equipment exports, 2001 .................................................................................. Composition of communication equipment imports, 2001 .................................................................................. Direction of OECD communication equipment exports, growth 1991-2001....................................................... Direction of OECD communication exports, 2001.................................................................................................. Source of OECD communication equipment imports, growth 1991-2001...........................................................

94 95 95 121 123 124 126 127 129 129 130 131 133 133 134 136 155 155 156 158 159 159 160 160 161 162 163 164 165 166 194 196 197 209 210 210 211 212 213 213 214 215 216 228 230 230 231 232 233 234 235 237 238 239

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© OECD 2003

Chapter 1

INTRODUCTION

Abstract. This chapter provides an overview of the 2003 edition of the OECD Communications Outlook. It addresses the issue of policy and regulation, and examines the size and structure of the telecommunications market. It also provides insight into competition within the industry and the financial crisis that plagued it in 2001 and 2002. Finally, it touches upon some of the future challenges the industry will face.

11

© OECD 2003

OECD Communications Outlook 2003

T

his report is the seventh edition of the biennial OECD Communications Outlook. It provides a range of performance indicators for public communication services in the 30 OECD countries. The research has been carried out in the context of the work programme of the OECD’s Committee on Information, Computer and Communications Policy (ICCP) and its Working Party on Telecommunication and Information Services Policies (TISP). The tables presented in this report provide communication indicators in a harmonized format using the most recent data available. For the most part, data are presented on a country by country basis. This task is becoming increasingly difficult, based on traditional information sources, due to the rapid expansion in the number of firms supplying communication services to the public and the increasing participation by service suppliers in foreign markets. This is particularly true for telecommunication operators, once largely confined to national boundaries but increasingly entering each other’s markets. Technological convergence and the ability of firms to supply the same services over different networks are increasingly blurring traditional distinctions between industry segments. To complement the national figures, an extensive range of additional firm-level data is provided for leading service suppliers. In general, data from earlier years are displayed to enable analysis of developments over the past decade and to highlight future trends. Most comparisons of the telecommunication sector are for 2001, but some indicators, including tariff indicators, are provided for 2002. Data for Internet developments are also for 2002. Where countries use a reporting period for financial data which differs from and goes beyond the calendar year, these figures are taken to represent 2001. Policy and regulatory outlook The telecommunications industry has played, over the last decade, an important role in productivity growth and technological diffusion. As the supporting infrastructure for electronic commerce and the growth and diffusion of the Internet, the industry has been a key factor in the new economy and changes in economic structures. At the same time, in 2001 and 2002, the industry has been an important factor in the poor performance of stock markets, job losses, and financial losses. Reasons for these setbacks include exaggerated expectations arising from the “dot.com bubble”, resulting in rapid investment growth and poor management decisions, which led to a number of companies expanding their activities outside their traditional core business. The accumulated large debts of many companies could not be supported during a period of downturn in the market. Although this report mainly provides data up to the end of 2001, the underlying long-term trends of the industry remain propitious. Telecommunications traffic and revenues have grown in most areas, and the available 2002 data, at the time of writing, tend to confirm continued underlying growth in key areas of the industry. The crisis that has affected a number of firms in the industry does not provide any evidence for a reversal of government telecommunication policies or telecommunication regulatory frameworks which emphasize competition. Recent financial problems in the telecommunications sector should not be interpreted as arising from attempts by regulators to enhance competition in the sector and should not be used as a pretext to give more power back to incumbent telecommunication operators, or to lift asymmetric regulations, as argued in some quarters. The setbacks in investment and employment, while important, do not wipe out the increasingly important role the sector is playing in increasing GDP and in the underlying industrial and social fabric of OECD economies. 12

The return to a healthier industry will depend on continued market growth and investment. In turn, this demands that continued efforts be made by regulators to enhance conditions of access. This has © OECD 2003

Introduction

been one of the main preoccupations of OECD regulators in 2000 and 2001. Improving conditions of competition will continue to help the trend in decreasing prices, which has been occurring since the early days of market liberalisation. Policies aimed at facilitating interconnection, including reducing interconnection charges, easing market entry requirements, enhancing access through unbundling and reducing market power of dominant carriers remain important and should continue to be reviewed. The telecommunications market In 2001 the total revenues for telecommunication carriers with headquarters in the OECD area were around USD 878 billion. At the same time the size of the telecommunication services market in the OECD area was more than USD 831.3 billion, just over four-fifths of the world total. The two major drivers of growth continue to be wireless communications and the Internet. Revenues for cellular mobile services reached USD 264.8 billion in 2001. This represented a tenfold increase from a decade earlier and reflected the tremendous expansion of wireless access over that time. The impact of the Internet on growing telecommunication revenues is harder to determine because it cuts across a range of platforms and services. It has undoubtedly created a new revenue stream from Internet subscriptions but has also increased the demand for fixed network access, backbone capacity and leased lines. More recently, revenues for fixed network broadband access and wireless data services have begun to become significant. At the end of 1991 there were only 15 million cellular mobile subscribers in the OECD area. By the end of 2001 there were more than 600 million. The number of Internet users in the early 1990s was negligible. Arguably, as the service had not yet been commercialised, there were no subscribers. By the beginning of 2002, the number of Internet subscribers with access over a variety of platforms was more than 250 million and there were more than half a billion users of these subscriptions. Together with the development of the fixed network, particularly in countries with low penetration rates, the degree of access has expanded enormously in OECD countries (Figure 1.1). In 2001, OECD countries had 1.2 billion fixed and mobile subscriber lines, approximately 62% of the world total.

Figure 1.1. Access growth in the OECD area Broadband Internet subscribers

Narrow-band Internet subscribers (fixed network)

Cellular mobile subscribers

Fixed network channels

Millions of subscribers 1 600

Millions of subscribers 1 600

1 400

1 400

1 200

1 200

1 000

1 000

800

800

600

600

400

400

200

200

0 1992 Source: OECD.

© OECD 2003

1993

1994

1995

1996

1997

1998

1999

2000

0 2001

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OECD Communications Outlook 2003

Telecommunication market structure By 2003 there was only one country with a monopoly for the provision of fixed network services remaining in the OECD area (Figure 1.2). The process of liberalisation has been faster in the wireless sector, where the last monopoly was eliminated in 1998 (Figure 1.3). Figure 1.2.

Competition in fixed network

Open competition

Monopoly

Duopoly

Number of countries 30

Number of countries 30

25

25

20

20

15

15

10

10

5

5

0

0 1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Source: OECD.

Figure 1.3. Competition in mobile infrastructure Four or more operators

Three operators

Monopoly

Duopoly

Number of countries 30

Number of countries 30

25

25

20

20

15

15

10

10

5

5

0

0 1989

14

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: OECD.

© OECD 2003

Introduction

In general, the methodology used in the Communications Outlook shows data on a country by country basis. Data are also included for the leading telecommunication operators in the OECD area on a company by company basis (Table 1.1). These data provide an additional perspective on industry development to complement data presented on a national basis because the increasing international investment by telecommunications operators means that the country by country analysis no longer wholly captures the dimensions of communication markets. These include records of market entry and market exit. In 2001 there were 78 providers of telecommunication and Internet access services with revenues greater than USD 1 billion. This compares with 71 in 2000 and, on a comparable basis, 72 in 1999. A number of mergers have occurred since the previous edition of the Communications Outlook. These include Bell Atlantic and GTE to form Verizon, KDD and DDI to form KDDI and Qwest and US West into Qwest. In other cases, independent firms have been purchased and fully incorporated in the accounts of larger carriers. One example is France Telecom purchasing Orange and Equant. The major forthcoming merger, at the time of writing, is between Telia and Sonera. Apart from the telecommunication carriers, three companies have been added due to their significance in the Internet access market. Two of these companies are headquartered in the United States and one in Japan. In the United States, AOL and Earthlink have Internet access rather than telephony as their primary focus. AOL is part of AOL-Time Warner but only the ISP subscription revenues are shown so as to exclude the group revenues from areas such as motion pictures and publishing. Time Warner Telecom is treated a separate entity. In Japan, Softbank’s BB Technologies launched broadband access in 2001 and then commercial Internet telephony services. By mid-2002, BB Technologies had more than 1 million broadband subscribers. That being said, the majority of Softbank’s revenues were not drawn from telecommunication or Internet access services in 2001. In Europe, Tiscali was the largest Internet service provider (ISP) independent of a telecommunication carrier, but the company did not have revenues above USD 1 billion in 2001. Firms with revenues greater than USD 1 billion that have exited the market since the previous edition of the Communications Outlook include Star Telecommunications and RSL Communications. In addition, Teleglobe, a subsidiary of Bell Canada, applied for bankruptcy in 2002 and sold or closed down most of its foreign operations. Prior to this, Teleglobe had ceased to be a stand-alone company when, in November 2000, BCE acquired all outstanding Teleglobe stock. However, the majority of firms exiting the market completely were those with revenues below USD 1 billion. By 2002 several of the companies with revenues over USD 1 billion had filed for bankruptcy protection (Chapter 11, as regards the United States) while they restructured their financial position. Some of the most notable financial restructuring was being undertaken by Worldcom, NTL, Global Crossing, XO, McLeodUSA, Williams Communications and United Pan-European Communications. However, in most cases these companies had not exited the market and continued to provide services. By the end of 2002, a number had emerged from bankruptcy protection or had their assets purchased by other companies. Companies to have emerged from bankruptcy protection include Covad, Flag Telecom, McLeodUSA, NTL, Williams Communications and 360Networks. One further company which has undergone financial restructuring can be added to this group. In 2000, Energis had more than USD 1 billion in revenue. In July 2002, trading of Energis shares on the London Stock Exchange was suspended and the company withdrew from European operations. Subsequently, the Energis operations in the United Kingdom were sold back into private ownership and continue to provide services. As a privately owned company, financial accounts are no longer published. The undoubted losers from firms exiting the market or defaulting on bonds have been investors. According to data collected by Standard & Poors in 2002, companies in the telecommunications sector defaulted on USD 97 billion (Figure 1.4). This was more than double the amount for all of 2001. In 2002 Worldcom recorded the largest individual default of some USD 31.8 billion. On the other hand, those telecommunication firms with strong balance sheets have been able to purchase assets at very low © OECD 2003

15

OECD Communications Outlook 2003

Figure 1.4. Telecommunication sector defaults Amount defaulted

Number of telecom defaults

Amount defaulted (USD billion) 100

Number of defaults 60

90 50 80 70 40 60 50

30

40 20 30 20 10 10 0

0 1996

1997

1998

1999

2000

2001

2002

Source: OECD and Standard & Poors.

prices in relation to what was originally paid for them. This has been true not only for firms filing for bankruptcy, but also those withdrawing to home markets. The firms purchasing the assets were, generally, those that continued to have stronger balance sheets. In some cases they represent new entrants extending their coverage in regional markets. A noticeable characteristic was that firms with headquarters outside North America have been among the buyers. One reason for this is that North American companies were among the first to expand into global markets. As some of these firms filed for bankruptcy protection (Chapter 11) or withdrew from certain regions their foreign assets became available at very low prices. PSINet, which filed for Chapter 11 in June 2001, provides one example. PSINet’s regional assets were sold separately. Cable & Wireless purchased PSINet’s assets in Japan and CITIC Pacific bought those in Hong Kong, China. At the same time, a group of investors purchased PSINet Europe while one of Hungary’s first Internet service providers, Elender, was bought back by its original owners from bankrupt PSINet. In Canada, PSINet’s assets were acquired by Telus. Cogent, a domestic broadband access provider, purchased PSINet’s assets in the United States.

16

In some cases, telecommunication carriers have acquired assets of firms in financial distress to augment their regional networks. In Europe, Telia purchased 360Networks cable assets in the United Kingdom while the latter was in bankruptcy protection. Telia also purchased KPN Qwest’s assets in France when that company went into liquidation. Indeed, KPN itself purchased the Belgian assets of KPN-Qwest. By way of contrast, relatively few foreign firms have purchased network assets of companies in the United States. A notable exception was the Cable & Wireless purchase of Exodus after the latter filed for bankruptcy protection. Apart from the very competitive availability of backbone capacity in the United States, some foreign firms appeared reluctant to commit as events progressed in 2002. One example was Telmex agreeing to take a stake in XO but subsequently seeking a release from that commitment for the payment of a fee. Moreover, Cable & Wireless and Telia announced that they were scaling back some domestic operations in the United States. © OECD 2003

Introduction

Some of the largest transactions of assets, albeit at very low prices, have been between North American players and those in the Asia-Pacific region. Telstra purchased Level3’s cable assets in Asia by agreeing to meet the ongoing capital and operational expenditure commitments. Global Crossing announced that it has signed an agreement under which Hutchison Telecommunications in Hong Kong (China) and Singapore Technologies Telemedia would invest a modest USD 250 million for a 61.5% majority interest in a newly constituted Global Crossing on its emergence from bankruptcy. This sum was around 2% of the book value of Global Crossing’s total assets before it filed for Chapter 11. In late 2002, China Netcom, China’s second largest fixed network operator, acquired the assets of Asia Global Crossing. Telecommunication crisis Analysts have put forward a number of factors to explain the financial difficulties experienced in 2001 and 2002 by some telecommunication carriers. Previous editions of the Communications Outlook have noted that the corollary of creating frameworks that enable market entry is that market exit is also possible. In some cases, market exit results because of decreasing demand for a product or service. On the whole this is not the case for the telecommunications market. While the telecommunications market grew more slowly in 2001 than in previous years, the overall size of the market expanded. Throughout 2002, the available evidence suggests that demand for telecommunication services did not decline. In some cases, of course, there may be a shift in demand between services. Examples might include DSL or cable modems replacing second residential lines, Internet protocol (IP) telephony substituting for public switched telecommunication network (PSTN) telephony or cellular mobile substituting for some fixed network services. To date, change in telecommunications has occurred at a relatively slow pace compared to what might be expected in the future. The factors that have resulted in market exit or extreme financial distress have not been, in large part, due to the shifting demand between services. One reason for this is that as the changes begin to impact telecommunication carriers, changes in pricing and service strategies have taken place in response to these challenges. Another reason is that many telecommunication carriers operate across all market segments. Accordingly, they may well be providing the services that are substituting for traditional services. A third factor is that the telecommunication sector continues to generate new services. Nonetheless, the longer-term change resulting from technological development is having an impact. If IP networks are less expensive to build and operate than PSTNs, carriers will need to make that transition if they are to be competitive. At the same time liberalisation has curtailed tremendously the monopoly rents extracted from long distance services, international services and leased lines. The transition to lower prices for some telecommunication services and the availability of new services, such as broadband access, are extremely beneficial for users and overall economic development. Liberalisation has, therefore, brought tremendous benefits to OECD countries and telecommunication carriers are adjusting to the new market conditions by increasing efficiency and improving levels of service. Where then do the roots of the financial difficulties faced by some incumbents and many new entrants stem from? If the overall telecommunication market is still growing, why have so many of the new entrants sought bankruptcy protection? At the same time, why are some incumbents announcing losses to their bottom line results for the first time in their recent history? Understanding the root causes of any “financial bubble” is a complex matter. The losses sustained by bond holders or by investors in telecommunication stock no doubt qualify the sector as having experienced a bubble during the late 1990s and that it burst from 2000 onwards. While many factors are involved, the basic premise of the bubble was that the telecommunication market would continue to grow at the very high rates experienced as liberalisation increased across the OECD. While the telecommunications market, including Internet, did continue to grow, it did not do so at the pace projected by many of the business models assembled by new entrants or in the strategic plans of incumbents. Much of the financial community appears to have had an unrealistic understanding of the time it would take new entrants to establish a competitive presence in local access and the ease with © OECD 2003

17

OECD Communications Outlook 2003

which multiple entrants could enter backbone markets. Contributing to this lack of understanding was the lack of reliable data in areas such as Internet traffic growth. Moreover, it now appears that some information was misleading and fraudulent. The result was that the financial community provided capital for unrealistic business models both in terms of entry into new geographical markets and new service markets. In the latter case, this involved providing financing that resulted in very high amounts being paid for universal mobile telecommunication system (UMTS, also referred to as third-generation or 3G) licences. In 2000, various OECD governments received nearly USD 93.5 billion in spectrum revenue compared to little more than USD 1 billion in 1999. In terms of geographical expansion, telecommunication carriers paid very high prices to acquire operators outside their traditional markets. The combination of these factors raised debt levels to record highs for some companies. For some of these companies, higher debt levels could be sustained because of the underlying strength of their core business and their dominant position in home markets. What could not be sustained was the valuation these operators carried in their accounts. Between 1999 and 2000, the total value of intangible assets that telecommunication operators carried on their books increased by around USD 414 billion. At the same time, the value of tangible fixed assets (i.e. property plant and equipment) increased by around USD 150 billion. Many point to overinvestment in facilities. This is true in some segments of the telecommunications market, such as backbone markets, but while overinvestment in facilities undoubtedly occurred the larger impact was the result of “acquisition excess”. As reassessments of the value of the tangible and intangible assets acquired in this period occurred against the prices paid, it was concluded that amounts carried as assets in the accounts of telecommunication carriers no longer equated to their market value. In 2001 the size of the intangible assets was cut by USD 243 billion. The value of fixed assets was reduced by a further USD 63 billion. The reductions were both the result of extraordinary write-downs and market exit. In 2002 this restructuring process was ongoing. Deutsche Telekom, for example, recorded a writedown of USD 33.1 billion for the third quarter of 2002. Although the underlying core business of most incumbent telecommunication carriers and some new entrants were sound, the write-downs in assets value had a negative impact on current levels of profitability. The impact of higher than expected UMTS spectrum licence fees on the financial state of some telecommunication companies was an ongoing debate in 2002. Nine telecommunication players were responsible for USD 84 billion of the total amount paid in UMTS spectrum fees. The largest participant was Vodafone, which paid USD 19.2 billion (Table 1.2). This company was followed by Deutsche Telekom (USD 13.8 billion), BT (USD 13.8 billion), France Telecom (USD 10.1 billion), KPN (USD 7.4 billion) and Hutchison-Whampoa (USD 7.0 billion). The amount Telefonica and Sonera collectively spent was USD 9.4 billion. Telecom Italia’s exposure was relatively modest, compared to the other operators, with that company outlaying USD 2.3 billion for UMTS spectrum in Austria, Greece and Italy. At the end of 2001, there were significant variations in the ratio of amounts spent on UMTS licences for firms spending more than USD 1 billion, relative to their non-current liabilities. On average, expenditure in foreign markets was more than twice that in these companies’ countries of incorporation. There are, of course, a number of exceptions with KT and SK Telecom only purchasing spectrum in their “home markets”. Telecom Italia and Deutsche Telekom also spent more in home markets than in foreign markets. In the case of the other operators, most expenditure on UMTS spectrum was in foreign markets. For some operators, such as Vodafone and Sonera, the amounts paid were more than the total non-current liabilities of those firms at the end of 2001. The relatively high level of UMTS spectrum expenditure to total liabilities was one of the reasons BT and KPN acted ahead of some other carriers in financial restructuring. In other cases the amounts spent on UMTS represent a significant, albeit smaller, proportion in relation to total non-current liabilities.

18

For some of these companies, the UMTS spectrum licence fees closely followed a series of mergers and acquisitions of wireless companies in foreign markets. Cash and the issuance of new shares generally paid for the transactions. The largest such transaction was Vodafone’s acquisition of Mannesmann for USD 128 billion. This deal also included Italy’s Omnitel and the subsequent sale of © OECD 2003

Introduction

Orange. Vodafone also expanded its interests in Ireland, Japan, Mexico, Spain, Switzerland and China. Deutsche Telekom’s expansion in the wireless sector included the acquisition of One-2-One in the United Kingdom for USD 9.7 billion and USD 30 billion for the acquisition of Voicestream and Powertel in the United States. Together with other acquisitions, Deutsche Telekom’s expansion into foreign wireless markets cost more than USD 40 billion. France Telecom’s acquisitions, since the beginning of 2000, amounted to some USD 34.4 billion, of which the various Orange properties represented USD 23.7 billion. The foregoing examples of mergers and acquisitions, mainly focused on wireless markets, draw out the high level of such activity between 1998 and 2001. Other notable transactions across the sector included Worlcom’s acquisition of MCI, the combination of Qwest and US West and Olivetti’s takeover of Telecom Italia. In all these cases, and others, telecommunication carriers subsequently needed to write down the value of the properties they had purchased. In most cases the results represented a loss to shareholders. In other cases, the rash of expansions was still reflected in high levels of debt compared to historical levels. In 2002, action to address this situation was underway with a number of telecommunication carriers selling foreign operations and seeking to reduce their debt. The actions of BT in this regard provide a good example. Recognising the need to put the company on a firmer financial footing and to allow its fixed and wireless operations to focus on their core operations, the company split off mmO2 and sold a number of foreign holdings. This provided evidence that the measures needed to restructure were in the hands of the companies concerned rather than requiring action by governments. Gradual transition or future shock At the close of 2002, the telecommunications sector had experienced two years of slower growth than many had expected at the end of the 1990s. Nevertheless, the data assembled in this edition of the Communications Outlook show that the sector as a whole continued to grow and increase its importance for economic and social development. Throughout 2002, all indications were that the leading players were acting to stabilise their financial position and undergoing the necessary restructuring to compete in the new environment. While basic access to fixed and cellular mobile had stabilised in countries with high penetration rates, the development of new services was making steady progress in an increasing number of countries. The number of broadband subscribers in OECD countries, for example, surpassed 50 million by the end of 2002. At the same, time it was of concern that in some countries service had not yet commenced or that in others prices were far higher than in countries with high growth rates. Those telecommunication carriers taking a proactive role in developing broadband appear to be best placed to be competitive as markets continued to develop following liberalisation. By October 2002, “Yahoo BB!” in Japan was serving more than 1 million subscribers for little more than USD 20 per month. In October 2002, Yahoo BB added more than 250 000 IP telephony subscribers and was headed to more than 1 million telephony customers by the end of the year. Not surprisingly, NTT and KDDI, together with their respective partners, announced that they would also launch IP telephony services. To compete effectively in this market segment, traditional telecommunication carriers will need to adopt radically different pricing structures. These pricing structures are not the transitional change that has typified steadily declining prices. They will entail radical structures that treat the price of call the same whether it is across one city or to another country. Pricing is also likely to undergo significant change in wireless markets. One reason is that operators of UMTS networks will have to find pricing structures that are attractive enough to customers to make them a viable platform for Internet access. They also need to ensure that pricing structures are sufficiently attractive to ensure existing second-generation mobile customers migrate to UMTS. In addition, they face a more competitive market than with the introduction of previous generations of wireless technology. This is because certain fixed wireless services, commonly referred to as wireless local area networks (W-LAN or WiFi) which provide high speed capabilities in more limited locations may become competitive with UMTS. In some OECD countries, the W-LAN or WiFi coverage of the © OECD 2003

19

OECD Communications Outlook 2003

central business districts of some cities and the entirety of some towns and individual locations (e.g. airports, hotels, cafes, train stations and so forth) is rapidly being developed. Although many technological and commercial questions remain to be answered about UMTS, W-LAN or WiFi and other wireless platforms, these are decisions that should be made by markets. The main challenge for OECD governments is to keep markets open such that all players can continue to compete and continue to develop the telecommunications market. Liberalisation has brought tremendous benefits to users and overall growth in the sector over the recent past. The restructuring that was ongoing in some firms during 2002 was the consequence of “irrational exuberance” and in other firms reflected long-term trends that increase efficiency. They were not the result of a slowdown of growth in demand for communications services. With that in mind, OECD governments need to keep markets open if these benefits are to be sustained and if growth is to continue. The key infrastructure issue (for stimulating broadband – fixed and wireless) is ensuring competition in local access markets.

20

© OECD 2003

© OECD 2003

Table 1.1. Major public telecommunication operators and Internet service providers in the OECD area with revenues greater than USD 1 billion, 2001 USD millions Name of PTO

Country

Revenue

Depreciation

Operating income

Net interest paid

Tax

Net income Total assets

Fixed assets

Debt

Capital expenditure

Total access lines

Mobile subscribers

Employees (units)

Personnel costs

Mobile revenue

NTT

Japan

96 121

20 969

7 795

..

-4891

-6683

171 819

138 232

44 751

18 859

61 888 000

42 705 000

213 000

..

42 553

Verizon

United States

67 190

9 332

11 532

3 288

2 176

389

170 795

74 419

45 657

17 400

71 000 000

29 400 000

247 000

..

17 393

AT&T

United States

52 550

6 856

3 754

3 242

-791

-6842

165 282

41 322

40 527

8 388

2 900 000

..

117 800

..

..

SBC Communications

United States

45 908

9 077

10 888

1 599

4 097

7 242

96 322

49 827

17 133

11 189

59 532 000

21 596 000

193 420

..

8 647

Deutsche Telekom

Germany

43 133

13 590

-2232

4 732

721

-3084

114 732

36 161

59 821

9 732

30 300 000

66 900 000

257 058

10 816

13 069

France Telecom

France

38 416

6 170

4 643

3 435

2 618

-7393

113 713

28 329

48 699

8 004

34 200 000

43 184 000

211 554

8 466

11 995

Worldcom

United States

35 179

5 880

3 514

1 400

148

1 501

103 914

38 809

30 038

7 886

1 500 000

..

61 800

..

..

Vodafone (Group)

United Kingdom

33 109

3 916

-17151

1 745

3 493

-23413

236 087

26 871

19 012

6 007

..

101 136 000

67 178

2 893

33 109

BT

United Kingdom

31 616

7 746

-2158

2 288

546

-4186

40 106

23 301

23 543

5 897

29 113 000

..

108 600

6 703

..

Telefonica

Spain

27 726

6 584

4 848

1 436

729

1 881

41 449

57 121

24 725

7 519

44 955 800

16 700 000

161 029

4 813

5 121 9 152

Telecom Italia

Italy

27 516

6 009

5 959

3 531

-654

-1846

55 955

19 426

19 591

7 289

27 353 000

23 946 000

109 956

4 166

Sprint

United States

26 071

4 217

-662

1 181

-624

-1402

45 793

28 977

22 883

9 046

8 200 000

13 600 000

83 700

..

9 725

Bell South

United States

24 130

4 782

6 341

1 315

1 447

2 570

52 046

24 943

15 014

5 125

25 422 000

8 638 000

87 875

..

5 227

KDDI

Japan

23 393

3 489

839

..

..

107

..

..

14 375

3 086

..

16 306 000

9 300

..

17 230

Qwest

United States

18 370

3 994

820

1 442

..

-4023

73 781

29 977

25 003

8 543

..

..

61 000

..

660

Japan Telecom

Japan

14 022

..

733

..

285

-543

15 275

11 690

3 005

3 854

..

12 185 000

3 300

..

11 063

BCE Inc.

Canada

14 007

..

1 110

1 011

1 004

295

35 055

17 161

9 588

4 772

13 339 000

3 460 000

75 000

..

1 032

AT&T Wireless

United States

13 610

2 502

598

386

130

-963

41 722

12 496

6 705

5 205

..

18 047 000

33 000

..

13 610

Korea Telecom

Korea

12 351

3 106

1 505

552

326

862

23 247

17 153

5 045

3 035

21 898 000

9 591 000

48 668

2 293

3 453

Telmex

Mexico

11 881

1 848

4 560

612

1 422

2 515

16 800

12 254

5 595

2 442

13 372 000

..

67 550

381

..

KPN Telecom

Netherlands

11 481

15 908

-12889

1 497

10

-6692

36 716

27 013

15 086

2 633

6 569 000

13 700 000

45 720

1 959

4 172

Telstra

Australia

10 778

1 693

3 221

399

931

1 897

19 480

12 135

5 986

1 809

10 010 000

5 176 000

44 977

1 679

1 680

Cable & Wireless

United Kingdom

8 567

1 571

-1194

-312

201

-7425

17 814

6 807

238

2 743

1 542 000

990 000

10 200

..

362

Swisscom

Switzerland

8 513

1 007

3 260

168

9

2 937

14 408

4 795

4 125

730

..

3 373 000

17 784

1 456

2 357

Nextel

United States

7 689

1 746

-1715

1 196

-135

-2625

22 064

9 274

14 865

3 510

..

8 666 500

13 400

..

7 689

AllTEL

United States

7 599

1 168

1 668

289

704

1 067

12 609

6 301

3 862

1 232

2 612 300

6 683 000

23 955

..

3 640

Cegetel / SFR

France

6 821

..

1 188

..

..

..

..

..

..

..

..

12 600 000

8 400

..

4 414

TDC

Denmark

6 500

1 018

521

182

217

158

11 086

7 868

4 159

1 322

4 740 000

6 316 000

19 130

1 105

2 085

MMo2 (Group)

United Kingdom

6 197

1 109

-1023

36

33

-1241

27 296

5 933

894

1 655

..

17 457 000

14 000

584

6 197

Telia

Sweden

5 537

1 370

529

41

252

181

12 398

9 178

2 722

1 715

6 464 000

4 936 000

17 149

1 110

1 588

AOL (ISP Subscription Revenue)

United States

5 353

..

..

..

..

..

..

..

..

..

..

..

..

..

..

Introduction

21

Revenue

Depreciation

Operating income

Net interest paid

Tax

Net income Total assets

Fixed assets

Debt

Capital expenditure

Total access lines

Mobile subscribers

Employees (units)

Personnel costs

Mobile revenue

Name of PTO

Country

Türk Telekom

Turkey

5 138

307

4 321

3

33

3 788

3 617

1 006

294

361

..

69 971

69 545

766

9

Telenor

Norway

5 121

807

353

100

433

787

9 191

7 241

2 165

1 294

2 292 000

2 237 000

21 000

1 127

1 015

Portugal Telecom

Portugal

5 113

854

1 004

268

171

274

15 747

4 903

4 871

1 175

4 301 000

3 905 000

17 822

465

1 244

Belgacom

Belgium

5 013

886

830

34

328

445

5 626

3 047

424

934

4 879 307

4 147 745

22 296

1 073

1 553

SK Telecom

Korea

4 824

851

1 707

..

..

883

8 232

6 226

2 509

961

..

11 867 000

4 268

170

4 824

Telus Corp.

Canada

4 647

964

540

403

60

293

12 430

8 232

5 581

1 681

4 967

2 578 000

27 765

1 109

..

America Movil

Mexico

4 429

479

650

53

321

-89

9 921

4 280

1 625

2 471

..

16 965 000

14 786

..

4 429

TPSA

Poland

4 236

936

465

349

173

133

8 282

6 573

3 619

1 546

10 069 796

2 785 000

60 120

950

405

NTL

United Kingdom

3 725

4 610

-20298

2 014

-92

-22891

13 026

10 840

..

1 648

2 596 800

..

..

..

..

OTE

Greece

3 643

523

1 007

61

321

512

7 625

6 771

1 738

1 306

5 607 759

2 943 532

18 545

697

581

Telekom Austria

Austria

1 530

3 521

937

139

168

55

49

9 032

4 805

2 930

725

3 166 900

2 849 900

16 586

573

Softbank (BB Technologies) Wind (Infostrada)

Japan

3 335

97

-222

112

69

-732

9 575

234

108

86

..

..

..

..

..

Italy

3 167

500

41

202

..

-698

8 132

2 412

4 732

1 777

..

7 900 000

8 428

..

1 298

Optus

Australia

2 577

466

399

125

9

-208

..

..

456

716

419 000

3 700 000

8 473

232

1 261

Telephone and Data Systems (TDS)

United States

2 559

450

436

89

-45

-168

8 047

2 558

1 575

700

847 000

3 461 000

9 300

..

1 895

Citizens Communications United States

2 457

632

-64

317

-14

-90

10 554

4 512

5 995

531

2 481 400

..

10 121

..

..

Global Crossing

United States (Bermuda)

2 437

1 168

-1972

349

..

-4334

25 511

12 058

7 647

3 282

..

..

..

..

..

Tele2 AB

Sweden

2 428

..

-131

61

..

-188

4 759

913

1 050

208

..

3 710 000

2 172

115

..

Bouygues Telecom

France

2 394

199

47

138

35

-54

4 196

2 134

1 922

356

..

6 500 000

7 132

..

2 394

Broadwing

United States

2 351

441

-171

168

80

-286

6 312

3 060

2 702

649

..

..

..

..

..

Telecom, NZ

New Zealand

2 326

342

589

174

153

-80

3 465

2 028

1 863

327

1 690 000

1 308 000

6 901

252

345

Mobilcom

Germany

2 313

150

-202

296

-38

-184

8 766

385

1 255

825

..

5 010 000

5 681

162

1 714

CenturyTel

United States

2 117

473

558

226

210

343

6 319

3 000

3 050

507

1 797 643

797 340

6 900

..

438

Auna (Amena, Retevision) Sonera

Spain

2 013

..

92

..

..

..

6 607

..

..

..

3 700 000

5 225 000

..

..

..

Finland

1 953

296

849

249

31

56

7 852

6 638

2 918

321

753 140

2 510 028

10 482

457

1 083

Eircom

Ireland

1 927

388

156

11

18

77

1 929

2 121

170

366

1 603 000

..

13 121

..

..

Matav

Hungary

1 912

407

417

46

41

288

3 854

3 398

1 582

446

2 151 346

2 537 800

16 633

188

694

Telewest

United Kingdom

1 826

2 345

-1901

694

7

-2804

7 912

5 070

971

794

2 207 310

..

10 650

372

..

McLeodUSA

United States

1 811

618

-3471

243

..

-3600

4 775

2 683

28

663

98 000

..

8 500

..

..

Turkcell

Turkey

1 781

..

217

..

..

-187

3 582

..

1 413

..

..

12 200 000

..

..

1 781

Aliant Inc.

Canada

1 678

283

275

102

94

78

2 382

1 514

942

300

1 550 000

478 000

10 621

..

161

LG Telecom

Korea

1 644

56

286

16

4

120

2 143

1 574

93

..

..

8 000 000

1 335

..

1 644

Level3

United States

1 533

1 122

-5448

485

..

-4978

9 316

6 890

7 318

2 325

..

..

3 178

..

..

OECD Communications Outlook 2003

22

Table 1.1. Major public telecommunication operators and Internet service providers in the OECD area with revenues greater than USD 1 billion, 2001 (continued) USD millions

© OECD 2003

100.0

BT (MMo2)

100.0

UK

47 928

28 981

7 626

5 841

45.5

15.9

20.2

© OECD 2003

Total Australia Austria Belgium France Germany Greece Ireland Italy Netherlands New Zealand Poland Portugal Spain Switzerland Sweden Total Austria Czech Poland United Kingdom Total France Germany Ireland Netherlands

Vodafone Pacific Vodafone AG Belgacom Mobile SFR Vodafone D2 Panfon Vodafone Vodafone Ireland Omnitel Vodafone Libertel Vodafone Polkomtel Telecel Vodafone Airtel Swisscom Europolitan

100.0 99.6 25.0 31.9 100.0 51.9 100.0 76.8 70.0 100.0 19.6 61.4 93.8 25.0 74.4

T-Mobile Austria RadioMobil PTC T-Mobile UK

100.0 60.8 45.0 100.0

SFR Viag Interkom O2 Telfort

20.8 100.0 100.0 100.0

11 479 131 101 34 176 7 576 157 102 2 186 677 12 114 89 117 7 0 6 273 153 56 261 5 803 8 039 115 7 435 102 387

Ratio of spectrum fee to non-current liablities (%)

Spectrum fee

8 643

Ratio of spectrum fee to non-current liablities (%)

DT Germany (T-Mobile Deutschland)

19 012

Company

Spectrum fee

100.0

Country

Total

% of ownership share

United Kingdom

Ratio of spectrum fee to non-current liablities (%)

Vodafone

Spectrum fee

Country

In other OECD countries

Non-current liabilities

Name of PTO

% of ownership share of mobile company

In country of incorporation

60.4

20 123

105.8

13.1

13 899

29.0

27.7

13 879

47.9

OECD Communications Outlook 2003

24

Table 1.2. PTOs having spent more than USD 1 billion on UMTS spectrum fees USD millions

© OECD 2003

Table 1.2. PTOs having spent more than USD 1 billion on UMTS spectrum fees (continued) USD millions

74.6

13 342

16 566

635

19

4.8

0.1

Total Austria Belgium Denmark Germany Italy Netherlands Poland Portugal Sweden Switzerland United Kingdom Total Belgium Germany United Kingdom Total Australia Austria Denmark Italy New Zealand Sweden United Kingdom

Connect Austria Mobistar Orange A/S MobilCom Wind Dutchtone PTK CenterTel Optimus Orange Sverige Orange Com Orange 3G Lmt

17.5 50.8 53.6 28.3 26.6 100.0 34.0 22.0 98.0 99.8 100.0

KPN Orange Belgium E-plus Hutchison 3G UK

100.0 77.5 15.0

Hutchison Telecom Australia Hutchison Austria Hi3G Access Hutchison 3G Italia TCNZ Hi3G Access Hutchison 3G UK

57.3 100.0 60.0 88.2 19.9 60.0 65.0

9 668 19 134 114 2 115 577 389 197 20 0 31 6 071 6 921 134 5 834 953 6 993 58 124 114 2 563 3 0 4 131

Ratio of spectrum fee to non-current liablities (%)

Hutchison Hong Kong Whampoa (China) (Hutchison 3G Hong Kong)

85.0

1.0

Spectrum fee

Netherlands

553

Ratio of spectrum fee to non-current liablities (%)

KPN (KPN Mobile)

56 434

Company

Spectrum fee

99.9

Country

Total

% of ownership share

France

Ratio of spectrum fee to non-current liablities (%)

FT (Orange)

In other OECD countries Spectrum fee

Country

Non-current liabilities

Name of PTO

% of ownership share of mobile company

In country of incorporation

17.1

10 221

18.1

51.9

7 556

56.6

42.2

7 012

42.3

Introduction

25

Telefónica Spain (Telefónica Móviles España)

100.0

Sonera

100.0

Finland

Telecom Italia Italy (Telecom Italia Mobile)

54.8

Korea Telecom Korea SK Telecom Korea

100.0 100.0

Total of above Note: Exchange rates used are for 2001. Source: OECD.

24 726

1 924

33 471

117

0

2 158

0.5

0.0

6.4

12 374 2 663

1 007 1 007

8.1 37.8

257 419

27 605

10.7

Total Austria Germany Italy Switzerland Total Germany Italy Spain Norway Total Greece Austria Total Total

3G Mobile Group 3G IPSE 2000 3G Mobile

100.0 57.2 45.6 100.0

Group 3G IPSE 2000 Xfera Mòviles Broadband Mobile

42.8 12.6 14.3 50.0

Stet Hellas Mobilkom

64.0 14.8

5 791 104 4 326 1 331 29 3 540 3 238 275 17 11 155 132 23 0 0 58 859

Ratio of spectrum fee to non-current liablities (%)

Spectrum fee

Ratio of spectrum fee to non-current liablities (%)

Company

Spectrum fee

Country

Total

% of ownership share

Ratio of spectrum fee to non-current liablities (%)

In other OECD countries Spectrum fee

Country

Non-current liabilities

Name of PTO

% of ownership share of mobile company

In country of incorporation

23.4

5 908

23.9

184.0

3 540

184.0

0.5

2 313

6.9

0.0 0.0

1 007 1 007

8.1 37.8

22.9

86 464

33.6

OECD Communications Outlook 2003

26

Table 1.2. PTOs having spent more than USD 1 billion on UMTS spectrum fees (continued) USD millions

© OECD 2003

Chapter 2

RECENT COMMUNICATION POLICY DEVELOPMENTS

Abstract. The telecommunications industry has played an important role in productivity growth and technological diffusion over the last decade. As the supporting infrastructure for electronic commerce and the growth and diffusion of the Internet, the industry has been a key factor in the new economy and changes in economic structures. This chapter examines trends in competition, regulatory safeguards, foreign ownership, interconnection, portability and carrier selection, local loop unbundling, Internet regulation and CATV. Household expenditure on communication is also discussed.

27

© OECD 2003

OECD Communications Outlook 2003

T

he telecommunications industry has played an important role in productivity growth and technological diffusion over the last decade. As the supporting infrastructure for electronic commerce and the growth and diffusion of the Internet, the industry has been a key factor in the new economy and changes in economic structures. At the same time, over the last year, the industry has been an important factor in the poor performance of stock markets, job losses and financial losses. Some of the reasons for these setbacks have been noted in Chapter 1. The return to a healthier industry will depend on continued market growth and investment. In turn, this demands that continued efforts be made by telecommunication regulators to enhance conditions of market access. This has been one of the main preoccupations of OECD country regulators in 2000 and 2001. Improving conditions of competition will continue to help to maintain the trend in decreasing prices, which has been occurring since the early days of market liberalisation. Policies aimed at facilitating interconnection, including reducing interconnection charges, easing market entry requirements, enhancing access through unbundling and reducing market power of dominant carriers remain important. Since the last Communications Outlook, new service growth has occurred mainly in broadband networks and services, and new services have emerged in the form of wireless local area networks. These wireless local area networks (commonly referred to as W-LAN or WiFi) are viewed as having important consequences in enhancing the availability of broadband. They are also viewed as potentially competitive, as well as complementary, to high-speed mobile networks. Existing mobile services have reached a level of maturity in a number of OECD countries and these second-generation (2G) networks are beginning to undergo transformation to third-generation (3G) mobile networks based on universal mobile telecommunications system (UMTS) standards. It is too early to determine the types of issues which may be raised by 3G development, but a fallout of the spectrum licensing process may be to focus more attention on spectrum allocation issues including resale of spectrum. This may help in alleviating pressure on firms in several OECD countries that may have exaggerated the economic value of 3G spectrum and consequently bid too high. For broadband, the implementation of unbundling policies which took place in many OECD countries during 2000-01 was an important regulatory initiative to support this new technology. In a number of countries, the implementation of unbundling, including collocation, and pricing issues related to unbundling will continue to be a priority over the next several years. Trends in competition At the beginning of 2003 only one OECD country, Turkey, still has a monopoly telecommunication market structure. Turkey has been preparing for competition as of 1 January 2004 and has begun to put in place the necessary regulatory framework to support a competitive market, including the creation of an independent regulator. This section examines market share, which is only one of the indicators of competition.

28

As Table 2.1 indicates, there are a large number of market entrants in many OECD countries. This number has expanded for most countries since the last Communications Outlook. Of particular note is the expansion in wireless local loop entrants (the data include narrowband and broadband operators) and the number of licensed 3G operators, which are not yet operational. Despite the many fixed public switched telecommunication network (PSTN) operators, facilities-based competition, as measured by new entrant’s share of access lines, has been slow to develop (Table 2.2). The United Kingdom and the United States, both early starters in introducing telecommunications competition, are ahead of most other OECD countries in the development of PSTN facilities-based competition with the market share © OECD 2003

Recent Communication Policy Developments

of access lines by new entrants at 19.8% in the United Kingdom and 10% in the United States. Other countries where facilities-based competition has made good progress are Denmark and the Netherlands. One of the main reasons for the success of the United Kingdom and the United States in facilities competition is the development of telephony services provided by cable networks (Table 2.3). Just over two-thirds of CATV-based telephony subscribers in the OECD area are in the United Kingdom. Other countries, such as Spain, where new entrants increased their share of access lines from just over 2% in 2000 to over 5% in 2001, have also benefited from telephony provided by cable networks. Although good comparable data across the OECD are not available to measure market share in terms of traffic (minutes), for those countries where such data are published it is clear that incumbents have been losing market share to new entrants as a result of carrier selection and pre-selection. For example, in Italy, where new entrants have just under 1% of access lines, they have 13% of local traffic minutes. In contrast to local access, the development of competition in the national and international long distance markets has been much more rapid across the OECD (Tables 2.4 and 2.5). Competition has been helped by the implementation of carrier selection and pre-selection in the last several years in many OECD countries. Mobile markets, as this report shows, have developed rapidly across the OECD area. Market shares are relatively better distributed across operators than is the case for PSTN services (Table 2.6), and since the previous Communications Outlook, incumbent cellular operators have in general lost some market share. The slowdown in growth of cellular mobile in a number of markets where penetration is close to saturation can be expected to result in more price competition among the market players. The challenge for the mobile sector is to make a successful transition to 3G services. This will require attractive pricing to induce customers to migrate from 2G, as well as attractive content packages. Regulatory safeguards In the previous Communications Outlook it was noted that that the speed of privatisation has been relatively slow. It continued to be slow through 2001-02. Poor stock market performance was a major reason for this. Two OECD countries (Luxembourg and Turkey) still have 100% ownership of the incumbent operator (Table 2.7) and although in a number of cases the government’s share in the incumbent has declined below the 50% level (Austria, Germany, Greece, Japan, Korea), commitments to further privatisation were not adhered to in most cases. The tendency of some governments to intervene in assisting their state-owned carriers that have accumulated large debts has again raised the issue of privatisation in order to avoid conflict of interest between regulation and ownership, and to ensure a level playing field for new entrants. A number of OECD countries still have laws requiring the state to maintain majority ownership (France, Norway, Switzerland). Foreign ownership Sixteen OECD countries report that they have no foreign ownership restrictions. Among countries which maintain restrictions on foreign ownership, some of these restrictions only apply to the incumbent public telecommunications operator (PTO) (Table 2.8). Canada, which has relatively extensive foreign ownership restrictions compared to most OECD countries, announced that it would be reviewing these restrictions. Several OECD countries maintain a “golden share” or some type of control, which is usually aimed at ensuring that the dominant telecommunication operator does not come under the control of a single investor (domestic or foreign). Interconnection Interconnection remains an important issue preoccupying regulators. The last several years have seen increased concern with regard to fixed to mobile interconnection where mobile operators terminating calls are viewed as having a bottleneck position. In a number of OECD countries rates for terminating calls on mobile networks have steadily decreased in the last several years. © OECD 2003

29

OECD Communications Outlook 2003

However, a number of initiatives have been taken by regulators to put further pressure on mobile termination charges. Within the European Union, the designation of mobile operators as having significant market power in the interconnection market has led to the imposition of cost-oriented termination charges which are applied on a non-discriminatory basis in a number of countries. Operators in some cases are required to publish their termination rates and some countries have intervened directly to set maximum termination prices, impose price caps or impose reductions on these charges (Table 2.9). Number portability and carrier selection The implementation of carrier number portability has improved considerably over the last several years. Mexico is the only country having opened its market to competition that has yet to introduce number portability. Twelve OECD countries have now implemented mobile number portability (Table 2.10) and a number of others plan to do so over the next few years. Some countries are planning to introduce mobile number portability between 2G and 3G mobile services. The implementation of carrier selection and preselection has also been implemented in the majority of OECD countries for all geographic calls. However, in countries such as Australia, Finland, Germany, Hungary, Korea, Mexico, New Zealand and Poland, there is no carrier selection for local calls. Local loop unbundling Between 2000 and 2002, local loop unbundling, including the details of its implementation, was a key regulatory issue for many OECD countries (Table 2.11). In several cases, initial decisions on unbundling were extended by imposing the requirement for sub-loop unbundling and bitstream access. A number of countries have also begun to use the long-run incremental cost method to set prices for unbundled loops. In view of the difficulty in implementing frameworks for unbundling, which had to encompass collocation principles as well, it is not surprising that there has been a slow take-up of unbundled loops. As is evident from Table 2.11, countries with an early history of unbundling have a much higher take-up of unbundled loops. The rapid increase in unbundling in Japan is noteworthy, reflecting the rapid demand for unbundled loops by new entrants to offer digital subscriber line (DSL) services. Regulation and the Internet There are an increasing number of regulators who have now taken the position that Voice over Internet Protocol (VoIP) services would be treated in the same way as voice service offered to the public over circuit-switched networks and made subject to the same conditions and obligations as these PSTN services (Table 2.12). Several countries, however, still state that they would consider these services as value-added network services not subject to the obligations of licensed telecommunication carriers. In Japan, where several Internet service providers (ISPs) have been providing VoIP services, broadband subscribers can call toll-free to subscribers with the same ISP and can call PSTN subscribers at flat-rate or low charges. Providers are expanding toll-free alliances and this is resulting in an increase in users. CATV development

30

As noted above, cable networks are providing some competition to traditional PSTN carriers. At the end of 2001 there were 152 million cable television subscribers (Table 2.3) in the OECD area and the percentage of homes passed was 51% on average. However, the development of cable communications networks varies significantly across the OECD. Greece, for example, has no CATV infrastructure, while in Turkey and Australia the percentage of homes passed by cable is low. On the other hand, Belgium has complete national coverage of cable networks, and in some countries more than four-fifths of homes are passed by cable networks (97% in the United States, 90% in Luxembourg, 82% in Germany and Portugal). Structural separation of cable TV activities from incumbent PSTN operators may help in growing the cable industry as well as providing alternate infrastructure competition to the PSTN. © OECD 2003

Recent Communication Policy Developments

Household expenditures on communication Access to communication services has grown significantly from 1990 through 2001. This reflects wider geographical coverage and the advent of new means of communication and services. The increased take-up in access also reflects the fact that services have become more affordable and pricing structures have been tailored to better suit different types of customers. In what manner is this reflected in the household consumption patterns of OECD member countries? One database providing a relatively long time series is the Statistics of National Accounts (SNA) database. On the other hand, it is not easy to harmonise the available indicators to evaluate the household expenditures for the greatest number of OECD member countries. Many national surveys are carried out on this subject, but because they are based on individual methodologies, indicators and years of reference vary across OECD countries. “Household expenditures on communication” from the SNA database is the best available source to evaluate the overall trend of expenditure on communication in comparison to the other consumption sectors within OECD member countries. However, two disadvantages must be noted. First, the “communication” indicator of the SNA database consists of telecommunication equipment and services as well as postal services. It is not possible to disaggregate these data. A second disadvantage is that, at the time of writing, year 2001 data were not yet available. Bearing those two caveats in mind some interesting trends are evident. Figure 2.1 shows the evolution of all consumption sectors in relation to available household income. The communication sector shows significant growth since the beginning of the decade. Unlike the other sectors, this growth began to accelerate in 1995. This can be explained by the substantial development of the Internet and mobile telephone services from this period onwards as well as increasing impact of liberalisation on traditional services.

Figure 2.1.

Changes in the proportion of communication in disposable household income

Communications* Recreation and culture

Health Transport

Households equipment

Clothing and footwear

Education Restaurants and hotels

Water, electricity and gas Alcohol, tobacco and narcotics Food

Index 1990 = 100 160

Index 1990 = 100 160

150

150

140

140

130

130

120

120

110

110

100

100

90

90

80

80

70

70 60

60 1990

1991

1992

1993

1994

1995

1996

1997

* Communications includes telecommunication equipment and services, and postal services. Note: Hungary, Norway, Slovak Republic, Switzerland and Turkey are not included in this index. Source: OECD, SNA database.

© OECD 2003

1998

1999

2000

31

OECD Communications Outlook 2003

The percentage of final consumption expenditure that households allocate to communication increased from an average of 1.6% to 2.3% between 1991 and 2000 (Table 2.13). This represents a supplementary annual spending of USD 399 (current dollars) per household from 1991 to 2000. The annual expenditures on communication increased from USD 534 in 1991 to USD 933 in 2000. This constant increase of 65% between 1990 and 2000 was the most significant of all consumption sectors. Because the SNA data do not provide the opportunity to disaggregate between telecommunication equipment and services and postal services, further examination was undertaken of national surveys to indicate the proportion between these three elements. Within countries which provide surveys with enough detail in order to evaluate shares of household expenditures, it can be observed that on average, postal services make up 2% of household budgets for all communications. By way of contrast, telecommunications equipment made up 8% and telecommunications services make up 90% of the total for communications. These proportions tended to remain relatively stable during the short period of time for which data are available. Figure 2.2, which was created from different national surveys, shows that monthly spending on communication, for most countries, falls between USD 40, based on purchasing power parity (PPP), to USD 106, for an average value of USD 62.50. This amount represents approximately 2.25% of total household spending. As noted, this proportion has tended to grow in recent years. This figure shows the household expenditures for the last available year in national surveys and gives, where available, the disaggregation between telecommunication equipment and telecommunication services and postal services. Figure 2.3 shows the annual harmonised index of consumer prices for the 15 countries of the European Union. It can be observed in this figure that prices for telecommunication equipment followed by telecommunication services declined significantly over the last five years. In comparison, the index for “all items” increased for the same period. From this we can conclude that telecommunication is tending to be more affordable for consumers and that the increase in consumption is due in part to decreasing prices for some services or the substitution of new services with lower prices for traditional services.

Figure 2.2. Monthly household expenditure on communications Post

Equipment

Total USD PPP 160

140

140

120

120

100

100

60

60

40

40

20

20

0

0

tra

Au s

Ita

Av lia er ag e Ire la n Be d lg iu Po m r tu ga l Ja pa n Fr an ce N or w a G er y m an D en y m ar k Sp ai n C ze Au st ch R r ia ep ub lic

80

ly

80

Sw itz er la nd Ko re a Ic el N an et d he Lu rlan d xe m s bo ur g U Can ni te ad d a St at es Fi nl an U G d ni re te e d Ki ce ng do m

32

Service

USD PPP 160

Note: The figure is not harmonized. Values are for the last available year: Australia (1999), Austria (2000), Belgium (2001), Canada (2000), Czech Republic (2001), Denmark (1999), Finland (2001), France (2001), Germany (1998), Greece (1999), Iceland (1999), Ireland (2001), Italy (2001), Japan (1999), Korea (2001), Luxembourg (2000), Netherlands (2000), Norway (2000), Portugal (1999), Spain (1999), Switzerland (1998), United Kingdom (2001), United States (2000). Source: National surveys.

© OECD 2003

Recent Communication Policy Developments

Figure 2.3.

Trend of harmonised indices of consumer prices (HICP) for communication for the EU-15 All items

Communication

Telephone and telefax services

Telephone and telefax equipment

Index 1996 = 100 115

Index 1996 = 100 115

110

110

105

105

100

100

95

95

90

90

85

85

80

80

75

75 70

70 1996

1997

1998

1999

2000

2001

Source: Eurostat.

Figure 2.4. CPI all items and CPI telephone services CPI all items

CPI telephone services

1982-1984 = 100 200

1982-1984 = 100 200

180

180

160

160

140

140

120

120

100

100

80

80

60

60

40

40

20

20

0 1921

1926

1931

1936

1941

1946

1951

1956

1961

1966

1971

1976

1981

1986

1991

1996

0 2001

Source: Bureau of Labor Statistics.

In the United States, the Bureau of Labor Statistics (BLS) collects a variety of information on telephone service as part of three separate programmes – the Consumer Price Index (CPI), the Producer Price Index (PPI), and the Consumer Expenditure Survey. A CPI for telephone services was first published in 1935. As liberalisation was introduced in the United States much earlier than in most other OECD countries, it is useful to examine the trend over a much longer time period. It is evident that from the mid-1980s, and the landmark divestiture of AT&T, telephone prices have tended to increase at a slower pace than most other prices. Figure 2.4 shows the levels of the overall CPI and the CPI for telephone services over time. © OECD 2003

33

OECD Communications Outlook 2003

In the United States, the CPI of telephone services is based on a “market basket” intended to represent the telephone-related expenditures of a typical urban household. It includes both local and long distance services. For 2001, the United States’ overall level of prices (measured by the CPI for all items) rose by 1.5%. The CPI for telephone services rose by 1.3% during 2001. The CPI for telephone services is composed of three subindices. During 2001, the local service component (including subscriber line charges) rose by 4.5%, while the price index for interstate long distance calls fell by 2.0%, and the price index for intra-state long distance calls fell by 1.7%.

34

© OECD 2003

Recent Communication Policy Developments

Table 2.1. Number of operators in service, 2002 Fixed PSTN (local, national and international)2

Network infrastructure capacity (only includes companies not licensed to provide voice services)

Cellular mobile

1

Wireless local loop (fixed wireless)

IMT-2000 operators (i.e. UMTS/ 3rd generation)

Australia

89

4

5

6

Austria

67

31

4

2

6

Belgium

22

17

3

Canada

75

8

25

Czech Republic

23

27

3

5

2

Denmark

15

15

4

5

4

Finland

85

66

4

4

France3

69

30

7

6

3 6

Germany

184

389

4

18

Greece

19

5

4

7

3

Hungary

10

62

3

0

0

Iceland

3

4

3

Ireland

0

86

..

3

6

3

Italy

206

65

4

73

5

Japan

359

32

26

15

12

Korea

4

14

3

1

3

Luxembourg

25

15

2

4

3

Mexico

37

10

4

Netherlands

26

6

New Zealand

11

2

3

3

180

3

Norway

43

Poland

56

Portugal

42

19

3

9

4

1

35

2

3

3

3

6

4

146

117

63

3

4

52

129

3

34

4

3

5

Slovak Republic Spain Sweden Switzerland Turkey United Kingdom

37

5 4

50

1 225

2

3

4 3

4

2 222 420 200+ United States4 1. As licensing practices differ across OECD countries, it is difficult to compare the number of operators. In several countries, licences do not differentiate between local, national and international PSTN, and some licences may be regional. Some countries licence services rather than networks. Resellers are not included. In a number of OECD countries, analogue mobile, which is being phased out, is a monopoly. 2. Some countries have included companies providing PSTN via carrier selection in data on fixed PSTN. 3. France has awarded two fixed wireless access (FWA) licenses in each of the country’s 22 regions. Only licences for continental France are included. 4. 93% of the US population has access to at least three competitors in their market and 33% has access to six or more. Source: OECD.

35

© OECD 2003

OECD Communications Outlook 2003

Table 2.2. Access line market share of new entrants Percentage of access lines

Australia

1997

1998

1999

2000

2001

0.41

1.04

3.97

6

7

0.2

1.8

4

7.1

0

0

0.1

0.1

0.5

1.6

2.6

3.4

3.2

0.3

0.34

0.46

0.49

0

0.89

0.37

18

12

0.38

0.46

5.5

4.6

4.9 0.5

Austria Belgium Canada Czech Republic Denmark Finland France

0

0

0.5

0.5

1

1.7

3

Greece

0

0

0

0

Hungary

0

0

23

21

Iceland

0

0

0

0

Ireland

0

2.4

0

0

Italy

0

0

0.4

0.98

1

1.3

Korea

0

0.3

1.52

1.5

Luxembourg

0

0

0.77

0.89

2

Germany

Japan

Mexico Netherlands New Zealand

0.06

0

0.4

0.1

0.1

3 15

2

3.5

3

3.7

Norway

0

0.4

0.14

0.28

Poland

3.7

5.3

6

0

0

Portugal Slovak Republic

0

Spain

0.5

0

2.3

5.2

Sweden

0.1

0.1

Switzerland

0.1

Turkey United Kingdom United States Source: OECD.

1.06

1.7

8 2.2

0

0

0

14.3

15.4

19.2

19.8

3.05

4.3

7.7

10.2

36

© OECD 2003

© OECD 2003

Table 2.3. Cable communications Percentage of homes passed by a cable television network

Number of cable television subscribers 199713 Australia Austria

199813

199913

2000

199913

2001 1

1

2000

2001

Number of subscribers to telephony services provided by cable networks 2000 2001

760 000

907 000

1 171 000

684 000

760 000

..

19

19

..

..

1 065 000

1 100 000

1 100 000

1 200 000

1 250 000

53

53

53

..

142 600 209 378

Belgium

3 686 001

3 725 191

3 751 795

3 788 650

3 814 949

100

100

100

152 539

Canada2

7 946 000

7 994 000

8 041 000

7 977 000

7 868 000

90

90

90

..

..

512 076

792 372

923 837

955 0003

956 0004

60

61

62

0

0 0

Czech Republic

1 000 000

1 050 000

1 350 000

1 040 598

1 078 483

70

701

701

0

Finland

875 000

906 000

933 000

950 000

1 000 000

63

58

59

0

0

France

2 136 000

2 392 000

2 662 000

3 055 400

3 375 200

32

34.51

34.51

40 300

62 000

18 020 000

18 650 000

20 400 000

21 100 000

21 800 000

86

81.9

82.6

Denmark

Germany Greece Hungary

14

20 000

14

20 000

0

0

0

0

0

0

0

0

0

0

1 490 000

1 520 000

1 543 000

1 458 000

1 560 0007

66

53.8

567

0

0 ..

Iceland

0

0

0

4 000

5 000

..

33

35

..

Ireland

430 000

535 000

596 000

630 000

613 000

50

76.14

77.69

..

..

44 200

61 000

82 000

50 000

10

5

0

1.4

8

0

0

Japan

6 719 744

7 936 093

9 470 882

10 480 000

5

20

21.8

27.1

6

..

..

Korea

6 678 300

6 423 538

7 041 993

8 402 584

10 831 666

48

56.2

71

..

..

..

..

115 000

120 000

121 000

73

75

75

0

0

Mexico

1 383 047

1 614 887

1 959 381

2 281 679

2 514 150

32

32

32

0

0

Netherlands

5 800 000

5 900 000

6 000 000

6 200 0003

6 200 0004

94

94

94

..

.. ..

Italy

Luxembourg

9 5

120 000

13 030 000

..

6 100

16 723

21 000

26 000

11

6.7

7.3

9.7

..

Norway

705 125

774 607

788 722

824 116

840 097

47

47

47

..

..

Poland

3 037 000

3 172 000

3 636 000

3 590 000

4 300 000

..

..

30

..

22 350 58 197

New Zealand

383 000

596 000

760 000

925 000

1 119 000

47

54

60

1 550

Slovak Republic

550 000

616 000

650 000

726 000

724 000

36.6

40.6

35.2

..

..

4 500

12 500

156 000

341 000

553 179

8

18.8

28.5

312 134

661 485

Sweden

1 930 000

2 000 000

2 000 000

2 155 800

2 110 000

65

65

65

..

..

Switzerland

2 516 803

2 550 291

2 585 814

2 628 639

2 684 016

73

73.5

75

0

0

511 706

611 057

750 290

884 574

908 662

..

6.15

13

..

..

Spain

Turkey United Kingdom

1 900 000

2 374 000

2 826 000

3 562 000

3 618 000

51

50

50

5 298 000

5 408 000

United States

64 900 000

66 100 000

66 700 000

68 500 000

69 000 00012

96

97

97.112

900 000

1 500 000

OECD

134 983 502

140 319 546

148 010 437

154 535 040

162 780 402

55.7

56.2

58.7

6 724 523

8 084 010

Notes: 1. Approximations. 2. From Statistics Canada. 3. Data from ITU. 4. Data from previous year. 5. Number of households. 6. Percentage of total number of households as of 2000. 7. Estimate. Statistical data for this year has not been compiled. 8. At the end of 2001 Fastweb was available in 36 000 buildings, corresponding to 319 000 or 1.4% of Italian households. 9. Approximation for Stream TV. 10. About 80 000 (Stream TV). In addition, the 40 000 subscribers (4th quarter 2001) to Fastweb, the main Italian fibre-to-the home provider, can access a selection of the state-owned TV company RAI’s channels, D+ (satellite TV operator) and Stream TV (satellite and cable TV operator). 11. For September 2001. 12. For June 2001. 13. Data from Chapter 6 of the OECD Communications Outlook 2001. (Source: OECD, ITU, OBS.) 14. Lower than 20 000. Source: OECD.

37

Recent Communication Policy Developments

Portugal

OECD Communications Outlook 2003

Table 2.4. National long distance market shares of new operators Share of switched minutes, percentages

Australia

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

0.0

0.5

2.0

7.6

11.7

13.9

17.3

15.0

16.4

16.0

29.0

..

15.0

40.0

54.7

Austria Belgium Canada

5.0

7.0

14.0

18.0

..

..

..

Czech Republic Denmark Finland

5.5

54.0

60.0

2001

..

..

..

15.3

26.1

27.9

37.4

35.8

0.0

0.9

2.75

25.0

0.0

5.0

10.0

38.0

37.0

36.0

60.1

59.6

63.0

62.0

63.0

63.0 21.0

France Germany1 Greece

5.0

20.0

13.0

30.0

40.0

34.0

40.0

0.0

0.0

0.0

1.75

Hungary

0.0

0.0

0.0

0.0

Iceland

0.0

4.0

5.0

8.0

Ireland

0.0

..

..

..

Italy

0.0

15.0

16.4

24.7

Japan

22.4

26.8

29.1

31.3

31.9

35.7

40.6

..

..

57.2

..

0.0

9.0

8.9

10.0

15.8

15.4

..

..

..

..

0.0

18.8

..

24.0

26.8

32.0

11.0

16.0

21.0

24.0

..

25.0

25.0

..

..

..

Norway2

3.0

13.0

21.0

24.0

Poland

0.0

0.0

3.3

27.0

Portugal3

0.0

0.0

12.0

9.4

Korea Luxembourg Mexico Netherlands New Zealand

12.0

18.0

19.0

21.0

22.0

Slovak Republic Spain

0.0

0.0

14

18.1 31

1.0

14.3

..

14.0

23

5.6

18.6

29.4

..

0.0

0.0

0.0

33.4

33.5

35.6

United States 37.8 39.5 39.8 41.5 44.5 47.8 48.6 61.3 62.9 1. New entrants’ share of total national call minutes was 5.9% in 1998 and 18.2% in 1999. 2. On 1 July 1999 the long distance charge zones were eliminated. Data represent share of local calls. 3. The percentage relates to all types of national calls. Source: OECD.

65.2

..

Sweden

0.0

5.0

10.0

17.0

Switzerland Turkey United Kingdom

9.0

10.7

14.0

16.5

18.6

21.0

24.0

30.7

38

© OECD 2003

Recent Communication Policy Developments

Table 2.5. International market share of new market entrants Share of minutes of international traffic, percentages 1984 Australia

1986

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

0

4.4

13

21

27.8

36.1

42.9

43.8

42.9

54

49

56

Austria

..

..

Belgium

..

..

36

57

45.3

41.4

0

0

0.73

25.0 47.2

Canada

0

7

20

26

33

33

Czech Republic Denmark

55 48.5

0

7.5

18.0

35.9

43.7

55.8

27.3

34.3

41.4

45.3

48.5

49

50

15.0

27.1

18

26

30

40

56

50

Greece

0

0

0

4.3

Hungary

0

0

15

25

Iceland

0

5

16

22

0

..

25

.. 50

Finland

0

9

France Germany

Ireland

0

Italy

..

32

37.5

Japan

26.7

30.4

33.1

33.7

33.8

35.1

40.6

..

..

47.2

..

Korea

0

20.1

25.5

31.3

27.4

26.5

32.0

32.9

38

43

51

..

..

25.2

28.0

Luxembourg Mexico

0

7

24

25

29

38

Netherlands

0

5

10

33

35

38

21.8

36.0

..

..

..

..

28

31

33

New Zealand

11

15

17.4

21.0

21.0

Norway Poland1

0

0

0

0

Portugal

0

0

19

27.2

0

0

Slovak Republic Spain Sweden

0

7.4

15

21

25

32

Switzerland

1

12.9

13.8

17.2

..

45

51

57

18

38.2

48.6

..

0

0

0

Turkey United Kingdom

14

22.3

26.3

30.5

30.3

40

51

51.6

54.6

47.5

53.1

20 .. 27.3 United States2 1. Monopoly for international services. 2. Based on revenue. Source: OECD.

31

37.5

40.9

44.4

50.6

54.6

56.9

61.8

67.5

..

39

© OECD 2003

OECD Communications Outlook 2003

Table 2.6. Cellular mobile competition in the OECD area, 2001 Mobile operator market share according to number of operators, percentage Number of operators Australia

1

2

3

4

47

34

17

2 4

Austria

43

34

19

Belgium

54

33

13

Canada

37

28

24

Czech Republic

47

41

12

5

Other

5

11

Denmark

42

24

15

7

7

Finland

58

29

6

5

2

France

48

34

18

Germany

41

39

13

7

Greece

37

36

27

0

Hungary

51

39

10

Iceland

72

24

4

Ireland

58

39

3

Italy

48

32

16

Japan

57

17

16

6

Korea

41

11

33

15

Luxembourg

59

41

Mexico

78

8

7

4

11

11

10

2

1

Netherlands

42

26

New Zealand

57

43

Norway1

65

27

5

Poland

38

33

28

Portugal

48

31

21

Slovak Republic

56

44

Spain

56

26

18

Sweden

51

24

24

4

64

18

17

1

Turkey

66

29

3

2

United States2 1. Three operators in Norway are resellers. 2. There are 72 carriers reporting to the FCC. Source: OECD.

3

1

Switzerland United Kingdom

4

27

26

24

23

23

17

14

10

35

40

© OECD 2003

© OECD 2003

Table 2.7. Government ownership of public telecommunication network operators (December 2002) Operator

Status

Australia

Telstra

State ownership: 51%.

Austria

Telekom Austria AG

State ownership: 47.8%.

Belgium

Mobilkom Austria AG

Telekom Austria: 75% - 1 share.

UTA Telekom AG

1.49% owned by the federal government via VTÖB. Regional governments are shareholders via electricity providers.

Belgacom

State ownership: 50% + 1 share in accordance with the law of 21 March 1991.

Belgacom Mobile B-Telecom MET IRISNET ALE IGEHO SEDITEL INATEL SIMOGEL TELELUX

75% 100% 100% 100% 99.9% 34.26% 50% 33.3 43.45% 50%

SaskTel owned by province of Saskatchewan.

Czech Republic

ýHVNê7HOHFRP

State ownership: 51%

Denmark

Tele Danmark

Private ownership.

Orange

Banestyrelsen: 14%

Finland

Sonera Ltd.

State ownership: 53.1%

Elisa

Private ownership (state ownership: 0.78%)

France Telecom

State ownership: 56.45%

Télécom Développement

~ 50% of capital (indirectly, via the SNCF)

France

Government in process of further privatisation.

In June 2000 the Finnish Parliament authorised the government to lower the state’s holding to zero.

The FT Law (Law No. 96-660 of 26 July 1996) provides for a portion of the share capital of France Telecom to be held by shareholders other than the French state, but requires that the French state remain the majority shareholder.

41

Recent Communication Policy Developments

Canada

Control of PSTN

Operator

Status

Control of PSTN

Germany

Deutsche Telekom AG

State ownership: 42.77%

Greece

OTE

Government in process of finding a strategic partner. State ownership: 33.76%. OTE also owns a number of subsidiaries which provide other telecommunication services: 1) 58.98% of COSMOTE (active in the mobile services sector). 2) 99.99% of OTESAT (active in the satellite services sector). 3) 80.2% of OTENET (active in the Internet services sector). 4) 99.99% of OTEGlobe (active in the international services sector).

EVERGY S.A.

Owned by Wind-PPC Holding N.V, a joint venture in which 50% - 1 of the share capital is owned by PPC Telecommunications Services S.A., a subsidiary of the Public Power Corporation (PPC S.A.), a state-owned company.

FORTHnet S.A.

The Greek state owns 23.1% through the Public Foundation of Technological Research. FORTHnet S.A. holds 60% of the Mediterranean Broadband Access S.A.

Hungary

Hungarian Telecommunication Private ownership, one golden share owned by state that Co. gives certain voting rights. Antenna Hungária

87%

Vodafone Hungary

Indirect state interest through 30% ownership by Antenna Hungária.

Local governments hold small amounts of shares of local telecommunication operators. Iceland

Iceland Telecom

State ownership: 95%

Ireland

Eircom

Private ownership.

Neither German law nor the Memorandum and Articles of Association (Satzung) of Deutsche Telekom restricts the right of non-resident or foreign share owners to hold or vote the shares. The German government has indicated its intention to substantially reduce its shareholding in DT.

OECD Communications Outlook 2003

42

Table 2.7. Government ownership of public telecommunication network operators (continued) (December 2002)

© OECD 2003

© OECD 2003

Table 2.7. Government ownership of public telecommunication network operators (continued) (December 2002) Operator Italy

Status

Control of PSTN

Telecom Italia

The Ministry of the Treasury holds 3.46% of TI’s share capital plus another 0.62% of the capital in the form of saving shares.

WIND – Infostrada

ENEL, the Italian national energy utility, holds 73.4% (34.7% directly and 38.7% through ENEL Investment Holding BV) of the share capital of Wind – Infostrada. The Treasury Ministry, in turn, holds 67.25% of the share capital of ENEL.

Japan

NTT Corp.

The government currently holds 46% of the issued shares The NTT Law stipulates that the government shall always hold one-third of NTT Corp. or more of the total number of the outstanding shares of NTT Corp. (holding company), and the law also stipulates that NTT Corp. shall always hold all the shares of NTT East Corp. and NTT West Corp. Therefore, the government does not have any direct ownership shares in NTT East Corp. and NTT West Corp.

Korea

Korea Telecom

Private ownership.

Luxembourg

P&T Luxembourg

State ownership: 100%

Mexico

Telefonos de Mexico

Private ownership.

The Foreign Investment Law and Regulations and the Concession require that Mexican shareholders retain the power to determine the administrative control and the management of Telmex. Non-Mexican investors are not permitted to own more than 49% of the capital stock of a public telecommunication operator. Mexican corporation engaged in the telephone business. Foreign investment in cellular telephony may be authorised up to 100%.

Netherlands

KPN Telecom BV

State ownership: 34.7% plus 1 special share.

The special share gives the right to approve decisions that lead to fundamental changes in KPN’s structure.

New Zealand

Telecom New Zealand

Private ownership. A convertible preference share in The Kiwi Share Obligation imposes universal service obligations on the Telecom (“the Kiwi Share”) is held by the Kiwi Shareholder incumbent. (the Minister of Finance). The New Zealand government purchased the Kiwi Share for $1 when Telecom was privatised in 1990.

Telenor

State ownership: 77.7%

Bane Tele AS

State ownership: 100%

State will remain majority owner.

43

Recent Communication Policy Developments

Norway

Pursuant to the Golden Share Decree, the Italian government can have special powers to prevent acquisition of shares.

Operator

Status

Poland

Telekomunikacja Polska Spolka Akcyjna (TPSA)

State ownership: 22.61%

Portugal

PT Comunicações Brisatel CPR Marconi SA Oni Telecom Oni Infocomunicações SA Optimus PT Prime Portugal TMN – Telecomunicações Móveis Refer Telecom

State ownership: 6.63% State ownership: 19.31% State ownership: 6.63% State ownership: 19.31% State ownership: 13.2% State ownership: 5% State ownership: 5.9% State ownership: 6.63%

Control of PSTN

State ownership: 100%

Slovak Republic Slovenské Telekomunikácie, a.s.

State ownership: 49%

34% of shares owned by the state and 15% by the Fund of National Property.

Spain

Telefónica

Private ownership.

When Telefónica de España, S.A. was privatised, a “golden share” regime was created requiring prior administrative authorisation for the direct or indirect acquisition of shares in Telefónica de España’s capital stock when this involves at least 10% of this capital). The same regime is applied for Telefonica’s subsidiary that manages the mobile telephone service (Telefónica Móviles España, S.A.U.)

Sweden

Telia

State ownership: 70.6%

Requirement for minimum state ownership of 51% abolished in June 2001.

Switzerland

Swisscom

State ownership: 62.7%

The state is required to retain its majority shareholding in Swisscom.

Turkey

Türk Telekom

State ownership: 100%

There is a legal restriction limiting foreign ownership of Turk Telekom (shares of up to 45%) [Law 4673]. Up to 100% of Turk Telekom can be privatised. State maintains a golden share.

Aycell

State ownership: 100%

United Kingdom BT

Private ownership: 100%

United States

Private ownership: 100%

Source: OECD.

AT&T, regional Bell operating companies

OECD Communications Outlook 2003

44

Table 2.7. Government ownership of public telecommunication network operators (continued) (December 2002)

© OECD 2003

© OECD 2003

Table 2.8. Foreign ownership restrictions in telecommunications Total foreign shareholding in Telstra is limited to 35% of listed capital, with any individual foreign person or associations shareholding limited to 5% of listed capital. There is a legislative requirement ensuring that Telstra’s Chair and the majority of Telstra’s directors are Australian citizens and Telstra’s head office, base of operations and place of incorporation remains in Australia. Prior approval is required for foreign involvement in the establishment of new entrants to, or investment in existing businesses in, the telecommunications sector.

Austria

No foreign ownership restrictions.

Belgium

No foreign ownership restrictions.

Canada

Foreign ownership is limited to a maximum of 20% of voting shares in any facilities-based carriers and at least 80 % of the board of directors of facilities-based carriers must be Canadian. In addition, these facilities-based carriers must be Canadian controlled. Investor companies in such carriers are treated as Canadian if at least 66 % of voting shares are held by Canadians. There are no limits on non-voting shares, while resellers can be foreign owned and controlled.

Czech Republic

No foreign ownership restrictions except as regards land ownership.

Denmark

No foreign ownership restrictions.

Finland

No foreign ownership restrictions.

France

There is a 20% limitation on direct foreign investment (for companies outside of the European Economic Area) for the mobile communications sector, but no limitation on indirect participation.

Germany

No foreign ownership restrictions.

Greece

No foreign ownership restrictions.

Hungary

No foreign ownership restrictions.

Iceland

No foreign ownership restrictions.

Ireland

No foreign ownership restrictions. The incumbent must notify the ODTR of any changes in shareholdings/ownership.

Italy

No foreign ownership restrictions.

Japan

There are no restrictions on individuals and corporations investing in the incumbent PTO(s) in Japan. However, foreign capital participation, direct and/or indirect, in NTT Corp. that holds all the shares of NTT East Corp. and NTT West Corp. is restricted less than one-third.

Korea

Foreign governments, foreigners or domestic corporations with over 80% of its stock held by a foreign government or foreigners cannot hold more than 49% of a share issued by a company in Korea.

Luxembourg

No foreign ownership restrictions.

45

Recent Communication Policy Developments

Australia

Mexico

Concessions are only granted to individuals or corporations of Mexican nationality. Foreign investment can be no greater than 49% except for cellular telephony services where permission is required from the Commission of Foreign Investment for a greater level of foreign participation.

Netherlands

No foreign ownership restrictions.

New Zealand

According to the Constitution of Telecom Corporation of New Zealand Limited (Clause 6) no person shall have a relevant interest in 10% or more of the total voting shares for the time being without, and except in accordance with the terms of, the prior written approvals of each of the Kiwi Shareholder and the Board given and no person who is not a New Zealand national shall have a relevant interest in more than 49.9% of the total voting shares for the time being without, and except in accordance with the terms of, the prior written approval of the Kiwi Shareholder. There are no restrictions on other operators.

Norway

The PTO is a limited company in which the state must own shares. A change in ownership requires approval by Parliament. No foreign ownership restrictions.

Poland

No foreign ownership restrictions. The President of the Office of Telecommunications and Post Regulation may impose on a PTO, within the provisions of the granted telecommunications authorisation, the obligation to inform the URTiP, within 14 days of the date of receiving such information, on each case when a shareholder took the right to over 10%, 30% and 50% votes on a general shareholders’ meeting (Art. 13.1 of the Telecommunications Law).

Portugal

No foreign ownership restrictions.

Slovak Republic

No foreign ownership restrictions.

Spain

According to the General Law on Telecommunications direct or indirect investment in Telefonica and Telefonica Moviles by foreign persons may not exceed 25% of share capital unless otherwise provided for by the applicable international treaties and agreements, including the Fourth Protocol of the General Agreement on Trade in Services. Citizens of the European Union, including entities domiciled in those countries, are not considered foreign persons.

Sweden

No foreign ownership restrictions.

Switzerland

No foreign ownership restrictions. The federal government is required to retain majority shareholding in Swisscom.

Turkey

Foreigners are not allowed to have more than 49% shares of telecommunications operators that require concession agreements directly or indirectly.

United Kingdom

No foreign ownership restrictions.

United States

The Telecommunications Act allows the FCC to deny radio licenses to corporations with greater than 25% foreign investment only if the public interest is served by this refusal. Wireline common carriers are not subject to these restrictions.

Source: OECD.

OECD Communications Outlook 2003

46

Table 2.8. Foreign ownership restrictions in telecommunications (continued)

© OECD 2003

© OECD 2003

Table 2.9. Fixed to mobile interconnection Publication of termination rates

Determination of fixed to mobile termination rates

Regulation of termination rates

No

Commercially negotiated between operators.

GSM (and CDMA) termination is a declared service. The ACCC has indicated that the pricing methodology that it will use for determining access prices in an arbitration will be based on benchmarking of retail mobile prices rather than a cost-based approach.

Austria

Yes

Fixed to mobile rates are agreed through commercial negotiations between operators. The regulatory authority may settle disputes.

Mobile termination rates have to be cost oriented if operators have significant market power.

Belgium

For operators with significant market power.

Termination rates are in principle determined by operators. The regulator has advised that a 15% maximum difference between the termination tariffs of various operators should be respected.

Operators with significant market power in the mobile telephony market have to apply non-discriminatory termination tariffs. Operators with significant market power in the interconnection market are subject to a cost orientation obligation and termination tariffs have to be approved by the regulator.

Canada

Receiving party pays pricing system used in Canada.

Termination rates not imposed.

Not applicable.

Czech Republic

Regulated prices of interconnection are published.

Commercial agreement. If there is no agreement the method of calculation and prices can be set by the regulator.

Only where commercial agreement cannot be reached.

Denmark

Yes

Commercial negotiation.

Only if an operator where designated as having significant market power.

Finland

No

France

Yes for operators that have been designated as having significant market power in the interconnection market.

Determined by the mobile operators.

Operators with significant market power in the interconnection market are required to have non-discriminatory termination charges which are cost oriented. The regulator has already imposed two reductions of 20% between 1999 and 2000 and has put in place a proposal for a further reduction of 40% between 2002 and 2004.

Germany

No

Commercial negotiation.

Mobile termination rates could be the subject of regulation if an operator has significant market power or if termination in the mobile network has been the subject of an interconnection decision.

Greece

Yes

Commercial negotiation

Operators with significant market power must apply the principle of nondiscrimination.

Hungary

No

Commercial negotiation.

Prices must be cost oriented if operators have significant market power.

47

Recent Communication Policy Developments

Australia

Publication of termination rates

Determination of fixed to mobile termination rates

Regulation of termination rates

Iceland

Rates made available on request.

Commercial negotiation. The regulator intervenes if there is a need to resolve disputes.

Cost orientation required.

Ireland

Yes

Commercial negotiation.

If the operator has been designated as having significant market power then charges must be cost-justified.

Italy

Yes for the two operators deemed as having significant market power.

The regulator has set a price ceiling on the two notified operators.

Yes. Non-discriminatory rules apply to operators with significant market power.

Japan

Operators with significant market power are obliged to publish interconnection tariffs that indicate termination rates.

Termination rates are commercially agreed between carriers. The Ministry intervenes when no agreement is reached.

The Ministry can order changes in termination rates if it deems that operators with significant market power have set rates which exceed reasonable cost levels and a reasonable profit.

Korea

Yes

The government sets the conditions for rate determination and these are published.

The government makes public the criteria for calculating the interconnection fee and calculates mobile termination rates accordingly.

Luxembourg

No

Commercial negotiation.

Tariffs of operators with significant market power are regulated.

Mexico

No

Netherlands

No

Commercial negotiation, but from 1 December 2002 mobile network operators are only allowed to set charges below a maximum reasonable level as set out in guidelines published by the regulator.

The regulator has set maximum reasonable average charges for mobile operators.

New Zealand

No

Commercial negotiation

No

Norway

Yes

Commercial negotiation

Poland

No

Portugal

No. Maximum prices set by regulator.

Cost-oriented rates for the operator with a significant market position. No

The regulator published the prices of some interconnection services applied by mobile operators.

None of the mobile operators has been declared as having significant market power on the interconnection market so that cost orientation does not apply. A regulatory decision of 24 January 2002 set the maximum average prices in 2002 for national termination in the mobile network for calls originating from the fixed network.

OECD Communications Outlook 2003

48

Table 2.9. Fixed to mobile interconnection (continued)

© OECD 2003

© OECD 2003

Table 2.9. Fixed to mobile interconnection (continued) Publication of termination rates

Determination of fixed to mobile termination rates

Regulation of termination rates

No

Commercial negotiations.

Dominant operators must have cost-oriented prices.

Spain

Interconnection prices with mobile operators not published. The regulator must make available to all interested parties, whenever this does not affect commercial secrets, the interconnection agreements made with dominant operators.

Commercial negotiations.

Dominant operators are required to have prices that are cost oriented and must provide the regulator externally audited accounts on a yearly basis.

Sweden

An operator with significant market power must declare rates to the regulator and these are available to other operators.

Rates are commercially negotiated between operators.

Operators with significant market power must use cost-oriented pricing for mobile termination.

Switzerland

Providers with a dominant position in the market must publish a basic offer every year.

Commercial negotiations between operators.

Dominant operators must use cost-oriented prices.

Turkey

Under consideration.

Commercial negotiation. If the operators fail to reach an agreement, the national regulatory authority shall be authorised to set such terms, conditions and prices. Such terms, conditions and prices are valid until the parties agree otherwise.

Interconnection providers that are designated by the national regulatory authority have to determine cost based termination rates.

United Kingdom

Mobile operators with significant market power must publish interconnect agreements.

Termination rates for two mobile operators are subject to a charge control of RPI-9. The regulator has proposed that the control be extended to the other two mobile operators.

Charges are regulated and the control is designed to reflect cost.

United States

Most mobile networks operate under a mobile party pays regime. In general interconnection rates for mobile networks are not regulated.

Interconnection between incumbent local exchange carriers and mobile operators are regulated. “Reciprocal compensation” rules apply which require that the rate a fixed operator charges the mobile operator for termination equal the rate the mobile operator charges the incumbent fixed operator unless the mobile operator can prove that its costs are higher.

Termination rates for fixed to mobile calls are initially commercially negotiated. If operators cannot reach agreement, they are generally arbitrated by local public utilities commissions.

Source: OECD.

49

Recent Communication Policy Developments

Slovak Republic

PSTN carrier number portability Australia Austria Belgium Canada

Czech Republic Denmark

Finland France

Germany

Local number and non-geographic number portability available. Mobile number portability available. Geographic portability only available if consumer stays within a local area. Implemented. Service level agreements introduced for number portability in fixed networks. Mobile number portability introduced in September 2002. Local number portability (LNP) implemented in major centres. Incumbent carriers required to implement LNP in smaller centres upon request by competitive local exchange carriers. Portability of toll free numbers implemented. Implemented at end of 2002. Implemented between fixed networks within the same geographic area and includes ISDN. By 1 January 2001 total portability, including between fixed and mobile, introduced. Mobile portability implemented on 1 July 2001. Geographic number portability available including nation-wide portability. Plans for mobile portability by mid 2003. Implemented for fixed geographic areas. For non geographic numbers portability introduced in July 2001 for freephone numbers, in January 2002 for the numbers with shared charges, and it is expected to be introduced in December 2002 for number where revenue is shared. For mobile numbers portability is expected to be introduced at the latest by 30 June 2003. Implemented for fixed geographic areas and for non-geographic numbers. Mobile number portability came into effect in November 2002.

Greece

Introduced on 1 January 2003.

Hungary

Implemented from 1 January 2002.

Iceland

Number portability introduced 1 September 2000, and geographic portability on 1 June 2001. Number portability for mobile calls will be available from 1 July 2003. Non-geographic portability introduced on 1 January 2000. Geographic number portability was established by June 2001. Full mobile number portability introduced by end of 2002. Geographic number portability introduced within the local area only. Nongeographic portability restricted to toll free, shared cost, and premium services. Mobile number portability introduced including porting numbers from 2G to 3G services.

Ireland

Italy

Carrier preselection Implemented, including fixed to mobile calls, but not available for local calls. Implemented and covers all types of geographic calls Implemented and covers all type of geographic calls including 0800 numbers. Service level agreements introduced for carrier select and pre-select. Implemented for long distance and international calls.

Carrier selection implemented in June 2002 and preselection at end 2002. Implemented for all geographic calls

Implemented for long distance and international calls Implemented for long distance and international calls. Carrier selection and preselection introduced for fixed to mobile calls from 17 November 2001. From 1 January 2002 carrier selection and preselection introduced for local calls. Implemented for long distance and international calls and for fixed-mobile calls. Preparations are underway to introduce carrier selection and preselection for local calls. Carrier selection introduced on 1 January 2002. Introduction of carrier preselection was available on 1 December 2002 for international calls and from 1 February 2003 for long distance calls, calls to mobiles and local calls. Carrier selection introduced 1 January 2002. There are no plans for carrier selection for local calls. Implemented for all geographic calls.

Implemented for all geographic calls.

Implemented for all geographic calls.

OECD Communications Outlook 2003

50

Table 2.10. Carrier number portability and carrier preselection

© OECD 2003

© OECD 2003

Table 2.10. Carrier number portability and carrier preselection (continued) PSTN carrier number portability Japan

Korea

Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland

United States

Source: OECD.

Number portability in the fixed network available since 30 June 2001 and for mobile networks since 1 January 2002. Number portability has to be introduced in fixed networks by 31 December 2004 at the latest. Geographic and non-geographic portability implemented. Geographic and non-geographic portability implemented. Available for digital mobile services from 1 September 2001. Geographic portability within the same numbering area and non-geographic portability implemented. From 29 March 2002 full national geographic portability. Mobile number portability implemented. Not applicable until the monopoly ends on 31 December 2003 Geographic and non-geographic portability implemented including mobile number portability from 1999. Local number portability and non-geographic portability implemented. Wireless carriers in the largest Metropolitan Statistical Areas required to support local number portability by November 2003. This will include mobile to mobile and fixed to mobile number portability.

Implemented for all geographic calls in May 2001.

Implemented for national long distance.

Implemented. Implemented for national and international long distance services. Implemented for all geographic calls. Implemented for all geographic calls and for fixed to mobile calls. Implemented for all geographic calls. Carrier selection and preselection introduced for long distance services in 2001. There is no carrier selection for local calls. Implemented for all geographic calls. Carrier selection introduced from 1 January 2003. Implemented for national and international long distance services. Implemented for national and international long distance services, mobile calls and for local calls. Implemented for all geographic calls, including fixed to mobile calls. Mobile operators required to allow users to choose on a call-by-call basis service providers for international calls. Not applicable until the monopoly ends on 31 December 2003. Interim carrier preselection using autodiallers was withdrawn at the end of 2001. Switched based preselection. Implemented for all geographic calls.

51

Recent Communication Policy Developments

Turkey United Kingdom

Number portability for PSTN and ISDN numbers to be provided from 2001. Geographic portability within the same numbering area is not an obligation but is provided by telecommunication carriers. Mobile number portability is being examined. The decision to adopt number portability was taken in January 2001 for local calls and toll-free services. Full adoption will take place by 2004. A decision to adopt mobile number portability was taken in February 2002. This will be implemented first for 3G, eventually for 2G and then for the transition from 2G to 3G services. Implemented. Not implemented. Implemented. Mobile portability available. Number portability is a designated service which imposes an obligation on telecommunications carriers to provide the service. Geographic and non-geographic portability implemented. Mobile number portability introduced on 1 November 2001. Number portability for geographic PSTN introduced at end of 2002.

Carrier preselection

Number of unbundled loops (mid-2002)

© OECD 2003

Regulatory requirement for local loop unbundling

Cost methodology for unbundled loops

Australia

Unconditioned local loop service, mandated in July 1999, was made available in the second half of 2000 by the incumbent. A draft decision made by the ACCC in April 2002 that a line sharing service would be in the long-term interests of end users, but that if Telstra offered reasonable commercial terms to access seekers the ACCC would exercise regulatory forbearance.

Total service long run incremental cost plus contribution to indirect costs.

5 000

Austria

Implemented on July 1999. Sub-loop unbundling and penalties in case of incumbent’s failure to meet lead times have been implemented. The incumbent, since September 2001, has to make available shared access for local loops.

Cost-oriented (FL-LRAIC) based on a bottom-up cost model calculation. The cost for shared access for a local loop is 50% of the monthly charge for the full unbundled line. Costs are 50% of the monthly charge for the full unbundled line.

4 800

Belgium

Full unbundling, shared access and sub-loop unbundling in place since 1 March 2001.

Recurring charges are based on a “retail minus” formula and non-recurring charges on a LRIC methodology.

1 190 full unbundled; 684 shared access.

Canada

Announced in May 1997. Facilities that were classified as essential are subject to mandatory unbundling. Rate reductions of 30%-40% have been implemented since 1997.

Incremental costs plus a mark-up to recover fixed and common costs. The mark-up was reduced from 25% to 15% in 2002.

144 360 (end 2002)

Czech Republic

Legislative process ongoing; due to elections the date of coming into force was postponed.

Under consideration.

n/a

Denmark

Implemented in July 1998. Line sharing mandated in January 2001. Bitstream access available since 2000.

Based on historic costs, and as of 1 January 2003 on LRAIC.

41 321 (December 2001)

Finland

Implemented in 1997.

France

Available from 1 January 2001. Includes raw copper unbundling and line sharing.

Long run incremental costs.

500

Germany

The incumbent has been obliged to offer access to the local loop since 1998. In 2001 the obligation to offer shared access was implemented.

Long run incremental costs.

700 794 (March 2002)

Greece

Unbundling came into effect on 1 January 2001.

Prices for full unbundled loops as well as shared access are based on LRAIC methodology using current costs.

93

Hungary

Unbundling came into force on 1 July 2001 and the first reference unbundling offer was accepted in 2002. From 2002 full unbundling and shared access available.

Individual approvals using the fully distributed cost methodology in 2002 and from 2003 a long run incremental cost methodology.

Iceland

Came into force on 1 October 2000.

Using a cost-based tariff model using historic costs.

458 (end 2001)

Ireland

Bit stream unbundling available from 2000. Full unbundling in April 2001.

Prices are reviewed by the regulator and based on historic costs.

20

OECD Communications Outlook 2003

52

Table 2.11. Local loop unbundling

© OECD 2003

Table 2.11. Local loop unbundling (continued) Regulatory requirement for local loop unbundling

Number of unbundled loops (mid-2002)

Cost methodology for unbundled loops

Italy

During 2000 different decisions of the regulator led to full implementation of unbundling. This was supplemented in January 2001 by decisions to implement shared access and sub-loop unbundling.

Historical cost methodology used.

25 000 (April 2002)

Japan

The Ministry issued a document in August 1999 clarifying that the incumbent was required to provide interconnection to the main distribution frame and line sharing. Unbundling of optical fibre implemented in April 2000. Full unbundling and line sharing implemented in September 2000.

Costs for unbundled lines are calculated using the interconnection accounting information.

1 411 126 (December 2001).

Korea

Full unbundling and line sharing available

Luxembourg

EC Directive applied. Not available.

Netherlands

Unbundled access to the local loop available since December 1997. In March 1999, OPTA laid down guidelines indicating the way in which it would settle any disputes over unbundled access. Implementation of EC Directive came into effect in January 2001.

New Zealand

The Telecommunications Commissioner is required to report to the Minister by December 2003 on whether access to the unbundled elements of the incumbent’s local loop should be regulated.

Norway

From 6 February 2001 the incumbent is obliged to offer full access, shared access and bitstream access.

Poland

Draft amendments to the Telecommunication Law contain provisions for local loop unbundling.

Portugal

The EC regulation on unbundling came into force in January 2001.

Slovak Republic

The Telecommunication Act will be amended to allow for unbundling.

Spain

Since 2001 the dominant carrier has been required to provide full unbundled access, shared access and bitstream access.

Prices are regulated and subject to cost orientation which means the cost of the service plus a reasonable profit margin.

208 224 (May 2002)

Prices should be cost oriented.

.

Cost estimations and international bench-marking for reference purposes. Cost estimations used the incumbent’s cost accounting system, based on historical costs. When assessing new services for which historical information was not available, certain present costs were used.

20

Based on costs justified by the operator to the regulator.

72 unbundled loops (May 2002)

53

Recent Communication Policy Developments

Mexico

18

Number of unbundled loops (mid-2002)

Regulatory requirement for local loop unbundling

Cost methodology for unbundled loops

Sweden

The EC regulation brought unbundling into force in January 2001. The incumbent offers full unbundling, shared access and sub-loop unbundling.

Costs are calculated with a top down fully distributed cost model based on current costs. Tariffs for ULL are set on a geographically averaged basis.

3 393 fully unbundled lines 1 670 shared lines (end June 2002)

Switzerland

A process is underway to introduce full access and shared line access.

Turkey

Monopoly. LLU not applicable.

United Kingdom

From January 2001 the incumbent has published a reference offer that includes fully unbundled loops, shared lines and sub-loop unbundling.

Charges are cost-oriented and geographically averaged.

785 (July 2002)

United States

The Telecommunications Act of 1996 required incumbent local exchange carriers to provide unbundled network elements on a non-discriminatory basis. In 1999 the unbundling rules were reviewed and changes made to the list of network elements required to be unbundled. In December 1999 line sharing was mandated for xDSL-based services. 72% of exchanges are able to offer unbundled local lines.

Based on forward-looking economic costs.

9 461 000

OECD Communications Outlook 2003

54

Table 2.11. Local loop unbundling (continued)

© OECD 2003

© OECD 2003

Table 2.12. Treatment of national and international voice telephony services provided over the Internet Voice over Internet Protocol service providers (who use managed, dedicated IP-based networks) would be treated the same as carriage service providers. That is, they would be subject to telecommunication consumer and industry codes, universal service obligations and cost, services to the disabled and emergency service access. Voice over Internet telephony which uses the public Internet would not be subject to obligations.

Austria

Voice telephony services provided over the Internet have to be notified according to section 13 of the Telecommunications Act. No licence is required.

Belgium

Such services are not considered voice telephony and, as a result, it is not necessary to obtain a licence to provide this service. A declaration is sufficient.

Canada

The CRTC determined that most Internet service providers are not facilities-based telecommunications carriers and consequently they are not regulated. If an ISP should wish to become a facilities-based carrier then it would be subject to the same conditions and obligations as other facilities-based carriers.

Czech Republic

These services are considered as telecommunication services and providers have only to be registered according to the General Licence obligations. No licence is required.

Denmark

As with any other type of voice telephony services, no specific restrictions apply.

Finland

For VoIP services no licence or notification is required although most ISPs prefer to notify in order to facilitate relations with licensed operators.

France

French law defines telephone service provided to the public in a way which is independent of the technology used. Under these circumstances, the provider of telephone service to the public is subject to the same rules whether using Internet or any other platform. The provision of telephone services to the public also requires ministerial authorisation.

Germany

Voice communication over the Internet is not a voice telephony service as defined in the Telecommunications Act or by the European Union and is therefore not subject to a licence. Such services must only be notified.

Greece

General authorisation is required. In order to obtain this, entities have to submit a registration form to EETT specifying the services they shall provide.

Hungary

Licenses are not needed for VoIP; only registration is required. Between 1998 and 2002, there were some voice quality restrictions due to the exclusive rights of the incumbents. Since liberalisation these restrictions have been lifted.

Iceland

IP telephony is treated in the same manner as any other form of voice telephony. A license is required. Obligations are similar to obligations of other telephony operators.

Ireland

If the service was provided by an operator other than the incumbent, it would probably not be regulated. Obligations on Eircom would include network obligations and provision of service level agreements, as well as other service obligations.

Italy

VoIP is not regulated and is only subject to general authorisation.

Japan

Type II telecommunication carriers can provide national and international voice telephony services over the Internet.

55

Recent Communication Policy Developments

Australia

Korea

Facility-based telecommunication operators with an existing licence for voice services can also provide VoIP service. When providing a VoIP service over the network of a facility-based service provider the entity has to meet registration qualifications in areas such as technological capabilities, financial capabilities, plans for consumer protection, etc.

Luxembourg

Following European Commission recommendations, two special provisions are foreseen for entities other than a PTO. A licence is required from the regulator for interconnection to the public network.

Mexico

National or international voice telephony services over the Internet would require a concession as any other voice telephony service provider, and they would have to comply with the voice telephony regulatory framework which would have to be adapted to this new technology.

Netherlands

An entity providing international voice services over the Internet would, according to existing legislation, be regarded as a public telecommunication operator and thus require registration.

New Zealand

Under New Zealand law, national and international voice telephony services provided over the Internet by entities other than a PTO are defined and treated the same as such services provided by a PTO.

Norway

National and international voice telephony services provided over the Internet will be defined and treated as a public telephony services, with an obligation to register, if the quality of service is as good as voice on the PSTN. If the service provider has significant market power a licence will be required.

Poland

International telephone service can only be provided by PTOs.

Portugal

Voice over IP requires a licence, while voice over the Internet requires registration.

Slovak Republic

VoIP is generally licensed if no limited resources are used (numbers) and individually licensed if limited resources are used. The delay for VoIP must be more than 250ms.

Spain

If communications is telephone to telephone an individual licence is required; if it is made between two data terminals, a general authorisation is required and, if it is made between both types of terminals, a provisional authorisation is required.

Sweden

The same regulations apply to all undertakings that provide fixed telephony services.

Switzerland

Voice telephony over the Internet is regarded as a telecommunication service and is consequently subject to telecommunication legislation. It is not considered as forming part of the universal service provision and is therefore not subject to the legal requirements applicable to that service and to its providers. Service providers offering national and international voice telephony services on Internet would be subject to a number of legal obligations which are applicable to service providers using the PSTN such as interconnection, secrecy of communications, etc.

Turkey

Voice services are a legal monopoly until 31 December 2003.

United Kingdom

For VoIP service, OFTEL considers this should be regulated as a publicly available telephone service if any of the following apply: the service is marketed as a substitute for traditional PSTN services, or the service appears to customers as a substitute for public voice telephony, or the service provides the customer’s sole means of access to the traditional circuit switched PSTN.

United States

Not subject to regulation.

© OECD 2003

Source: OECD.

OECD Communications Outlook 2003

56

Table 2.12. Treatment of national and international voice telephony services provided over the Internet (continued)

© OECD 2003

Table 2.13. Final consumption household expenditure in the OECD area Percentages

Food and non-alcoholic beverages

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

13.4

13.1

12.8

12.6

12.4

12.0

11.6

11.3

11.1

10.7

Alcoholic beverages, tobacco and narcotics

3.1

3.1

3.0

3.0

3.0

2.9

2.8

2.9

2.9

2.8

Clothing and footwear

6.9

6.8

6.6

6.5

6.4

6.2

6.1

6.0

5.8

5.7

19.3

19.4

19.8

20.0

20.3

20.3

20.1

20.0

19.8

19.7

Furnishings, household equipment, routine maintenance

6.4

6.3

6.1

6.1

6.0

6.0

5.9

5.9

5.8

5.7

Health

7.7

7.8

8.1

8.1

8.2

8.4

8.8

9.0

9.0

9.3

11.9

12.0

11.7

11.9

11.9

12.1

12.1

11.9

12.0

12.1

1.6

1.7

1.7

1.8

1.9

2.0

2.1

2.2

2.3

2.3

Housing, water, electricity, gas and other fuels

Transport Communications Recreation and culture

9.0

8.9

9.0

9.0

9.2

9.2

9.2

9.2

9.2

9.2

Education

1.7

1.7

1.8

1.8

1.8

1.8

1.9

1.9

1.9

2.0

7.5

7.4

7.4

7.4

7.5

7.4

7.5

Restaurants and hotels 7.5 7.5 7.5 Note: Hungary, Norway, Slovak Republic, Switzerland and Turkey are not included in this average. Source: OECD, SNA Database.

Recent Communication Policy Developments

57

Chapter 3

TELECOMMUNICATION MARKET SIZE

Abstract. OECD telecommunication service revenues reached USD 831 billion in 2001. This represented a 2% increase over the same figure for 2000. While the sector was still growing, there was a considerable slowdown in the rate of growth from previous years. This chapter provides information on the size of the telecommunications market. It specifically examines the wireless market, international communications, leased lines and research and development.

59

© OECD 2003

OECD Communications Outlook 2003

O

ECD telecommunication service revenues reached USD 831 billion in 2001 (Table 3.1). This represented a 2% increase over the same figure for 2000. While the sector was still growing, there was a considerable slowdown in the rate of growth from previous years. The increase in 2001 contrasted to an increase of more than 7% between 1999 and 2000. In 2001, revenue increased by USD 16 billion compared to USD 84 billion in 1999 and USD 58 billion in 2000. In 2001, the main factor underlying the slowdown in revenue growth was the decrease in the pace of access expansion compared to the two previous years as major markets in the industry reached a stage of maturity. The performance also reflected the dynamics of access expansion. While the number of wireless subscribers was still increasing, prepaid customers – who tend to generate lower amounts of revenue per new addition – accounted for a significant proportion. In 2000 and 2001, prepaid customers made up the equivalent of 57% of all new cellular mobile additions. At the same time, sources of potential new revenue growth, such as wireless data services, were still only in a nascent stage. In 2001, NTT DoCoMo led the way with some 18% of average revenue per user (ARPU) being generated by wireless data. However, Japan’s experience with i-mode had yet to be replicated in any other OECD countries, where the majority of the relatively small wireless data revenues were generated by short message services (SMS). Given the relatively high rate of cellular mobile penetration and the slowing rate of subscriber expansion, wireless operators will depend on data revenues for new growth. In respect to the fixed network, although the number of Internet subscribers was still increasing, the proportion of broadband subscribers was still too small in most OECD countries to have a

Figure 3.1. Trends in public telecommunications revenue, investment and access paths, 1980-2001 Revenue (left scale)

Investment (left scale)

Access lines (right scale)

Access paths (fixed lines and mobile subscribers) (right scale) Revenue and investment (billions of current USD) 900

Access paths (millions) 1 200

800 700

1 000

600 800 500 600

400 300

400

200 200 100 0

0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

60

Source: OECD.

© OECD 2003

Telecommunication Market Size

Figure 3.2. Telecommunication revenue as a percentage of GDP for total OECD, 1985-2001 % of telecommunication revenue in GDP 4

% of telecommunication revenue in GDP 4

3

3

2

2

1

1

0

0 1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Source: OECD.

significant impact on revenue growth. Korea Telecom (KT) led the way by increasing its broadband revenue by 341% in 2001. In 1999, broadband did not warrant a separate line in KT’s accounts. In 2001, some 7% of KT’s revenue was generated by broadband access. This was by far the largest proportion for any incumbent telecommunication carrier. Telecommunication revenues continue to increase in proportion to GDP. Across the OECD area telecommunication revenues increased from 2% in 1990 to 3.35% in 2001 (Table 3.2). In 2001, despite the relative slowdown in growth of the telecommunication sector, the sector still grew faster than the overall economy. In 2001, telecommunication services increased their share of GDP by 0.16% compared to 0.18% and 0.20% respectively in 1999 and 2000. Clearly, the general economic downturn across the OECD during this period also contributed to the slowdown in telecommunication growth. Despite this, the increasing use of telecommunication services meant that the sector’s overall share of GDP continued to rise. Liberalisation has been fundamental in the growth of the telecommunication sector. The opening of markets has promoted competition, and in turn, brought a tremendous expansion of access and increasing innovation in services. It has also made it possible for telecommunication carriers to better serve their customers outside their “home country” and to seek new opportunities for growth in foreign markets. One reflection of this trend is the growing proportion of revenue that telecommunication carriers earn outside their “home markets”. In the past, most telecommunication carriers did not disclose earnings from foreign markets because they were not significant. Cable & Wireless has long been the exception due to the company’s global holdings. All other telecommunication carriers earned the bulk of their revenues from their “home market”. Following widespread liberalisation there is an increasing trend to report revenue by geographical market. These data reveal an increasing globalisation of industry revenue. Some companies that sought foreign opportunities before others now earn the majority of their revenues in © OECD 2003

61

OECD Communications Outlook 2003

foreign markets. TDC, for example, earned 54% of that company’s revenue outside Denmark in 2001 compared to 41.8% in 1999 (Table 3.3). In 2001, some 83.5% of Vodafone’s revenue was earned outside the United Kingdom, compared to 63.2% in 1999. In terms of size, Vodafone is the largest beneficiary of foreign revenues, earning some USD 27 billion outside the United Kingdom in 2001. France Telecom and Deutsche Telekom were the second and third-ranked companies, by the scale of foreign earnings, with USD 13.7 billion and USD 11.7 billion respectively. Telefonica had previously been ranked first in 1999 and second in 2000. However, Telefonica’s foreign revenues declined due to the weakness of economies and currencies in Latin America. Cable & Wireless foreign revenues have also been declining, as the company has divested several foreign operating companies and sought to transform itself into an “Internet carrier”. The foreign revenues of British Telecom (BT) have also decreased as the company sought to reduce debt by selling several foreign operations and divesting mmO2. Most significant in this process was that the divestiture of mmO2 split off BT’s wireless holdings in several European markets. Aside from the creation of a specialist wireless company, a significant factor in BT’s actions was its desire to reduce its level of debt. In 2002, a number of other operators that had built up substantial levels of debt through foreign acquisitions were also seeking to sell foreign operations. By way of contrast, a number of others with relatively strong balance sheets were seeking greater exposure to opportunities for growth in foreign markets. These companies were seeking to purchase assets from companies that had exited the market or those selling foreign assets to reduce their debt levels. One caveat needs to be noted in relation to the data on foreign revenues shown by company. This concerns the different accounting treatment given to foreign revenue. Some companies fully consolidate foreign operations. In such cases all revenue and costs are included in those companies’

Figure 3.3.

Public telecommunication revenue per access path, 2000 and 2001 2000

2001

USD 1 200

USD 1 200

1 000

1 000

800

800

600

600

400

400

200

200

0

U

ni

te

d

St

at e Sw Ja s itz pan er la U ni n te No d d rw Ki a ng y do O m EC C D an Au ada st ra Fi lia nl D an en d m a Ire rk G lan er d m Be any lg iu N Sw m ew e Ze den al an N Ice d et la h n Lu erl d xe an m ds bo u Au rg st ri Sp a a Po in rtu g M al e H xico un ga Fr ry an G ce re ec e Sl Ita ov l ak Ko y R rea ep u C ze P blic ch ol R and ep ub Tu lic rk ey

0

62

Source: OECD.

© OECD 2003

Telecommunication Market Size

Figure 3.4. Mobile telecommunication revenue in OECD countries, 2001 USD million (logarithmic scale) 100 000

USD million (logarithmic scale) 100 000

10 000

10 000

1 000

1 000

100

10

10

1

1

U

ni

te

d

St

at e Ja s G pa er n m U an ni y te d I Ki tal ng y do m Ko re Sp a a Fr in an C ce an ad N Me a et xi he co rla Au nds Sw str itz alia er la n Au d st r Be ia lg iu Po m la Po nd rtu g G al re ec Fi e nl a Sw nd e de C ze n ch Irel a R nd ep u H blic un ga N ry or D wa en y m ar k N ew Tur Sl k ov Ze ey ak al R an Lu ep d xe ub m lic bo u Ic rg el an d

100

Source: OECD.

accounts. Other companies use the equity method. Under this accounting treatment, only the net income or net losses from their equity share in foreign operations are counted as revenue. Companies such as SBC (United States) and NTT (Japan) use the equity method in treating foreign revenues. Accordingly, the foreign revenues shown for these companies are much less than those consolidating foreign operations even though these companies have significant offshore holdings. SBC, for example, has significant investments in North America and Europe. NTT has foreign holdings in Southeast Asia, Europe and North America. Mobile communications The size of the wireless communications market in the OECD area was USD 264.8 billion in 2001 (Table 3.4). In 1999, one in every four dollars of telecommunication service revenue earned was attributable to mobile communications. By 2001, the same ratio was just under one in three. In five countries – Austria, the Czech Republic, Ireland, Japan and Korea – more than 50% of all revenues are attributable to mobile communications. In a further seven countries, more than 40% of all revenue is derived from wireless services. Revenues per access path (i.e. fixed lines plus mobile subscribers) have tended to fall over recent years (Table 3.5). The main reason for this is the trend toward lower revenue per wireless user. Users of prepaid cards generate much less revenue than post-paid wireless customers. By way of contrast, revenue per capita has increased due to the expansion of fixed and wireless access across the OECD. In the early 1990s most users of mobile telephones were business users. In 1992 the average revenue per user was around USD 972. In some countries, such as the Czech Republic, Japan and Luxembourg, the annual revenue per user was more than USD 3 000 at that time. In the following © OECD 2003

63

OECD Communications Outlook 2003

Figure 3.5. Public telecommunication revenue per capita, 1991 and 2001 1991

2001

USD 1 400

USD 1 400

1 200

1 200

1 000

1 000

800

800

600

600

400

400

200

200

0

U

ni

te

d

St a N tes or w a J y U Sw ap ni itz an te e d rla K n Lu ing d xe do m m bo u Fi rg nl a Sw nd e D de en n m a Ic rk el an N O d et E he CD rla G nd er s m Au an st y r Be alia lg i C um an ad Ire a la N A nd ew us Ze tria al an Sp d Po ain rtu g Fr al an G ce re ec e Ita l Ko y C ze Hu rea c Sl h R nga ov e ry ak pu R bli ep c ub Po lic la M nd ex ic Tu o rk ey

0

Source: OECD.

decade the average revenue per user has decreased to USD 433 (Table 3.6). The countries with the highest mobile revenue per user tend to be those with a low proportion of prepaid users. Canada, Finland, Japan, Korea and the United States all generate more than USD 400 in mobile revenue per user and all have relatively low proportions of prepaid users. The main exceptions are Ireland and to a lesser extent Iceland and Switzerland. These countries also generate more than USD 400 but they have higher proportions of prepaid users. Japan has the highest annual mobile revenue per user. There are several reasons for this occurrence. One reason is that NTT DoCoMo, the largest Japanese mobile company, derived 19.6% of its total revenue from equipment sales. In many other countries equipment sales are made through independent entities so that the cost and revenue from these transactions do not appear in their accounts (or appear to a much lesser extent). If equipment sales were removed from the Japanese data the average revenue per user would be less than USD 800 instead of USD 1008. This is still the highest in the OECD for several other reasons.

64

NTT DoCoMo’s annual ARPU for cellular mobile subscribers is USD 864 per annum. Wireless data revenues in other OECD countries are still very small compared to Japan and this is an additional reason that companies such as NTT DoCoMo generate higher ARPU. Some 18% of NTT DoCoMo’s annual ARPU from cellular mobile subscribers (USD 156) is derived from i-mode services. The remaining USD 708 is attributable to telephony. This is still relatively high compared to operators outside Japan with the main subsequent factors being the type of subscription, level of usage and price. Japan has a very low proportion of prepaid users compared with most OECD countries. In general, this translates into higher usage and revenue per subscriber. For example, the average use by an NTT DoCoMo cellular mobile subscriber in 2001 was 178 minutes per month (130 outgoing and 48 incoming). This is © OECD 2003

Telecommunication Market Size

Figure 3.6. Cellular mobile telecommunication revenue per cellular mobile subscriber, 1998 and 2001 1998

2001

USD 1 200

USD 1 200

1 000

1 000

800

800

600

600

400

400

200

200

0

Sw Ja itz pan er la n U ni Ire d te la d nd St at Au es st Ic ria el an O d EC Fi D nl a C nd an ad Ko a r N ea or w B a N elg y et he ium rla Au nd st s r Po alia rtu ga Sp l G a er in m H any un D ga Lu enm ry U xe a ni te mb rk d ou N Kin rg ew gd Ze om al Sw and ed Po en la nd Ita Fr ly a C ze G nce ch re R ece ep u Sl ov M blic ak e R xico ep ub Tu lic rk ey

0

Source: OECD.

much higher, for example, than prepaid cards that are used, on average in a number of OECD countries, for less than 60 minutes per month. Mobile operators in the United States have also been successful in generating relatively high amounts of revenue per user. In 2001, for example, Nextel’s 8.6 million customers had an ARPU of USD 852 per annum. These revenues are firmly driven by much higher levels of usage. Nextel’s users averaged 565 minutes per month whereas the highest amount for most mobile operators, in other OECD countries, rarely exceeds 180 minutes. International communications Revenue from international telecommunications was once one of the most closely scrutinised indicators. In the past, the very high prices for international telephony and high costs of terminating international calls made this segment a significant part of the revenue of telecommunication carriers. In 1992, more than a third of carriers in the OECD area relied on international traffic for more than 20% of their revenue. A decade later, international traffic amounted to no more than 10% in virtually all OECD countries and represented less than 5% in more than half. Several factors are at work in the declining proportion of international revenue in relation to the total. A significant factor, of course, has been the growth of mobile communications which has meant that overall industry revenues have increased at a rapid rate. At the same time, liberalisation has pushed prices closer to the cost of providing international services. This has caused a sharp increase in the volume of international traffic even at a time of increasing substitution of public switched © OECD 2003

65

OECD Communications Outlook 2003

Figure 3.7. Share of mobile revenue in public telecommunication revenue, 1998 and 2001 1998 % of mobile revenue in total revenue 70

2001 % of mobile revenue in total revenue 70

60

50

50

40

40

30

30

20

20

10

10

0

0

C

ze c

h

Au s

tri Ko a R rea ep ub l Ja ic pa Ire n la Ic nd el Po and rtu ga l Ita Fi ly Sw nl itz and er la n Sp d a Be in lg Sl ov P ium ak ol R and ep u H bli un c ga N Gre ry et he ece rla nd O s EC Lu Fr D x an N em ce ew bo Ze urg al a M nd e G xic er o m Au an st y ra N lia or w Sw ay ed D U en en ni te ma d St rk U a ni C tes te a d na Ki d ng a do Tu m rk ey

60

Source: OECD.

telecommunication network (PSTN)-based international communications. Some of the services substituting for international PSTN telephony and fax traffic include Internet telephony and e-mail. iBasis, a company specialising in Voice over Internet Protocol (VoIP), increased the number of international minutes its network carried from 600 million to 1.4 billion in 2001. The company expects to carry more than 2 billion minutes in 2002. The largest customers of iBasis are traditional carriers who outsource a portion of their international carriage to the company. Internet telephony is also growing apace with various combinations of PC-to-PC, PC-to-Phone and Phone-to-Phone internet protocol (IP) telephony. These combinations radically alter the traditional definition of an international telephone call. One new service, for example, allows foreign users to select a telephone number in the area code of their choice in another country. Users in that area code then only pay the price of a local call to reach that number. For their part, the international receiver of the call pays a fixed monthly fee of less than USD 10 for an unlimited number of calls.

66

Notwithstanding the substitution of services, or new forms of carriage, minutes of international traffic continue to grow in most OECD countries. This is particularly true of countries having liberalised more recently than 1998. In Spain, Telefonica’s outgoing minutes increased 30.7% in 2000 and 18.4% in 2001. Countries that liberalised international service much earlier are, however, also still growing. The outgoing minutes of international traffic from the United Kingdom grew by 7% in 2000 and 9% in 2001. In the United States, minutes of international telephone service increased 11% during 2001 from 30.1 billion to 33.3 billion. Accordingly, on a per capita basis, international traffic is increasing in most countries (Tables 3.7 and 3.8). IP telephony can be expected to further increase the amount of international minutes, but also further blur the distinction between domestic and international calls. In Japan, one broadband access company is providing IP telephony at USD 0.02 per minute to any part of Japan and the United States. © OECD 2003

Telecommunication Market Size

Figure 3.8. Minutes of outgoing international telecommunication traffic (MiTT), 2001 Outgoing MiTT per capita

Outgoing MiTT per access paths (fixed + mobile)

MiTT 1 000

MiTT 1 000

900

900

800

800

700

700

600

600

500

500

400

400

300

300

200

200

100

100

0

bo u itz rg er N l ew an Ze d al an Be d lg i D um en U m ni ar te k d St at e s U N ni or te w d a Ki y ng do m Ic el an d Au st r Sw ia ed N et he en rla nd G er s m an Fi y nl an d M ex ic o Sp ai n Sl ov Gre ak ec e R ep ub l Po ic rtu ga l Ita l y H C ze un ga ch ry R ep ub lic Tu rk ey Po la nd

xe m

Sw

Lu

0

Source: OECD.

Leased lines While the number of leased lines continues to increase in nearly all OECD countries, the trends in revenue are mixed across different incumbent telecommunication carriers. The advent of the Internet has created significant new demand for leased lines. In countries where competition had already pushed down the price of leased lines, such as the United States, the demand for additional leased capacity has pushed revenues from USD 18.7 billion in 1997 to USD 33 billion in 2000 (Table 3.9). In countries where there has been a decrease in revenue, it is generally not because of any volume decrease. Rather, it suggests increasing competition in a market or geographical segments that previously faced little competition. Australia provides a good example of the impact increasing competition can have at a time of growing demand. In Australia, there was a duopoly for the provision of international infrastructure until mid-1997. Given the time it takes to build new undersea cable connections, the first independent capacity on new facilities came on stream in 2000. In 2001 Telstra’s revenue from international leased lines decreased by 51%, which it attributed to “multiple participants and excess capacity driving down prices”. Meanwhile, domestic leased line revenue remained relatively constant even with greater competition and increasing demand for capacity. The main reason for this is that it is easier for competitors to offer a wholly substitutable international service than national service due to the reach of their facilities. In the future, asymmetrical and symmetrical digital subscriber line (DSL) services are expected to increasingly substitute for local leased lines. As these services are much less expensive, this should © OECD 2003

67

OECD Communications Outlook 2003

place pressure on the prices of local leased lines, and should have an increasing impact on revenue in that segment of the market. Research and development Although data are not available for all telecommunication carriers, research and development expenditure by leading carriers continues to be in the range of USD 6 to USD 7 billion (Table 3.10). The majority of this expenditure is impacted by government regulation. In a number of OECD countries regulation requires telecommunication carriers to allocate a certain amount of their turnover for research and development. In Japan, the NTT Law, amended in June 1997, requires NTT to conduct research relating to telecommunications technologies. The NTT Law stipulates that NTT (including NTT East and NTT West) are responsible for promoting research in telecommunications technologies and disseminating the results of such research. In Korea, under the Telecommunications Basic Law, the Ministry for Information and Communications may recommend that network service providers contribute a percentage of their total annual revenues to telecommunication research. These recommendations may apply to the level of internal R&D made by carriers as well as to external contributions. The external contributions are made to a fund administered by MIC, which then distributes funding to Korean research institutes. In France, government regulation requires France Telecom to spend 4% of its unconsolidated revenues on research and development. This amount has declined relative to the growth of consolidated revenues and represented 1.3% of France Telecom’s turnover in 2001. Mobile operators in Canada are also required, as part of their licence obligations, to invest 2% of adjusted gross revenues in research and development. Apart from Canada, France, Japan and Korea, telecommunication carriers in most OECD countries are not required by regulation to engage in a specific amount of R&D. It is noteworthy, however, that some carriers with significant state ownership tend to spend the greatest proportion of revenue on R&D among those countries that do not have regulatory requirements relating to R&D. For example, Telia and Sonera respectively spend 2.2% and 3.7% of their revenue on R&D. On the other hand, Elisa, which is 100% privately owned, also spends 2.5% of turnover on R&D. This means that there may be other factors at work that are more significant than ownership or regulation in particular markets. Worthy of note is that BT, without a regulatory obligation and 100% privately owned, spent more on R&D than France Telecom in 2001. In some cases, telecommunication carriers spent much less in 2001 than they did in 1997 or 1999. Carriers such as AT&T, KPN and Telecom Italia are spending less on R&D. This does not mean that fewer products and services have less of an R&D component. In liberalised markets, and free of regulatory requirements, telecommunication carriers tend to focus R&D expenditures on applying technology and services developed by others such as equipment companies. This contrasts with the era of monopolies when some telecommunication carriers did significant amounts of fundamental research. This does not mean that less R&D is being conducted in the sector. In fact, the reverse is the case. In competitive markets, telecommunication carriers have become increasingly demanding customers for the technologies and applications developed by others. The impact of this is readily evident in the trends in R&D expenditure among the leading equipment suppliers. In 2001, telecommunication equipment companies spent more than USD 38 billion on R&D. This compares to around USD 27 billion in 1997 – the last year in which monopolies over telecommunication services existed in the majority of OECD countries.

68

Although experiencing a sharp downturn in the market for equipment, telecommunication equipment companies generally increased their R&D in 2001. Ericsson led the way in 2001 with R&D expenditure of USD 4.5 billion, representing some 20.1% of the company’s turnover. Other companies that increased R&D expenditure included Motorola, Cisco, Nortel and Alcatel. In other cases, companies such as Lucent maintained levels of R&D expenditure in the face of falling demand, meaning that R&D increased as a proportion of total revenue. © OECD 2003

Telecommunication Market Size

As measured by the number patents filed with the United States Patent and Trademark Office (USPTO), the level of R&D undertaken by telecommunication equipment companies has also increased significantly following widespread liberalisation across the OECD. In 2001, the leading equipment manufacturers were awarded 11 500 patents by the USPTO. This was nearly double the number of patents awarded in 1997. The number of patents awarded to telecommunication carriers has also increased. In 2001, nearly 600 patents were awarded to leading telecommunication carriers in OECD countries by the USPTO (Table 3.11). This was around three times the number of patents awarded in 1997. Data on patents granted by the USPTO by country are also available (Table 3.12).

69

© OECD 2003

© OECD 2003

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD Source: OECD.

Revenue 1991 (USD m) 9 554 2 934 2 820 12 667 485 2 389 2 140 20 527 28 430 1 345 466 89 1 271 18 155 52 115 6 112 154 5 390 5 192 1 484 2 204 1 160 1 671 0 10 066 5 717 5 173 2 744 26 031 153 942 382 426

Revenue 1996 (USD m) 13 109 4 012 4 480 13 361 1 130 3 491 2 693 30 591 42 067 3 133 1 841 156 1 952 24 189 111 574 14 919 318 6 755 8 413 2 142 3 437 2 535 3 822 417 11 630 7 577 7 687 3 066 30 539 222 256 583 293

Revenue 1997 (USD m) 13 463 3 736 4 244 17 080 1 452 3 485 3 071 28 620 43 698 3 285 2 138 151 2 131 23 880 109 958 9 097 306 8 770 7 890 2 249 3 609 2 593 3 959 451 14 254 6 910 6 794 3 983 35 782 256 801 623 841

Revenue 1998 (USD m) 12 850 4 120 5 101 18 539 1 833 3 760 3 634 28 878 49 091 4 304 2 513 167 1 912 26 468 105 886 12 784 341 9 207 9 491 2 041 5 018 3 620 4 215 480 15 961 7 393 7 699 5 017 45 000 272 801 670 122

Revenue 1999 (USD m) 14 098 4 997 5 896 18 472 2 110 4 146 4 041 33 153 50 707 4 254 3 071 191 2 448 26 696 136 760 13 557 364 10 537 10 719 2 173 4 910 4 592 4 730 444 18 202 7 421 7 535 5 462 50 806 301 648 754 140

Revenue 2000 (USD m) 14 656 4 440 6 095 20 072 2 316 4 173 4 004 27 186 51 038 4 297 3 210 253 2 249 24 590 157 582 18 168 342 13 196 10 150 2 224 4 562 5 427 4 981 804 18 652 6 867 7 559 6 215 54 608 335 023 814 938

Revenue 2001 (USD m) 13 382 5 043 6 716 20 102 2 558 4 216 4 233 29 270 57 075 4 995 3 613 216 2 478 26 930 141 943 18 131 372 14 890 11 607 2 117 5 130 6 583 5 431 942 21 745 7 219 7 879 5 888 55 828 344 762 831 294

Revenue CAGR 2000-2001 -8.7 13.6 10.2 0.1 10.4 0.5 5.7 7.7 11.8 16.3 12.5 -14.8 10.2 9.5 -9.9 -0.2 9.0 12.8 14.4 -4.8 12.4 21.3 9.0 17.1 16.6 5.1 4.2 -5.3 2.2 2.9 2.0

Revenue CAGR 1996-2001 0.4 4.7 8.4 8.5 17.7 3.8 9.5 -0.9 6.3 9.8 14.4 6.7 4.9 2.2 4.9 4.0 3.2 17.1 6.6 -0.2 8.3 21.0 7.3 17.7 13.3 -1.0 0.5 13.9 12.8 9.2 7.3

Revenue CAGR 1991-2001 3.4 5.6 9.1 4.7 18.1 5.8 7.1 3.6 7.2 14.0 22.7 9.2 6.9 4.0 10.5 11.5 9.2 10.7 8.4 3.6 8.8 19.0 12.5 .. 8.0 2.4 4.3 7.9 7.9 8.4 8.1

OECD Communications Outlook 2003

70

Table 3.1. Telecommunication revenue in the OECD area

Telecommunication Market Size

Table 3.2. Telecommunication revenue as a percentage of GDP 1985

1990

1995

1997

1998

1999

2000

2001

GDP per capita 2001 (USD)

Australia

1.92

2.81

2.99

3.24

3.45

3.47

3.76

3.85

17 817

Austria

1.68

1.75

1.82

1.82

1.95

2.39

2.36

2.68

23 145

Belgium

1.27

1.37

1.56

1.74

2.03

2.35

2.68

2.93

22 323

Canada

2.21

2.12

2.09

2.71

3.05

2.85

2.85

2.90

22 325

..

1.69

1.91

2.74

3.23

3.86

4.56

4.53

5 484

Czech Republic Denmark

1.49

1.77

2.07

2.06

2.18

2.38

2.60

2.61

30 154

Finland

1.50

1.62

1.95

2.50

2.82

3.15

3.33

3.51

23 212

France

1.65

1.55

1.94

2.04

1.99

2.30

2.09

2.24

22 079

Germany

1.60

1.49

1.87

2.08

2.29

2.41

2.75

3.10

22 378

Greece

1.33

1.55

2.38

2.70

3.54

3.40

3.78

4.60

10 213

Hungary

..

..

3.45

4.68

5.34

6.39

6.89

6.96

5 098

Iceland

1.29

1.35

1.92

2.07

2.06

2.25

2.98

2.80

27 016

Ireland

2.31

2.76

2.65

2.67

2.21

2.58

2.37

2.40

26 848

Italy

1.48

1.46

1.68

2.05

2.22

2.26

2.30

2.48

18 943

Japan

1.58

1.52

2.01

2.55

2.69

3.04

3.31

3.43

32 556

Korea

2.05

2.05

2.17

1.91

4.03

3.34

3.94

4.29

8 917

Luxembourg

1.03

1.33

1.66

1.74

1.81

1.86

1.82

1.96

42 968

Mexico

0.52

1.53

2.27

2.19

2.19

2.19

2.28

2.54

5 926

Netherlands

1.45

1.71

2.05

2.10

2.41

2.70

2.76

3.06

23 725

New Zealand

2.46

3.33

3.44

3.41

3.77

3.88

4.38

4.51

12 199

Norway

1.91

2.02

2.14

2.33

3.40

3.20

2.82

3.24

35 087

..

0.88

1.69

1.80

2.28

2.96

3.45

3.93

4 334

2.66

1.93

2.83

3.70

3.76

4.13

4.72

4.96

10 889

Poland Portugal Slovak Republic

..

..

1.72

2.21

2.25

2.25

4.17

5.13

3 411

Spain

1.44

1.69

1.89

2.54

2.72

3.03

3.34

3.75

14 417

Sweden

1.78

2.24

2.91

2.89

3.08

3.06

3.00

3.44

23 583

Switzerland

2.15

2.14

2.62

2.65

2.94

2.91

3.16

3.19

34 123

Turkey

1.03

1.37

1.08

2.10

2.50

2.95

3.12

3.98

2 157

United Kingdom

2.36

2.59

2.50

2.69

3.14

3.50

3.81

3.89

23 890

United States

2.67

2.54

2.71

3.11

3.13

3.28

3.42

3.51

34 419

OECD 2.13 2.00 2.25 2.63 2.81 Note: Using current exchange rates and current market prices. Source: OECD.

3.00

3.20

3.35

21 814

71

© OECD 2003

1999

Name of PTO

Country

Major foreign telecom operator shareholders, 2001

Telstra

Australia

Telekom Austria

Austria

Telecom Italia (29.78)

Belgacom

Belgium

SBC (17%), TDC (16.5%), Singapore Telecom (12.5%)

1

Revenue (USD m)

Group foreign revenue (USD m)

2000 Foreign revenue as % of total

Revenue (USD m)

2001

Group foreign revenue (USD m)

Foreign revenue as % of total

Revenue (USD m)

Group foreign revenue (USD m)

Foreign revenue as % of total

12 800

370

2.9

13 362

618

4.6

10 778

793

7.4

3 966

..

..

3 575

136

3.8

3 521

251

7.1

Bell Canada Enterprises

Canada

SBC (20%)

9 540

728

7.6

11 669

881

7.5

14 007

2 063

14.7

Telus

Canada

Verizon (23.7%)

3 941

..

..

4 098

..

..

4 647

..

..

Czech Republic

KPN (6.5%), Swisscom, AT&T (27%)

1501

..

..

1 482

..

..

1 470

..

..

TDC (TeleDanmark)

Denmark

SBC (41.6%)

5 762

2 407

41. 8

5 787

2 690

46.5

6 500

3 522

54.2

Elisa

Finland

1 138

57

5.0

1 141

90

7.9

1 285

48

3.7

Sonera

Finland

1 841

92

5.0

1 887

139

7.4

1 953

133

6.8

France Telecom

France

29 000

3 843

13. 3

30 894

7 982

25.8

38 416

13 750

35.8

4 087

23

0.6

4 835

150

3.1

6 821

1 132

16.6

Czech Telecom

BT (26%), Vodafone (15%), SBC (15%)

Cegetel / SFR

France

Deutsche Telekom

Germany

35 325

2 988

8.5

37 559

7 156

19.1

43 133

11 786

27.3

OTE

Greece

3 622

17

0.5

3 299

56

1.7

3 643

68

1.9

Siminn

Iceland

191

..

..

224

..

..

187

..

..

29 425

1 739

5.9

24 926

3 290

13.2

27 516

3 742

13.6 11.0

2

Telecom Italia

Italy

Matav

Hungary

1 623

..

..

1 580

..

..

1 912

210

Eircom

Ireland

2 313

..

..

1 806

20

1.1

1 927

..

..

NTT

Japan

91 156

..

..

105 912

6

..

96 121

51

0.1

KT

Korea

9 914

..

..

11 970

..

..

12 351

..

..

P&T

Luxembourg

327

..

..

283

..

..

285

..

..

Telmex

Mexico

10 075

..

..

11 262

..

..

11 881

..

..

America Movil

Mexico

1693

168

9.9

3 181

723

22.7

4 429

974

22.0

9 722

921

9.5

12 395

1 859

15.0

11 481

2 526

22.0

2 299

471

20.5

2 562

813

31.7

2 326

757

32.5

4 291

748

17.4

4 270

379

8.9

5 121

731

14.3

KPN Telecom

Netherlands

Telecom, NZ

New Zealand

Telenor

Norway

Deutsche Telekom (59.52%)

SBC (8.1%)

Verizon (21.5%)

OECD Communications Outlook 2003

72

Table 3.3. Globalisation of selected telecommunication carrier revenues

© OECD 2003

© OECD 2003

Table 3.3. Globalisation of selected telecommunication carrier revenues (continued) 1999

Name of PTO

Country

Major foreign telecom operator shareholders, 2001

TPSA

Poland

France Telecom (33.93%)

Portugal Telecom

Portugal

Slovak Telecom

Slovak Republic

Telefonica

Spain

Deutsche Telekom (51%)

Revenue (USD m)

Group foreign revenue (USD m)

2000 Foreign revenue as % of total

Revenue (USD m)

2001

Group foreign revenue (USD m)

Foreign revenue as % of total

Revenue (USD m)

Group foreign revenue (USD m)

Foreign revenue as % of total

3 317

..

..

3 650

..

..

4 236

..

..

3 429

303

8.8

4 721

1 508

31.9

5 113

1 252

24.5

445

..

..

399

..

..

416

0

0.0

24 459

14 214

58. 1

26 133

11 349

43.4

27 726

10 611

38.3

Tele2

Sweden

992

187

18. 8

1 358

485

35.7

2 428

1 551

63.9

Telia

Sweden

6 310

649

10.3

5 902

829

14.0

5 537

1 050

19.0 27.8

Swisscom

Switzerland

7 440

676

9.1

8 393

2 441

29.1

8 513

2 363

Cable & Wireless

United Kingdom

14 840

10 366

69. 9

12 271

9 021

73.5

8 567

5 139

60.0

Vodafone

United Kingdom

12 698

8 019

63. 2

22 733

17 515

77.0

33 109

27 655

83.5

Colt

United Kingdom

648

353

54. 5

1 041

697

67.0

1 313

940

71.6

BT

United Kingdom

35 327

2 506

7.1

31 921

8 315

26.0

31 616

7 807

24.7

MMo2

United Kingdom

..

..

..

5 812

1 667

28.7

6 197

2 130

34.4

Bell South

United States

25 224

2 358

9.3

26 151

2 906

11.1

24 130

2 910

12.1

Level3

United States

515

22

4.3

1 184

125

10.6

1 533

174

11.4

Verizon

United States

58 194

1 714

2.9

64 707

1 976

3.1

67 109

2 337

3.5

SBC

United States

49 531

255

0.5

51 374

328

0.6

45 908

185

0.4

518 922

56 194

10.8

567 712

86 151

15.2

585 161

108 641

18.6

Total of above

1. Bell Canada Enterprises purchased SBC shares in June 2002. 2. Telecom Italia announced its intention to sell its stake in Telekom Austria in 2002. Source: OECD.

Telecommunication Market Size

73

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD Source: OECD.

1995 (USD m) 1 776.71 .. 419.50 1 662.84 112.11 312.14 512.36 2 140.68 6 828.67 293.53 286.38 13.15 .. 2 847.88 25 292.37 2 216.80 15.34 449.53 859.70 206.12 478.86 .. 397.36 3.57 613.47 848.11 539.83 55.18 2 539.68 18 627.00 70 348.89

% of total revenue 15.96 .. 9.73 13.65 11.26 8.37 20.23 7.10 14.77 10.49 18.58 9.92 .. 15.41 23.72 20.87 5.11 6.92 10.15 9.83 15.29 .. 13.04 1.13 5.57 12.13 6.69 3.03 8.90 9.35 13.05

1998 (USD m) 3 564 937 1 167 2 958 597 829 1 295 4 385 12 472 1 127 712 36 490 7 706 45 697 3 798 26 815 2 164 315 1 272 668 1 155 25 4 327 1 351 1 237 336 6 000 37 032 144 492

% of total revenue 27.74 22.75 22.88 15.96 32.58 22.05 35.64 15.18 25.41 26.18 28.33 21.41 25.60 29.12 43.16 29.71 7.57 8.85 22.81 15.42 25.35 18.46 27.40 5.31 27.11 18.28 16.07 6.69 13.33 13.57 21.56

1999 (USD m) 3 861 1 823 1 600 3 155 850 993 1 588 6 393 16 428 1 564 764 46 987 8 785 60 028 7 284 81 1 350 2 580 481 1 350 1 416 1 549 13 6 295 1 532 2 527 670 7 903 50 152 194 047

% of total revenue 27.38 36.48 27.14 17.08 40.28 23.95 39.30 19.28 32.40 36.76 24.89 24.18 40.33 32.91 43.89 53.73 22.23 12.81 24.07 22.16 27.49 30.83 32.75 2.84 34.59 20.65 33.53 12.28 15.56 16.63 25.73

2000 (USD m) 3 686 2 587 2 052 3 747 1 162 983 1 666 7 120 15 478 1 670 1 043 111 1 341 9 444 74 948 10 905 82 2 944 3 412 625 1 239 1 931 1 980 276 7 544 1 571 2 776 861 10 455 63 280 236 918

% of total revenue 25.15 58.27 33.67 18.67 50.16 23.56 41.61 26.19 30.33 38.88 32.49 43.76 46.48 38.40 47.56 60.02 24.04 22.31 33.62 28.10 27.16 35.59 39.74 34.30 40.45 22.88 36.72 13.85 19.14 18.89 29.07

2001 (USD m) 3 488 3 006 2 707 4 287 1 414 1 032 1 796 8 803 16 204 1 802 1 312 104 1 649 11 986 75 382 10 800 112 4 247 4 129 612 1 304 2 621 2 495 354 8 954 1 772 3 322 758 11 864 76 474 264 793

% of total revenue 26.06 59.60 40.30 21.33 55.29 24.48 42.42 30.07 28.39 36.08 36.32 48.18 50.52 44.51 53.11 59.57 29.98 28.52 35.58 28.91 25.43 39.81 45.94 37.62 41.18 24.55 42.17 12.88 21.25 22.18 31.85

OECD Communications Outlook 2003

74

Table 3.4. Mobile telecommunication revenue

© OECD 2003

© OECD 2003

Table 3.5. Telecommunication revenue ratios 1998 (USD)

847.27 683.58 748.71 729.62 388.71 701.13 602.58 627.66 812.59 565.47 550.22 591.11 741.24 565.98 918.00 366.92 931.26 693.51 853.96 676.33 995.10 346.78 586.14 239.25 669.45 707.73 1 178.33 245.11 987.93 1 060.78 834.90

1999 (USD)

Per capita

Per access path (fixed + mobile)

684.95 509.97 499.93 612.89 178.03 708.93 705.13 494.51 598.46 409.29 248.47 608.93 516.11 464.02 837.13 276.19 799.64 96.23 604.24 538.26 1 132.41 93.63 422.88 89.09 404.54 835.25 1 082.83 77.44 759.66 1 008.47 605.42

825.06 611.97 697.95 668.98 363.93 666.13 613.12 568.48 711.71 442.96 563.54 530.39 768.51 467.22 1 068.64 267.09 761.50 564.71 653.01 658.17 829.29 319.39 531.36 190.46 557.80 636.44 927.62 211.17 880.04 1 067.16 792.78

2000 (USD)

Per capita

Per access path (fixed + mobile)

742.63 617.47 576.61 605.67 205.19 779.08 781.47 565.54 617.72 403.73 305.07 688.82 653.59 467.71 1 079.52 290.81 840.52 107.98 677.87 570.09 1 100.42 118.79 473.54 82.36 459.35 837.77 1 054.78 82.98 853.88 1 105.16 676.79

745.05 441.61 559.02 653.99 281.83 583.24 553.47 395.07 518.56 360.94 446.06 618.84 589.07 349.12 1 109.55 335.73 545.60 498.50 475.09 565.16 682.47 272.30 453.73 282.51 436.65 525.21 765.48 185.64 695.36 1 078.90 720.96

2001 (USD)

Per capita

Per access path (fixed + mobile)

Per capita

762.33 547.53 594.55 652.33 225.47 781.39 772.85 461.62 620.86 405.30 320.27 899.36 593.95 429.98 1 241.53 386.49 778.91 135.51 637.29 580.65 1 015.90 140.42 497.73 148.92 467.14 773.96 1 052.14 92.13 913.84 1 216.62 727.18

598.04 471.15 523.56 622.50 231.00 541.05 552.87 379.99 525.92 353.26 392.81 504.86 534.94 340.53 951.97 322.27 477.76 418.37 497.12 505.67 732.04 242.85 439.59 247.15 443.63 520.25 739.28 157.52 684.09 1 074.04 676.36

686.80 620.50 654.41 646.75 248.66 786.80 814.77 494.49 693.41 470.20 354.71 756.02 645.42 469.59 1 115.81 382.96 844.10 150.24 726.04 549.93 1 136.40 170.37 539.83 175.06 540.03 811.48 1 089.65 85.82 930.27 1 209.59 731.74

75

Telecommunication Market Size

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD Source: OECD.

Per access path (fixed + mobile)

OECD Communications Outlook 2003

Table 3.6. Cellular mobile telecommunication revenue per cellular mobile subscriber USD 1994

1995

1996

1997

1998

1999

2000

2001

881

792

533

548

725

611

431

313

..

..

..

747

407

424

423

445

Belgium

1 933

1 785

..

679

664

502

365

352

Canada

703

642

610

490

552

456

428

395

2 965

2 452

755

705

618

437

267

204

Australia Austria

Czech Republic Denmark

462

380

507

528

429

378

292

261

Finland

505

493

464

425

455

485

447

430

France

875

1 487

1 329

818

391

310

240

238

1 129

1 829

1 571

1 234

896

701

321

288

215

1 075

915

839

548

402

282

226

1 021

1 073

1 284

1 088

687

477

339

264

428

426

434

413

337

267

515

441

Germany Greece Hungary Iceland Ireland

..

..

876

725

518

617

664

595

886

726

724

564

380

292

224

240

Japan

3 132

2 160

1 388

1 140

966

1 056

1 122

1 008

Korea

1 232

1 351

1 338

506

272

311

407

372

960

571

465

335

199

388

271

258

Mexico

1 570

653

501

378

243

175

209

195

Netherlands

Italy

Luxembourg

1 543

1 601

732

843

647

380

310

318

New Zealand

412

488

..

292

251

312

286

253

Norway

488

488

572

495

604

492

368

354

Poland (TPSA) Portugal Slovak Republic Spain Sweden

..

..

..

453

347

363

286

244

1 176

1 166

1 023

653

376

332

297

313

..

290

..

..

55

19

249

165

842

660

767

735

614

423

315

304

407

422

444

348

329

299

247

248

1 007

1 210

1 134

906

728

826

598

630

Turkey

353

126

339

353

96

86

57

41

United Kingdom

488

448

573

609

462

330

241

256

United States

630

593

588

597

535

583

578

595

Switzerland

OECD 924 944 854 746 589 540 461 433 Note: Data for 1999 are missing for Iceland (TAL), Netherlands (Dutchtone, Telfort, Ben), Luxembourg (P&T), Turkey (Telsim). Source: OECD.

76

© OECD 2003

© OECD 2003

Table 3.7. International telecommunication revenue International revenue (USD m) 1998 1 279 .. .. .. 228 302 226 1 772 2 761 589 181 15 .. 1 544 2 422 522 .. 1 367 .. 217 65 .. .. 59 760 312 968 131 2 333 20 056 38 108

International revenue (USD m) 1999 1 161 295 369 .. 182 191 203 1 312 2 044 576 185 17 .. 1 283 2 235 483 .. 1 599 678 185 53 .. .. 45 751 287 799 164 2 258 20 360 37 713

International revenue (USD m) 2000 1 006 218 273 .. 100 233 154 1 105 1 269 373 147 10 .. 978 2 069 536 .. 1 768 545 161 42 343 241 39 1 037 234 468 110 1 818 23 325 38 603

International revenue (USD m) 2001 .. 200 226 .. 58 115 .. 1 005 1 245 336 123 7 .. 875 .. 486 .. 1 470 527 150 42 327 340 34 930 153 .. 139 1 594 17 885 28 268

As % of total national revenue 2000 6.86 4.90 4.48 .. 4.33 5.59 22.8 4.06 2.49 0.03 4.57 4.04 .. 3.98 1.31 2.95 .. 13.40 5.37 7.25 0.93 6.32 4.83 4.90 5.56 3.42 6.19 1.78 3.33 6.96 4.74

As % of total national revenue 2001 .. 3.97 3.37 .. 2.27 2.73 .. 3.43 2.18 6.73 3.39 3.36 .. 3.25 .. 2.68 .. 9.87 4.54 7.10 0.81 4.97 6.25 3.60 4.28 2.39 .. 2.36 2.86 5.19 3.40

Per total national access paths (fixed + mobile) (USD) 2001 .. 18.68 17.62 .. 5.24 14.74 .. 13.05 11.47 23.78 13.33 16.96 .. 11.07 .. 8.64 .. 41.30 22.56 35.93 5.94 12.06 27.49 8.90 18.98 11.04 .. 3.72 19.53 55.72 23.00

77

Telecommunication Market Size

Australia Austria Belgium Canada1 Czech Republic2 Denmark (TDC) Finland France (France Telecom) Germany Greece (OTE) Hungary (Matav) Iceland (Telecom) Ireland Italy Japan (KDD) Korea (Korea Telecom) Luxembourg Mexico Netherlands (KPN) New Zealand (Telecom) Norway Poland (TPSA) Portugal (Telecom) Slovak Republic Spain Sweden Switzerland (Swisscom) Turkey United Kingdom United States OECD 1. Total revenue for Teleglobe. 2. Cesky Telecom only for 2001. Source: OECD.

International revenue (USD m) 1997 1 276 .. 552 1 441 241 370 213 2 164 2 836 548 124 .. 358 1 467 2 604 690 .. 1 887 1 067 303 .. .. 478 74 922 353 948 143 2 459 20 355 43 872

Outgoing MiTT Outgoing MiTT Outgoing MiTT per access path per access path per capita (fixed + mobile) (fixed + mobile) 1999 1998 1999 Australia 90.1 111.4 111.4 123.8 Austria 137.8 184.7 145.6 144.3 Belgium 143.1 214.3 122.2 147.9 Canada 158.9 189.1 191.2 211.1 Czech Republic 33.0 72.0 .. .. Denmark 109.7 108.5 123.2 105.4 Finland 79.8 68.2 83.4 65.4 France 68.4 86.9 74.8 75.2 Germany 71.6 97.2 96.3 110.9 Greece 65.1 89.9 69.3 76.0 Hungary 29.3 64.9 32.4 59.9 Iceland 166.1 161.2 181.7 139.9 Ireland 238.9 343.1 271.0 318.7 Italy 40.1 48.9 44.6 44.5 Japan 14.4 15.7 15.4 15.3 Korea 19.5 25.9 20.6 18.9 Luxembourg 688.9 802.3 737.8 668.4 Mexico 13.8 99.1 16.0 83.8 Netherlands 114.9 162.4 136.0 131.0 New Zealand (Telecom) 124.7 156.7 149.8 173.0 Norway 124.1 109.0 143.0 107.7 Poland 15.6 57.7 16.1 43.4 Portugal 47.2 65.4 41.0 46.0 Slovak Republic 28.6 76.9 30.1 69.6 Spain 34.6 57.3 41.7 50.7 Sweden 143.0 121.2 171.1 130.0 Switzerland 286.1 311.3 337.9 297.2 Turkey 9.9 31.5 11.4 29.1 United Kingdom 97.9 127.3 116.0 119.5 United States 89.6 94.3 104.5 100.9 OECD 61.6 85.0 71.4 83.6 Notes: MiTTs are minutes of international telecommunications traffic. OECD is a weighted average. Source: OECD, ITU. Outgoing MiTT per capita 1998

Outgoing MiTT per capita 2000 .. 156.8 150.5 234.8 35.0 164.0 90.3 .. 112.2 .. 32.9 151.3 .. 48.8 17.2 13.7 867.8 19.3 .. 163.9 149.4 17.5 51.1 30.0 53.7 142.7 392.0 10.8 123.8 109.3 68.1

Outgoing MiTT per access path (fixed + mobile) 2000 .. 126.5 141.5 235.4 43.8 122.4 64.7 .. 93.7 .. 45.8 104.1 .. 39.6 15.3 11.9 607.9 71.1 .. 159.6 100.4 33.9 46.5 57.0 50.2 96.8 285.2 21.9 94.2 96.9 67.5

Outgoing MiTT per capita 2001 .. 128.4 172.2 .. 31.3 160.5 104.1 .. 111.0 64.7 30.5 147.6 .. 53.5 .. .. 894.7 20.6 133.0 158.2 155.9 11.1 54.7 32.1 66.7 152.1 383.9 9.8 135.0 116.8 64.9

Outgoing MiTT per access path (fixed + mobile) 2001 .. 97.5 137.8 .. 29.1 110.4 70.6 .. 84.2 48.6 33.8 98.5 .. 38.8 .. .. 506.4 57.3 91.1 145.5 100.4 15.8 44.5 45.4 54.8 97.5 260.5 18.1 99.3 103.7 60.0

OECD Communications Outlook 2003

78

Table 3.8. International telecommunication traffic

© OECD 2003

© OECD 2003

Table 3.9. Leased line revenue, selected incumbents/countries USD millions

1997

1998

1999

2000

2001

Leased line revenue as a % of total company revenue 1999

Leased line revenue as a % of total company revenue 2001

Change 1998-99 (%)

Change 2000-01 (%)

Telstra

Australia

..

..

..

264.0

173.1

..

1.6

..

Telekom Austria

Austria

..

213.3

231.4

208.9

229.1

2.3

6.5

8.5

9.7

All operators1

Belgium

256.0

270.8

354.4

305.6

300.6

6.0

4.5

30.9

-1.6

Czech Telecom

Czech Republic

Tele Danmark

Denmark

Sonera

-34.4

48.2

51.7

54.1

51.3

63.1

3.6

4.3

4.5

22.9

175.0

178.5

184.1

182.4

187.3

3.2

2.9

3.1

2.6

Finland

18.9

24.9

31.9

47.7

50.0

1.7

2.6

28.0

4.8

France Telecom

France

909.0

1 106.6

1 108.6

1 151.4

1 150.9

4.0

3.0

0.2

0.0

All operators2

Germany

1 087.6

865.5

1 250.0

1 132.0

1 226.0

2.3

2.6

44.4

..

OTE

Greece

..

..

155.2

146.9

166.2

..

4.6

..

13.1

Matav

Hungary

40.7

48.9

58.3

58.3

62.9

3.6

3.3

19.0

7.8

Telecom Italia

Italy

1 782.0

1 702.4

1 376.1

1 339.3

5.8

4.9

-4.5

-2.7

NTT

Japan

4 034.7

3 874.3

4 388.6

4 583.8

4 311.7

4.8

30.8

13.3

-5.9

KT

Korea

..

486.6

796.6

931.1

864.5

..

7.0

63.7

-7.2

Telenor

Norway

115.9

114.8

103.9

100.5

115.7

1.4

2.3

-9.5

15.2

TPSA

Poland

..

..

110.1

130.5

126.6

3.3

3.0

..

-3.0

Portugal Telecom

Portugal

102.2

114.3

144.6

143.8

145.0

4.2

2.8

26.5

0.9

Telefonica

Spain

670.2

756.0

821.9

893.4

833.2

3.4

3.0

8.7

-6.7

Telia

Sweden

204.5

179.8

188.9

102.0

120.3

3.0

2.2

5.1

18.0

Swisscom

Switzerland

..

..

253.3

231.4

200.6

..

2.4

..

-13.3

Türk Telekom

Turkey

BT

United Kingdom

Local and long distance carriers

United States

8.0

8.4

100.0

132.3

2.7

2.6

4.5

32.3

1 888.0

1 830.6

1 653.0

1 505.8

5.2

4.8

-3.0

-8.9

18 786.0

22 355.0

26 083.0

33 053.0

38 368.0

8.6

11.1

16.7

16.1

28 314.1

34 319.0

39 860.0

46 847.0

51 672.0

3.9

30.7

16.1

10.3

79

Telecommunication Market Size

Total of above 1. Belgacom only for 1997-98. 2. Deutsche Telekom only for 1997-98. Source: OECD.

6.9 1 858.1

PTO NTT Deutsche Telekom

R&D expenditure (1997)

R&D as a % of total revenue (1997)

R&D expenditure (1999)

R&D as a % of total revenue (1999)

R&D expenditure (2001)

R&D as a % of total revenue (2001)

2 388

3.1

3 140

3.4

3 216

3.3

692

1.8

697

2.0

804

1.9

BT

502

2.0

556

1.6

525

1.7

France Telecom

918

3.5

632

2.2

506

1.3

AT&T

829

1.6

550

0.9

325

0.6

Korea Telecom

113

2.2

258

2.6

293

2.4

Telefonica

153

0.8

96

0.4

153

0.6

Telia

202

3.3

190

3.0

126

2.3

..

..

352

1.2

123

0.4

SK Telecom

41

1.7

89

2.4

119

1.8

Vodafone

55

1.4

74

0.6

104

0.3

113

3.1

68

1.6

102

2.0

Telecom Italia

Telenor Sonera

52

3.5

64

3.5

73

3.7

KPN Telecom

60

0.8

59

0.6

41

0.4

Elisa

..

..

16

1.4

32

2.5

Telekom Austria

..

..

20

0.6

19

0.5

Hanaro Telecom

..

..

6

28.4

10

1.6

Dacom

3

0.6

6

1.0

4

0.5

Telecom New Zealand

4

0.2

5

0.1

3.4

0.1

Qwest

..

..

36

0.9

..

..

Telstra

43

0.3

19

0.1

..

..

..

..

11

0.3

..

..

18

0.4

7

0.1

..

..

169

1.2

18

0.1

..

..

6 355

1.7

6 970

2.5

6 578

1.5

OTE Belgacom Cable & Wireless

© OECD 2003

Total/average of above

OECD Communications Outlook 2003

80

Table 3.10. R&D expenditures for PTOs and telecommunications equipment manufacturers USD millions

© OECD 2003

Table 3.10. R&D expenditures for PTOs and telecommunications equipment manufacturers (continued) USD millions R&D expenditure (1997)

Manufacturer

R&D as a % of total revenue (1997)

USPTO patents granted (1997)

R&D expenditure (1999)

R&D as a % of total revenue (1999)

USPTO patents granted (1999)

R&D expenditure (2001)

R&D as a % of total revenue (2001)

USPTO patents granted (2001)

Ericsson

3 175

14.5

181

4 201

16.0

657

4 511

20.1

775

Motorola

2 748

9.2

1 058

3 440

11.1

1 192

4 300

14.3

778

Cisco

1 050

12.4

..

1 663

13.7

45

3 922

17.6

163

Lucent

3 023

11.5

768

3 563

13.2

1 152

3 520

16.5

1 109

Nortel

2 147

13.9

64

2 724

13.9

240

3 292

18.8

461

Fujitsu

3 199

7.8

903

3 520

7.6

1 192

2 878

7.0

1 116

NEC

2 880

7.0

1 095

2 767

5.5

1 842

2 745

6.5

1 953

Nokia Alcatel Siemens1 2

879

8.7

47

1 793

8.9

268

2 665

9.6

291

2 844

8.9

68

2 181

9.5

115

2 589

11.3

315

2 312

..

454

2 446

18.8

722

2 461

10.1

793

1 213

8.3

582

1 697

6.5

1 455

1 690

6.2

1 450

..

..

746

994

12.1

1 124

1 128

12.9

1 440

GEC Marconi

407

6.5

7

611

7.1

13

910

14

3

LG Electronics

457

4.7

110

353

4.0

224

588

4.6

245

Corning1

117

6.5

264

245

9.8

340

474

10.6

241

Qualcom

349

10.4

45

340

10.6

110

415

15.5

173

3Com

270

12.9

..

611

14.1

90

286

19.3

220

..

..

..

42

40.4

..

156

17.5

..

12.4

10 781

38 529

12.9

11 526

Samsung Electronics

Matsushita Communications3

Juniper Networks

Total/average 27 071 9.5 6 392 33 190 of above 1. Siemens and Corning R&D expenditure data are proportional for communications sales. 2. Samsung R&D expenditure for 2001 are 2000 data. 3. Matsushita patent data for 2001 are for Matsushita Electrical and Industrial. Source: OECD.

Telecommunication Market Size

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OECD Communications Outlook 2003

Table 3.11. United States Patent and Trademark Office (USPTO): Number of patents granted to selected telecommunication operators 1995 AT&T1

1996

1997

1998

1999

2000

2001

Total (1995-2002) 1 057

..

..

46

150

278

294

289

BT

55

48

35

70

77

70

94

449

France Telecom

35

47

36

63

47

39

35

302

NTT (including mobile)

3

12

25

49

32

67

78

266

Telecom Italia (SIP and CSELT)

7

15

16

11

7

7

11

74

Telia

1

5

9

13

10

9

4

51 50

Deutsche Telekom

0

0

2

8

9

6

25

Qwest Communications International

..

..

..

..

..

..

40

40

KPN

0

0

0

0

13

16

1

30

Telstra

1

3

3

5

5

0

3

20

Telefonica

0

2

1

8

1

2

0

14

SK Corportation

..

..

0

0

1

6

5

12

Korea Telecom

0

1

0

0

4

0

6

11 10

Bell Canada

2

0

1

1

2

2

2

Sonera

..

..

0

0

2

2

1

5

Total 104 133 174 378 1. Data for AT&T prior to 1997 include Lucent. Reports: www.uspto.gov/web/offices/ac/ido/oeip/taf/topo_01.pdf Telecom definition: www.uspto.gov/go/classification/uspc379/defs379.htm Source: USPTO.

488

520

594

2 391

82

© OECD 2003

Telecommunication Market Size

Table 3.12. Electric communication technique patents granted by the USPTO, filed to the European Patent Office (EPO) and the Japan Patent Office (JPO) Patent families by country of invention

Australia

CAGR 1995-2000

1995

1996

1997

1998

1999

2000

2

8

7

14

13

17

51.3 34.1

Austria

3

8

5

5

9

11

Belgium

15

25

14

34

22

19

4.8

Canada

16

32

23

52

46

38

18.2

0

0

0

1

0

0

..

Czech Republic Denmark

3

7

3

2

9

9

21.6

Finland

28

42

41

77

102

98

28.3

France

117

134

111

142

171

158

6.2

Germany

8.8

102

117

93

143

131

155

Greece

0

1

1

1

0

0

..

Hungary

0

1

1

2

1

2

.. 14.9

Iceland

1

1

0

1

1

2

Ireland

0

3

1

2

0

3

..

14

19

22

21

23

16

2.3

Japan

805

867

680

1 037

934

970

3.8

Korea

25

47

48

53

56

57

17.9

Italy

Luxembourg

0

0

0

0

0

0

..

Mexico

0

0

0

0

1

1

..

Netherlands

95

91

63

94

101

92

-0.8

New Zealand

0

0

1

2

1

0

..

Norway

0

2

2

3

1

2

..

Poland

0

0

0

1

0

1

..

Portugal

0

1

1

0

0

0

..

Slovak Republic

0

0

0

0

0

0

..

Spain

1

5

3

5

3

3

24.6

Sweden

48

79

69

105

134

134

22.9

Switzerland

17

11

18

18

28

20

2.8

0

0

0

0

0

0

..

United Kingdom

106

113

110

165

197

156

8.2

United States

867

965

895

1 264

1 237

1 183

6.4

2 263

2 579

2 211

3 241

3 222

3 143

6.8

Turkey

OECD European Union World

530

644

537

794

903

852

9.9

2 280

2 604

2 234

3 277

3 260

3 182

6.9

OECD as % of world 99.3 99.0 99.0 98.9 98.8 98.8 Note: Electric communication technique corresponds to class H04 from the International Patent Classification. The reference for counting and year is the USPTO grant. Source: OECD, Patent Database, September 2002.

83

© OECD 2003

Chapter 4

NETWORK DIMENSIONS AND DEVELOPMENT

Abstract. Access to communication networks continues to expand across the OECD area. At the end of 2001 the total number of fixed channels and mobile subscribers was 1.2 billion. This represented an 8.7% increase from 2000. This chapter examines investment in network expansion and development, and specifically looks at the process of digitalisation and mobile access.

85

© OECD 2003

OECD Communications Outlook 2003

A

ccess to communication networks continues to expand across the OECD area. At the end of 2001 the total number of fixed channels and mobile subscribers was 1.2 billion (Table 4.1). This represented an 8.7% increase from 2000. During a decade in which all OECD countries increasingly liberalised fixed and mobile markets, a compound annual growth rate of 10.9% was achieved. In the context of market liberalisation, 1998 was significant in the OECD area. It was the year when, for the first time, countries with open entry into fixed markets and three or more mobile operators represented the majority of OECD countries. Since that time more than half a billion fixed and mobile connections have been added to networks. With fixed and mobile access expanding by 148 million and 179 million connections respectively, 1999 and 2000 were banner years for the expansion of telecommunication connectivity. Access growth continued to expand in 2001, but at a slower rate than the previous two years. Just under 100 million fixed and mobile connections were added in 2001. While all the available evidence points to a continuation in growth during 2002 and beyond, the trend toward ever increasing growth in the number of new connections appears to be over. This is not to suggest that demand for telecommunication connectivity has declined, but rather that this demand is being expressed in different ways as fixed and wireless telecommunication networks continue to evolve. New access technologies are changing traditional platforms, in particular through the development of greater capacity for fixed and mobile connections, as well as making them closer substitutes.

Figure 4.1. Access channels per 100 inhabitants in OECD countries, 1992, 1997 and 2001 1992

1997

2001

Access channels per 100 inhabitants 90

90 80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

Lu xe m

bo u Sw rg Sw e d itz e er n la N nd or D wa en y m C ark an ad U ni Fra a te n d ce St a Ic tes el an N Fin d et la he n rla d U ni Ge nds te r m d Ki an ng y do m Ja p G an re Au ece st ra l Ko ia re O a EC D I Be taly lg iu Au m st r Ire ia la n N ew S d p Ze ain al a Po nd rtu g Po al C ze Hu land c n Sl h R ga ov e ry ak pu R blic ep ub Tu lic rk M ey ex ic o

80

86

Source: OECD.

© OECD 2003

Network Dimensions and Development

It is worth considering these developments in greater detail, beginning with the fixed networks that still provide the core infrastructure for all telecommunication networks. In 2001, fixed access channels grew by only 0.1% compared to a compound annual growth rate of 3.9% for the previous decade. In nearly a third of OECD countries there was a slight decline in the number of fixed connections. One reason for this is that some substitution of cellular mobile connections for fixed connections is taking place. For some users, a mobile connection may simply meet all their requirements without the need for a fixed line. For other users, wireless service may be the most economical option in light of their usage patterns. Some users with low usage, for example, find prepaid cards to be the best way to budget for their needs. Alternatively, some high users may forego a fixed line connection because they have a mobile telephone provided by their employer for which personal use incurs little or no additional cost under certain tariff options. However, much of this substitution is taking place at the margin and it raises the question of why, despite the number of mobile phones exceeding the number of fixed connections by early 2002, more users are not giving up fixed connections. There are several factors at work. One reason that the number of fixed network channels is still expanding in the OECD area is that growth continues apace in countries with relatively low penetration rates for fixed networks. Moreover, for all but very low users with prepaid cards, wireless service is still priced at a premium compared with the fixed network. A further factor is that fixed networks are used for more purposes than telephony. Internet access, for example, is a prominent use for fixed networks. While cellular mobile networks can potentially substitute for some services that are akin to Internet access, they still do so in a limited way. In countries with relatively high penetrations of telecommunication networks, significant factors in the growth of connectivity during the latter half of the 1990s were second residential lines and additional channels via ISDN. Prior to the advent of the Internet, neither of these options had been greatly used. In the United States, between 1990 and 2000, the percentage of additional lines for households with a telephone service increased from 4% to just under 27%. In Germany, the demand for additional channels was met with a rapid increase in the residential take-up of ISDN. To a lesser extent, encouraged by the take-up of Internet use, the same trend toward additional residential lines, either through second lines or ISDN, was also evident in other OECD countries. Thus, as wireless penetration increased, users did not give up their fixed line connection; the advent of the Internet was in fact a cause for the increase in the number of fixed line connections. However, as technology evolved, in particular with the appearance of asymmetrical digital subscriber lines (ADSL), greater demand for Internet access is now contributing to a decrease in the number of fixed network connections in some countries. In these cases, second lines may be given up in favour of a single DSL-enabled connection. In a number of countries with relatively high penetration rates, the expansion of fixed network access has been due to the additional channels enabled by ISDN rather than an increase in stand-alone connections. This is readily evident from the decline in the number of standard analogue telephone lines during 2001 in all but a small number of OECD countries, and the increase in the number of ISDN channels in most countries (Table 4.2, Table 4.3). One way to exclude the impact of ISDN is to count each such connection as one line and add that total to the number of standard analogue lines. In this way it is possible to show the change in the number of connections. This number is a more likely indicator of the impact of cellular mobile substitution for fixed connections. In 2001 the largest decreases occurred in the Slovak Republic and Norway, where the number of fixed connections decreased by 8.35% and 8.59% respectively. The Slovak Republic recorded the largest increase in mobile subscribers in 2001 – up 93.5%, which lifted that country’s penetration from 20.5 to 39.9 subscribers per 100 inhabitants. Austria, Belgium, Germany, Luxembourg, the Netherlands, Switzerland and the United States were other countries to experience an over 4% decrease in standard fixed lines. The increasing impact of very high cellular mobile penetrations is no doubt a factor in most of these countries. At the same time, in those countries with the leading broadband penetration, another phenomenon is residential users replacing “second lines” with DSL or cable modem connections. © OECD 2003

87

OECD Communications Outlook 2003

The widespread decrease in the number of fixed line connections suggests that wireless is substituting for some standard analogue fixed lines. In some countries with relatively low fixed network penetration rates, the fixed network is still growing but at a reduced rate. For example, Telmex added 1.9 million fixed network lines in 2001 but also experienced 615 000 disconnections. At the same time, the number of mobile subscriptions increased by nearly 8 million subscribers. Just under 92% of Mexican mobile subscribers use prepaid cards and one inference that might be drawn is that users who cannot afford the monthly subscription have substituted prepaid mobile service. In response to this development, Telmex has introduced a tariff option for the fixed network that is very similar to prepaid mobile options. In this case, users pay for the connection of a line but do not pay any monthly fee. They purchase Telmex prepaid calling cards at prices that are the same as for the use of public payphones. One advantage of this option over simply choosing a prepaid wireless service is that it is less expensive for the calling party to make a call to the fixed network. A similar phenomenon to those in Mexico and the Slovak Republic may also be at work in Turkey where growth of fixed network penetration has slowed over recent years. However, the fixed network is still growing in Mexico, Poland and Turkey because of the relatively low penetration rate. By way of contrast, in countries with higher penetration rates, the number of fixed network connections has started to decline. This raises the question of whether operators of fixed networks in these countries will also offer tariffs aimed at keeping customers on the fixed network rather than opting for prepaid cards for wireless service. In Japan and Korea, connection tariffs for the fixed network have already been radically changed so as not to put the fixed network at a disadvantage relative to wireless networks for new customers. In both these countries, the previous pricing structures, based on high tariffs for an initial connection to the network, became a disadvantage in attracting new subscribers compared to the wireless sector. In the wireless sector, greater competition has generally meant that there was a minimal connection charge and this was particularly attractive for young people seeking their first independent telephone connection. While the number of fixed network connections is declining in a growing number of countries, the demand for capacity is increasing. How this trend will develop over the longer term is an interesting question. While the use of ISDN continues to expand in most countries, its future growth is uncertain. The reason for this is that if additional capacity is now the main driver for opting for ISDN (rather than additional telephony access which is being met by cellular mobile), then it will be rapidly superseded by technologies providing greater bandwidth. To some extent this depends on the strategy of the incumbent. In countries where DSL was not widely available or unavailable prior to 2002, ISDN continued to grow apace (e.g. Greece, Ireland). ISDN access also continues to grow where the incumbent favourably tariffs an upgrade to DSL for existing ISDN users (e.g. Germany). In June 2002, 85% of T-DSL users were ISDN customers. This trend is likely to change as in mid-2002 the price of the analogue plus DSL package became lower than the price for the ISDN plus DSL package. In the Netherlands, in June 2002, some 32% of DSL subscribers were also ISDN subscribers. This being said, it is significant that the two countries with the highest broadband penetration – Canada and Korea – experienced a decrease in basic rate ISDN connections in 2001. Placing ISDN to one side, it seems likely that wireless access will continue to make inroads into the number of standard telephone lines. In the United States, a number of telecommunication carriers have reported lower demand for second residential lines in the face of substitution by wireless and broadband. Worthy of note is the decrease in the number of residential lines in Canada, the Czech Republic, Finland, Hungary, Italy, Norway, Sweden and Switzerland – even if only slight in some cases (Table 4.4). This has contributed to the decrease in the number of fixed access channels per 100 inhabitants in a growing number of OECD countries for the first time. In 2001, the number of fixed channels per 100 inhabitants was reduced from 55 to 54.3 (Table 4.5). Offsetting this is the fact that the total number of telecommunication access paths (i.e. fixed plus wireless) continues to increase.

88

By 2001 all but five OECD countries had more than one telephone for every inhabitant. Luxembourg was the leader with 176.7 fixed and mobile access paths per 100 inhabitants. In 2001, Luxembourg displaced Sweden as the country with the highest penetration for fixed networks. Luxembourg also has the greatest number of cellular mobile users. Access to cellular mobile networks has transformed telecommunication access in recent years and is worthy of greater examination. © OECD 2003

Network Dimensions and Development

Mobile access Although cellular mobile communications are now pervasive, it is worth remembering that this is still a relatively recent phenomenon. Indeed, 60% of users in 2001 had only been connected since 1999. By 2001 the number of mobile subscribers in OECD countries almost reached 612 million, which was 65% of all mobile users in the world (Table 4.6). More than one in every two people in the OECD area had a mobile telephone by the end of 2001. In the case of Luxembourg, there was nearly one mobile telephone for every person (Table 4.7). This may suggest that some users have one phone for professional use and one for private use. It may also be the case that some users, residing in surrounding countries but working in Luxembourg, purchase additional phones to avoid international roaming charges. Italy is the country with the second highest penetration and this may reflect the number of users with dual prepaid cards for different operators in one handset. In Europe the rapid expansion of mobile penetration rates owes more to the popularity of prepaid cards than any other factor. Prepaid cards were introduced in the southern Mediterranean countries from 1996 onwards and immediately fostered very high growth rates. In 1996, for example, Finland’s mobile penetration rate was double Italy and Portugal’s rate and more than four times the rate in Greece. By 2001, Italy and Portugal had exceeded Finland’s penetration and Greece had almost reached parity. This was not because Finland’s mobile market ceased to grow. Rather, it reflects that growth rates were much higher in countries where prepaid cards became popular. At the close of 1996 only around 1% of mobile users were prepaid customers. By the end of 2001 nearly 40% were prepaid (Table 4.8). In countries such as Hungary, Italy and Portugal more than 70% of users have opted for prepaid service. In the European Union area the proportion of prepaid cards was 61% in 2001. By way of contrast, some countries outside Europe have relatively low proportions of prepaid cards with most users being on post-paid tariff plans. Even within Europe, prepaid is little used in Finland with just 2% of the overall market being prepaid. Outside Europe, Korea has virtually no prepaid cellular services while Japan had just 2.5% of its market being prepaid in 2001. In North America the contrast is stark between Mexico with nearly 92% of users being prepaid and just 9% for the United States and 25% for Canada.

Figure 4.2. Mobile subscribers in OECD countries Contract

Pre-paid

Mobile subscribers (millions) 700

Mobile subscribers (millions) 700

600

600

500

500

400

400

300

300

200

200

100

100

0 1996 Source: OECD.

© OECD 2003

1997

1998

1999

2000

0 2001

89

OECD Communications Outlook 2003

There are a number of possible explanations for the relative popularity of prepaid cards in different countries. In markets where operators have tried to make prepaid cards popular, they have generally found it necessary to subsidise handsets. The initial cost of buying an unsubsidised handset would otherwise be a barrier to entry for some users attracted by the low maintenance cost of prepaid cards. It may be for this reason that in countries where subsidies are discouraged or disallowed by regulation, operators have chosen not to market prepaid cards (e.g. Finland and Korea). In Canada and the United States, the relatively low use of prepaid may be due to this pricing structure being less popular in countries with receiving party pays. Certainly, the experience of Mexico would suggest that the take-up and use of prepaid cards accelerated enormously following the introduction of calling party pays. However, it also reflects the strategy of operators in different countries. Cellular operators in the United States generally bundle large amounts of minutes for a fixed monthly charge. Operators in Europe and the Asia-Pacific region generally prefer to meter usage and include lower amounts of bundled minutes in the most widely used tariff plans. The latter of these two systems lends itself more to prepaid cards. As a result, the penetration of cellular mobile phones is much higher in Europe than in Canada and the United States. Some have suggested that the existence of unmetered local calls on the fixed network in North America has contributed to lower mobile penetration rates in Canada and the United States. If this was significant, it raises the question of why the same impact has not been evident in Australia and New Zealand, where local calls on the fixed network are also unmetered. Another explanation for why some have higher penetration rates than others relates to the quality of the fixed network. In those countries with a competitive wireless sector and a poorly performing fixed network, it is not surprising that users would opt for a mobile telephone. However, using the reverse case by claiming that an efficient and inexpensive fixed network lessens the need for users to also take up mobile service is tenuous. If this were true, the Nordic countries would not have led mobile communications and would not have such high penetration rates. None of the foregoing is to wholly suggest that one pricing structure is better at developing mobile communications than another. Calling party pays does appear to be more favourable to marketing prepaid cards and hence the higher penetration rates that result. On the other hand, by bundling larger amounts of minutes with post-paid packages, operators encourage greater use of mobile phones and Figure 4.3. Cellular mobile subscribers per 100 inhabitants, 2001 100

90

90

80

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

Lu

xe m

bo

ur g Ita Au ly st Ic ria el a N No nd et rw he a rla y Sw nds ed Fi en nl U ni P and te or d tu Ki ga ng l d G om re Be ece lg iu m D E en U m a Sw Sp rk itz ain er la Ire nd l a C ze Ger nd ch m a N Re ny ew pu Ze blic al a Fr nd an c Ko e re Ja a Au pa st n ra l O ia E U Hu CD n n Sl ited ga ov r ak Sta y R tes ep C ubli an c a Po da la Tu nd rk M ey ex ic o

100

90

Source: OECD.

© OECD 2003

Network Dimensions and Development

have largely negated any perceived disadvantage for users with receiving party pays. At the same time, one advantage of receiving party pays over calling party pays is that it places greater competitive pressure on the cost of terminating a call on a mobile network. One other important factor underlying the rapid spread of cellular mobile penetration has been the high level of population coverage (Table 4.9). These data do not differentiate between digital and analogue services but rather take the greatest proportion of population covered by either system. In most cases this is now digital but in a few countries analogue services still provide greater geographical coverage. In Canada, for example, Rogers Communications’ analogue network covered 93% and its digital network 92% of the population at the end of 2001. The joint coverage of population, by all networks in Canada, was estimated by the Canadian Wireless Telecommunications Association (CWTA) to be 96% at the end of 2001. In large countries such as Australia and the United States, the data indicate that nearly all the population live in regions with access to cellular service. In 2001, digital cellular service was available in counties in the United States covering 97% of the population and 70.7% of the country. This was up from 95% and 57.2% respectively for the previous year. This does not necessarily mean that all the people living in these counties will be covered. The Federal Communications Commission (FCC) notes that some operators may only cover a portion of the geographic area of some counties. However, as in other countries, the available data suggest a high degree of availability for wireless services. Turkey is the country with the lowest proportion of population covered by mobile service. By 2002, Turkcell covered 100% of the population in cities of 10 000 or more people and 99.5% in cities of 5 000 or more, as well as the 81 largest cities and the majority of the country’s tourist areas and principal intercity highways. Under its license, Turkcell must cover 90% of the population and 50% of the geographic area of Turkey within a defined period. Digitalisation The process of digitalising all telecommunication networks is nearing completion across the OECD area. Nearly all wireless networks are now digital although there are still a small but rapidly decreasing share of analogue services in countries such as Iceland, Mexico and the United States. In respect to the fixed network the proportion of all lines connected to a digital exchange is now 97% in the OECD area (Table 4.10). OECD countries whose networks were still less than 90% digital at the end of 2001 included Hungary, Korea, the Slovak Republic, Spain and Turkey. It is somewhat surprising that Spain’s rate of digitalisation has not changed in the previous three years. This is particularly so given the rapid pace at which Telefonica moved to upgrade the fixed network to provide DSL. The level of digitalisation in Korea is also relatively low. In 2002, KT planned to have all its lines connected to a digital exchange by 2005. With most OECD countries being fully digital, attention has more recently turned to the number of lines that can be enabled to provide DSL technology. In this context, Belgium and Denmark lead the way with coverage of 90% or more in 2001 (Table 4.11). Denmark aimed to have 95% coverage by the end of 2002. Germany and Spain have coverage of 80% and 81.3% respectively, and aimed to have coverage of 90% and 89.3% respectively by the end of 2002. Although telecommunication carriers report coverage using several different measures (lines, households, population), the data should be broadly comparable. There wil,l however, be slight variations between the measures. In the United Kingdom, for example, 66% of people lived in areas where the exchange has been upgraded by September 2002, but BT advises Oftel that because of the technical limitations of ADSL, approximately 5% of people in each exchange area could not get the service. This meant that ADSL was available to approximately 63% of the households at that date. In those countries where cable networks provide broadband service in areas where DSL is not yet offered, the national totals would be higher. The same caveat could apply where satellite service is available although the performance levels and cost would also need to be taken into account. Investment In the period leading to 1999 capital expenditure had grown to record levels in OECD countries. The three main drivers for this increase in investment were the construction of second generation © OECD 2003

91

OECD Communications Outlook 2003

wireless networks, the first significant entry into local access markets by new fixed network providers, and very large commitments by new entrants and incumbents in national and international backbone infrastructure. By 1999 the combined impact of these developments produced capital expenditures of USD 197 billion across the OECD. In 2000 investment increased again by USD 32 billion to USD 229 billion. Investment at this level proved to be the peak. By 2001 the total investment in telecommunication infrastructure had decreased 16% to USD 192 billion (Table 4.12). Some USD 21 billion of this reduction occurred as a result of decreasing capital expenditure in the United States. This being said, capital expenditure was reduced in nearly two-thirds of OECD countries in 2001. Although investment in infrastructure continued to be at very high levels historically by the end of 2001, the financial performance of a number of telecommunication equipment companies seriously waned during this period. One reason for this was the phenomenon known as vendor financing. This practice entailed telecommunication manufacturers financing the equipment they sold to service providers. In many cases vendor financing was made available to new entrants that subsequently exited the market. At the same time several other factors were at work. Perhaps the most important of these was that although the telecommunication sector continued to grow, the rate slowed appreciably from the late 1990s. Even in those cases where vendor financing was not involved the reduced rate of growth meant that many new entrants could not service the debt they had incurred for market entry. The business plans of both equipment and services companies were the casualties of the absence of reliable industry data. This was particularly acute in Internet backbone markets where the absence of industry-wide traffic metrics meant that business plans were predicated on what proved to be highly inaccurate existing and projected growth rates. In some cases deliberately misleading or fraudulent information, fuelled by the hype of the “dot.com bubble”, filled the void. A further factor in the severe downturn in the fortunes of equipment manufacturers at a time when the telecommunication sector continued to expand was the vastly increasing capabilities of technology. Although access continued to expand, and relatively new sectors such as wireless communications were responsible for an increasing proportion of new investment, the unit cost of serving customers continued its long-term decline. In 1991, capital expenditure of USD 245 per subscriber (fixed, wireless and Internet) was recorded. In 2001, the same measure was USD 133 per subscriber. This was the case even though total capital expenditure in the OECD nearly doubled over the same period. Access and service expansion, particularly via wireless and Internet, increased enormously at a time when the capabilities of the core fixed networks to carry the additional traffic also escalated. The advent of cellular wireless and Internet were both responsible for considerable investment in new overlay networks. In the case of wireless, new access networks were built for both first and secondgeneration systems. Moreover, digitalisation coincided with a tremendous amount of new entry as OECD governments liberalised the sector. Whereas monopolies (and duopolies) characterised the analogue era, three or more networks were typically constructed in OECD countries as digital networks were introduced. In addition, the advent of Internet and globalisation resulting from liberalisation attracted a range of new and existing players to build new backbone networks. At the same time, new players such as Cisco and Juniper Networks emerged in equipment markets to challenge the existing players in the supply of this equipment. This has resulted in an increasingly competitive equipment market at a time when demand has shifted toward technologies based on Internet protocol (IP) rather than circuit-switched networks. For the future, the two areas most likely to augment infrastructure investment are broadband access for fixed networks and universal mobile telecommunications system (UMTS or third-generation wireless).

92

The licensing process for spectrum has had an unprecedented impact on levels of telecommunication investment from 1999 to 2001. In 1999, OECD public authorities received around USD 1.5 billion in revenue from spectrum licenses (Table 4.13). In 2000, this amount soared to USD 93 billion before declining to USD 3.9 billion in 2001. The vast bulk of this revenue was derived from the auction of spectrum licences for UMTS. Licences for PCS services have also been purchased but they account for a relatively small amount of overall licence revenue received by public authorities. © OECD 2003

Network Dimensions and Development

Few developments have attracted more attention in the field of telecommunications than the prices paid for UMTS licences. The UMTS auction in the United Kingdom raised USD 33 billion. This was followed by an auction for UMTS licences in Germany, which raised nearly USD 47 billion. In Italy, UMTS licenses raised USD 11 billion in 2000. UMTS auctions also raised considerable amounts in other countries relative to their size – such as the Netherlands where the UMTS auction raised USD 2.5 billion in 2000. Generally, telecommunication carriers have included expenditure on UMTS licenses in their accounts under capital expenditure and financial investments. Historically, the OECD investment series has largely tracked investment in tangible assets (i.e. property, plant and equipment) rather than financial investments such as licences. However, it is necessary to take into account the expenditure on UMTS licenses, in relation to overall investment, as it is having significant impact on the accounts of some major telecommunication carriers. Deutsche Telekom began amortising the recorded value of its UMTS licenses in 2000 but accelerated this process in 2002 when their market value was determined to be much lower than the amount on which the amortisation was earlier predicated. BT would have normally amortised the UMTS licenses it purchased in Europe over their lifetime commencing with the start of service. Due to the demerger of mmO2 (formerly BT Cellnet), however, the company amortised a significant amount of the total cost of the UMTS licenses in 2001. In Italy, Telecom Italia plans to commence UMTS service from 2004 and write off the cost of licences over their 15-year duration. The main impact on Telecom Italia’s investment was in 2000 when the bulk of the licence fee was paid. However, UMTS license fees will have an ongoing impact on Telecom Italia’s capital expenditure that is in addition to actual construction of network infrastructure. The company is capitalizing the interest expense resulting from financing the license fee which, under United States generally accepted accounting principles (GAAP), is considered as construction in progress. KPN had also planned to begin amortisation of its UMTS licensees when service commenced in 2003. However, in announcing its second quarter 2002 results, KPN brought this forward and announced that USD 8.7 billion had been written off the value of its mobile assets. In Japan, 3G licences were provided using a comparative selection process at a relatively low fee. NTT DoCoMo, KDDI and J-Phone have commenced 3G services since October 2001, April 2002 and December 2002, respectively.

Figure 4.4. Public telecommunications investment by region, 1990-2001 (excluding spectrum fees) North-America

EU

Asia-Pacific

Rest of OECD

Billion USD 250

Billion USD 250

200

200

150

150

100

100

50

50

0 1990 Source: OECD.

© OECD 2003

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

0 2001

93

OECD Communications Outlook 2003

The impact of the UMTS auctions can be seen when the data on telecommunication investment are examined on a regional basis. In 2000, Europe invested more in telecommunications than North America for the first time, when taking into account expenditures on spectrum (Table 4.14). The same year, the total sum invested by telecommunication carriers in Europe was USD 154 billion compared to USD 125 billion in North America. By 2001 the traditional ranking re-emerged with North America once again recording the largest share of telecommunication investment in the OECD area. Remarkably, the combined investment in tangible infrastructure and spectrum licenses reached a peak of USD 324.9 billion. This was more than three times the total investment in the sector a decade earlier. The sums paid for UMTS licenses made 2000 an extraordinary year in terms of the amounts that telecommunication operators recorded as expenditure on tangible and intangible assets. This being said, it is worth noting that investment in telecommunication infrastructure has continued to show a slight longterm decline in proportion to growth in sector revenues. In 2001, capital expenditures represented the equivalent of 23.1% of industry revenue in the OECD area (Table 4.15). This compares with an average ranging between of 26.9% between 1988 and 1990 through to 25% between 1997 and 1999. In the Slovak Republic, investment in telecommunications has exceeded revenue in recent years due to the construction of new wireless infrastructure as well as expansion and upgrading of the fixed network. In 2001, investment in telecommunication infrastructure decreased as a proportion of gross fixed capital formation (GFCF). It is, nevertheless, still at a high level historically with telecommunication infrastructure investment representing 3.64% of GFCF compared to 2.51% in 1990 (Table 4.16). As GFCF only applies to expenditure on structures, machinery and equipment, the levels of investment are not impacted by investment in spectrum licences. The ratio between overall telecommunication investment and the number of fixed network access channels decreased in 2001 (Table 4.17). This followed a general increase in previous years. However, these data should be read in conjunction with the ratio between overall telecommunication investment and all telecommunication access paths (i.e. fixed network plus cellular wireless) (Table 4.18). In relation

Figure 4.5. Public telecommunication investment as a percentage of PTO revenue and GFCF, 2001 % revenue (left scale)

GFCF (right scale)

% 160

% 30

140 25 120 20 100 15

80 60

10 40 5 20 0

M

h

ze c

C

Sl

ov ak

R ep ex . R ico ep ub Au lic s G tria re D ec en e m a U ni Po rk t ed la U n ni te St d a d Ki tes ng Au dom st H rali un a g Po ary rtu g Ko al re N O a et EC he D rla nd Fr s an C ce an ad a Ita Ire ly la n Ja d pa I Sw cel n itz and er l Sw and ed Fi en nl an d N ew Sp Ze ain a G lan er d m a N ny or w a Lu Bel y xe giu m m bo u Tu rg rk ey

0

94

Source: OECD.

© OECD 2003

Sl

ov a n k U ite Re ni d te S p. d ta Ki te ng s do m Ja D pa en n m a M rk ex ic O o EC Au D Au stri Sw str a itz alia er l C an N an d et he ada rla n G ds re e Po ce rt H uga un l ga C ze r ch Irel y R and ep u Ic blic el a Fi nd nl an N d or w Sw ay ed e Fr n an c Ko e N P rea ew o Ze lan al d an d G Ital er y m an Sp y a Lu Bel in xe giu m m bo u Tu rg rk ey

U

U ni t ov ed ak Sta R tes ep u U ni De blic te n d m Ki ar ng k do Au m st ri Sw Ja a itz pan er Au land st ra l N O ia et EC he D rla n G ds re Sw ece ed N en or w Ic ay e Po lan rtu d g C al an a Fi da nl a Ire nd la C ze F nd ch ra R nce ep ub lic Ita Ko ly H rea un G gar er y m an N ew Sp y Z a Lu ea in xe lan m bo d u M rg ex Be ico lg iu Po m la n Tu d rk ey Sl

Network Dimensions and Development

Figure 4.6.

Figure 4.7.

Source: OECD.

© OECD 2003 Public telecommunication investment per capita

USD 400 1999

1999

2001 USD 400

350 350

300 300

250 250

200 200

150 150

100 100

50 50

0 0

Source: OECD.

Public telecommunications investment per access path

USD 500 2001 USD 500

450 450

400 400

350 350

300 300

250 250

200 200

150

150

100

100

50

50

0

0

95

OECD Communications Outlook 2003

to all access paths, the ratio of investment has fallen in recent years. In 2001 it was at an historic low across the OECD. The main reason for this was not the decline in capital expenditure but the very large increase in the number of cellular mobile subscribers. In other words, the telecommunications industry is only investing less relative to the large increase in the number of access paths. Countering this longterm trend, in the future new investment will be required to construct networks for UMTS services whereas the number of mobile subscribers in some countries is unlikely to grow as fast as in recent years. Upgrading the fixed network to provide services such as DSL will also entail new investment. Given that more than half the fixed network lines in the OECD area were enabled to provide DSL by the end of 2001, this investment may be more incremental in nature. Despite a decline in 2001, investment in telecommunications on a per capita basis continued at a relatively high level that year (Table 4.19). The level of investment in infrastructure per capita peaked in 2000 at USD 204 per OECD country inhabitant. This was double the per capita investment of a decade earlier. If UMTS licensing fees were included, this amount would have been just under USD 286 per capita in 2000.

96

© OECD 2003

Network Dimensions and Development

1997 (‘000)

1998 (‘000)

1999 (‘000)

2000 (‘000)

2001 (‘000)

CAGR (1991-2001)

1996 (‘000)

CAGR (1996-2001)

1991 (‘000)

CAGR (2000-2001)

Table 4.1. Telecommunication channels in the OECD area

Australia

8 259

9 620

9 900

10 248

10 772

11 109

11 245

1.2

3.2

3.1

Austria

3 344

3 779

3 726

3 726

3 865

3 938

3 946

0.2

0.9

1.7 2.3

Belgium

4 098

4 871

5 209

5 056

5 261

5 273

5 138

-2.6

1.1

Canada

15 815

18 051

18 660

20 051

20 702

21 940

21 435

-2.3

3.5

3.1

Czech Republic

1 707

2 817

3 274

3 749

3 853

3 872

4 126

6.6

7.9

9.2

Denmark

2 951

3 315

3 280

3 432

3 596

3 791

3 833

1.1

2.9

2.7

Finland

2 718

2 932

3 080

3 184

3 317

3 506

3 480

-0.7

3.5

2.5

France

29 250

32 382

32 685

34 800

37 700

39 200

40 000

2.0

4.3

3.2

Germany

33 861

44 205

45 142

46 500

47 800

50 220

52 280

4.1

3.4

4.4

Greece

4 190

5 333

5 436

5 555

5 710

5 972

6 176

3.4

3.0

4.0

Hungary

1 128

2 688

3 172

3 531

3 849

4 121

4 230

2.6

9.5

14.1

Iceland

136

157

164

176

187

194

192

-1.1

4.0

3.5

Ireland

1 048

1 390

1 500

1 634

1 585

1 798

1 862

3.5

6.0

5.9

Italy

23 071

25 324

26 088

26 465

27 070

28 235

29 134

3.2

2.8

2.4

Japan

56 481

64 343

66 189

68 037

71 130

75 239

74 285

-1.3

2.9

2.8

Korea

14 573

19 959

20 887

20 858

27 316

27 298

27 213

-0.3

6.4

6.4

Luxembourg

192

252

265

236

269

323

347

7.4

6.6

6.1

Mexico

6 025

8 826

9 254

9 927

10 927

12 393

13 833

11.6

9.4

8.7

Netherlands

7 175

8 530

9 660

7 767

9 624

10 363

10 349

-0.1

3.9

3.7

New Zealand

1 491

1 719

1 753

1 763

1 759

1 749

1 765

0.9

0.5

1.7

Norway

2 198

2 590

2 734

2 936

3 176

3 317

3 318

0.0

5.1

4.2 16.5

Poland

3 565

6 533

7 511

8 511

10 472

13 182

16 360

24.1

20.2

Portugal

2 694

3 806

3 993

4 117

4 230

4 314

4 378

1.5

2.8

5.0

..

1 246

1 392

1 542

1 669

1 737

1 663

-4.3

5.9

8.2 3.9

Slovak Republic Spain

13 264

15 632

16 372

16 790

17 748

18 776

19 521

4.0

4.5

Sweden

5 957

6 132

6 210

6 338

6 535

6 705

6 718

0.2

1.8

1.2

Switzerland

4 083

4 444

4 688

4 835

5 066

5 236

5 383

2.8

3.9

2.8 8.7

Turkey United Kingdom United States

8 200

14 286

15 744

16 964

18 068

18 415

18 959

3.0

5.8

25 677

31 560

31 538

32 550

33 790

35 079

35 326

0.7

2.3

3.2

139 741

167 955

178 028

187 961

196 617

201 024

192 494

-4.2

2.8

3.3

422 890

512 958

535 783

557 478

591 906

616 571

617 221

0.1

3.8

3.9

15 147

120 093

170 311

245 162

359 356

513 777

611 852

19.1

38.5

44.8

438 037

633 052

706 094

802 639

951 262

1 130 347

1 229 073

8.7

14.2

10.9

OECD (fixed network) (mobile subscribers)

OECD (fixed channels and mobile subscribers total)

Note: Slovak Republic CAGR is for 1992-2001. Source: OECD.

97

© OECD 2003

OECD Communications Outlook 2003

1997 (‘000)

1998 (‘000)

1999 (‘000)

2000 (‘000)

2001 (‘000)

CAGR (1991-2001)

1996 (‘000)

CAGR (1996-2001)

1991 (‘000)

CAGR (2000-2001)

Table 4.2. Standard analogue telecommunication access lines in the OECD area

Australia

8 257

9 350

9 540

9 760

10 050

10 060

10 010

-0.50

1.37

1.94

Austria

3 344

3 656

3 482

3 299

3 202

3 034

2 900

-4.42

-4.53

-1.41 -0.23

Belgium

4 097

4 725

4 939

4 549

4 394

4 256

4 003

-5.95

-3.27

Canada

15 815

18 051

18 209

19 294

19 806

20 803

20 278

-2.52

2.35

2.52

Czech Republic

1 707

2 817

3 273

3 732

3 795

3 746

3 850

2.78

6.45

8.47

Denmark

2 951

3 225

3 104

3 086

2 934

2 833

2 770

-2.23

-3.00

-0.63

Finland

2 718

2 842

2 861

2 855

2 850

2 849

2 806

-1.51

-0.25

0.32

France

29 100

31 600

31 572

31 218

30 581

31 950

31 850

-0.31

0.16

0.91

Germany

33 700

39 000

37 800

36 400

34 500

32 100

30 600

-4.67

-4.74

-0.96

Greece

4 190

5 329

5 431

5 536

5 611

5 659

5 608

-0.91

1.03

2.96

Hungary

1 128

2 675

3 133

3 457

3 726

3 798

3 742

-1.47

6.95

12.74

Iceland

136

154

152

151

148

144

140

-2.57

-1.79

0.34

Ireland

1 048

1 390

1 500

1 536

1 585

1 590

1 590

0.00

2.73

4.26

Italy

23 071

24 918

24 801

24 251

23 453

22 569

22 244

-1.44

-2.24

-0.36

Japan

56 260

61 526

60 451

58 559

55 446

52 258

50 997

-2.41

-3.68

-0.98

Korea

14 573

19 942

20 845

20 756

26 879

26 999

27 002

0.01

6.25

6.36

192

248

255

219

189

206

191

-7.22

-5.04

-0.02

Luxembourg Mexico

6 025

8 826

9 254

9 927

10 927

12 332

13 773

11.69

9.31

8.62

Netherlands

7 175

8 110

8 850

7 767

7 330

7 075

6 779

-4.18

-3.52

-0.57

New Zealand

1 491

1 719

1 753

1 763

1 759

1 749

1 765

0.91

0.53

1.70

Norway

2 198

2 441

2 324

2 167

1 914

1 698

1 552

-8.59

-8.66

-3.42

Poland

3 565

6 532

7 510

8 485

9 533

10 946

11 400

4.15

11.78

12.33

Portugal

2 694

3 724

3 819

3 803

3 752

3 653

3 560

-2.54

-0.90

2.83

..

1 246

1 392

1 539

1 655

1 698

1 556

-8.35

4.54

2.24

Slovak Republic

13 264

15 413

15 854

16 285

16 770

17 102

17 427

1.90

2.49

2.77

Sweden

5 957

6 032

6 010

5 965

5 892

5 760

5 668

-1.60

-1.24

-0.50

Switzerland

4 081

4 045

4 076

3 883

3 622

3 382

3 241

-4.16

-4.34

-2.28

Turkey

8 200

14 286

15 744

16 960

18 060

18 395

18 904

2.77

5.76

8.71

25 595

30 678

30 330

30 900

31 400

31 909

31 819

-0.28

0.73

2.20

United States

139 673

165 421

173 891

180 471

186 659

188 627

179 747

-4.71

1.67

2.55

OECD

422 204

499 921

512 154

518 573

528 422

529 178

517 772

-2.16

0.70

2.60

Spain

United Kingdom

Note: Slovak Republic CAGR is for 1992-2001. Source: OECD.

98

© OECD 2003

© OECD 2003

Table 4.3. ISDN subscribers in OECD area 1992 (‘000) Australia

Austria

Belgium

Denmark

Finland*

France

1999 (‘000)

2000 (‘000)

CAGR (20002001)

2001 (‘000)

..

270 000

360 000

488 000

722 300

1 048 800

1 235 000

3 500

193 600

269 525

360 350

..

..

..

..

ISDN Primary

..

..

..

..

..

..

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

47 766

122 564

244 166

427 400

663 200

ISDN Basic

..

16 308

40 642

83 083

152 200

247 600

ISDN Primary

..

505

1 376

2 600

4 100

1 950

78 066

145 984

270 260

825

27 288

53 342

95 935

10

783

1 310

ISDN Channels (64 Kbit/s Voice Equivalents)

CAGR (19962001)

17.8

35.5

..

..

..

903 800

1 046 400

15.8

53.6

331 900

398 700

20.1

57.9

5 600

8 000

8 300

3.8

43.2

507 468

867 650

1 017 200

1 135 100

11.6

50.7

179 769

311 230

420 094

438 191

4.3

52.4

2 613

4 931

8 173

9 668

9 530

-1.4

48.7 20.7

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

451 024

756 840

895 588

1 137 524

1 156 182

1.6

ISDN Basic

..

..

..

50 162

69 975

80 999

82 342

76 851

-6.7

8.9

ISDN Primary

..

..

..

11 690

20 563

24 453

32 428

33 416

3.0

23.4

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

1 260

17 210

58 040

126 084

276 010

118.9

193.8

ISDN Basic

..

..

..

165

2 335

10 135

23 562

80 555

241.9

244.9 162.0

..

..

..

31

418

1 259

2 632

3 830

45.5

ISDN Channels (64 Kbit/s Voice Equivalents)

..

41 688

89 574

176 000

346 000

661 912

958 084

1 063 322

11.0

64.0

ISDN Basic

..

13 599

28 797

58 000

113 000

240 731

368 762

397 906

7.9

69.1

ISDN Primary

..

483

1 066

2 000

4 000

6 015

7 352

8 917

21.3

52.9

ISDN Channels (64 Kbit/s Voice Equivalents)

..

25 544

90 184

218 946

329 028

467 346

656 930

674 286

2.6

49.5

ISDN Basic

..

5 962

25 922

54 168

95 064

151 413

199 015

272 013

36.7

60.0

ISDN Primary

..

454

1 278

3 687

4 630

5 484

8 630

4 342

-49.7

27.7

350 000

1 417 600

782 400

1 112 800

2 800 000

3 600 000

4 300 000

4 700 000

9.3

43.1

55 000

258 800

391 200

556 400

..

..

..

..

..

..

8 000

30 000

..

..

..

..

..

..

..

..

403 800

2 778 800

5 204 600

7 342 400

10 100 000

13 300 000

17 300 000

20 400 000

17.9

31.4

98 400

864 400

1 918 300

2 831 200

4 030 900

5 548 650

7 358 000

9 000 000

22.3

36.2

6 900

35 000

45 600

56 000

72 300

88 300

107 700

121 000

12.3

21.6

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

4 566

5 604

19 956

99 424

312 324

567 940

81.8

162.4

ISDN Basic

..

..

888

792

3 258

27 542

96 972

199 205

105.4

202.1

ISDN Primary

..

..

93

134

448

1 478

3 946

5 651

43.2

127.4

ISDN Channels (64 Kbit/s Voice Equivalents)

ISDN Channels (64 Kbit/s Voice Equivalents) ISDN Basic ISDN Primary

*In 2000, a change was made in the way Finnish data are compiled.

99

Network Dimensions and Development

ISDN Primary

ISDN Primary

Greece

1998 (‘000)

7 000

ISDN Basic

Germany

1997 (‘000)

ISDN Basic

ISDN Primary

Czech Republic

1996 (‘000)

ISDN Channels (64 Kbit/s voice equivalents)

ISDN Basic

Canada

1995 (‘000)

1992 (‘000) Hungary

Iceland

Ireland

Italy

Japan

Luxembourg

Mexico

1996 (‘000)

1999 (‘000)

2000 (‘000)

CAGR (20002001)

2001 (‘000)

CAGR (19962001)

..

5 000

12 900

38 600

74 100

123 500

322 900

487 116

50.9

106.7

..

2 500

6 450

19 300

37 050

61 750

161 450

243 558

50.9

106.7

ISDN Primary

..

..

..

..

..

..

..

..

..

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

3 916

12 700

24 856

39 204

49 670

51 228

3.1

67.2

ISDN Basic

..

..

698

3 425

7 388

12 192

16 300

17 379

6.6

90.2

ISDN Primary

..

..

84

195

336

494

569

549

-3.5

45.6

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

..

97 700

..

208 340

271 848

30.5

..

ISDN Basic

..

..

..

..

48 850

76 223

43 360

65 484

51.0

..

ISDN Primary

..

..

..

..

..

..

4 054

4 696

15.8

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

195 842

406 136

1 287 000

2 213 950

3 616 900

5 666 100

6 889 774

21.6

76.2

ISDN Basic

..

45 571

97 543

448 500

867 500

1 524 500

2 163 300

2 334 602

7.9

88.7

ISDN Primary

..

3 490

7 035

13 000

15 965

18 930

44 650

74 019

65.8

60.1

ISDN Channels (64 Kbit/s Voice Equivalents)

406 892

1 345 902

2 817 196

5 737 970

9 478 094

15 683 500

22 981 664

23 288 218

1.3

52.6

ISDN Basic

156 811

519 846

1 084 928

2 364 520

4 019 707

6 600 080

9 571 522

10 233 239

6.9

56.6

3 109

10 207

21 578

33 631

47 956

82 778

127 954

94 058

-26.5

34.2

ISDN Channels (64 Kbit/s Voice Equivalents)

..

8 618

16 810

42 220

102 372

436 588

299 608

211 892

-29.3

66.0

ISDN Basic

..

4 309

8 405

21 110

37 686

171 314

96 629

54 316

-43.8

45.2

ISDN Primary

..

..

..

..

900

3 132

3 545

3 442

-2.9

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

1 556

3 688

9 840

17 220

80 018

116 440

155 356

33.4

111.3

ISDN Basic

..

778

1 844

4 920

8 610

27 544

40 640

57 968

42.6

99.3

ISDN Primary

..

..

..

..

..

831

1 172

1 314

12.1

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

..

61 678

59 638

-3.3

..

ISDN Basic

..

..

..

..

13 739

26 669

94.1

..

..

..

..

..

1 140

210

-81.6

..

1 130

95 000

420 000

810 000

..

2 294 000

3 288 778

3 570 000

8.6

53.4

385

22 000

30 000

270 000

..

862 000

1 239 389

1 395 000

12.6

115.5

12

1 700

12 000

9 000

..

19 000

27 000

26 000

-3.7

16.7

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

..

..

..

..

..

..

..

ISDN Basic

..

..

..

..

..

..

..

..

..

..

ISDN Primary

..

..

..

..

..

..

..

..

..

..

ISDN Channels (64 Kbit/s Voice Equivalents) ISDN Basic ISDN Primary

New Zealand

1998 (‘000)

ISDN Channels (64 Kbit/s Voice Equivalents)

ISDN Primary Netherlands

1997 (‘000)

ISDN Basic

ISDN Primary Korea

1995 (‘000)

OECD Communications Outlook 2003

100

Table 4.3. ISDN subscribers in OECD area (continued)

© OECD 2003

© OECD 2003

Table 4.3. ISDN subscribers in OECD area (continued) 1992 (‘000) Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

1999 (‘000)

2000 (‘000)

CAGR (20002001)

2001 (‘000)

CAGR (19962001)

45 180

148 708

410 480

768 992

1 262 338

1 619 198

1 765 876

9.1

64.0

..

11 580

41 819

146 005

304 636

524 999

696 289

760 463

9.2

78.6

ISDN Primary

..

734

2 169

3 949

5 324

7 078

7 554

8 165

8.1

30.4

ISDN Channels (64 Kbit/s Voice Equivalents)

..

164

476

800

26 402

939 420

2 235 780

4 959 500

121.8

536.2

ISDN Basic

..

82

238

400

5 956

99 000

260 520

340 000

30.5

327.5

ISDN Primary

..

..

..

..

483

24 714

57 158

142 650

149.6

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

37 902

81 934

173 670

313 654

477 352

660 998

817 926

23.7

58.4

ISDN Basic

..

7 101

18 212

45 060

85 907

132 926

187 774

243 018

29.4

67.9

ISDN Primary

..

790

1 517

2 785

4 728

7 050

9 515

11 063

16.3

48.8

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

..

2 858

13 466

39 110

106 502

172.3

..

ISDN Basic

..

..

..

..

724

4 183

11 365

29 461

159.2

..

ISDN Primary

..

..

..

..

47

170

546

1 586

190.5

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

28 012

219 110

518 176

504 640

978 826

1 674 100

2 094 000

25.1

57.1

ISDN Basic

..

10 601

96 040

228 458

177 215

355 493

632 470

..

..

..

ISDN Primary

..

227

901

2 042

5 007

8 928

13 640

..

..

..

ISDN Channels (64 Kbit/s Voice Equivalents)

..

39 900

99 900

200 100

372 900

643 000

944 700

1 049 900

11.1

60.1

ISDN Basic

..

12 000

30 000

60 000

114 000

194 000

259 050

270 100

4.3

55.2

..

530

1 330

2 670

4 830

8 500

14 220

16 990

19.5

66.4

ISDN Channels (64 Kbit/s Voice Equivalents)

4 712

236 946

399 180

612 000

952 202

1 443 810

1 854 130

2 142 000

15.5

39.9

ISDN Basic

1 951

65 958

120 540

201 000

331 516

517 245

712 295

846 000

18.8

47.7

27

3 501

5 270

7 000

9 639

13 644

14 318

15 000

4.8

23.3

ISDN Channels (64 Kbit/s Voice Equivalents)

..

..

..

..

3 940

8 190

19 730

54 400

175.7

..

ISDN Basic

..

..

..

..

..

..

7 000

7 370

5.3

..

..

..

..

..

..

..

191

1 322

592.1

..

108 000

661 000

882 000

1 208 000

1 650 000

2 390 000

3 170 000

3 507 000

10.6

31.8

ISDN Basic

9 000

102 500

141 000

214 000

330 000

550 000

765 000

846 000

10.6

43.1

ISDN Primary

3 000

15 200

20 000

26 000

33 000

43 000

54 667

60 500

10.7

24.8

ISDN Channels (64 Kbit/s Voice Equivalents)

246 590

1 320 500

2 534 340

4 137 174

7 489 906

9 958 070

12 397 366

12 747 958

2.8

38.1

ISDN Basic

118 630

502 375

836 895

1 102 062

1 402 208

1 509 385

1 550 558

1 694 474

9.3

15.2

311

10 525

28 685

64 435

156 183

231 310

309 875

311 967

0.7

61.2

ISDN Channels (64 Kbit/s Voice Equivalents)

ISDN Primary

Source: OECD.

101

Network Dimensions and Development

United States

1998 (‘000)

..

ISDN Primary United Kingdom

1997 (‘000)

ISDN Basic

ISDN Primary Turkey

1996 (‘000)

ISDN Channels (64 Kbit/s Voice Equivalents)

ISDN Primary Switzerland

1995 (‘000)

© OECD 2003

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD (Total of above) Source: OECD.

1990 .. .. .. .. .. .. 2 035 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 92 200

1991 .. .. .. .. .. .. 1 995 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 95 900

1992 .. .. .. .. .. .. 2 057 .. .. .. 952 .. .. .. .. .. .. 4 818 .. .. .. .. .. 611 .. .. .. 5 714 .. 99 300

1993 .. .. .. .. .. .. 2 119 .. .. .. 1 135 .. .. .. .. .. .. 5 524 .. .. .. .. .. 662 .. .. .. 6 754 .. 101 800

1994 6 420 .. .. .. .. .. 2 112 .. .. .. 1 399 .. .. .. .. .. .. 6 207 .. .. .. .. .. 748 .. .. .. 8 004 .. 105 100

1995 6 560 .. .. .. .. .. 2 018 .. .. .. 1 785 .. .. .. .. .. .. 6 481 .. .. .. .. .. 830 .. .. .. 9 821 .. 108 100

1996 6 640 .. .. .. .. .. 2 041 .. .. .. 2 213 .. .. .. .. .. .. 6 589 .. .. .. .. .. 920 .. .. .. 10 631 22 777 111 100

1997 6 770 .. .. .. .. .. 2 031 .. .. .. 2 627 .. .. .. .. .. .. 6 902 .. .. .. .. .. 1 003 .. .. .. 11 658 23 412 114 700

1998 7 100 .. .. 12 602 .. .. 2 007 .. .. .. 2 888 .. .. 18 890 .. .. .. 7 428 .. 1 339 .. .. .. 1 126 .. .. .. 12 612 23 700 117 300

1999 6 810 .. .. 12 744 .. .. 1 961 .. .. .. 3 091 .. .. 18 700 .. .. 192 8 079 .. 1 349 1 810 .. .. 1 229 .. 3 921 3 235 13 511 24 694 122 800

2000 6 715 .. .. 13 199 2 663 .. 1 923 .. .. .. 3 063 .. .. 18 460 .. .. 188 9 042 .. 1 357 1 777 .. .. 1 255 .. 3 848 3 040 13 967 24 625 126 700

2001 6 930 .. .. 12 844 2 632 .. 1 877 .. .. .. 2 926 .. .. 18 220 .. 15 782 199 10 063 .. 1 385 1 746 .. .. 1 157 .. 3 843 2 942 14 200 24 995 ..

94 235

97 895

113 452

117 994

129 990

135 595

162 910

169 103

206 991

224 125

231 821

121 742

OECD Communications Outlook 2003

102

Table 4.4. Residential lines Thousands

Network Dimensions and Development

Table 4.5. Telecommunication channels per 100 inhabitants in the OECD area

1990

1992

1995

1996

1997

1998

1999

2000

2001

Telecommunication access paths (fixed and wireless) per 100 inhabitants1, 2001

Australia

47.1

48.9

50.7

52.5

53.4

54.6

56.7

57.8

57.7

114.8

Austria

41.8

44.0

46.6

46.9

46.2

46.1

47.8

48.6

48.6

131.7

Belgium

39.3

42.5

46.4

48.0

51.2

49.6

51.5

51.4

50.1

125.0

Canada

55.2

57.3

59.8

60.8

62.2

66.3

67.9

71.3

69.0

103.9

Czech Republic

15.7

17.6

23.2

27.3

31.8

36.4

37.5

37.7

40.1

107.6

Denmark

56.6

58.1

62.0

63.0

62.1

64.7

67.6

71.0

71.5

145.4

Finland

53.5

54.4

55.5

57.2

59.9

61.8

64.2

67.7

67.0

147.4

France

49.6

53.2

58.8

55.8

56.2

59.6

64.3

66.6

67.6

130.1

Germany

50.7

44.7

51.4

54.0

55.0

56.7

58.2

61.1

63.5

131.8

Greece

39.1

43.6

49.4

51.0

51.8

52.8

54.2

56.3

58.1

133.1

Hungary

9.6

12.5

21.7

26.4

31.2

34.9

38.2

41.1

41.5

90.3

Iceland

51.4

53.6

55.6

58.6

60.7

64.3

67.6

68.9

67.2

149.7

Ireland

28.1

31.4

36.5

38.3

41.0

44.1

42.3

47.5

48.5

120.7

Italy

39.4

41.7

44.1

44.6

45.8

46.4

47.4

49.4

50.8

137.9

Japan

44.2

46.7

49.8

51.1

52.5

53.8

56.1

59.3

58.4

117.2

Korea

35.7

35.6

42.0

43.8

45.5

45.1

58.6

58.1

57.5

118.8

Luxembourg

47.8

52.2

55.9

60.5

63.0

55.4

62.2

73.6

78.6

176.7

6.6

8.0

9.8

9.6

9.9

10.4

11.2

12.7

14.0

35.9

Mexico Netherlands

46.4

48.7

52.5

55.0

61.9

49.4

60.9

65.1

64.7

146.0

New Zealand

43.8

43.2

45.4

46.3

46.6

46.5

46.2

45.7

45.8

108.8

Norway

50.3

52.9

56.5

59.1

62.1

66.3

71.2

73.9

73.5

155.2

Poland

8.6

10.3

14.8

16.9

19.4

22.0

27.1

34.1

42.3

70.2

24.1

30.7

36.8

38.6

40.4

41.3

42.3

43.1

43.5

122.8

Portugal Slovak Republic

..

15.5

20.9

23.2

25.9

28.6

30.9

32.2

30.9

70.8

Spain

32.4

35.4

38.6

39.8

41.6

42.6

44.8

47.0

48.5

121.7

Sweden

68.3

68.4

68.6

69.4

70.2

71.6

73.8

75.6

75.5

156.0

Switzerland

58.7

60.9

66.0

62.8

66.1

68.0

70.9

72.9

74.4

147.4

Turkey

12.3

16.2

23.0

22.8

24.7

26.2

27.5

27.3

27.6

54.5

United Kingdom

44.2

45.3

51.3

53.7

53.4

54.9

56.8

58.7

58.9

136.0

United States

53.9

55.9

60.6

63.3

66.4

69.5

72.0

73.0

67.5

OECD 39.7 41.4 45.6 47.0 48.7 50.4 53.1 55.0 54.3 1. Telecommunication access paths include the total of fixed access lines and cellular mobile subscribers. Source: OECD.

112.6 108.2

103

© OECD 2003

© OECD 2003

CAGR

CAGR

CAGR

(2000-2001)

(1996-2001)

(1991-2001)

11 132 000 6 758 000 7 690 000 10 858 323 6 947 151 3 960 165 4 175 587 37 028 266 56 245 000 7 963 742 4 967 430 235 400 2 770 000 49 950 000 74 819 186 29 045 596 432 400 21 757 089 13 000 000 2 422 000 3 689 246 10 750 000 7 977 500 2 147 331 29 495 278 7 158 000 5 275 000 18 420 000 46 282 000 128 500 000 611 851 690 280 885 938 939 901 393

30.0 10.5 36.6 24.1 59.9 17.7 12.0 25.0 16.7 34.2 61.5 9.5 37.1 18.4 12.0 8.3 42.6 54.5 18.2 10.7 9.5 59.3 19.7 93.5 23.2 12.4 13.7 22.3 6.5 17.4 19.1 17.8 27.0

22.8 62.4 74.3 26.0 103.2 24.6 23.1 72.3 57.6 71.8 60.0 38.4 57.0 50.8 22.7 55.6 57.2 84.3 66.5 38.4 23.9 118.3 64.4 137.1 58.0 23.5 51.4 87.0 46.7 23.9 38.5 53.1 45.3

43.9 50.2 65.0 30.0 137.0 36.5 29.3 58.3 59.4 102.6 89.1 33.7 56.2 56.5 49.1 67.6 81.3 63.3 60.4 37.5 32.1 157.0 90.6 126.3 75.2 28.8 40.6 81.4 43.4 32.8 44.8 52.1 50.0

65

-6.2

-4.7

-3.5

1991

1996

1997

1998

1999

2000

2001

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand1 Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD EU World

291 459 115 402 51 420 786 000 1 242 175 943 319 137 375 000 532 251 .. 8 477 12 889 32 000 568 000 1 378 108 166 198 1 130 160 900 115 000 100 200 227 733 .. 12 600 .. 108 451 568 200 174 557 47 828 1 260 000 7 557 148 15 147 273 4 234 534 16 279 106

3 990 000 598 804 478 172 3 420 318 200 315 1 316 592 1 476 976 2 440 139 5 782 200 531 488 473 000 46 302 290 000 6 413 412 26 906 511 3 180 989 45 000 1 021 900 1 016 000 476 200 1 261 445 216 900 663 651 28 658 2 997 212 2 492 000 662 700 806 339 6 817 000 44 042 992 120 093 215 33 358 646 144 965 802

4 578 000 1 164 270 974 494 4 265 778 521 469 1 444 000 2 091 791 5 754 539 8 175 500 938 038 706 000 65 746 510 747 11 760 000 38 253 000 6 895 477 67 208 1 740 814 1 688 550 710 000 1 676 763 812 000 1 506 958 200 141 4 330 282 3 169 000 1 044 400 1 609 808 8 344 000 55 312 293 170 311 066 51 919 377 214 483 373

4 918 000 2 300 000 1 756 287 5 358 015 965 476 1 931 000 2 845 985 11 210 100 13 913 000 2 056 084 1 036 000 106 000 946 000 20 300 000 47 307 592 13 982 919 130 000 3 349 500 3 347 000 1 254 900 2 106 414 1 928 000 3 074 633 465 364 7 051 441 4 108 000 1 698 565 3 506 100 13 000 000 69 209 321 245 161 696 87 969 530 318 316 658

6 315 000 4 300 000 3 186 602 6 911 038 1 944 553 2 628 585 3 273 433 20 619 000 23 446 000 3 894 312 1 601 000 172 600 1 600 000 30 068 000 56 845 594 23 442 724 208 364 7 731 635 6 790 000 1 542 000 2 744 793 3 904 000 4 671 458 664 072 14 884 207 5 125 000 3 057 509 7 796 000 23 942 000 86 047 003 359 356 482 148 636 961 489 998 313

8 562 000 6 117 243 5 629 000 8 751 338 4 346 009 3 363 552 3 728 625 29 613 764 48 202 000 5 932 403 3 076 000 215 000 2 020 000 42 200 000 66 784 374 26 816 398 303 274 14 077 880 11 000 000 2 187 000 3 367 763 6 747 000 6 664 951 1 109 888 23 938 970 6 369 000 4 638 519 15 062 744 43 452 000 109 500 000 513 776 695 238 534 782 740 189 267

OECD % share of world total

93

83

79

77

73

69

1. New Zealand in 1996 and 1997 is for Telecom NZ only. Source: OECD.

OECD Communications Outlook 2003

104

Table 4.6. Cellular mobile subscribers in the OECD area

© OECD 2003

Table 4.7. Cellular mobile penetration, 2001

1997 24.7 14.4 9.6 14.2 5.1 27.3 40.7 9.9 10.0 8.9 7.0 24.3 14.0 20.7 30.3 15.0 16.0 1.9 10.8 18.9 38.1 2.1 15.3 3.7 11.0 35.8 14.7 2.5 14.1 20.6 15.5 13.9

Subscribers per 100 inhabitants 1998 1999 26.2 33.3 28.5 53.1 17.2 31.2 17.7 22.7 9.4 18.9 36.4 49.4 55.2 63.3 19.2 35.2 17.0 28.6 19.6 37.0 10.2 15.9 38.7 62.3 25.5 42.7 35.6 52.7 37.4 44.9 30.2 50.3 30.5 48.2 3.5 7.9 21.3 42.9 33.1 40.5 47.5 61.5 5.0 10.1 30.8 46.8 8.6 12.3 17.9 37.6 46.4 57.9 23.9 42.8 5.4 11.8 21.9 40.2 25.6 31.5 22.1 32.3 23.5 39.6

2000 44.5 75.4 54.9 28.4 42.3 63.0 72.0 50.3 58.6 56.0 30.7 76.5 53.3 73.8 52.6 57.0 69.2 14.5 69.1 57.1 75.0 17.5 66.6 20.5 60.0 71.8 64.6 22.3 72.7 39.8 45.8 63.4

2001 57.1 83.1 74.9 34.9 67.5 73.9 80.4 62.6 68.3 75.0 48.8 82.6 72.2 87.1 58.8 61.4 98.0 22.0 81.3 62.9 81.7 27.8 79.3 39.9 73.3 80.5 72.9 26.8 77.1 45.1 53.9 74.3

CAGR

CAGR

(2000-2001)

(1996-2001)

28.3 10.2 36.5 22.8 59.6 17.3 11.7 24.4 16.5 34.0 58.9 8.0 35.3 18.0 11.8 7.5 41.8 51.9 17.7 10.2 9.0 59.4 19.1 94.3 22.2 12.1 13.0 20.2 6.1 13.4 17.5 17.3

21.3 62.1 73.9 24.8 103.4 24.2 22.8 71.6 57.5 71.3 60.1 36.8 55.3 50.5 22.4 54.4 55.4 81.7 65.5 37.5 23.2 118.3 63.8 137.1 57.2 23.3 50.7 83.6 46.1 22.1 37.4 52.7

105

Network Dimensions and Development

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD EU Source: OECD.

1996 21.8 7.4 4.7 11.5 1.9 25.0 28.8 4.2 7.1 5.1 4.6 17.2 8.0 11.3 21.4 7.0 10.8 1.1 6.5 12.8 28.8 0.6 6.7 0.5 7.6 28.2 9.4 1.3 11.6 16.6 11.0 9.0

1995

% of total

1996

% of total

1997

% of total

1998

% of total

1999

% of total

2000

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD

.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. .. .. .. 577 207 .. .. .. 414 493 .. .. .. .. .. .. .. .. 36 000 .. .. .. 1 027 700

.. .. .. .. .. .. .. .. .. .. .. .. .. 9.0 .. .. .. 40.6 .. .. .. .. .. .. .. .. 5.4 .. .. .. 0.9

.. .. .. .. .. .. .. .. .. .. .. .. .. 5 527 200 .. .. .. 999 711 .. .. .. .. .. .. .. 235 000 209 000 .. .. .. 6 970 911

.. .. .. .. .. .. .. .. .. .. .. .. .. 47.0 .. .. .. 57.4 .. .. .. .. .. .. .. 7.4 20.0 .. .. .. 4.1

.. .. .. 182 341 .. .. .. .. 2 086 950 716 314 0 5 500 .. 15 022 000 .. .. .. 2 314 982 1 573 090 577 254 474 152 462 720 2 428 960 .. 2 609 033 1 016 000 590 000 .. 4 901 000 .. 34 960 296

.. .. .. 3.4 .. .. .. .. 15.0 34.8 .. 5.2 .. 74.0 .. .. .. 69.1 47.0 46.0 22.5 24.0 79.0 .. 37.0 24.7 34.7 .. 37.7 .. 14.3

757 800 2 044 168 1 275 000 528 239 .. 979 811 29 907 7 279 489 5 533 256 2 052 085 473 630 40 000 640 000 25 257 120 1 907 000 .. 46 631 6 369 630 3 938 200 878 940 1 194 034 942 285 3 705 968 127 007 8 930 524 1 983 000 1 053 425 779 600 13 527 230 4 302 350 96 576 329

12.0 47.5 40.0 7.6 .. 37.3 0.9 35.3 23.6 52.7 29.6 23.2 40.0 84.0 3.4 .. 22.4 82.4 58.0 57.0 43.5 24.1 79.3 19.1 60.0 38.7 34.5 10.0 56.5 5.0 26.9

1 798 020 3 184 653 3 377 400 1 034 822 .. 1 244 886 74 573 13 041 600 26 318 292 3 468 960 1 748 981 63 000 1 266 338 32 020 000 1 414 000 .. 119 560 12 449 635 7 370 000 1 487 160 1 344 000 2 605 691 5 305 301 479 740 15 320 941 2 773 000 1 707 078 6 627 607 30 702 000 6 570 000 184 917 238

EU

..

..

577 207

1.7

5 762 200

11.1

30 353 347

34.5

77 222 389

52.0

145 587 503

Source: OECD.

% of total

2001

% of total

37.0 2.0 44.0 54.6 58.5 56.9 29.3 62.7 75.9 2.1 .. 39.4 88.4 67.0 68.0 39.9 38.6 79.6 43.2 64.0 43.5 36.8 44.0 70.7 6.0 36.0

3 339 600 3 372 242 4 614 000 2 733 386 3 016 209 1 473 921 83 512 18 060 800 28 122 500 5 029 014 3 584 581 88 000 1 966 700 38 640 000 1 847 000 .. 179 416 19 973 638 8 580 000 1 661 492 1 528 000 5 120 000 6 366 045 1 535 671 19 171 931 3 536 000 2 155 000 11 500 000 31 991 000 11 565 000 240 834 657

30.0 49.9 60.0 25.2 43.4 37.2 2.0 48.8 50.0 63.1 72.2 37.4 71.0 77.4 2.5 .. 41.5 91.8 66.0 68.6 41.4 47.6 79.8 71.5 65.0 49.4 40.9 62.4 69.1 9.0 39.4

61.0

171 187 080

60.9

21.0 52.1 60.0 11.8 ..

OECD Communications Outlook 2003

106

Table 4.8. Mobile prepaid subscriptions

© OECD 2003

Network Dimensions and Development

Table 4.9. Percentage of population coverage of mobile networks 1995

1996

1997

1998

1999

2000

2001

Australia

85

91

91

94

94

95

97

Austria

87

90

93

97

97

99

99

Belgium

..

..

95

96

98

99

99

Canada1

..

..

93

93

93

94

96

Czech Republic

88

92

95

96

97

98

98

Denmark

100

100

100

100

100

100

100

Finland

100

100

100

100

100

100

100

France

98

98

98

98

98

98

98

Germany

99

99

99

99

99

99

99

Greece

95

95

95

95

96

98

99

Hungary

89

97

97

98

98

98

98 99

Iceland

..

..

99

99

99

99

Ireland

95

95

96

96

96

98

99

Italy

95

95

97

98

100

100

100

Japan

..

..

98

98

98

98

99

Korea

95

95

97

98

99

99

99

Luxembourg

..

..

99

98

98

98

99

Mexico

..

..

80

81

82

86

90

Netherlands

97

80

98

98

98

100

100

New Zealand

95

95

95

95

95

95

97

Norway

98

98

98

98

98

98

98

Poland

..

..

75

91

93

95

98

Portugal

..

..

98

98

99

99

99

Slovak Republic

..

..

95

96

98

98

98

98

98

99

99

99

99

99

..

..

96

96

96

96

96

95

98

98

98

98

98

99

..

46

61

61

61

64

88

..

..

98

98

98

98

98

95

95

95

95

95

95

97

Spain Sweden Switzerland Turkey United Kingdom United States2

OECD average 94.7 92.4 91.1 95.2 95.7 96.4 97.8 1. Rogers Communications Canadian coverage for 1997-1999 and Bell Canada for 2000. This would tend to slightly understate the combined coverage of all systems in these years. Canadian data for 2001 is a CWTA estimate for the entire industry. 2. Data for the United States show the proportion of population living in counties with mobile network coverage. Source: OECD.

107

© OECD 2003

OECD Communications Outlook 2003

Table 4.10. Digitalisation in the OECD area Fixed network (percentage of digital access lines) 1993

1995

1997

1998

1999

2000

Australia

40

62

84

95

100

100

2001 100

Austria

54

72

82

92

100

100

100

Belgium

54

66

83

83

91

100

100

Canada

85

94

99

100

100

100

100

Czech Republic

10

17

55

64

74

86

95 100

Denmark

46

61

86

100

100

100

Finland

62

90

100

100

100

100

100

France

86

100

100

100

100

100

100

Germany

41

56

100

100

100

100

100

Greece

22

37

47

75

91

93

96

Hungary

27

53

73

79

81

86

88

Iceland

66

100

100

100

100

100

100

Ireland

71

79

92

100

100

100

100

Italy

57

76

94

98

100

100

100

Japan

72

90

100

100

100

100

100

Korea

59

63

67

69

74

80

88

Luxembourg

82

100

100

100

100

100

100

Mexico

65

88

90

98

100

100

100

Netherlands

93

100

100

100

100

100

100

New Zealand

95

97

100

100

100

100

100

Norway

60

82

100

100

100

100

100

Poland

10

48

58

62

68

77

90

Portugal

59

70

88

98

100

100

100

Slovak Republic

5

26

51

62

67

70

74

Spain

41

56

81

86

87

87

87

Sweden

67

91

99

100

100

100

100

Switzerland

48

66

99

99

99

100

100

Turkey

74

77

82

83

84

87

89

United Kingdom

75

88

100

100

100

100

100

United States

78

82

86

90

93

95

97

OECD Source: OECD.

69

82

88

92

95

95

97

108

© OECD 2003

Network Dimensions and Development

Table 4.11. Availability of digital subscriber lines (DSL) in the OECD area

Commercial service launch

Actual coverage by year end (%)

Projected coverage

2000

2001

2002

2003

85

87

Indicator used to express coverage

2004

Australia

August 2000

50

72

Austria

November 1999

72

77

Lines

Belgium

October 1999

75

93

95

96

Canada

1996

69

Czech Republic

Yet to launch - trial

0

0

0

44

Denmark

July 1999

65

90

95

95

95

Lines

Finland

May 2000

50

60

75

85

95

Lines

France

November 1999

32

76

86

91

95

Lines

Germany

August 1999

60

80

90

Greece

Yet to launch - trial

0

0

Hungary

December 2000

Iceland

Beginning 2000

Ireland

May 2002

Italy

December 1999

Japan

September 2000

Korea

April 1999

Luxembourg

2001

Mexico

September 2001

Netherlands

June 2000

New Zealand

Lines

97

Lines Households

20 33

51

0

0

45

67.5 73.5

Households

38

45

25

50

80

90

50 Population Lines

90

70

Households Lines

65

89

Lines

40

64

85

Lines

June 1999

60

69

83

Lines

Norway

December 2000

20

50

52

Poland

2001

0

3.5

10

Lines

Portugal

December 2000

61

Population

Slovak Republic

Yet to launch

Spain

1999

Sweden

October 2000

Switzerland

2nd quarter 2001

Turkey

February 2001

United Kingdom

July 2000

United States

1997

OECD (weighted average) Source: OECD.

0 0

50

54

Lines

0

0

62.2

81.3

89.3

Lines

70

75

Lines

0

85

90

Lines

0

0.01

2.5

50

60

66

36

50

31.91

58.02

5

10

62

65

67

65.85

68.79

69.56

Lines Lines Lines

109

© OECD 2003

OECD Communications Outlook 2003

Table 4.12. Public telecommunication investment in the OECD area (excluding spectrum fees) USD millions Average 1988-90

Average 1991-93

Average 1994-96

2 285

2 130

Austria

965

Belgium

614

Canada

3 479

Australia

Czech Republic

1997

1998

1999

2000

2001

3 050

4 009

3 463

4 145

3 842

3 333

1 308

1 283

1 000

1 663

1 890

1 907

1 611

780

928

722

670

746

952

591

3 353

2 811

3 991

4 116

3 665

4 028

3 997

39

226

818

1 421

1 164

849

960

971

Denmark

490

431

612

890

1 077

986

1 116

1 280

Finland

670

510

632

832

596

573

626

654

France

4 548

6 081

6 175

6 421

6 456

5 629

7 206

6 407

Germany

9 263

15 808

12 717

11 970

10 850

11 203

8 491

7 075

Greece

291

808

751

841

1 557

1 403

1 531

1 552

Hungary

216

456

754

764

662

812

820

888

Iceland

12

23

30

29

52

56

69

37

Ireland

221

257

328

588

654

584

704

442

7 365

8 657

5 065

5 558

5 981

5 500

4 711

5 289

Japan

15 389

20 339

33 120

32 815

29 023

32 924

32 883

24 658

Korea

2 587

3 167

4 615

3 049

4 495

3 248

6 800

4 260

39

72

96

79

30

55

15

30

Mexico

1 409

2 214

1 862

1 963

3 161

4 027

5 163

5 738

Netherlands

1 144

1 572

1 511

1 494

2 682

4 731

3 174

2 671

New Zealand

362

367

340

389

298

352

379

289

Norway

500

483

361

541

477

541

578

597

Poland

140

489

896

1 006

1 365

1 862

2 434

1 965

Portugal

562

973

938

1 078

1 503

1 676

1 979

1 304

..

41

287

384

343

1 048

1 358

1 405

Italy

Luxembourg

Slovak Republic Spain

4 517

4 265

3 220

2 654

2 959

3 506

2 905

3 070

Sweden

1 079

1 164

1 197

967

929

1 267

1 226

1 180

Switzerland

1 597

1 786

1 761

1 637

1 275

2 034

2 245

1 356

Turkey

548

787

498

546

604

575

628

361

4 830

3 738

4 887

9 971

8 987

12 800

14 122

14 159

United States

23 401

26 064

37 751

54 224

65 829

88 434

116 117

95 086

OECD Source: OECD.

88 561

108 351

129 295

151 832

162 919

197 120

228 967

192 260

United Kingdom

110

© OECD 2003

© OECD 2003

Table 4.13. Licensing revenues in the OECD area USD millions Revenue from sale of spectrum for cellular wireless communications (including UMTS) 1999

Revenue from sale of spectrum for wireless local loop

2000

2001

0.03

771.51

601.04

104.49

770.38

64.39

Belgium

6.21

5.94

8.62

..

..

..

3.51

2.88

Canada

115.33

..

956.06

..

..

..

..

..

4.92

8.29

11.83

..

1

Australia Austria

2, 2f

Czech Republic Denmark Finland France

1999

2000

Revenue from sale of spectrum for any other telecommunication service (e.g. LMDS)

2001

65.39

1999

2000

42.73

21.86

2001

1999

2000

2001

9.62

10.81

11.61

60.71

54.65

61.87

0.29

0.19

0.14

104.78

770.57

65.74

3.29

15.43

14.47

21.11

25.15

23.29

27.99

..

..

..

..

115.33

..

956.06

2a

45.18

2d

67.13

1.21

2a

11.66

2a

0.53

2b

3.24

2b

3.95

Total revenue received by public authorities from licensing or spectrum fees

Revenue from PSTN licences

2b

7.99

2g

..

2a

..

..

1999

2000

2c

2001

12.24

2e

..

..

..

..

..

..

..

..

..

..

..

..

..

0.01

0.12

3.58

3.36

4.37

0.21

0.28

0.22

0.05

0.06

0.16

..

..

..

3.84

3.71

4.75

113.39

47.87

56.88

226.11

46 871.79

..

..

..

..

..

16.86

26.24

12.50

64.70

83.03

125.89

11.56

7.79

6.24

14.88

5.09

26.91

106.62

-93.10

266.09

47 004.85

3

-80.23

..

..

432.61

..

54.03

..

..

..

..

3.53

2.99

3.53

57.02

447.45

Hungary

131.28

Iceland

47.02

119.17

11.97

..

..

9.77

12.95

10.48

10.69

6.71

5.44

4.82

150.94

135.10

37.26

61.78

58.08

..

..

..

40.02

55.79

49.63

103.93

89.15

72.88

..

..

1.27

Ireland

..

24.90

1.42

..

..

..

..

..

..

..

0.06

0.04

..

42.69

22.63

Italy

..

11 155.96

..

..

..

32.43

..

..

..

4.73

9.98

15.54

..

..

..

Japan4

..

..

..

..

..

..

..

..

..

..

..

..

313.41

379.51

371.10

68.56

120.25

66.38

15.98

..

..

2.44

..

1 006.98

..

..

..

191.87

261.46

1 157.25

..

..

0.00

..

..

..

..

..

..

..

..

0.05

..

..

..

277.65

..

..

56.36

..

..

24.11

12.41

..

..

..

..

358.12

12.41

..

Netherlands

..

25.80

..

..

..

..

..

..

..

..

..

..

..

..

..

New Zealand

..

..

49.79

..

..

5.21

..

..

..

..

..

..

6.35

5.23

5.21

Norway

..

..

..

..

..

..

..

..

..

..

..

..

2.56

93.18

12.41

Greece

Korea 5

Luxembourg 6

Mexico

Poland Portugal Slovak Republic

..

..

..

..

..

..

..

..

..

..

..

..

..

..

45.61

32.60

38.41

49.33

..

3.63

3.54

..

..

..

0.72

1.31

1.41

14.58

10.08

6.41

1.70

1.57

1.98

..

..

..

..

..

..

..

..

2.61

3.03

2.97

4.34

111

Network Dimensions and Development

.. 6.84

Germany

Revenue from sale of spectrum for cellular wireless communications (including UMTS) 1999 Spain

29.47

Sweden Switzerland Turkey United Kingdom United States7 OECD

2000

2001

38.26

Revenue from sale of spectrum for wireless local loop

Revenue from sale of spectrum for any other telecommunication service (e.g. LMDS) 1999

2000

2001

Total revenue received by public authorities from licensing or spectrum fees

Revenue from PSTN licences

1999

2000

2001

1999

2000

2001

1999

2000

2001

735.27

..

2.02

38.21

1.28

43.12

21.25

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

3.20

2.84

124.26

..

343.20

0.04

..

..

..

..

..

..

..

..

..

27.83

77.35

..

..

..

..

0.004

0.79

..

..

..

27.84

77.36

..

..

..

33 333.33

..

..

..

..

..

..

..

..

..

..

..

33 333.33

..

412.84

..

538.78

..

410.65

..

45.06

..

..

85.00

90.71

97.59

172.52

185.76

201.21

1 512.84

93 438.28

3 906.92

79.39

902.41

98.96

181.62

165.45

1 105.86

273.72

357.98

147.20

1 902.69

82 498.92

3 618.83

© OECD 2003

1. Notes on Australia: a) Licence fee information in the total revenue row is by financial (not calendar) year and does not include revenue from the PSTN licences category. b) There are no PSTN licences as such, but Australia provides telecommunication carrier licences which include access to the PSTN. This revenue includes a licence application charge, an annual charge and a percentage of eligible revenue. 2. Notes on Czech Republic: 2a) Revenue from the tender process. Administrative charges for licence and use of frequencies and numbers are not included. 2b) The following services are included: fixed, broadcasting, maritime, aeronautical and satellite. 2c) Sum of fees for use of frequencies and licences sold to providers: CZK 281.8 million in fees for use of frequencies; CZK 1.28 billion in income from the tender of GSM operator (administrative charges for granting of licence and use of frequencies and numbers not included). 2d) Fees for use of frequencies. 2e) Sum of fees for usage of frequencies and licences sold to providers. The sum given represents the total of the following: CZK 1.8 billion (part of income from the tender for the UMTS licence paid in the year 2001; no administrative fees for granting of the licence or fees for the frequencies and numbers are included. Payment of the sum of CZK 7.385 billion for the UMTS tender is spread out over a period of 10 years up to 2011) and CZK 753.8 million (income from fees paid for use of frequencies). 2f) For 2001 data: The revenue from the usage of frequencies is still being recalculated as it must be in accordance with the governmental edict which entered into force in July 2000 and it is applied retroactively. 2g) Any fees collected for these licences before the issue of the new Telecommunications Act. 3. Note on Greece: Revenues from PSTN licences received by EETT plus revenues from sale of spectrum received by government. 4. Note on Japan: The spectrum user fee is a special charge that is borne by all radio station license holders to cover the expenditure of the administrative work for all the radio stations. 5. Notes on Luxembourg: a) The Regulation of 14 December 2001 established the basic conditions for the establishment and operation of mobile telecommunication networks and services. The Luxembourg Regulatory Institute requires: i) payment of an annual license fee amounting to 0.2% of sales realised by the operator within the scope of the license (minimums apply); and ii) operators must contribute to spectrum and frequency management costs. b) The Luxembourg Regulatory Institute only charges license fees in order to cover extraordinary costs related to the management, regulation and implementation of local radio loop authorisations. They do not constitute royalties. 6. Notes on Mexico: For 1999, includes MXN 344 168 774 corresponding to value added taxes, MXN 689 613 827 for interest related to late bid payments and MXN 98 908 449 due to penalties arising from default on payments of winning bids. For 2000, includes MXN 15 131 447, corresponding to value added taxes, MXN 849 736 for interest related to late bid payments and MXN 1 421 828 due to penalties arising from default on payments of winning bids. 7. Note on the United States: Auction close date is the qualifier for spectrum revenue generated for the respective year, not the date money was actually collected. Source: OECD.

OECD Communications Outlook 2003

112

Table 4.13. Licensing revenues in the OECD area (continued) USD millions

© OECD 2003

Table 4.14. Telecommunication investment by region USD millions

Europe (%) Including wireless spectrum (%) North America (%) Including wireless spectrum (%) Asia/Pacific (%) Including wireless spectrum (%) EU (%) Including wireless spectrum (%) OECD

Average 1988-1990

Average 1991-1993

Average 1994-1996

39 650

50 717

45 746

1997

1998

1999

2000

2001

Average 1999-2001

51 393

52 535

60 324

59 755

54 899

58 326

45

47

35

34

32

31

26

29

28

39 650

50 717

45 746

51 393

52 535

60 747

154 794

56 871

125 447

45

47

35

34

32

26

48

29

34

28 289

31 631

42 424

60 179

73 106

96 127

125 308

104 821

108 752

32

29

33

40

45

49

55

55

53

28 289

31 631

42 424

60 179

73 106

96 933

125 308

106 316

109 519

32

29

33

40

45

49

39

54

47

20 622

26 003

41 125

40 261

37 279

40 670

43 904

32 540

39 038

23

24

32

27

23

21

19

17

19

20 622

26 003

41 125

40 261

37 279

40 738

44 796

33 208

39 581

23

24

32

27

23

21

14

17

17

36 599

46 425

40 340

45 065

46 594

52 547

50 663

47 318

50 176

41

43

31

30

29

27

22

25

24

36 599

46 425

40 340

45 065

46 594

52 740

145 425

49 082

82 416

41

43

31

30

29

27

45

25

32

88 561

108 351

129 295

151 832

162 919

197 120

228 967

192 260

206 116

129 295

151 832

162 919

198 418

324 899

196 395

239 904

Including wireless spectrum 88 561 108 351 Note: Data for wireless spectrum included from 1999 onwards. Source: OECD.

Network Dimensions and Development

113

OECD Communications Outlook 2003

Table 4.15. Public telecommunication investment as a percentage of revenue Average 1988-90

Average 1991-93

Average 1994-96

Average 1997-99

1997

1998

1999

2000

2001

Australia

30.4

23.7

26.8

28.7

29.8

27.0

29.4

26.2

24.9

Austria

38.7

41.2

32.1

35.4

26.8

40.4

37.8

42.9

31.9

Belgium

26.5

25.3

22.7

14.0

17.0

13.1

12.6

15.6

8.8

Canada

30.8

27.1

22.6

21.8

23.4

22.2

19.8

20.1

19.9

Czech Republic

23.5

43.2

84.3

63.7

97.9

63.5

40.3

41.5

38.0

Denmark

23.7

16.6

17.8

25.9

25.5

28.7

23.8

26.7

30.3

Finland

35.7

26.7

27.0

18.6

27.1

16.4

14.2

15.6

15.4

France

26.2

27.6

22.1

20.4

22.4

22.4

17.0

26.5

21.9

Germany

41.7

47.7

29.9

23.7

27.4

22.1

22.1

16.6

12.4

Greece

26.2

50.3

26.9

32.1

25.6

36.2

33.0

35.6

31.1

Hungary

69.7

58.3

48.5

29.0

35.7

26.3

26.4

25.6

24.6

Iceland

14.6

23.7

22.8

26.8

18.9

31.1

29.2

27.5

17.3

Ireland

20.7

19.6

19.0

28.1

27.6

34.2

23.9

31.3

17.8

Italy

51.2

47.3

25.0

22.1

23.3

22.6

20.6

19.2

19.6

Japan

34.4

33.9

33.0

26.9

29.8

27.4

24.1

20.9

17.4

Korea

56.7

46.9

40.9

30.5

33.5

35.2

24.0

37.4

23.5

Luxembourg

33.9

35.5

32.6

16.3

25.8

8.9

15.1

4.4

8.1

Mexico

51.3

33.3

25.5

32.1

22.4

34.3

38.2

39.1

38.5

Netherlands

26.2

26.9

19.0

31.7

18.9

28.3

44.1

31.3

23.0

New Zealand

25.7

26.5

17.2

16.1

17.3

14.6

16.2

17.0

13.6

Norway

23.3

20.4

11.8

11.5

15.0

9.5

11.0

12.7

11.6

Poland

28.8

36.0

42.6

39.2

38.8

37.7

40.5

44.8

29.9

Portugal

48.0

49.4

30.9

33.0

27.2

35.7

35.4

39.7

24.0

..

59.8

89.3

129.0

85.1

71.3

235.9

168.8

149.2

Spain

67.0

40.9

30.0

18.8

18.6

18.5

19.3

15.6

14.1

Sweden

24.7

21.4

18.3

14.6

14.0

12.6

17.1

17.9

16.4

Switzerland

38.6

31.5

23.5

22.5

24.1

16.6

27.0

29.7

17.2

Turkey

33.9

30.4

21.1

11.9

13.7

12.0

10.5

10.1

6.1

United Kingdom

21.4

14.6

17.2

24.1

27.9

20.0

25.2

25.9

25.4

United States

16.3

16.1

18.7

25.1

21.1

24.1

29.3

34.7

27.6

OECD Source: OECD.

26.9

26.5

24.4

25.0

24.3

24.3

26.1

28.1

23.1

Slovak Republic

114

© OECD 2003

Network Dimensions and Development

Table 4.16. Public telecommunication investment as a percentage of gross fixed capital formation (GFCF) Average 1988-90

Average 1991-93

Average 1994-96

Average 1997-99

1997

1998

1999

2000

2001

Average 1999-2001

Australia

3.06

3.18

3.60

4.17

4.18

4.00

4.31

4.68

4.55

4.51

Austria

2.95

3.05

2.47

3.10

2.07

3.34

3.88

4.28

3.75

3.97

Belgium

1.69

1.78

1.80

1.39

1.45

1.30

1.43

1.98

1.24

1.55

Canada

2.89

3.08

2.63

3.09

3.15

3.35

2.80

2.86

2.86

2.84

Czech Republic

1.57

2.74

5.23

7.24

8.75

7.30

5.57

6.68

6.14

6.13

Denmark

2.06

1.71

1.96

2.84

2.68

3.03

2.80

3.21

3.77

3.26

Finland

1.97

2.32

3.25

2.84

3.77

2.48

2.36

2.70

2.74

2.60

France

1.92

2.29

2.22

2.32

2.54

2.41

2.03

2.76

2.43

2.41

Germany

2.97

3.51

2.45

2.50

2.66

2.37

2.47

2.11

1.90

2.16

Greece

1.79

3.99

3.48

4.94

3.50

6.06

5.16

5.95

6.32

5.81

..

5.94

8.22

6.83

7.51

5.95

7.07

7.28

7.30

7.22

Hungary Iceland

0.98

1.94

2.59

2.58

1.96

2.65

2.99

3.49

2.23

2.90

Ireland

3.11

3.09

2.87

3.17

3.63

3.42

2.63

3.14

2.03

2.60

Italy

9.35

3.82

2.48

2.59

2.61

2.71

2.44

2.22

2.46

2.37

Japan

1.65

1.72

2.39

2.75

2.71

2.74

2.80

2.62

2.31

2.58

Korea

3.54

2.66

2.68

2.88

1.82

4.76

2.88

5.19

3.73

3.93

Luxembourg

1.89

2.33

2.64

1.30

2.03

0.76

1.16

0.38

0.75

0.76

Mexico

3.54

3.24

2.99

3.41

2.51

3.59

3.95

4.19

4.60

4.25

Netherlands

1.97

2.30

1.88

3.50

1.86

3.17

5.28

3.81

3.20

4.10

New Zealand

4.12

5.05

2.67

2.94

2.83

2.79

3.20

3.92

3.23

3.45

Norway

1.92

1.98

1.21

1.43

1.52

1.24

1.56

1.80

1.90

1.75

Poland

3.39

3.43

3.77

3.74

2.98

3.41

4.72

6.21

4.72

5.21

Portugal

3.56

4.65

3.97

4.79

3.94

4.99

5.33

6.56

4.33

5.41

..

..

5.48

8.26

5.24

4.23

17.27

23.51

25.55

22.11

Spain

4.23

3.34

2.64

2.27

2.16

2.21

2.42

2.05

2.11

2.20

Sweden

2.27

2.76

3.28

2.73

2.67

2.42

3.07

3.09

3.22

3.13

Switzerland

2.98

3.23

2.89

3.19

3.26

2.43

3.87

4.45

2.66

3.66

Turkey

1.99

1.94

1.27

1.23

1.09

1.23

1.42

1.41

1.37

1.40

United Kingdom

2.59

2.19

2.67

4.39

4.53

3.56

5.11

5.69

5.82

5.54

United States

2.41

2.54

2.89

4.11

3.51

3.88

4.83

5.85

4.79

5.16

OECD

2.51

2.54

2.61

3.30

3.01

3.21

3.66

4.13

3.64

3.81

Slovak Republic

Source: OECD.

115

© OECD 2003

OECD Communications Outlook 2003

Table 4.17. Public telecommunication investment per access channel USD millions Average 1988-90

Average 1991-93

Average 1994-96

Average 1997-99

1997

1998

1999

2000

2001

Average 1999-2001

Australia

294.77

313.06

327.02

375.69

404.91

337.93

384.77

345.86

296.40

342.34

Austria

310.44

377.64

343.32

402.33

268.40

446.21

489.13

484.14

408.18

460.49

Belgium

164.28

183.32

196.98

137.66

138.60

132.49

141.69

180.55

115.09

145.78

Canada

238.61

206.09

159.35

198.14

213.89

205.28

177.04

183.60

186.48

182.37

25.18

123.35

333.18

315.76

433.95

310.51

220.45

248.00

235.38

234.61

Denmark

171.92

143.37

189.35

286.44

271.25

313.90

274.07

294.33

333.84

300.75

Finland

260.18

186.09

221.13

208.90

270.19

187.30

172.73

178.47

187.79

179.66

France

168.65

199.94

187.27

175.94

196.45

185.52

149.31

183.81

160.18

164.44

Germany

Czech Republic

312.15

438.27

298.63

243.99

265.16

233.33

234.38

169.07

135.34

179.59

Greece

76.85

180.44

145.65

227.58

154.76

280.18

245.72

256.35

251.36

251.14

Hungary

233.77

349.51

337.65

212.04

240.86

187.42

210.88

199.07

210.03

206.66

Iceland

96.56

166.50

198.54

257.95

173.56

294.56

297.60

358.52

194.55

283.56

Ireland

243.15

231.47

249.91

386.94

391.71

400.49

368.45

391.29

237.38

332.37

Italy

346.83

366.00

202.69

213.99

213.05

226.00

203.16

166.84

181.55

183.85

Japan

294.81

350.81

529.64

461.46

495.78

426.58

462.88

437.05

331.94

410.62

Korea

194.55

202.80

244.85

156.26

145.95

215.50

118.92

249.11

156.55

174.86

Luxembourg

222.50

353.56

409.73

213.49

298.22

128.69

204.47

47.05

87.29

112.93

Mexico

289.69

325.60

213.82

303.95

212.18

318.39

368.55

416.59

414.81

399.98

Netherlands

170.73

212.43

184.98

329.26

154.70

345.28

491.56

306.31

258.14

352.00

New Zealand

254.54

242.82

205.22

197.03

221.76

169.11

200.38

216.75

163.65

193.59

Norway

241.07

213.06

145.39

176.12

197.70

162.41

170.22

174.08

179.95

174.75

Poland

44.77

123.10

155.60

159.75

133.95

160.33

177.77

184.63

120.13

160.84

267.57

325.17

257.67

344.93

269.87

365.02

396.22

458.81

297.91

384.32

..

71.76

256.02

385.58

275.88

222.11

628.13

781.64

845.13

751.63

Spain

383.10

309.41

212.49

179.11

162.12

176.21

197.52

154.72

157.28

169.84

Sweden

188.66

196.30

197.56

165.72

155.74

146.54

193.82

182.88

175.72

184.14

Switzerland

421.68

425.04

389.34

339.07

349.24

263.77

401.52

428.74

251.83

360.70

92.90

79.07

35.64

33.96

34.68

35.59

31.81

34.10

19.06

28.32

United Kingdom

195.32

140.92

161.99

324.46

316.16

276.10

378.80

402.56

400.82

394.06

United States

178.81

181.80

235.92

370.57

304.58

350.23

449.78

577.63

493.97

507.13

OECD

227.94

247.03

261.33

303.75

283.38

292.24

333.03

371.36

311.49

338.63

Portugal Slovak Republic

Turkey

Source: OECD.

116

© OECD 2003

Network Dimensions and Development

Table 4.18. Public telecommunication investment per access path USD Average 1988-90

Average 1991-93

Average 1994-96

Average 1997-99

1997

1998

1999

2000

2001

Average 1999-2001

Australia

290.88

292.78

259.15

248.58

276.88

228.35

242.57

195.32

148.95

195.61

Austria

305.17

359.99

308.61

238.62

204.49

275.91

231.53

189.61

150.49

190.54

Belgium

162.93

180.76

185.93

99.67

116.76

98.34

88.25

87.33

46.10

73.89

Canada

232.51

193.62

138.71

155.01

174.09

161.99

132.73

131.25

123.78

129.25

25.18

122.97

321.26

240.03

374.33

246.92

146.51

116.85

87.71

117.02

Denmark

164.73

132.44

148.81

181.01

188.34

200.88

158.33

155.95

164.19

159.49

Finland

244.70

163.57

161.53

112.49

160.91

98.90

86.94

86.49

85.37

86.27

France

167.49

197.18

178.80

129.63

167.04

140.32

96.52

104.71

83.18

94.80

Germany

310.29

425.40

273.02

183.93

224.50

179.60

157.25

86.27

65.20

102.90

Greece

76.85

180.07

137.16

161.12

131.99

204.49

146.09

128.60

109.79

128.16

Hungary

233.55

341.25

298.36

161.03

197.01

144.91

148.93

113.99

96.59

119.84

Iceland

90.58

150.18

163.02

156.11

123.98

183.86

154.92

169.91

87.28

137.37

Ireland

239.22

222.57

221.59

234.82

292.21

253.63

183.36

184.29

95.42

154.35

Italy

344.85

353.27

173.57

120.20

146.85

127.90

96.25

66.88

66.88

76.67

Japan

291.82

340.58

430.97

272.49

314.19

251.62

257.27

231.53

165.38

218.06

Korea

193.87

198.94

222.13

95.18

109.73

129.02

63.99

125.66

75.72

88.46

Luxembourg

221.84

349.37

365.81

139.86

237.91

83.01

115.22

24.25

38.85

59.44

Mexico

288.23

312.44

196.64

213.17

178.58

238.06

215.84

195.04

161.23

190.70

Netherlands

169.31

207.78

171.83

229.11

131.68

241.30

288.22

148.59

114.41

183.74

New Zealand

245.61

221.80

164.59

118.35

157.83

98.79

106.78

96.31

68.99

90.69

Norway

222.58

188.75

105.37

101.34

122.55

94.56

91.31

86.39

85.21

87.64 108.04

Czech Republic

44.77

122.91

152.67

127.72

120.88

130.72

129.49

122.12

72.49

267.18

319.78

232.58

197.12

195.93

208.96

188.28

180.27

105.56

158.04

..

71.63

252.51

299.16

241.20

170.62

449.33

476.92

368.82

431.69

Spain

382.07

305.38

193.98

118.15

128.21

124.09

107.43

68.01

62.64

79.36

Sweden

177.75

175.59

149.25

100.45

103.12

88.91

108.63

93.79

85.07

95.83

Switzerland

413.36

404.24

352.06

242.61

285.61

195.20

250.39

227.34

127.19

201.64

92.60

78.56

34.47

27.08

31.46

29.49

22.22

18.76

9.67

16.88

United Kingdom

188.58

132.61

137.10

221.83

250.01

197.30

221.71

179.82

173.50

191.68

United States

174.00

168.74

195.93

269.65

232.38

255.97

312.86

373.94

296.22

327.67

OECD

223.77

235.35

224.80

208.08

215.03

202.98

207.22

202.56

156.43

188.74

Poland Portugal Slovak Republic

Turkey

Note: Access paths include access channels and cellular mobile subscriptions. Source: OECD.

117

© OECD 2003

OECD Communications Outlook 2003

Table 4.19. Public telecommunication investment per capita USD Average 1988-90

Average 1991-93

Average 1994-96

Average 1997-99

1997

1998

1999

2000

2001

Average 1999-2001

Australia

135.97

121.83

168.73

206.40

216.24

184.60

218.33

199.85

171.06

196.41

Austria

126.24

165.56

159.44

187.82

123.89

205.84

233.61

235.08

198.19

222.29

Belgium

61.80

77.64

91.49

69.83

70.91

65.66

72.90

92.88

57.62

74.47

Canada

127.61

118.17

95.76

129.74

133.10

136.07

120.17

130.92

128.60

126.56

3.79

21.86

79.21

111.21

137.90

113.09

82.60

93.49

94.41

90.17 210.96

Czech Republic

95.44

83.36

116.96

185.57

168.34

203.11

185.18

208.94

238.77

Finland

134.87

101.14

123.83

129.43

161.90

115.73

110.81

120.77

125.81

119.13

France

80.61

106.25

106.76

105.61

110.31

110.56

96.02

122.35

108.25

108.87

Denmark

148.79

196.16

155.73

138.21

145.88

132.27

136.48

103.29

85.96

108.58

Greece

28.95

78.42

71.89

120.47

80.14

148.01

133.15

144.40

146.13

141.23

Hungary

20.75

44.21

73.70

73.76

75.23

65.44

80.62

81.84

87.22

83.23

Iceland

47.13

89.15

112.46

165.67

105.33

189.40

201.20

246.92

130.70

192.94 152.29

Germany

62.85

72.43

91.16

164.33

160.49

176.60

155.94

185.81

115.12

Italy

128.67

152.72

89.28

99.61

97.61

104.86

96.35

82.37

92.23

90.32

Japan

125.07

163.49

263.89

249.81

260.09

229.46

259.89

259.07

193.84

237.60 101.44

Ireland

60.93

72.40

102.35

77.72

66.34

97.11

69.68

144.66

89.98

103.11

182.69

234.21

128.49

187.79

71.28

127.18

34.63

68.63

76.81

17.00

26.07

20.63

31.86

20.90

33.03

41.27

53.02

57.90

50.73

Netherlands

77.01

103.58

97.75

189.00

95.75

170.74

299.19

199.32

167.10

221.87

New Zealand

108.63

104.52

92.99

91.46

103.36

78.62

92.49

98.95

75.03

88.82

Norway

118.26

112.68

82.87

117.16

122.72

107.61

121.17

128.59

132.28

127.35

3.68

12.75

23.21

36.50

26.03

35.29

48.16

62.98

50.86

54.00

56.71

98.85

95.17

142.67

109.10

150.76

167.80

197.75

129.63

165.06 235.65

Korea Luxembourg Mexico

Poland Portugal

..

7.73

53.62

109.76

71.33

63.54

194.30

251.39

261.25

Spain

116.46

109.34

82.09

77.00

67.45

74.99

88.47

72.76

76.25

79.16

Sweden

127.06

134.34

135.72

119.09

109.33

104.94

142.99

138.21

132.70

137.96

Switzerland

239.14

259.96

249.97

231.77

230.96

179.38

284.72

312.47

187.47

261.55

9.97

13.48

8.08

8.87

8.57

9.32

8.73

9.31

5.27

7.77

United Kingdom

84.21

64.45

83.38

178.66

168.96

151.71

215.12

236.32

235.94

229.13

United States

94.57

102.05

143.50

256.92

202.29

243.35

324.00

421.67

333.61

359.76

OECD

86.80

102.26

119.28

154.15

138.09

147.19

176.90

204.31

169.23

183.48

Slovak Republic

Turkey

Source: OECD.

118

© OECD 2003

Chapter 5

INTERNET AND BROADBAND INFRASTRUCTURE

Abstract. At the end of 2001, there were around 213 million subscribers to fixed Internet connections in OECD countries. There is also an increasing number of mobile Internet users. Broadband access is becoming more common, with more than 50 million subscribers using broadband access networks by the end of 2002. Both the pattern of growth in overall subscriber numbers and rapid adoption of broadband access among the more advanced countries suggest that even among OECD countries there continues to be a digital divide, in terms of both ability to access and the quality of access available. This chapter examines the Internet infrastructure and provides information on subscribers to fixed Internet and broadband connections, Internet hosts, and statistics on Web sites, secure servers and domain names.

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T

he Internet continues to expand and the number of people using broadband access technologies is increasing rapidly. At the end of 2001, there were around 213 million subscribers to fixed Internet connections in OECD countries. During 2001, the number of subscribers grew by 22%. There are also an increasing number of mobile Internet users. Broadband access is becoming more common, with more than 50 million subscribers using broadband access networks by the end of 2002 – well over double the number at the beginning of 2001. Both the pattern of growth in overall subscriber numbers and rapid adoption of broadband access among the more advanced countries suggest that even among OECD countries there continues to be a digital divide, in terms of both ability to access and the quality of the access available. The development of e-commerce, together with recently increased concerns about security, is underpinning rapid growth in the adoption and use of secure servers. In the four years to July 2002, the number of secure servers in OECD countries increased almost 70% per annum. Interestingly, while the majority of content continues to be in English, it appears to account for a lower share of Internet content than was formerly the case. Regionally, address allocations suggest that the Internet is growing somewhat faster in the Asia-Pacific region and Europe than in the Americas, but strong growth is evident almost everywhere. Internet subscribers There is widespread interest in industry and government in the take-up and use of the Internet. The number of people accessing Internet is, therefore, a key indicator. However, as yet there is no single measure of adoption, some national statistical agencies report the number of “users” based on business and household surveys, and many private and public sector organisations report the number of “users”, “people” or “households” online. From an international perspective, the major drawback of these data is that there is no common definition of terms such as “users”. An alternative approach is to compile information on Internet subscribers by country from major telecommunication carrier reports of the number of subscribers to their Internet services and their estimated market share. As these carriers manage connectivity via public switched telecommunication networks, they are often in the best position to know subscriber numbers on a nationwide basis. Moreover, the term “subscribers” has a more specific meaning for most carriers – namely, the number of active registered Internet accounts. Although the definition of “active” varies slightly from country to country (e.g. from accessing an account every 45 days to every 90 days), these data provide the best internationally comparable source of information on the take up and use of Internet services.

Box 5.1.

Mobile Internet

Developments such as SMS, GPRS, WAP, third generation mobile and the popularity of handheld devices have encouraged a rapid increase in the number of mobile Internet subscribers wherever services are available. The FCC reported that there were 8 to 10 million mobile Internet subscribers in the United States at the end of 2001, up from 2 to 2.5 million at the end of 2000. There were reports of 7 million mobile Internet users in Europe by the end of 2001, and carrier reports suggest that subscriber numbers increase rapidly as new services are introduced. For example, KPN reported that within months of its launch it had 100 000 i-mode subscribers in Germany and the Netherlands. The Korean Ministry of Information and Communication reported more than 19 000 mobile Internet subscribers in Korea by April 2001. In Japan, there were more than 48 million mobile Internet subscribers at the end of 2001 – including NTT DoCoMo (30.2 million), J-Phone (9.3 million) and KDDI (9 million). The Telecommunication Carriers Association in Japan recently reported that by July 2002, the number had grown to more than 55 million mobile Internet subscribers. 120

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Major factors affecting subscriber numbers include the recent, now declining business model that encouraged the registration of “free” Internet accounts, and the recent rapid adoption of mobile Internet access. To date, however, mobile Internet access provides a more limited Internet experience, with tremendous price differences and more limited capabilities, such that a mobile Internet subscriber is not equivalent to a fixed line Internet subscriber. Moreover, at the end of 2001, the number of mobile Internet subscribers was relatively small. Japan was the exception, with more than 40 million. Korea had around 19 000 mobile Internet subscribers in April 2001, and there were 8 to 10 million in the United States. For these reasons mobile Internet subscriptions have been omitted, and the data presented refer to the number of active subscribers to fixed line Internet services. Fixed Internet subscribers There were 213 million active Internet subscribers with fixed Internet connections in OECD countries at the end of 2001, up by 22% from 175 million a year earlier (Table 5.1). At the end of 2001, 77.5 million or 36% of all OECD Internet subscribers were in the United States and 64 million or 30% were in European Union countries, with almost 15 million Internet subscribers in Germany, 13.6 million in the United Kingdom, 8.3 million in Italy and around 7 million in France. Other countries with high Internet subscriber numbers included Japan with 24 million, Korea with 23 million, and Canada with around 7 million. The rate of increase in the number of Internet subscribers varies considerably from country to country. During 2001, there was an 86% increase in Greece, a 75% increase in Mexico, a 69% increase in Austria, and increases of 48% in Canada and the Slovak Republic. Single-digit increases were experienced in the Czech Republic, Ireland, Italy, the Netherlands, Norway and the United Kingdom. On a per capita basis, the highest level of penetration of Internet at the end of 2001 was in Iceland, which had 59 subscribers per 100 inhabitants (Figure 5.1). Other countries with high levels of adoption included Korea (with 48.8 Internet subscribers per 100 inhabitants), Denmark (37.8), Sweden (32),

Figure 5.1. Internet subscribers per 100 inhabitants, December 2001 Internet subscribers per 100 inhabitants 60

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an Ko d D re en a m Sw ark Sw e itz den er la U N nd ni or te w d a N S y U eth tat ni te erl es d an Ki d ng s d C om an Au ada st ra Au lia st r Ja ia pa O n EC F Lu in D xe lan m d bo Po urg r G tu N er gal ew m Ze any al a Ire nd la nd Ita Be ly lg iu Fr m an c Sp e ai Po n la n Tu d rk C ze G ey ch re R ece ep u H blic un g Sl ov M ary ak e R xico ep ub lic

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Switzerland (31), Norway (27.4), the United States (27.2), the Netherlands (25), the United Kingdom (22.7), Canada (22.6) and Australia (22). Countries with a level of Internet penetration significantly below the OECD country average of 18.8 subscribers per 100 inhabitants included the Slovak Republic (1.9 per 100), Mexico (2.0), Hungary (3.0), the Czech Republic (4.4), Greece (4.8) and Turkey (5.0). Despite some slowing of growth in countries that were early adopters, there remain significant differences in levels of adoption and use of the Internet. Broadband access The level of use of Internet services, quality of online experience and capabilities of the services accessed are impacted by available bandwidth, and there is increasing interest in the development of broadband access networks and the pace of adoption of broadband access technologies. Broadband connections to the Internet The development of broadband access networks is moving ahead rapidly in many OECD countries. During 2001, the number of subscribers in OECD countries using digital subscriber line (DSL) connections increased from 7.4 million to more than 16 million, at an annual rate of 116% (Table 5.2). Over the same period, the number of cable modem subscribers increased from 7.7 million to 15 million, at an annual rate of 94%. The total number of broadband and permanent connection subscribers in OECD countries increased from around 15 million at the end of 2000 to 33 million at the end of 2001, an annual increase of more than 118%. For the first time, the number of subscribers using DSL surpassed the number of subscribers using cable modems in late 2001. At the end of 2001, there were 1 million subscribers using broadband access technologies other than DSL and cable to access the Internet (e.g. Ethernet LANs, two-way direct satellite, fibre to the home, and fixed wireless). This is important because the initial market for some of these technologies tends to be business users. New entrants are using fixed wireless networks to connect business in metropolitan areas. Some new entrants are specialising in the use of Ethernet LANs to connect office buildings with some of the fastest broadband connections available. At the same time, satellites are being used to provide the first broadband access to business users in areas where networks have not been upgraded to provide DSL or cable modems. On a per capita basis, Korea continues to be the clear leader in broadband access network development. At the end of 2001, there were 17.2 broadband subscribers per 100 inhabitants in Korea. Canada was next with 8.8 broadband subscribers per 100 inhabitants. Sweden, Denmark, Belgium and the United States were the other countries to have exceeded four broadband subscribers per 100 inhabitants at that time. Korea is the leader in the development of DSL access networks, with almost 11 DSL subscribers per 100 inhabitants at the end of 2001. Iceland (3.5 per 100), Canada (3.4), Denmark (2.8), Sweden (2.7), Germany (2.3) and Belgium (2.2) were the other countries with more than two DSL subscribers per 100 inhabitants at that time. There was no commercial DSL or cable modem service available in Greece, Ireland and the Slovak Republic at the end of 2001. In Ireland, Eircom launched a commercial DSL service in May 2002. The launch of commercial services is occurring in the other countries without broadband during 2002. Korea also led in the adoption of cable modem access, with 6.2 cable modem subscribers per 100 inhabitants at the end of 2001. Canada (5.4), the United States and Netherlands (2.5), Austria (2.4) and Belgium (2.0) were the other countries with more than two cable modem subscribers per 100 inhabitants at that time.

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So rapid is the development of broadband access networks that almost 10 million broadband subscribers were added in OECD countries during the first half of 2002, taking the total to 43 million by the end of June 2002 (Figure 5.2 and Table 5.3), a 23% increase in six months. Korea increased its broadband penetration to 19.1 subscribers per 100 inhabitants. Canada (10.2 per 100), Sweden (7.0), Denmark (6.7), Belgium (6.3), the United States (5.6), Iceland (4.7) and Austria (4.2) were the other countries to have achieved broadband penetration in excess of four subscribers per 100 inhabitants. © OECD 2003

Internet and Broadband Infrastructure

Figure 5.2. Broadband access per 100 inhabitants, June 2002 DSL Broadband access per 100 inhabitants 20

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Ko C rea an Sw ada D ede en n m U Be ark ni lg te iu d St m a Ic tes el a Au nd st r N Ja ia et he pa Sw rla n itz nd er s la n O d EC Fi D n G lan er d m a N ny or w ay EU Sp a Fr in an Po ce rt U ni Au uga te s l d tra Ki li ng a do m N ew Ita Lu Zea ly xe la m nd bo C H ze u urg ch ng R ar ep y ub M lic ex i Ire co la Po nd Sl la ov n ak Tu d R rke ep y ub G lic re ec e

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During the first half of 2002, access to broadband networks increased most rapidly in Ireland, Luxembourg, the United Kingdom, Switzerland, Japan, Spain and Finland. Japan also benefited from an expansion in fibre-to-the-home services which started in March 2001. The number of subscribers served by several operators, has increased from 12 337 (January 2002) to 138 000 (October 2002). Much slower growth in broadband access was experienced in Austria, Canada, the Czech Republic, Greece, Korea, the Netherlands, Poland, the Slovak Republic and the United States. Clearly, some countries are experiencing rapid growth in broadband access from a low base, while others are experiencing continued growth from already considerable bases. Equally, some countries are seeing somewhat slower growth from already high levels of penetration, while others have been slow to start broadband rollout. Leased lines connected to the Internet Few comparable data are available on the penetration and use of leased lines to access the Internet. Some telecommunication carriers and regulators report the number of leased lines by company or country, but generally do so without indicating the proportion used for providing permanent local access connections to the Internet. An alternative is to examine Netcraft’s leased line survey, which uses a consistent methodology across countries. It should be noted, however, that some DSL connections are reported as leased line connections in the Netcraft data. This occurs where a user has a statically allocated IP address, which Netcraft counts as a permanent connection because it has the same characteristics as a leased line connection. Nevertheless, virtually all residential and many business DSL connections currently use dynamically assigned IP addresses, so potential double counting will be limited and the Netcraft survey results can be taken to be indicative of the development of lease line access networks. © OECD 2003

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At the end of 2001, there were more than 374 000 permanent leased line connections to the Internet around the world (Table 5.4), with a 26% increase during the year. Some 89% of leased line connections to the Internet were in OECD countries. At the end of 2001, the largest number of leased line connections was in the United States with 123 461, almost one-third of all connections in the world. Japan had the second highest number of leased line connections at 45 187 (12%), followed by the United Kingdom with 26 451 (7.1%), Germany with 24 719 (6.6%) and Canada with 12 445 (3.3%). Other countries with more than 10 000 leased line connections at the end of 2001 included Korea, Italy and the Netherlands. Over the year to the end of 2001, OECD countries experienced a 25% increase in the number of leased lines connected to the Internet. However, rates of growth varied from country to country. Strong growth in leased line connections was experienced in Australia (156%), Italy (54%), the United Kingdom (44%), Turkey (43%), Poland (42%), France (41%) and Denmark (40%). On a per capita basis, Iceland had the highest penetration of leased line connections to the Internet at the end of 2001, with 89.4 per 100 000 inhabitants. Denmark (88.5), Norway (79.5), Sweden (74.1), Luxembourg (67.8), the Netherlands (64.8), Finland (59.6), Switzerland (58.2) and Austria (50.9) were the other countries with relatively high levels of leased line Internet connection (Figure 5.3). In looking at these data it is important to remember that leased lines are only one technology capable of providing permanent connection to the Internet. Taken in isolation they cannot be regarded as an indicator of Internet penetration. For example, Korea had a relatively low penetration of leased line connection (23.2 per 100 000 inhabitants at the end of 2001), but is a leader in the adoption of alternative technologies such as DSL and cable modems. This may be because business users prefer these other options. A further factor may be the pricing and availability of leased lines. It is notable that the Scandinavian countries, which have traditionally had some of the lowest prices for leased lines, have high penetration rates whereas Korea has had relatively high prices for leased lines and relatively inexpensive DSL and cable modem services.

Figure 5.3. Leased line connections per 100 000 inhabitants, December 2001 Connections per 100 000 inhabitants 100

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For medium and large business users in a growing number of OECD countries connections to the Internet are almost ubiquitous. For large corporate users leased lines provide most permanent connections. For small and medium-sized enterprises (SMEs), the majority of connections are still dial-up. Business demand for broadband access will, therefore, continue to be expressed in two ways. For large users high speed leased circuits continue to be in demand, and the most recent data bears this out. For SMEs, demand for broadband access can be expected as they convert from narrowband dial-up connections (including ISDN) to broadband access. Use of new broadband access technologies, such as DSL, is still not very common among businesses. Hence, there remains tremendous scope for connecting SMEs to broadband access networks and bringing the advantages of broadband access to them. Internet hosts The number of Internet hosts is one of the most commonly used indicators of Internet development. A host is a domain name that has an IP address associated with it. This would include any computer or other device connected to the Internet via a full or part-time, direct or dial-up connection. Sometimes these devices are not accessible by automated survey techniques because of security devices such as firewalls. Consequently, host counts tend to on the low side, and should be seen as an indicator of the minimum size of the Internet. Moreover, it should be noted that with recent increased concern over security, it is possible that comparisons of historical and recent data will somewhat underestimate growth in the number of hosts as more firewalls are installed. In July 2002, there were 162 million hosts connected to the Internet worldwide (Table 5.5). The number of hosts has increased 45% per annum since 1998, when there were less than 37 million hosts connected to the Internet. More than 100 million of the hosts connected to Internet in July 2002 were under generic domains (gTLDs), of which .net (56 million hosts) and .com (44 million hosts) were the largest. The largest country code domain (ccTLD) in July 2002 was .jp (Japan) with 8.7 million hosts. However, if the various United States-related domains (i.e. .edu, .mil, .gov and .us) are combined, they totalled 14.3 million hosts. Other large ccTLDs included .ca (Canada) with 3.1 million hosts, .it (Italy) with 3 million, .de (Germany) with 2.9 million, .uk (United Kingdom) and .au (Australia) with 2.5 million, .nl (Netherlands) with 2.2 million and .fr (France) with 2.1 million. The number of hosts connected under gTLDs increased by 54% per annum between July 1998 and July 2002, with connections under .net increasing somewhat faster than those under .com. The fastest growing ccTLD was .mx (Mexico), with the number of hosts connected increasing 86% per annum – from 83 949 in July 1998 to just over 1 million in July 2002. Other ccTLDs experiencing rapid growth over the period included .it (Italy, 74% p.a.), .pl (Poland, 65% p.a.), .es (Spain, 62% p.a.), .jp (Japan, 59% p.a.), .tr (Turkey, 56% p.a.) and .pt (Portugal, 56% p.a.). Some of the early adopters experienced significantly slower growth over the last four years, including the combined United States at 16% per annum, .fi (Finland, 18% p.a.), .no (Norway, 19% p.a.) and .uk (United Kingdom, 20% p.a.). Nevertheless, even these rates suggest that the Internet continues to grow rapidly. Web sites Servers are computers that host World Wide Web content (i.e. Web sites). Netcraft conducts a survey of Web servers in order to provide information about the software used on computers connected to the Internet. In doing so they collect and collate data on as many host names providing Web content as their survey can find, and poll each one for the server name. These data can be used to estimate the number of active Web sites under each domain. When gTLDs and ccTLDs are distributed to countries according to the country allocation of IP address blocks, these data indicate the level of content development in each country. In July 2002, the Netcraft survey found more than 35 million Web sites (servers) operating in OECD countries, up from 19 million in July 2000 and increasing by 36% per annum (Table 5.6). With more than 18 million servers operating in July 2002, the United States accounted for 50% of all Web sites in the OECD area. Other countries with a relatively large share of Web sites included Germany with 7 million, the United Kingdom with 3.9 million and Canada with just over 1 million. © OECD 2003

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While the number of servers across the OECD area increased by 36% per annum between July 2000 and July 2002, growth rates varied considerably from country to country. Germany experienced an increase of almost 97% per annum, with strong growth also experienced by Denmark (86% p.a.), Netherlands (69% p.a.), Turkey (68% p.a.), the United Kingdom (64% p.a.), France (57% p.a.), Poland and Hungary (52% p.a.). Much slower growth was experienced in Switzerland (11% p.a.), Canada (17% p.a.), the United States (20% p.a.), Sweden and New Zealand (21% p.a.) – all of which were relatively early adopters. A more accurate indicator of relative national content development is Web sites (servers) per 1 000 inhabitants. In July 2002, there was an average of 31.4 Web sites per 1 000 inhabitants across OECD countries, up from 17.2 per 1 000 in July 2000. Countries varied widely. Germany ranked first, with 84.7 Web sites per 1 000 inhabitants in July 2002. Other countries with a relatively high number of Web sites per 1 000 inhabitants included Denmark (71.7), Norway (66.4), the United Kingdom (64.2), the United States (63.7), the Netherlands (48.2), Iceland (34.4) and Canada (32.9). In contrast, Mexico had just one Web site for every 3 247 people. Turkey also had less than one Web site per 1 000 inhabitants. Other countries with relatively few Web sites per 1 000 inhabitants in July 2002 included Greece (2.4), Japan (2.9), Portugal (3.6), Poland (4.6), Ireland (5.8), Hungary (6.1), the Slovak Republic (6.3) and Spain (6.6). Secure servers Netscape developed the secure socket layer (SSL) protocol for encrypted transmission over TCI/IP networks. Its most common use is to provide a secure end-to-end link for e-commerce transactions, with major e-commerce uses of secure server software including encrypted credit card transactions in retail applications and restricted access to privileged information both within and between organisations. Hence, Netcraft’s SSL surveys provide one of the best indicators of the growth and diffusion of

Figure 5.4. Web sites per 1 000 inhabitants, July 2002 Web sites per 1 000 inhabitants 90

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e-commerce. However, it should be noted that a change in methodology in October 2001 introduced a somewhat stricter definition for authenticated sites. Data from prior surveys have not been adjusted, such that comparing surveys over the period 1998 to 2002 may somewhat underestimate growth. In July 2002, the Netcraft survey found 169 321 secure servers worldwide. More than 95% of them (161 392) were located in OECD countries (Table 5.7). Among OECD countries, the United States had the largest number of secure servers in July 2002, with 106 884. Other countries with a relatively large number of secure servers operating at that time included the United Kingdom (with 10 288), Germany (7 987), Canada (7 768) and Japan (7 179). The number of secure servers in the world increased by 70% per annum between July 1998 and July 2002, as did the number in OECD countries. Among OECD countries, Germany, Greece, Japan, Poland and Turkey experienced annual growth in the number of secure servers in excess of 100%. Hungary, Italy, Portugal, the Slovak Republic and Spain experienced rates of growth in the number of secure servers below the OECD average, as did Australia and the United States albeit from a higher base. There were 14.2 secure servers per 100 000 inhabitants across the OECD in July 2002, up from 1.8 per 100 000 in July 1998 (Figure 5.5). Countries with high levels of penetration of secure servers in July 2002 included Iceland (with 47.7 per 100 000 inhabitants), the United States (37.5), New Zealand (25.5), Canada (25.0), Australia (24.1), Luxembourg (22.0) and Switzerland (21.5). A wide range of adoption levels is apparent, with seven countries having more than 20 secure servers per 100 000 inhabitants in July 2002 and 13 countries having fewer than five per 100 000. This clearly suggests that while there is strong growth in the use of secure servers for e-commerce across OECD countries, there remain significant disparities between countries in levels of adoption and use.

Figure 5.5. Secure servers per 100 000 inhabitants, July 2002 Sercure servers per 100 000 inhabitants 50

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Comparing growth in the use of secure servers with that of servers overall indicates the relative intensity of e-commerce development (Tables 5.6 and 5.7). Over the two years to July 2002, the total number of Web servers in OECD countries increased by 36% per annum, while the number of secure servers increased at the slightly slower rate of 32% per annum. Growth of secure servers was faster than overall Web sites (servers) in 14 of the 30 OECD countries and slower in 16. Much higher rates of growth in secure servers were experienced in Canada, New Zealand and Switzerland, while the number of secure servers found declined somewhat in the Czech Republic, Hungary and the Slovak Republic. Between July 2000 and July 2002, the ratio of secure servers to Web sites (servers) declined in 10 OECD countries, namely Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy, Portugal, the Slovak Republic and Spain. In the other countries, the ratio of secure servers to Web sites increased. The total number of servers is increasing as quickly as the number of secure servers, suggesting an expansion of e-commerce activities but no obvious intensification of the use of the Internet for e-commerce. Links to secure servers Another indicator of the level of development of e-commerce is the number of links that point from each domain to secure servers. It is not possible to produce a perfect count, but it is possible to use search engines, such as Google, to count the number of links under country code and generic top level domains that contain references to secure socket layer servers in the URL (i.e. to “https”). This is imperfect, because, in addition to direct links to secure servers, such counts will include some pages discussing the topic of secure socket layer servers that have “https” within the URL. However, these counts are indicative of the use of and interest in secure servers, and of the level of use of secure transactions for e-commerce. References to secure servers by domain In August 2002, Google reported almost 7.4 million URL references to secure socket layer servers (Figure 5.6 and Table 5.8). This compares with around 2.8 million links found in a similar sample taken in July 2000. Almost 3.5 million links were under generic top level domains, and a further 2.4 million were under OECD country code top level domains. As might be expected, the .com domain contained by far the largest number of reported references to secure socket layer servers of any domain, with almost 2.3 million references in August 2002. The combined United States-related domains (.us, .edu, .gov and .mil) contained some 815 800, and the generic domains .net and .org contained 621 000 and 541 000, respectively. Other domains with a relatively large number of references to secure socket layer servers included .de (Germany), .jp (Japan), .uk (United Kingdom) and .au (Australia). Of the 7.4 million URL references to secure socket layer servers found in August 2002, 47% were under generic top level domains, and 33% were under OECD country code top level domains. The combined United States-related domains (.us, .edu, .gov and .mil) accounted for 11%, and the generic domains .net and .org accounted for 8.4% and 7.4% respectively. References to secure servers by country

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It is possible to produce a similar count of references to secure socket layer servers by country, rather than domain, based on ISP allocations of IP address blocks. Again, the count is imperfect for the reasons noted above, and because most ISPs operating in multiple countries use IP addresses outside their home country’s. Nevertheless, it can be taken as indicative. A sample taken in August 2002 reported 4.8 million links (references) from OECD countries to secure socket layer servers (Figure 5.7 and Table 5.9). Of these, almost 45% or 2.15 million were found in United States-related ISP IP address blocks. Other address blocks relating to ISPs in certain countries reporting a relatively large number of references to secure socket layer servers included those relating to Germany, Japan, Canada and the United Kingdom. © OECD 2003

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Internet and Broadband Infrastructure

Figure 5.6.

© OECD 2003 References to secure servers by domain, August 2002

References to secure servers by domain (logarithmic scale) 1 000 000

References to secure servers (logarithmic scale) 10 000 000

Note: Sample taken using Google, August 2002. Source: OECD.

References to secure servers by domain (logarithmic scale) 1 000 000

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Figure 5.7. References to secure servers by country, August 2002

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Box 5.2.

The language of e-commerce

English continues to be the language of e-commerce. Some 3.9 million of the secure socket layer server pages found by Google in August 2002 were in 20 of the most widely used languages in OECD countries – the remainder being in languages other than these 20, or pages with no discernible language (e.g. purely graphics pages). Of those in the 20 most widely used OECD languages, 2.3 million or 58% were in English. The other major languages were German (10.5%), Japanese (9.9%), Spanish (5.3%) and French (4.1%) (Figure 5.8). This breakdown accords with Google’s reporting of languages used to access Google searches. For example, in January 2002 Google reported that 57% of its access was in English, 12% in German, 7% in Japanese, 6% in Spanish, 5% in French, 3% in Chinese and 2% in Italian. Figure 5.8. References to secure servers by language, August 2002 Danish Hungarian Swedish Italian Turkish Dutch Czech Finnish

Polish Korean Norwegian Icelandic Slovak Greek

Portugese French

Spanish

English (57.6%) Japanese

German

Source: OECD.

In a similar sample taken two years ago, more than 94% of the links to secure servers were in English, with less than 6% in all other languages combined. Clearly, while English remains the predominant language of e-commerce, it is much less so now than in the past.

E-commerce access and supply Internet subscribers are one indicator of connectivity to the Internet. Secure servers represent one infrastructure used to conduct secure electronic transactions, and imply the provision of content for sale or commercial use. Together, they can be seen as indicators of e-commerce access and supply. Hence a scatter plot of subscribers and secure servers can show something of the distribution of e-commerce access and supply – the demand side and supply side of Internet-based commercial content.

130

Countries which rank high on both scales (subscribers and secure servers) are likely to be the most active in e-commerce. These include Iceland, the United States, Canada, Switzerland and Australia (Figure 5.9). Countries that rank high in terms of subscribers, but lower on secure servers, are likely to © OECD 2003

Internet and Broadband Infrastructure

Figure 5.9. Internet subscribers and secure servers Internet subscribers per 100 inhabitants 70

Internet subscribers per 100 inhabitants 70

ISL

60

50

KOR

60

50

40

40 DNK

NLD 20

CHE

SWE

30

PRT

AUT

JPN

ITA BEL FRA 10 ESP POL GRC TUR CZE MEX HUN 0 SVK 5 0

30

NOR

DEU EU

USA

OECD FIN IRL

GBR

CAN

AUS

LUX

20

NZL 10

0 10

15

20

25

30

35 40 45 50 Secure servers per 100 000 inhabitants

Source: OECD.

have active e-commerce access but lower levels of domestic supply. These include Korea, Denmark, Sweden, Norway and the Netherlands. Those countries that rank high in terms of secure servers, but lower on subscribers, are likely to be more active online suppliers but have somewhat less developed access. These include Luxembourg, Ireland and New Zealand. Those countries below the OECD average on both scales are the slower e-commerce adopters, with lower levels of both connectedness and ecommerce infrastructure per inhabitant. As well as Turkey, Mexico, the Slovak Republic, Poland, Greece, the Czech Republic, Portugal and Hungary, such countries as France, Spain, Italy and Belgium also fall into this category. Web hosting Using the Google search engine it is possible to explore the internationalisation of Web hosting. Counting the number of Web pages reported by major search engines by domain and by country (i.e. country ISP-related IP address block) gives some indication, albeit imperfect, of the domestic versus foreign ISP location of hosted Web content. A variety of factors affect the location of Web content and the data presented in Table 5.10 should be interpreted with caution. Nevertheless, the counts reported are based on a sample of some 320 million Web pages. Within a sample taken in August 2002, the share of ccTLD-related content hosted within domestic ISP IP address space (e.g. the share of pages in .au hosted in Australian ISP IP address blocks) varied from a high of 74% for pages in the .us domain to a low of 28% for pages in the .de domain. That is to say, 74% of Web pages reported by Google in the .us domain were hosted at United States-related ISP IP addresses, whereas only 28% of the pages reported in the .de domain were hosted at German ISP IP addresses. Other domains with a relatively high share of apparent “local hosting” included .ca (Canada), .ch (Switzerland) and .se (Sweden). Domains with a relatively low share of apparent local hosting included .de (Germany), .jp (Japan), .cz (Czech Republic), .pl (Poland) and .is (Iceland). A country’s content can be said to consist of content under its country ccTLD and content under generic top level domains gTLDs that is hosted within that country’s ISP IP address spaces – effectively © OECD 2003

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Box 5.3.

Factors affecting the apparent location of Web content

A variety of factors affect the location of Web content, including: • Multinational firms hosting country-oriented content sites in their country of origin, or at regional rather than national centres −for example, IBM Australia’s Web page (www.ibm.com.au) is in the United States, not Australia. • Multinational ISPs hosting their customers’ Web sites in the ISP’s country of origin, or at regional rather than national centre −for example, the Adobe customer forums page (forums.adobe.co.jp) hosted by WebCrossing is in the United States, not Japan. • Multinational ISPs using IP address allocations to host content for clients from other countries of origin −for example, NTT/Verio (www.verio.com). Indeed, there are many reasons for content being hosted outside its apparent locale, and for the content not being where it appears to be from the search engine’s examination of the ISP’s IP address block. Consequently, the data presented in Table 5.10 is no more than indicative.

gTLD adjusting content. Looked at in this way, the proportion of a country’s total content that appears to be hosted overseas is the ratio of ccTLD pages not under national ISP IP addresses to the sum of pages in the ccTLD and total gTLD pages found within the country’s ISP IP address space. In August 2002, countries with relatively high levels of apparently domestic content hosting (i.e. share of Web pages hosted within national ISP IP addresses) included the United States (with 95%), Canada (91%), Luxembourg (90%), Spain and Switzerland (84%), Belgium (83%), Sweden (82%), the United Kingdom (81%) and Finland (80%). Countries with relatively low levels of apparently domestic content hosting included Germany (44%), Japan (50%), the Czech Republic and Poland (54%), the Slovak Republic (55%) and Hungary (59%). The share of “local” Web pages that are under gTLDs indicates something about national preferences for generic global addresses (gTLDs) over national addresses (ccTLDs) − a low share suggesting a preference for the country code domain and national recognition, and a high share a preference for generic or global identity. However, it should be noted that a high share of gTLDs could also indicate relatively high levels of hosting of non-country code domain related content, or relatively expensive or restrictive ccTLD domain name registration policy. Hence, Figures 5.10 and 5.11 should be looked at together. Calculating the ratio of gTLD pages within national ISP IP address blocks to the sum of gTLD and ccTLD pages within those blocks in August 2002 revealed that 87% of Web pages hosted under domestic Luxembourg ISP IP addresses were under gTLDs, as were 86% of those under domestic United States ISP IP addresses, 73% of those under domestic Canadian ISP IP addresses, 71% of those under domestic Spanish ISP IP addresses and 70% of those under domestic Turkish ISP IP addresses. This may indicate some preference for global branding in those countries. In contrast, only 12% of Web pages hosted under domestic Slovak ISP IP addresses were under gTLDs, as were 22% of those under domestic Polish ISP IP addresses, 25% of those under domestic Hungarian ISP IP addresses, 28% of those under domestic Czech ISP IP addresses and 30% of those under domestic Greek ISP IP addresses. This may suggest a greater preference for national branding in these countries. Domain names

132

The domain name system (DNS) translates Internet addresses back and forth between domain names and IP numbers. Whereas an IP number is an address, a domain name is the online equivalent of a business or personal name. Domain names enable users to find and refer to a person or organisation © OECD 2003

Lu x U em ni bo te d urg St a C tes an ad Sp a a Tu in rk Be ey lg Po ium rtu U g ni te Fr al d an Ki ce ng do m Ko re Fi a nl an N Ire d et la he nd Sw rla itz nds er la N nd or w M ay ex ic o Ita Sw ly e Au den st G rali er a m an Ja y pa Au n st N Ic ria ew el a Ze nd a D lan en d m C ze G ark ch re R ece ep u H blic un g Sl ov P ary ak ol R and ep ub lic St at e Lu Can s xe ad m a bo ur g Sw Sp itz ain er la Be nd l g U ni S ium te we d Ki den ng do Fi m nl Po and rtu g Tu al rk e Ko y r Au ea st ra Fr lia an Ire ce la M nd ex ic o Ita ly N N or et w he ay rla n Au ds s D t N en ria ew m Ze ark al a Ic nd el a G nd re Sl e ov Hu ce ak ng R ary ep ub C li ze ch Pol c R and ep ub li Ja c G pa er n m an y

d

te

ni

U

Internet and Broadband Infrastructure

Figure 5.10. Share of Web pages hosted within domestic ISP IP address space, August 2002

% 100 % 100

90 90

80 80

70 70

60 60

50 50

40 40

30 30

20 20

10 10

0 0

Source: OECD.

Figure 5.11.

Source: OECD.

© OECD 2003 Share of Web pages that are gTLDs, August 2002

% 100 % 100

90 90

80 80

70 70

60 60

50 50

40 40

30

30

20

20

10

10

0

0

133

OECD Communications Outlook 2003

in a way that is easily recognisable, and allow businesses to use recognised business and brand names in the online world. Domain name registrations In July 2002, there were almost 31 million domain names registered worldwide, an increase of almost 7 million from 24 million in July 2000 (Table 5.11). Hence, the number of registered domain names worldwide has increased by 13% per year over the last two years. In July 2002, the major gTLDs accounted for 94% of total registered domain names, with 21 million domain names or 69% of the world total registered under .com and a further 5.9 million or 19% registered under .net and .org. The remaining gTLDs, .biz, .info and so forth make up the remaining 8%. There are incomplete data for .mil and .us. Hence, a total for domain name registrations under domains relating to the United States is not available. Data are also incomplete for .hu (Hungary), .pl (Poland) and .tr (Turkey). Among other OECD countries, the largest number of registered domain names occur under .de (Germany) with 5.7 million, .uk (United Kingdom) with 3.6 million, .nl (Netherlands) with 748 510 and .it (Italy) with 735 156. Worldwide, the number of registered domain names increased by 13% per annum between July 2000 and July 2002. The major gTLDs have experienced somewhat stronger growth, with registrations under .org increasing 27% per annum, those under .net increasing 25% per annum and those under .com increasing 24% per annum (Figure 5.12). Registrations under ccTLDs exhibit wide variation in growth rates. Registrations under .be (Belgium) increased by more than 150% per annum and those under .ca (Canada) by 124% per annum, while registrations under .mx (Mexico), .nl (Netherlands), .es (Spain) and .lu (Luxembourg) increased by less than 20% per annum. The only OECD

Figure 5.12. Growth in domain name registrations by domain, 2000-2002 % 160

% 160

140

140

120

120

100

100

80

80

60

60

40

40

20

20

0

0 -20

Be

lg i C um Sw an .b itz ada e er la .ca N nd or .c G wa h er y m .n a o G ny re .d ec e Ja e .g p r Ic an e .j Sw lan p ed d .i e s Fi n .s nl a e Ire nd U l ni De an .fi te n d d m .ie Ki ar ng k .d Cz P dom k ec or h tug .uk Re a pu l .p bl t ic . Ita cz Fr ly Au anc .it st e M rali .fr N aj a ew or .a Ze gT u al LD an s d .n z Au .o st rg r ia .a t .n e M .c t N ex om et ic he o rla .m nd x Lu S s . xe pa nl m in bo .e s W urg or .lu ld to ta l . Ko ed re u a .k r

-20

134

Note: “.ch” registrations relate to end 2001 rather than July 2002. Source: OECD, compiled from country and generic NICs, August 2002.

© OECD 2003

Internet and Broadband Infrastructure

ccTLD to have experienced a decline in the number of domain name registrations was .kr (Korea), which reported 494 074 registered domain names in July 2000 and 479 643 in July 2002. Regional development of the Internet Tracking address space allocations reveals a good deal about the growth and regional development of the Internet. Internet address space allocation is handled by national Internet registries operating under three main regional Internet registries – ARIN (the Americas), RIPE NCC (Europe) and APNIC (the Asia-Pacific). These registries co-ordinate Internet address allocation for their regions. APNIC collects data, which provide a picture of the growth and regional distribution of Internet activity. APNIC’s statistics are drawn from the Internet Protocol Version 4 (IPv4) routing table of the APNIC router located at WIDE in Japan (ASN 4777). Because of the use of routing aggregation the Internet will look somewhat different from different routers, but these data give an overview of the regional development. To date, there has been limited allocation of IPv6 address space. To the end of 2001, RIPE NCC had made 51 IPv6 allocations, APNIC 48 and ARIN only 20. Hence, IPv4 allocations still provide a reasonable overview of the regional development of the Internet. During July 2002, an average of 114 575 routes were announced (i.e. entries in the routing table) (Table 5.12). Globally, an average of just over 31% of the possible publicly available IPv4 Internet address space was announced during July 2002. Of the IPv4 Internet address space that has been allocated to Internet registries, an average of almost 58% was being advertised (i.e. made available for public access). An average of 72% of the IP address space allocated to the Americas through ARIN was being advertised on the Internet during July 2002. A somewhat higher average level of almost 75% of the IP address space allocated to Europe through RIPE NCC was being advertised, and 59% of the space allocated to the Asia-Pacific through APNIC was being advertised. Autonomous system numbers (ASNs) identify autonomous systems (ASes), which are groupings of IP connected networks that share a common routing policy. In practice, ASNs and ASes refer to major networks, such as large international ISPs. Globally, there was an average of 13 458 ASes originating routes and 1 810 advertising transit routes in July 2002. An average of 5 164 ASes were advertising just one route. This gives some indication of the distribution of major national ISPs, international ISPs and international IP traffic carriers operating on Internet at that time. In July 2002, the following regional characteristics could be observed: – Routes: During July 2002, the largest regional share of routes being announced was the Americas (ARIN), with an average of 76 148 routes being announced −around 66% of all routes announced to Internet. Europe (RIPE NCC) showed an average of 19 458 routes or 17%, and the Asia-Pacific (APNIC) showed an average 18 969 routes, just less than 17% of all Internet routes announced (Figure 5.13). – Connecting networks: The Americas (ARIN) also showed the largest share of networks originating routes (i.e. connecting networks to the Internet) at 7 918, or 59% of the average total of networks originating routes globally during July 2002. Europe (RIPE NCC) showed 3 917 or 29% of total, and the Asia-Pacific (APNIC) 1 573 or 12%. – International transit: Europe (RIPE NCC) showed a somewhat higher relative share of international transit providers, at around 41% of monthly average during July 2002 −reflecting the geography of the region. The Americas (ARIN) accounted for 43%, and the Asia-Pacific (APNIC) for just 15%. – Local ISPs: No less than 49% of the ASes advertising just one route were doing so from the Americas (ARIN). During July 2002, 41% of the average number of networks advertising just one route did so from Europe through RIPE NCC, and the remaining 10% did so through APNIC in the Asia-Pacific. Comparing monthly averages for July 2002 with those from July 2000 indicates the rate of growth and the changing nature of Internet service provision. Despite the industry downturn of 2000 and the financial pressures on players in the industry through 2001, demand for IPv4 address space has remained strong. Between July 2000 and July 2002, the number of routes advertised increased by 35%, © OECD 2003

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OECD Communications Outlook 2003

Figure 5.13. Regional share of routes announced to the Internet, July 2002 RIPE (Europe and Middle East) 17%

APNIC (Asia Pacific) 17%

ARIN (Americas) 66% Source: APNIC (http://www.apnic.net/stats/bgp)

with stronger growth in Asia and Europe (APINIC up 50% and RIPE up 48%) than in the Americas (ARIN up 33%). The number of ASes announcing routes increased significantly faster. The number of ASes advertising transit routes increased by 59% over the two-year period, with stronger growth in Europe and Asia than in the Americas. The number of ASes originating routes increased by 67%, and the number of ASes advertising one route increased by 92% −more than doubling in Europe. These data show that the Internet is experiencing continuing growth. They also indicate the extent to which the Internet continues to reflect its North American roots, although the pace of development in Asia and Europe is faster. These data also suggest some increase in the number of service providers active in the provision of Internet networking services, despite recent consolidation in the industry.

136

© OECD 2003

Internet and Broadband Infrastructure

Table 5.1. Internet subscribers to fixed networks, 1999-2001 December 1999 Australia

December 2000

December 2001

Per 100 inhabitants 1999

Per 100 inhabitants 2001

Annual growth 1999-2001 %

2 407 407

3 849 000

4 273 000

12.7

21.9

33.2

486 364

992 000

1 675 000

6.0

20.6

85.6

Belgium

735 303

1 150 214

1 424 516

7.2

13.9

39.2

Canada

3 341 000

4 759 000

7 030 000

11.0

22.6

45.1

199 000

418 448

457 016

1.9

4.4

51.5

Austria

Czech Republic Denmark

1 135 393

1 684 167

2 023 462

21.3

37.8

33.5

Finland

564 000

810 000

950 000

10.9

18.3

29.8

France

3 030 000

5 263 000

6 986 500

5.2

11.8

51.8

Germany

9 000 000

11 066 102

14 900 000

11.0

18.1

28.7

Greece

199 960

271 278

505 000

1.9

4.8

58.9

Hungary

137 014

220 395

301 828

1.4

3.0

48.4

Iceland

49 125

117 500

168 000

17.7

58.9

84.9 21.7

Ireland

405 000

583 636

600 000

10.8

15.6

5 200 000

7 800 000

8 300 000

9.1

14.5

26.3

Japan

10 590 000

18 126 945

24 061 695

8.4

18.9

50.7

Korea

10 860 000

19 040 000

23 114 431

23.3

48.8

45.9

11 411

24 500

80 000

..

18.1

..

718 000

1 132 000

1 984 783

0.7

2.0

66.3

Italy

Luxembourg1 Mexico Netherlands

2 834 375

3 783 784

4 000 000

17.9

25.0

18.8

New Zealand

480 000

542 234

644 000

12.6

16.7

15.8

Norway

717 921

1 178 552

1 237 597

16.1

27.4

31.3

Poland

..

..

2 989 000

..

7.7

..

474 389

1 299 465

1 823 529

4.7

18.1

96.1

46 813

67 661

100 099

0.9

1.9

46.2

Spain

2 241 092

3 222 400

3 673 959

5.7

9.1

28.0

Sweden

1 880 000

2 306 800

2 849 000

21.2

32.0

23.1

898 000

1 666 341

2 221 960

12.6

30.7

57.3

1 500 000

2 500 000

3 400 000

2.3

5.0

50.6

Portugal Slovak Republic

Switzerland Turkey United Kingdom

7 400 000

12 600 000

13 600 000

12.4

22.7

35.6

49 723 100

68 481 217

77 500 000

18.2

27.2

24.8

117 264 667

174 956 639

212 874 375

10.5

18.7

34.7

EU 35 597 287 52 857 346 63 390 966 1. Only includes P&T Luxembourg subscribers for 1999-2000. Source: OECD.

9.5

16.8

33.4

United States OECD

137

© OECD 2003

DSL December 2000

Cable December 2000

Total December 2000

DSL December 2001

Cable December 2001

Other December 2001

Total December 2001

Growth 2000-01 %

Per 100 inhabitants 2001

© OECD 2003

Australia 10 000 64 000 74 000 65 000 110 000 5 000 180 000 143.2 0.9 Austria 39 000 99 000 138 000 101 000 192 000 .. 293 000 112.3 3.6 Belgium 43 000 102 013 145 013 230 000 201 000 3 674 434 674 199.7 4.2 Canada 465 600 927 000 1 392 600 1 060 000 1 670 000 .. 2 730 000 96.0 8.8 Czech Republic 0 10 000 10 000 100 12 000 .. 12 100 21.0 0.1 Denmark 26 399 41 000 67 399 151 775 87 500 .. 239 275 255.0 4.5 Finland 15 000 15 000 30 000 43 500 24 500 .. 68 000 126.7 1.3 France 64 000 121 911 185 911 430 000 189 343 .. 619 343 233.1 1.0 Germany 162 000 25 000 187 000 1 870 000 34 500 34 000 1 938 500 936.6 2.4 Greece 72 0 72 72 0 .. 72 0.0 0.0 Hungary 400 1 904 2 304 6 200 17 419 2 460 26 079 1 031.9 0.3 Iceland 2 035 0 2 035 9 978 0 500 10 478 414.9 3.7 Ireland 300 0 300 300 100 .. 400 33.3 0.01 Italy 114 900 0 114 900 390 000 0 25 000 415 000 261.2 0.7 Japan 9 732 625 000 634 732 1 524 348 1 303 000 12 000 2 839 348 347.3 2.2 Korea 3 870 293 1 556 072 5 426 365 5 178 323 2 936 280 31 398 8 146 001 50.1 17.2 Luxembourg 0 0 0 1 215 15 .. 1 230 .. 0.3 Mexico 0 15 000 15 000 29 854 15 000 .. 44 854 199.0 0.05 Netherlands 10 000 320 000 330 000 138 000 400 000 200 538 200 63.1 3.4 New Zealand 9 676 658 10 334 25 579 2 000 .. 27 579 166.9 0.7 Norway 943 16 344 17 287 36 137 45 339 6 379 87 855 408.2 1.9 Poland 0 0 0 1 796 10 000 .. 11 796 .. 0.03 Portugal 0 25 154 25 154 3 300 93 836 .. 97 136 286.2 1.0 Slovak Republic 0 0 0 0 420 .. 420 .. 0.01 Spain 44 956 13 459 58 415 375 816 98 466 .. 474 282 711.9 1.2 Sweden 49 000 56 300 105 300 242 100 115 500 126 600 484 200 359.8 5.4 Switzerland 4 416 56 475 60 891 35 124 98 753 .. 133 877 119.9 1.9 Turkey 292 4 167 4 459 2 818 7 897 .. 10 715 140.3 0.02 United Kingdom 38 000 19 693 57 693 140 000 208 000 2 000 350 000 506.7 0.6 United States 2 429 189 3 580 000 6 009 189 3 947 808 7 050 000 1 785 406 12 783 214 112.7 4.5 OECD 7 409 203 7 695 150 15 104 353 16 040 143 14 922 868 2 034 617 32 997 628 118.5 2.9 EU 606 627 838 530 1 445 157 4 117 078 1 644 760 191 474 5 953 312 311.9 1.6 Notes: “Other” broadband technologies include: satellite broadband internet, fibre-to-the-home Internet access, ethernet LANs and fixed wireless subscribers (at downstream speeds greater than 256 kbit/s). Source: OECD.

OECD Communications Outlook 2003

138

Table 5.2. Broadband access, 2000-2001

Table 5.3. Broadband access to end June 2002 CORRIGENDUM: Data in the growth column have been corrected Total DSL Cable Other Total Per 100 DSL Cable Other Growth December December December December June June June June inhabitants % 2002 2002 2002 2002 June 2002 2001 2001 2001 2001 45.1 Australia 65 000 110 000 5 000 180 000 111 800 140 900 8 400 261 100 1.3 17.3 Austria 101 000 192 000 0 293 000 136 000 207 800 .. 343 800 4.2 48.4 Belgium 230 000 201 000 3 674 434 674 362 000 259 036 23 824 644 860 6.3 16.4 Canada 1 060 000 1 670 000 .. 2 730 000 1 330 800 1 848 000 .. 3 178 800 10.2 0.0 Czech Republic 100 12 000 .. 12 100 100 12 000 .. 12 100 0.1 50.7 Denmark 151 775 87 500 .. 239 275 233 000 121 789 5 784 360 573 6.7 150.0 Finland 43 500 24 500 .. 68 000 119 000 51 000 .. 170 000 3.3 55.6 France 430 000 189 343 .. 619 343 730 000 233 579 .. 963 579 1.6 33.6 Germany 1 870 000 34 500 34 000 1 938 500 2 500 000 39 100 50 000 2 589 100 3.1 0.0 Greece 72 0 .. 72 72 0 .. 72 0.001 45.6 Hungary 6 200 17 419 2 460 26 079 18 781 19 200 .. 37 981 0.4 27.9 Iceland 9 978 0 500 10 478 12 900 0 500 13 400 4.7 400.0 Ireland 300 100 .. 400 1 200 800 .. 2 000 0.1 65.1 Italy 390 000 0 25 000 415 000 585 000 0 100 000 685 000 1.2 76.6 Japan 1 524 348 1 303 000 12 000 2 839 348 3 300 926 1 626 000 87 100 5 014 026 3.9 11.2 Korea 5 178 323 2 936 280 31 398 8 146 001 5 734 690 3 287 464 36 363 9 058 517 19.1 118.3 Luxembourg 1 215 15 .. 1 230 2 670 15 .. 2 685 0.6 48.9 Mexico 29 854 15 000 .. 44 854 51 786 15 000 .. 66 786 0.1 16.0 Netherlands 138 000 400 000 200 538 200 192 000 432 400 .. 624 400 3.9 57.7 New Zealand 25 579 2 000 .. 27 579 39 000 4 500 .. 43 500 1.1 38.1 Norway 36 137 45 339 6 379 87 855 75 000 46 300 .. 121 300 2.7 24.6 Poland 1 796 10 000 .. 11 796 4 000 10 700 .. 14 700 0.04 54.9 Portugal 3 300 93 836 .. 97 136 5 203 145 304 .. 150 507 1.5 0.0 Slovak Republic 0 420 .. 420 0 420 .. 420 0.01 77.3 Spain 375 816 98 466 .. 474 282 660 861 180 191 .. 841 052 2.1 28.4 Sweden 242 100 115 500 126 600 484 200 344 000 127 600 150 000 621 600 7.0 110.0 Switzerland 35 124 98 753 .. 133 877 101 177 180 000 .. 281 177 3.9 39.0 Turkey 2 818 7 897 .. 10 715 2 971 11 920 .. 14 891 0.02 114.9 United Kingdom 140 000 208 000 2 000 350 000 299 000 452 994 .. 751 994 1.3 25.7 United States 3 947 808 7 050 000 1 785 406 12 783 214 5 082 856 9 200 000 1 785 406 16 068 262 5.6 30.1 OECD 16 040 143 14 922 868 2 034 617 32 997 628 22 036 793 18 654 012 2 247 377 42 938 182 3.8 47.0 EU 4 117 078 1 644 760 191 474 5 953 312 6 170 006 2 251 608 329 608 8 751 222 2.3 Notes: “Other” broadband technologies include: satellite broadband internet, fibre-to-the-home Internet access, ethernet LANs, and fixed wireless subscribers (at downstream speeds greater than 256 kbit/s). Source: OECD. Country

OECD Communications Outlook 2003

Table 5.4. Leased lines connected to internet, 2000-2001 End 2000

End 2001

Growth %

Per 100 000 inhabitants

Australia

2 157

5 517

155.8

28.3

Austria

3 025

4 138

36.8

50.9

Belgium

2 677

3 268

22.1

31.8

Canada

10 008

12 455

24.5

40.1

2 645

3 219

21.7

31.3

Czech Republic Denmark

3 382

4 742

40.2

88.5

Finland

2 437

3 094

27.0

59.6

France

6 743

9 473

40.5

16.0

18 549

24 719

33.3

30.0

Greece

1 333

1 555

16.7

14.6

Hungary

2 810

3 219

14.6

31.6

241

255

5.8

89.4

Germany

Iceland Ireland

855

1 089

27.4

28.4

6 833

10 681

56.3

18.6

Japan

39 210

45 187

15.2

35.5

Korea

10 046

11 000

9.5

23.2 67.8

Italy

Luxembourg

232

299

28.9

Mexico

1 169

1 427

22.1

1.4

Netherlands

8 208

10 358

26.2

64.8 24.0

New Zealand

856

923

7.8

Norway

3 124

3 590

14.9

79.5

Poland

3 674

5 214

41.9

13.5

Portugal

2 677

2 719

1.6

27.0

437

465

6.4

8.6

Spain

2 333

3 075

31.8

7.6

Sweden

5 305

6 589

24.2

74.1

Switzerland

3 263

4 211

29.1

58.2

623

890

42.9

1.3

18 315

26 451

44.4

44.1

Slovak Republic

Turkey United Kingdom United States

103 624

123 461

19.1

43.3

OECD

266 791

333 283

24.9

29.3

82 904

112 250

35.4

29.7

EU

World 295 962 374 124 26.4 .. Note: Data for Australia and Korea are adjusted for monthly fluctuation for December 2000 and include November 2000 leased lines. Source: Netcraft (www.netcraft.com), OECD.

140

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Internet and Broadband Infrastructure

Table 5.5. Internet hosts by domain, 1998-2002

Domain

Hosts July 1998 (‘000)

Hosts July 2000 (‘000)

Hosts July 2002 (‘000)

Annual growth 1998-2002 %

Australia

.au

750

1 311

2 497

35.1

Austria

.at

132

350

721

52.8

Belgium

.be

154

361

833

52.6

Canada

.ca

1 028

1 815

3 130

32.1

Czech Republic

.cz

66

138

231

36.9

Denmark

.dk

190

370

872

46.3

Finland

.fi

514

704

986

17.7

France

.fr

431

983

2 053

47.7

Germany

.de

1 154

1 917

2 923

26.1

Greece

.gr

40

106

185

46.5

Hungary

.hu

74

130

228

32.5

Iceland

.is

21

38

65

33.2

Ireland

.ie

45

86

97

21.3

Italy

.it

321

1 574

2 959

74.3

Japan

.jp

1 352

3 413

8 714

59.3

Korea

.kr

175

476

412

23.9

Luxembourg

.lu

6

12

18

30.6

Mexico

.mx

84

496

1 005

86.0

Netherlands

.nl

515

1 082

2 150

43.0

New Zealand

.nz

178

310

420

23.9

Norway

.no

312

504

634

19.4

Poland

.pl

99

260

731

64.9

Portugal

.pt

45

117

267

56.0

Slovak Republic

.sk

14

32

77

52.8

Spain

.es

243

539

1 682

62.1

Sweden

.se

381

624

1 188

32.9

Switzerland

.ch

206

418

668

34.2

Turkey

.tr

28

108

165

56.0

United Kingdom

.uk

1 191

2 081

2 508

20.5

7 786

11 817

14 296

16.4

.us

1 302

2 251

1 875

9.5

.edu

4 464

6 678

7 381

13.4 9.0

United States

.mil

1 359

1 916

1 919

.gov

613

828

700

3.4

.arpa

48

144

2 421

166.6

gTLDs

18 006

57 225

101 723

54.2

.com

10 305

32 696

43 815

43.6

.net

7 055

23 432

56 646

68.3

.org

645

1 088

1 239

17.7

.int

1

9

10

84.7

.biz

8

.info

6

World total 36 739 93 048 Source: Internet Software Consortium (http://www.isc.org/).

© OECD 2003

162 128

44.9 141

OECD Communications Outlook 2003

Table 5.6. Web sites (servers) by country, 2000-2002

Australia

Web sites July 2000

Web sites July 2002

Sites per 1000 inhabitants (2000)

Sites per 1000 inhabitants (2002)

Annual growth % 26.4

176 505

282 139

9.2

14.5

Austria

87 485

183 783

10.8

22.6

44.9

Belgium

60 851

132 987

5.9

13.0

47.8

Canada

746 796

1 022 949

24.3

32.9

17.0

59 926

121 552

5.8

11.8

42.4

111 312

384 341

20.8

71.7

85.8

36 869

69 002

7.1

13.3

36.8 57.3

Czech Republic Denmark Finland France

252 399

624 250

4.3

10.5

1 802 855

6 970 691

21.9

84.7

96.6

Greece

12 569

25 209

1.2

2.4

41.6

Hungary

27 109

62 425

2.7

6.1

51.7

Iceland

5 068

9 806

18.0

34.4

39.1

Ireland

12 050

22 260

3.2

5.8

35.9

Germany

Italy

346 903

740 946

6.1

12.9

46.1

Japan

199 332

371 794

1.6

2.9

36.6

Korea

309 807

521 388

6.6

11.0

29.7

3 264

4 895

7.4

11.1

22.5 36.9

Luxembourg Mexico

16 289

30 526

0.2

0.3

Netherlands

269 546

770 259

16.9

48.2

69.0

New Zealand

40 133

58 879

10.5

15.3

21.1

Norway

134 773

299 657

30.0

66.4

49.1

Poland

75 993

176 065

2.0

4.6

52.2

Portugal

17 137

36 687

1.7

3.6

46.3

Slovak Republic

14 989

33 676

2.8

6.3

49.9

Spain

118 841

265 934

3.0

6.6

49.6

Sweden

170 929

249 132

19.3

28.0

20.7

Switzerland

120 134

148 218

16.7

20.5

11.1

Turkey

22 318

62 875

0.3

0.9

67.8

1 436 313

3 852 471

24.0

64.2

63.8

United States

12 569 533

18 167 665

45.6

63.7

20.2

OECD

19 258 028

35 702 461

17.2

31.4

36.2

EU 4 739 323 14 332 847 Source: Netcraft (http://www.netcraft.com).

12.6

37.9

73.9

United Kingdom

142

© OECD 2003

© OECD 2003

Table 5.7. Secure servers in OECD countries, 1998-2002 Secure servers July 1998

2 828 447 268 3 896 194 289 343 1 297 3 761 87 90 67 245 795 2 900 243 44 176 541 482 273 188 116 45 759 811 854 116 4 404 65 565 92 124 16 588 96 585

Secure servers July 2002 4 693 949 439 7 768 185 660 744 2 511 7 987 170 86 136 579 1 167 7 179 562 97 324 1 332 983 528 373 214 38 1 315 1 246 1 555 400 10 288 106 884 161 392 33 442 169 321

Per 100 000 inhabitants July 1998 3.4 1.2 0.5 3.1 0.2 0.8 1.3 0.4 0.6 0.1 0.2 4.7 1.5 0.3 0.3 0.1 2.6 0.0 0.8 2.4 1.2 0.1 0.3 0.3 0.6 1.6 2.1 0.0 1.2 5.4 1.8 0.8

Per 100 000 inhabitants July 2000 14.7 5.5 2.6 12.7 1.9 5.4 6.6 2.2 4.6 0.8 0.9 23.8 6.5 1.4 2.3 0.5 10.0 0.2 3.4 12.6 6.1 0.5 1.2 0.8 1.9 9.1 11.9 0.2 7.4 23.8 8.2 4.4

Per 100 000 inhabitants July 2002 24.1 11.7 4.3 25.0 1.8 12.3 14.3 4.2 9.7 1.6 0.8 47.7 15.1 2.0 5.6 1.2 22.0 0.3 8.3 25.5 11.7 1.0 2.1 0.7 3.3 14.0 21.5 0.6 17.1 37.5 14.2 8.8

Annual growth 1998-2002 % 65.1 76.4 70.5 70.0 76.6 96.8 81.9 83.4 100.7 114.7 47.8 79.8 79.3 62.6 102.3 96.1 72.3 87.9 80.0 81.8 76.0 100.7 67.8 26.2 53.2 71.2 78.8 174.9 94.8 64.3 69.4 82.7 69.6

143

Internet and Broadband Infrastructure

Australia 632 Austria 98 Belgium 52 Canada 929 Czech Republic 19 Denmark 44 Finland 68 France 222 Germany 492 Greece 8 Hungary 18 Iceland 13 Ireland 56 Italy 167 Japan 429 Korea 38 Luxembourg 11 Mexico 26 Netherlands 127 New Zealand 90 Norway 55 Poland 23 Portugal 27 Slovak Republic 15 Spain 239 Sweden 145 Switzerland 152 Turkey 7 United Kingdom 714 United States 14 674 OECD 19 590 EU 3 004 World 20 455 Source: Netcraft (http://www.netcraft.com).

Secure servers July 2000

OECD Communications Outlook 2003

Table 5.8. References to secure servers by domain, August 2002 Domain

Share of world total %

Australia

.au

118 000

1.6

Austria

.at

11 700

0.2

Belgium

.be

2 540

0.03

Canada

.ca

55 900

0.8

Czech Republic

.cz

61 200

0.8

Denmark

.dk

6 890

0.1

Finland

.fi

25 500

0.3

France

.fr

38 000

0.5

Germany

.de

402 000

5.5

Greece

.gr

2 200

0.03

Hungary

.hu

29 400

0.4

Iceland

.is

2 950

0.04

Ireland

.ie

1 070

0.01

Italy

.it

19 600

0.3

Japan

.jp

258 000

3.5

Korea

.kr

10 400

0.1

Luxembourg

.lu

652

0.01

Mexico

.mx

22 600

0.3

Netherlands

.nl

23 500

0.3

New Zealand

.nz

69 200

0.9

Norway

.no

38 400

0.5

Poland

.pl

20 800

0.3

Portugal

.pt

3 250

0.04 0.03

Slovak Republic

.sk

2 190

Spain

.es

28 100

0.4

Sweden

.se

28 000

0.4

Switzerland

.ch

86 400

1.2

Turkey

.tr

2 980

0.04

United Kingdom

.uk

United States

232 000

3.2

815 800

11.1 0.3

.us

25 400

.gov

29 400

0.4

.mil

263 000

3.6

.edu

498 000

6.8

3 456 039

47.0

.com

2 280 000

31.0

.net

621 000

8.4

.org

541 000

7.4

.int

409

0.01

Total gTLDs

144

Https pages August 2002

.biz

9 990

0.1

.info

3 640

0.05

OECD ccTLD

2 419 222

32.9

EU ccTLD

1 215 230

16.5

World Total 7 360 000 Note: Sample taken using Google, August 2002. Source: OECD.

100.0

© OECD 2003

Internet and Broadband Infrastructure

Table 5.9. References to secure servers by country, August 2002 Links to https Australia

Share of OECD total %

167 000

3.5

1 830

0.04

Belgium

5 810

0.1

Canada

298 000

6.2

Austria

Czech Republic Denmark Finland France

68 000

1.4

8 610

0.2

100 000

2.1

84 100

1.8

482 000

10.0

Greece

1 700

0.04

Hungary

31 900

0.7

Iceland

2 620

0.1

Germany

Ireland

1 600

0.03

64 600

1.3

Japan

403 000

8.4

Korea

17 800

0.4

4 750

0.1

Mexico

65 100

1.4

Netherlands

48 800

1.0

New Zealand

67 100

1.4

Italy

Luxembourg

Norway

42 800

0.9

Poland

21 300

0.4

Portugal

2 030

0.04

Slovak Republic

1 440

0.03

Spain Sweden Switzerland Turkey United Kingdom

156 000

3.2

34 000

0.7

155 000

3.2

39 300

0.8

279 000

5.8

United States

2 150 000

44.7

EU

1 274 830

26.5

OECD 4 805 190 Note: Taken as a sample from Google, August 2002. Source: OECD.

100.0

145

© OECD 2003

.org under domestic ISP IP address (’000)

.int under domestic ISP IP address (’000)

.biz under domestic ISP IP address (’000)

.info under domestic ISP IP address (’000)

Total gTLDs under domestic ISP IP address (’000)

Share of pages hosted outside domestic ISP IP address

ccTLD pages under national ISP IP address (’000)

3 490 2 260 1 130 4 240 2 140 2290 1 580 4 370 6 900 601 1 100 264 711 4 370 6 610 2 860 94 726 3 330 1 190 2 020 2 610 700 703 1 950 2 860 2 980 603 6 850 3 890

.net under domestic ISP IP address (’000)

5 700 4 010 1 890 5 850 4 690 4 080 2 570 8 340 24 900 1 120 2 120 536 1 250 7 510 20 000 5 030 169 1 250 6 110 2 180 3 580 5 460 1 290 1 360 3 200 4 280 4 320 1 180 11 300 5 290

.com under domestic ISP IP address (’000)

.au .at .be .ca .cz .dk .fi .fr .de .gr .hu .is .ie .it .jp .kr .lu .mx .nl .nz .no .pl .pt .sk .es .se .ch .tr .uk .us

ccTLD pages under foreign ISP IP address block (’000)

© OECD 2003

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States

Domain

Web pages in ccTLD (’000)

Country

2 210 1 750 760 1 610 2 550 1 790 990 3 970 18 000 519 1 020 272 539 3 140 13 390 2 170 75 524 2 780 990 1 560 2 850 590 657 1 250 1 420 1 340 577 4 450 1 400

2 440 1 020 1 320 6 030 484 862 1 290 4 270 3 450 162 239 61 905 2 400 3 500 2 570 28 704 2 240 672 1 330 345 365 69 2 640 2 160 1 660 936 6 310 9 520

840 330 337 2 940 158 243 941 1 860 1 800 35 54 58 36 1 330 1 760 1 370 4 80 1 320 201 803 250 181 16 1 110 731 425 281 3 110 7 320

600 688 567 2 450 141 424 244 2 320 1 620 55 78 106 81 1 450 1 160 646 10 146 1 170 54 481 108 135 7 986 600 1 470 199 2 810 6 730

0 1 263 5 0 9 1 0 25 0 0 0 0 97 2 0 562 0 4 0 28 0 738 0 74 3 354 2 30 39

0 7 1 14 3 2 0 4 45 0 0 0 0 16 17 72 0 0 9 0 2 2 0 0 3 2 3 1 31 168

5 28 1 129 48 5 8 83 247 0 1 0 0 61 107 53 0 2 40 1 13 12 0 4 46 8 16 0 201 380

3 885 2 073 2 489 11 568 834 1 544 2 485 8 537 7 187 253 371 225 1 023 5 354 6 546 4 710 604 933 4 782 928 2 656 717 1 419 95 4 859 3 504 3 927 1 419 12 492 24 157

23.1 28.8 17.4 9.2 46.2 31.8 19.6 23.5 56.1 37.8 40.9 35.7 23.7 24.4 50.4 22.3 9.7 24.0 25.5 31.9 25.0 46.1 21.8 45.1 15.5 18.2 16.2 22.2 18.7 4.8

OECD Communications Outlook 2003

146

Table 5.10. Web pages by domain and country, August 2002

© OECD 2003

0 0 1 0 0 0 0 0 0

Share of pages hosted outside domestic ISP IP address

109 196 435 219 369 77 281 98 63

Total gTLDs under domestic ISP IP address (’000)

150 348 1 370 578 536 85 748 107 62

.info under domestic ISP IP address (’000)

.org under domestic ISP IP address (’000)

976 818 2 860 1 270 2 050 629 1 150 1 480 679

.biz under domestic ISP IP address (’000)

.net under domestic ISP IP address (’000)

436 1 700 2 840 1 840 462 283 6 700 375 465

.int under domestic ISP IP address (’000)

.com under domestic ISP IP address (’000)

Non-OECD Argentina .ar 1 050 614 Brazil .br 4 170 2 470 China .cn 5 840 3 000 Chinese Taipei .tw 3 950 2 110 Hong Kong, China .hk 986 524 Malaysia .my 579 296 Russian Fed. .ru 11 400 4 700 Singapore .sg 893 518 South Africa .za 1 040 575 Note: Taken as a sample from Google, August 2002. Source: OECD.

ccTLD pages under foreign ISP IP address block (’000)

Domain

ccTLD pages under national ISP IP address (’000)

Country

Web pages in ccTLD (’000)

Table 5.10. Web pages by domain and country, August 2002 (continued)

0 0 13 33 2 0 6 1 1

2 0 17 4 1 5 92 0 5

1 237 1 363 4 696 2 103 2 959 796 2 277 1 686 810

19.1 30.7 27.0 30.4 11.7 20.6 49.0 14.5 25.1

Internet and Broadband Infrastructure

147

OECD Communications Outlook 2003

Table 5.11. Domain name registrations under top level domains, 2000-2002 Registrations July 2000

Registrations July 2002

Annual growth %

Country

Domain

Australia

.au

148 539

250 000

29.7

Austria

.at

157 387

252 441

26.6

Belgium

.be

32 709

206 989

151.6

Canada

.ca

60 000

300 000

123.6

Czech Republic

.cz

66 555

119 145

33.8

Denmark

.dk

208 300

397 552

38.2

Finland

.fi

17 603

36 210

43.4

France

.fr

89 097

155 554

32.1

Germany

.de

1 732 994

5 666 269

80.8

Greece

.gr

18 670

55 000

71.6

Hungary

.hu

..

81 804

..

Iceland

.is

3 300

8 200

57.6

Ireland

.ie

15 506

29 920

38.9

Italy

.it

417 609

735 156

32.7

Japan

.jp

190 709

482 644

59.1

Korea

.kr

494 074

479 643

-1.5

Luxembourg

.lu

11 404

15 454

16.4

Mexico

.mx

49 947

71 590

19.7

Netherlands

.nl

532 596

748 510

18.5

New Zealand

.nz

67 777

111 000

28.0

Norway

.no

45,541

150 000

81.5

Poland

.pl

56 708

..

..

Portugal

.pt

14 394

26 158

34.8

Slovak Republic

.sk

..

57 091

..

Spain

.es

29 590

40 952

17.6

Sweden

.se

45 241

102 785

50.7

Switzerland1

.ch

112 912

422 907

93.5

Turkey

.tr

..

40 059

..

United Kingdom

.uk

1 938 740

3 635 585

36.9

.gov

730

..

..

.mil

..

..

..

United States

.us

..

269 233

..

6 154

7 409

9.7

17 476 025

28 756 238

28.3

.com

13 721 175

21 198 557

24.3

.net

2 305 075

3 586 124

24.7

.org

1 449 775

2 328 690

26.7

.int

..

..

..

.biz

..

700 962

..

.info

..

864 457

..

.name .. 77 448 1. “.ch” registrations at end of 2001 rather than July 2002. Source: OECD, compiled from country and generic NICs, August 2002.

..

.edu Major gTLDs

148

© OECD 2003

Internet and Broadband Infrastructure

Table 5.12. Regional development of the Internet, 2000-2002

IPv4 space

APNIC (Asia-Pacific)

ARIN (Americas)

RIPE (Europe & Middle East)

Global

2000 (July monthly average) % of possible address space being advertised

31.2%

% of allocated address space being advertised

59.7%

86.8%

68.9%

63.5%

Announcements from ASNs

84 700

12 661

57 371

13 125

Originating ASNs

950

4 775

2 091

8 064

Transit ASNs

160

526

406

1 140

Advertising one route

333

1 296

981

2 685

2002 (July monthly average) % of possible address space being advertised

31.4%

% of allocated address space being advertised

59.0%

72.2%

74.7%

58.1%

Announcements from ASNs

18 969

76 148

19 458

114 575

1 572

7 918

3 917

13 458

Originating ASNs Transit ASNs

275

782

737

1 810

Advertising one route

510

2 537

2 117

5 164

Change (percent) Announcements from ASNs

49.8%

32.7%

48.3%

35.3%

Originating ASNs

65.5%

65.8%

87.3%

66.9%

Transit ASNs

71.9%

48.7%

81.5%

58.8%

Advertising one route

53.2%

95.8%

115.8%

92.3%

Source: APNIC (http://www.apnic.net/stats/bgp).

149

© OECD 2003

Chapter 6

MAIN TRENDS IN PRICING

Abstract. Several major trends have typified telecommunication pricing structures in the past several years. This chapter examines these trends and provides information on dial-up Internet access pricing, DSL pricing, residential and business telecommunications baskets, residential and business rates, international rates, mobile communications, leased lines and local loop unbundling.

151

© OECD 2003

OECD Communications Outlook 2003

S

everal major trends have typified telecommunication pricing structures in the past several years. The trend toward tariffs that are not related to distance has been discussed in previous editions of the Communications Outlook. In some countries, one metered rate now applies to all domestic calls. In those countries continuing to have divisions between local and long distance calling, particularly where local calls are unmetered, the size of local zones is often being expanded at the same time as long distance charges become more uniform. The approach of Canada provides one example of how the process of extending local zones is managed (Box 6.1). A second trend is the shift toward unmetered public switched telecommunication network (PSTN) access for dial-up Internet service. In the most competitive market segments, full or partially unmetered options are also being made available for telephony for those customers that prefer such a pricing structure. In the United Kingdom, where new entrants have gained the largest share of local access lines, the incumbent has introduced unmetered telephony for local calls. At the same time, in those countries that have traditionally had unmetered local telephony, new options being introduced included full or partially unmetered long distance services. In the United States, during 2002, AT&T offered unlimited long distance calls to other AT&T customers for USD 19.95 per month. Customers using this service hear “AT&T”, followed by a special tone which lets users know they are talking to another AT&T customer and that the call is unmetered. In other countries, such as Australia and New Zealand, price ceilings are applied to calls such that they become unmetered beyond a certain duration. In the past, some telecommunication carriers suggested that network capacity constrained their ability to offer a variety of pricing plans. The ability of some carriers to make a range of options available to customers suggests this is no longer the case. Traditionally, 25 December has been one of the days when networks carried the greatest amount of traffic. In 2002 it was therefore noteworthy that Swisscom offered free domestic local and long distance calls on its fixed network all day on Christmas. There has been far greater demand for unmetered dial-up Internet access than telephony. At the beginning of 2000 there were only five OECD countries in which it was possible for users to obtain unmetered Internet access from an incumbent telecommunication carrier. These were all countries where local telephony was traditionally unmetered – Australia, Canada, Mexico, New Zealand and the United States. In 2002 the number of OECD countries in which the incumbent telecommunication carrier offered unmetered access to the Internet, daytime or evenings, had increased to 12 (Table 6.1). Incumbents that introduced unmetered access included those in Czech Republic, Finland, Korea, Japan, Portugal, Spain and the United Kingdom. In several other OECD countries, such as France and Ireland, unmetered offers are available from Internet service providers (ISPs) using unmetered interconnection arrangements. In Poland, unmetered access was introduced by one of the smaller telecommunication carriers but not the incumbent.

152

Taken together, unmetered dial-up Internet access was available in half the OECD countries by 2002. On the other hand, the incumbent telecommunication carriers in two other OECD countries withdrew unmetered offers. In Gemany, Deutsche Telekom replaced unmetered access with a series of packages including fixed amounts of time. In Hungary, Matav, the incumbent in which Deutsche Telekom has an ownership share, also withdrew its off-peak unmetered Internet access option. In addition, a number of telecommunication carriers moved to differentiate unmetered access from the “always on” service enabled by broadband. Even in those countries that have traditionally had unmetered dial-up, volume caps are sometimes applied to ensure that users are not using PSTN lines as permanent connections. © OECD 2003

Main Trends in Pricing

The availability of unmetered digital subscriber lines (DSL) in Germany and Hungary mitigated some of the discord that would have otherwise been generated by the withdrawal of unmetered dial-up services. In those countries where broadband access is relatively inexpensive, users clearly prefer that service to unmetered dial-up. In Korea, for example, unmetered dial-up is among the least expensive in the OECD area but this has not deterred users from making the transition to broadband. In Canada, the United Kingdom and the United States, where dial-up is also relatively inexpensive, the growth of broadband has been influenced more by the price of the service than by dial-up service prices. Lower prices for broadband access in these countries have coincided with higher growth for broadband, rather the impact of low dial-up pricing. On the other hand, elements of metered broadband access in Australia and New Zealand have made the service less attractive than unmetered dial-up. One new development in Internet access pricing has concerned peak and off-peak dial-up services. Historically, peak and off-peak rates were used by telecommunication carriers to manage network capacity and encourage usage during periods of lower demand. Peak times generally coincided with the most common working hours whereas off-peak times coincided with evenings and weekends. As PSTN tariffs for dial-up have been separated from local telephony pricing, the distinction between peak and off-peak has tended to disappear. This trend was reinforced as the peak and off-peak times for residential Internet use varied considerably from those associated with telephony. For residential dial-

Box 6.1.

Local telephony zones in Canada

In October 2002, the Canadian Radio-television and Telecommunications Commission (CRTC) issued the framework it will use in deciding whether to extend toll-free calling between local telephone exchanges, in effect expanding local call areas. Effective from that date, the new framework sets out the principles, criteria and process the CRTC will follow in these cases. The recent trend toward municipal amalgamation has underlined the need for the CRTC to establish a general framework to use in expanding local calling areas. The new framework was developed in response to requests from telephone subscribers and municipalities looking to reduce their long distance telephone charges by expanding their local calling areas. It balances the interests of telephone users, municipalities, incumbent local telephone companies and telecommunications competitors. Under the new CRTC framework criteria, an elected local, municipal or regional government can start the process of expanding its local calling area by passing a motion and making a request to the local incumbent telephone company. The Commission will accept a request from the appropriate level of government as evidence that there is a community of interest for the purpose of expanding a local calling area. As there is great variation in the size of municipal or regional areas in Canada, the Commission will not require a distance criterion to expand a local calling area. Both incumbent telephone companies and competitors will be compensated for a portion of lost long-distance revenues caused by expanding the local calling area through a temporary surcharge. In its decision, the Commission suggests that this amount be equal to three years’ worth of long distance revenue and seeks comments from the parties involved in the hearing on this topic. In exchanges where the proposed temporary surcharge for residential subscribers would be above CAD 1 per month, all telephone subscribers will be able to vote on whether the local calling area should be expanded. A simple majority of respondents must vote in favour of expanding the local calling area for the proposal to go ahead. The process to expand a local calling area can be triggered by a request from a local, municipal or regional government to the incumbent local telephone company. The local telephone company will then determine the estimated cost increases, lost toll revenue and cost of any required plebiscite. Based on this information, the requesting government would decide whether to proceed or not. If it decided to go forward, the local telephone company would take the next step and file an application with the CRTC. Interested parties would then have an opportunity to comment. Any required vote, to be paid for by the requesting government, would be held following the CRTC conditional approval of the proposal. The local calling area would be expanded if a simple majority of respondents approve the proposal. 153

© OECD 2003

OECD Communications Outlook 2003

up users, the greatest amount of time spent online is during evenings and on weekends. Accordingly, charging peak rates for dial-up service during the day made little sense. Most operators that bundle online time with ISP fees now do not differentiate between peak and off-peak usage. At the same time, some telecommunication carriers are taking this a step further and introducing less expensive pricing during the day. Given these developments, the OECD’s peak and off-peak dial-up baskets have been renamed “daytime” and “evening” so that the least expensive option can be applied in each country. Telecom New Zealand offers a less expensive daytime rate for Internet access than their standard offer. With the “Xtra Daytime Pack”, users can access the Internet all day until 17:00 and all night after 23:00 for less than USD 14 per month. Accordingly, the offer includes up to 18 hours of Internet access every day. This option effectively makes working hours the off-peak time for Internet access. In Hungary, Matav has also introduced a rate for dial-up Internet access that makes daytime hours the least expensive. Dial-up Internet access pricing For several years, the OECD has been collecting data and comparing a basket of Internet access services. This basket includes line rental, PSTN usage charges and the ISP fee. The line rental charge is used in the basket to balance the fact that traditionally countries that did not charge for local calls had higher fixed charges, whereas countries which charged for local calls had lower fixed charges. The use of the full fixed charge does not imply that customers would require an incremental line to access the Internet, as most residential customers use their existing PSTN line for telephony and access to Internet services. Accordingly, for comparative purposes, the price of Internet access excluding line rental is also available. The prices, for all elements of the baskets, are those of the incumbent telecommunication carrier so as to ensure that they are for services that are comparable. One caveat to note is that some of the prices shown for a defined duration include further amounts of online time. This is the case for countries with unmetered access or packages with large amounts of online time included. For example, the option used for Bell Canada’s monthly Internet access includes 100 hours of online time. In September 2002, the average OECD monthly price of a 20-hour daytime basket of Internet access services, including line rental, PSTN usage charges and ISP fee was USD 44.01 (Table 6.2). The least expensive country for daytime dial-up service is Korea, followed by Finland, Turkey, France and Germany. Although dial-up Internet access is very inexpensive in Korea, most users prefer broadband access and the number of dial-up users is now decreasing. At evening times, this group of countries are joined by the United Kingdom, Switzerland and Sweden (Table 6.3). Unmetered options come more to the fore as online time increases. This is because metered pricing, of course, increases the cost to the user with an increase in online time. For the daytime basket of 40 hours of online time, both Canada and the United States, where unmetered rates apply, are among the least expensive countries (Table 6.4). The least expensive country is Korea, followed by Canada, France and the United States. At evening times, the least expensive countries for 40 hours of dial-up service are Korea, Canada, the United Kingdom, France and the United States (Table 6.5). Internet access pricing time series

154

Internet access prices have decreased considerably over recent years. Between 1998 and 2002, the OECD’s baskets for 20 hours of service both decreased by just under 7% (Table 6.6). Between 2001 and 2002 prices continued to fall for the daytime basket but rose by just under 1.8% at evening times. The largest relative rises occurred where Internet access costs are among the least expensive, in Turkey and Finland. In Turkey, the regulator ordered Turk Telekom to increase its charges after it decided that the existing rates were anti-competitive. In Finland, the rise resulted from the incumbent telecommunication carrier eliminating its off-peak tariff to create a standard rate at all times. The same impact is recorded for the baskets of 40 hours (Table 6.7). Accordingly, between 2001 and 2002, the daytime rate decreased by 7.9% while the evening rate increased by 1%. © OECD 2003

R

H e Lu un p. xe ga m ry bo Be ur lg g C ze P ium ch o R la N ep nd et u he bl rla ic n N ds or w ay I G taly r D eec en e m a Ja rk Po pan r tu g O al EC D EU M Sw ex itz ico er la Ire nd la Sw nd ed Au en st ri N ew S a pa Ze in al a Ic nd el a Au nd s G tra er lia m a Fi ny nl an U ni Tu d te r k d ey St U at ni te Fr es d an Ki c ng e d C om an ad Ko a re a

ov ak

Sl h Be Rep lg . Sl ov Hu ium ak ng a Lu Rep ry xe ub m lic bo P u N or rg et tu he ga rla l nd Sp s a Ire in la S n Sw we d itz de er n la nd EU O E G CD re e Po ce la Ic nd el an d Ita N ly or D wa en y m a Ja rk pa Tu n rk Au ey st M ria e Au xico s U ni G tral te er ia d m Ki an ng y d U F om ni in te la N d S nd ew t a Ze tes al an Fr d an C ce an ad Ko a re a

ze c

C

Main Trends in Pricing

Figure 6.1. OECD Internet access basket for 40 hours at daytime using discounted PSTN rates, September 2002 Including VAT

USD PPP 180 PSTN fixed

Figure 6.2.

PSTN fixed

Source: OECD.

© OECD 2003 PSTN usage

PSTN usage

ISP USD PPP 180

160 160

140 140

120 120

100 100

80 80

60 60

40 40

20 20

0 0

Source: OECD.

OECD Internet access basket for 40 hours at evening using discounted PSTN rates, September 2002 Including VAT

USD PPP 100 ISP USD PPP 100

90 90

80 80

70 70

60 60

50 50

40

40

30

30

20

20

10

10

0

0

155

OECD Communications Outlook 2003

Figure 6.3.

OECD Internet access basket for 20 hours per month, using discounted PSTN rates, 1998-2002 USD PPP, including VAT Day-time

Evening

USD PPP 70

USD PPP 70

60

60

50

50

40

40

30

30

20

20

10

10

0

0 1998

1999

2000

2001

2002

Source: OECD.

Placing Finland and Turkey to one side, the main reasons for price increases showing in the baskets were to do with rebalancing and the trend toward direct payment for ISP services. The main cause of an increase in the time series for the OECD baskets is the increase in line rentals. In one case, for Australia, it is the result of the incumbent withdrawing its “homeline-net” service that provided a line rental aimed at Internet users. At the same time, the rebalancing of line rentals in Australia, and elsewhere, contributed to the rise in the OECD’s time series. Some telecommunication carriers have attempted to lessen the impact of rebalancing on users with additional residential lines for Internet access. In Belgium, for example, a 25% discount was available on the price of second residential lines in 2002. In other cases new schemes offer lower prices for primary lines. Telecom New Zealand has introduced a line rental option called “homeline economy”. Under this option, residential users pay a lower line rental and a flat rate for local calls up to a duration of two hours. This produces a reduction in the price of Internet access in New Zealand from previous years. At the same time, ISP prices rose in some countries as some models of access pricing proved to be unsustainable. Among these was decreasing use of “free ISP” services that were supported by advertising. Other models of so-called free ISP services, which relied on payment via call charges, are still current in some countries but less popular than in preceding years. These services are generally the most economical for users with relatively low levels of usage. At the same time, some users prefer to pay more for an unmetered rate, or a larger block of online time, so that they know the amount of their monthly bill in advance.

156

As in past years, the relative gaps between countries in Internet access pricing, at daytime rates, are some of the largest for any communication service. In some OECD countries it costs much more to access the Internet, and although at evening times the differences are not as great, they are still significant. The new factor at work in some countries is the impact of broadband pricing for Internet access. Broadband access provides numerous benefits for Internet users. Foremost among these is improved performance in terms of capacity but also in the ability for users to have “always on” © OECD 2003

Main Trends in Pricing

connections. In addition, in some countries with metered dial-up pricing, broadband may provide the first unmetered option. DSL pricing The structure of DSL pricing has a number of variables in OECD countries. Foremost among these is the advertised capacity for connections. In a small number of countries, the lowest price for a DSL connection provides a downstream connection of 128 Kbit/s. As this speed is akin to integrated services digital network (ISDN) levels of service, they are excluded from broadband comparisons. A more common baseline service is for 256 Kbit/s downstream connectivity (Table 6.8). By way of contrast, the baseline level of downstream service in a number of other countries is more than 500 Kbit/s. Accordingly, to compare prices for DSL service, it is necessary to compare a range of baseline offers. Significantly, some services with advertised capacity greater than 500 Kbit/s are less expensive than services in other countries at 256 Kbit/s. A second aspect of DSL pricing is whether the service has a metered element or is at a flat monthly rate. In more than half of OECD countries, the incumbent offers a flat-rate monthly price. In some countries the service is virtually unmetered with the baseline threshold being set relatively high such as in Belgium, Canada, Portugal and Switzerland. The two countries where the threshold for metered service is relatively low are Australia and New Zealand. However, in both these countries some services from the incumbents’ own servers are not counted towards these limits. In comparing prices, therefore, it is necessary to consider the capacity of the connection and, where applicable, the number of bytes users can download before additional charges are incurred. In September 2002, the best value was available in Canada, Japan and Korea. For offers at low capacity, Switzerland was relatively inexpensive. One caveat to bear in mind is that these prices are for the services of incumbents and less expensive offers are available in some countries, albeit mostly on a more limited geographical basis. This being said, the degree of competition should be reflected in the prices of incumbents. In Japan, for example, the emergence of new competitive ISPs such as Yahoo BB has led to one of the least expensive offers for DSL service in the OECD area and this has placed competitive pressure on the prices of NTT. At the same time, the prices are for individual dwellings, whereas in a small number of cases incumbents provide less expensive offers to multiple users in apartment buildings. In a number of countries broadband access is less expensive than the cost of dial-up access as measured by the OECD baskets. Due to relatively high dial-up prices for service beyond 20 hours per month and low broadband prices, Japanese users have a tremendous incentive to shift to broadband access. When compared to 40 hours of dial-up service, at daytime rates, broadband access is less expensive in Belgium, Iceland, Japan, the Netherlands, Spain, Sweden and Switzerland. Some times this is because of relatively expensive prices for extended dial-up use at daytime rates. While it is clear that expensive dial-up can provide an incentive to shift to broadband, the reverse is not necessarily the case. There is not much indication that inexpensive dial-up service holds back the take-up of broadband service. The two leaders in the OECD in terms of broadband penetration are Korea and Canada, both of which have relatively inexpensive dial-up service as well as unmetered pricing options. In both countries users have therefore been prepared to pay for improved levels of Internet access. The key ingredient, therefore, is not the level of dial-up prices but the level of broadband prices. Both Korea and Canada have among the lowest DSL prices. A further factor to take into consideration, in terms of broadband pricing, is that the prices available to users in apartment buildings are sometimes lower than those for users at individual sites. The most widely available prices, and those advertised by most incumbents, are certainly for individual sites. In countries with a high prevalence of people living in apartment buildings, less expensive offers are sometimes available from new entrants using alternative technologies (e.g. Ethernet LANs in Sweden). In other cases there are offers available for shared use of DSL connections by users in apartment buildings. In Finland, for example, new entrants have used service levels aimed at business users to provide shared broadband connections for less than USD 10 to residential users in apartment © OECD 2003

157

OECD Communications Outlook 2003

buildings. The incumbent has responded with a similar offer. This reinforces the experience across the OECD that it costs much less to serve sites with multiple users than individual sites. Residential and business telecommunication baskets The OECD has two baskets to compare residential telecommunication prices. The first basket compares the price of domestic telephony (Table 6.9). The second basket, in addition to domestic services, includes international services and calls from the fixed network to mobile communication networks (Table 6.10). Iceland continues to have the least expensive domestic residential telecommunication services when measured in USD using purchasing power parity (PPP), followed by Switzerland, Korea, Sweden, Japan and the United Kingdom. The inclusion of cellular mobile and international calls has a significant impact on the rankings. In this case, the four Scandinavian countries and Switzerland are the least expensive. The OECD also has two baskets to compare business telecommunication prices. These baskets are for a small business user of telephony. The first basket compares the price of domestic telephony (Table 6.11). The second basket, in addition to domestic services, includes international services and calls from the fixed network to mobile communication networks (Table 6.12). The four Scandinavian countries are once again the least expensive for a basket of domestic telephony. For the composite basket, the Scandinavian countries are also the least expensive, joined by Luxembourg and Switzerland. Trends in residential and business rates Between 2001 and 2002 the average price for a basket of telephony services in the OECD was relatively stable for both business and residential users (Table 6.13). This followed more than a decade of declining prices. Between 1990 and 2002 the average price for a basket of residential services fell 14.5% (Figure 6.8a). Starting from a higher base the average decline for a basket of business services was

Figure 6.4. OECD residential tariff basket, August 2002 USD PPP, including VAT Fixed

Usage

USD PPP 900

USD PPP 900

800

800

700

700

600

600

500

500

400

400

300

300

200

200

100

100 0

Sl

ov ak

R e Po p. l a H n un d g C ze Po ary ch rtu R ga ep l ub Au lic st M ria ex ic Sp o ai n Ita Tu ly rk G ey re Be ece lg Au ium st ra li N ew OE a Ze CD al a Fr nd G anc U erm e ni te an d St y at e N Ire s et la he n rla d n Fi ds nl an Lu Nor d xe wa m y bo C urg an D ada en U m ni te J ark d ap Ki a ng n d Sw om ed en Sw Ko r itz ea er la Ic nd el an d

0

158

Source: OECD.

© OECD 2003

R

ze M ep. ch ex R ico ep ub Po lic l H and un ga Tu ry r N Po key ew rt u Ze ga al l an d I Au tal s y G trali er a m an O y EC D Sp Be ain lg U iu ni te Fra m d n U Kin ce ni g te d d om St at Au es st G ria re e Ire ce la n Fi d nl an N Ja d et he pa r la n n C ds an ad a Sw Ko r Lu itze ea xe rla m nd bo u N rg or w D en ay m Sw ark ed Ic en el an d

C

ov ak

Sl ov ak Po R lan ep d u H bli un c ga M ry ex i Tu co rk C ze Po ey ch rtu R ga ep l u G blic re ec e N ew I t Ze aly al an Sp d ai n Ko re a O E Au CD st ra U Be lia ni lg te iu d St m at Fr es a G nc er e m a Au ny st Fi ria nl an Ja d pa N Ire n et la he n rla d nd Lu Ca s xe na m da bo u N rg o U r w D ni te en ay d m Ki ar ng k d Sw om Sw e itz den er la Ic nd el an d

Sl

Main Trends in Pricing

Figure 6.5. OECD composite basket of residential telephone charges, August 2002

USD PPP 1 400 Fixed

USD PPP 2 200 Fixed

Source: OECD.

© OECD 2003 Usage USD PPP 1 400

1 200 1 200

1 000 1 000

800 800

600 600

400 400

200 200

0 0

Source: OECD.

Figure 6.6. OECD business tariff basket, August 2002 USD PPP, excluding VAT

Usage USD PPP 2 200

2 000 2 000

1 800 1 800

1 600 1 600

1 400 1 400

1 200 1 200

1 000

800 1 000

800

600

600

400

400

200

200

0

0

159

OECD Communications Outlook 2003

Figure 6.7.

OECD composite basket of business telephone charges, August 2002 Excluding VAT Fixed

Usage

USD PPP 3 500

USD PPP 3 500

3 000

3 000

2 500

2 500

2 000

2 000

1 500

1 500

1 000

1 000

500

500 0

Sl

ov M ak e R xico ep ub Tu lic r C ze P key ch ola R nd ep H ubli un c g Po ary rtu ga N ew K l o Ze rea al an d Ita l O y E Au CD st ra G lia re ec Ja e pa n S G pa er in m a Au ny st Be ria lg U iu ni te Fr m d an K U in ce ni gd te d om St at Ire es la Fi nd nl a C n N an d et a h d Sw erla a itz nd Lu er s xe la m nd b D our en g m Sw ark ed N en or w Ic ay el an d

0

Source: OECD.

Figure 6.8a. Time series for residential telephone charges Usage

Fixed

Total

Index 1990 = 100 140

Index 1990 = 100 140

120

120

100

100

80

80

60

60

40

40

20

20

0

0 1990

160

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: OECD.

© OECD 2003

Main Trends in Pricing

Figure 6.8b. Time series for business telephone charges Usage

Fixed

Total

Index 1990 = 100 140

Index 1990 = 100 140

120

120

100

100

80

80

60

60

40

40

20

20

0

0 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: OECD.

30% over the same time period (Figure 6.8b). Taking into consideration that the data are based on current dollars, the actual gains for users are greater than shown. For residential users it is worth noting that all these gains have been made since the middle of the decade when the decrease in usage charges began to outpace the rise in fixed charges. While the direct impact of rebalancing has been to shift the relative weight of charges, the decline in usage charges is directly attributable to increasing competition. For business users, the gains have been particularly noticeable with increased liberalisation. Most of the gains have been made since 1998 coinciding with widespread liberalisation that year. The stability of prices in 2002 may reflect less price competition as some firms exit the telecommunications market. On the other hand, some price changes reflect some degree of “optional rebalancing” as telecommunication carriers introduce a range of line rentals or fixed fees for discount plans. In these cases, users elect to pay higher fixed charges in return for lower usage charges. Given that the OECD time series tracks the price for a fixed number of calls, the benefits users receive are not fully captured if they increase their levels of usage above this amount. Examples of such schemes include partially or fully unmetered long distance plans. International rates For business users the least expensive international rates, in August 2002, were to be found in Norway, Switzerland, Sweden, the Netherlands and France (Table 6.14). At the same time, for residential users, the least expensive international rates were in Switzerland, Norway, the Netherlands, Sweden and Luxembourg. International rates have undergone the most reductions in any segment of telecommunication pricing over recent years. In some countries the standard published rates reflect these falls. In other countries it is necessary to subscribe to a discount plan to benefit from price reductions. In some cases these discount plans are automatically applied and in others the users need to pay an additional fixed monthly fee to receive the reduced rates. In November 2002, for example, a user of Bell Canada would have paid USD 0.63 per minute to call the Netherlands at peak times, using standard rates. If the same user subscribed to Bell Canada’s “First Rate Overseas Plan”, for a fixed charge of USD 3.17 per month, © OECD 2003

161

OECD Communications Outlook 2003

Figure 6.9.

OECD basket of international telephone charges for business and residential users, August 2000 Business

Residential

USD PPP 6.0

USD PPP 6.0

5.0

5.0

4.0

4.0

3.0

3.0

2.0

2.0

1.0

1.0

0

Ita Ja ly pa Lu K n o xe re m a bo ur N Me g et x h i N erl co ew an Ze ds al a N nd or w a Po y la Sl n P ov o d ak rtu R ga ep l ub lic Sp a S in Sw wed itz en er la U nd ni T te u rk d Ki ey ng do m

Au s

tra li Au a s Be tria lg iu C ze Ca m ch na R da ep ub D en lic m Fi ark nl an Fr d a G nc er e m a G ny re H ece un ga Ic ry el an Ire d la nd

0

Source: OECD.

the rate would have been USD 0.06 per minute. At the same time, the difference for a call from Canada to New Zealand using standard rate was USD 0.80 but only USD 0.06 under the discount plan. Canada’s experience is mirrored in many other countries. Prices under various discount plans have fallen to very low levels compared with those available prior to liberalisation. On the other hand, there is often little movement in the standard published rates that seem to be retained almost as benchmarks to show customers how much they are saving under various plans. In the future, Internet protocol (IP) telephony will exert pressure on international rates not least because services are now being offered without the need for a PC. In Japan, the standard peak time rate for a KDDI user to call the United States is USD 0.50 per minute. For the payment of USD 1.63 per month, a user can subscribe to the “Danzen Talk II DX” discount plan. Under this plan, users receive a 45% reduction to their most frequently called international number, 35% for their second most frequently called number and 25% off all other calls. Yet even with these reductions, IP telephony offers further significant price savings. For example, a user subscribing to Yahoo BB can make calls to the United States for USD 0.02 per minute. The standard rate for a call over the PSTN from Japan to Belgium is USD 2.42 per minute whereas an IP telephony call is priced at USD 0.19 per minute. This makes IP telephony much less expensive even taking into account various discount plans. In late 2002 this was one reason Yahoo BB was adding more than 100 000 telephony customers per month for its service.

162

The other significant development in the pricing of international telephony since the previous edition of the Communications Outlook is the differentiation between calls to fixed and mobile numbers. In recent years the price to terminate international calls on fixed networks has, in many cases, decreased below the price for terminating domestic calls to mobile networks. Accordingly, an increasing number of operators have negotiated international agreements to charge different rates for termination of incoming calls to fixed and mobile networks. The result, for the users making the call, is a higher price to call a mobile number in a foreign country than a fixed line. France Telecom, for example, charges © OECD 2003

Main Trends in Pricing

USD 0.49 per minute, at peak rates, to call a fixed line in Australia. The same call to a mobile number would cost USD 0.81 per minute. At off-peak times the rates for the same calls are USD 0.24 per minute and USD 0.63 per minute for fixed and mobile respectively. Calls from Australia to France have a similar pricing structure, with Telstra users paying 55% more per minute to call a mobile number than a fixed number. Mobile communications The OECD has three baskets for comparing cellular mobile communication prices. The low user makes 25 calls per month, the medium user makes 75 calls per month and the high user makes 150 calls per month. The baskets spread the calls over different times of day and days of the week. In addition, the calls are spread over destination including calls to fixed networks, calls to other users on the same network and calls to other users on different mobile networks. A number of SMS (short message service) are also included for each user. In each country, multiple mobile operators are surveyed and the least expensive option chosen for the applicable usage pattern. For the low user basket the least expensive offers were in Denmark, Iceland, Luxembourg, the United States, Finland and Canada (Table 6.15). The least expensive offers in this category tend to be prepaid. One caveat applies to the pricing for wireless service in the United States, where some pricing options use local calling areas in terms of the location from which users make calls. If users roam outside the local service area, they pay additional roaming charges under such pricing options. For the OECD baskets, the pricing option selected must enable users to roam on a national basis. If this stipulation did not apply, some prepaid options with local calling areas in the United States would be comparable to the pricing found in countries with relatively small national calling areas such as Luxembourg. For a medium user, the least expensive baskets are Finland, Canada, Iceland, Denmark, Luxembourg and Portugal (Table 6.16). For the high-volume basket, the least expensive offers were in

Figure 6.10.

OECD basket of low user mobile telephone charges, August 2002 Fixed

Usage USD PPP 350

300

300

250

250

200

200

150

150

100

100

50

50

0

0

M

Ko re a ex ic Po o la n Tu d rk H ey un ga Au ry st ri J a Sl G apa ov e n ak rm R an ep y ub lic N S ew p Ze ain al an N Gre d et he ece r la Be nds lg iu Fr m an C ce ze ch I R taly Sw epu itz blic er la Sw nd ed U e ni te No n d r Ki wa ng y d Po om r tu g Ire al l Au and st r C alia an ad U Fi a ni nl te an Lu d S d xe tat m es bo u Ic rg el a D en nd m ar k

USD PPP 350

Source: OECD.

© OECD 2003

163

OECD Communications Outlook 2003

Figure 6.11.

OECD basket of average user mobile telephone charges, August 2002 Fixed

USD PPP 1 400

Usage USD PPP 1 400

1 200

1 200

1 000

1 000

800

800

600

600

400

400

200

200 0

H

un

ga r Tu y rk e N Me y ew x Ze ico al a C ze P nd ch ol R and ep ub Sl ov lic ak I R tal ep y ub li Sp c a G in re G ec er e m an Ire y la n N Be d U eth lgiu ni te erla m d Ki nds ng do N m or Au wa st y ra lia A Sw us t itz ria er l Sw and ed e U ni Ko n te r e d St a at Fr es an c Ja e Po pan Lu rt xe ug m al b D our en g m a Ic rk el an C an d a Fi da nl an d

0

Source: OECD.

the United States, Canada, Denmark, Luxembourg, Japan and Finland (Table 6.17). The traditional approach to wireless pricing in North America, including large amounts of minutes, comes strongly into its own as the usage level compared increases. Leased lines Traditionally, leased lines have provided the main means by which telecommunication carriers have provided broadband services for business users. Leased lines, or private lines as they are called in North America, provide the building blocks for business-to-business electronic commerce. They allow users needing to transport high volumes of traffic to take advantage of lower prices than PSTN pricing and to have control over their own telecommunication facilities and traffic. Leased lines are also used by some companies to provide value-added services, often in competition with PTOs. ISPs use leased lines to build backbone networks for the Internet and large customers use them to access ISP facilities. The four Scandinavian countries have the least expensive leased lines in the OECD area. For 2 Mbit/s leased lines all the Scandinavian countries have prices 70% less than the OECD average (Table 6.18). For the same amount of capacity the least expensive countries outside the Nordic region are Switzerland, Luxembourg, Ireland, Germany and the United States. The national leased line basket also includes, where possible, analogue circuits equivalent to M1020 for up to 9.6 Kbit/s data transmission and 64 Kbit/s digital leased lines. Although these circuits are less important than they once were, many businesses still rely on them for local connections. The results shown for each circuit type are the annual prices for a basket of 100 circuits over spread different distances. 164

In the mid-1990s, prior to full liberalisation, a number of OECD countries that still had monopolies began to allow the competitive provision of leased lines. This began to impose the first competitive © OECD 2003

Main Trends in Pricing

Figure 6.12. OECD basket of high user mobile telephone charges, August 2002 Fixed

Usage

USD PPP 2 500

USD PPP 2 500

2 000

2 000

1 500

1 500

1 000

1 000

500

500

0

H

un

ga Po ry la n N ew Tur d Ze key al Sl a ov M nd ak ex R ico ep ub lic G Ita er ly m an Sp y C ze G ain ch re R ece ep ub Ire lic Au land st r Be alia Sw lg itz ium er la Au nd st N ria or w Sw ay N e U eth de ni te erla n d Ki nds ng do Fr m an Ic ce el an Ko d Po rea rtu g Fi al nl an Lu Ja d xe pa m n b D our en g m U C ark ni an te a d da St at es

0

Source: OECD.

discipline over leased line prices, but only over longer distances. The main reason for this is that it takes time to roll out alternative networks. Accordingly, the average price for short distance leased lines – as represented by the prices at two kilometres – actually increased during this period. Local leased line prices remain of concern because there is currently insufficient competition. For users this means that incumbents can continue to charge prices that are not disciplined by competition. For new entrants, it means that incumbents may price local leased circuits in an anti-competitive manner. A major turning point in the pricing of leased lines took place in 1998 when a significant number of European countries fully liberalised their telecommunication markets. The impact of increasing liberalisation is evident in the OECD’s index of leased line prices (Table 6.19). At the distances of 50 and 200 kilometres, the leased lines (2 Mbit/s) index fell from 75 and 76 in 1997 to 38 and 37 by 2002. Far greater decreases in the pricing of capacity are evident over long distances. This is as a result of the greater amount of competition for the provision of long distance infrastructure than local infrastructure. However, it is propitious that the prices at two kilometres have also fallen since 1998, reflecting the competition provided by new entrants. In the future it is expected that symmetrical DSL services will provide an increasingly available substitute for local leased connections. This should provide less expensive options for business users to connect to backbone networks. As noted in past editions of the Communications Outlook, an important consideration in any examination of list prices of capacity and the prices available at bandwidth exchanges is the quality of service. Some telecommunication carriers argue that the prices available at exchanges may not have comparable levels of service as their listed offerings. On the other hand, capacity which is listed at these exchanges is available under the conditions specified. A continuing issue, with leased lines, is that while prices are falling, incumbent operators may be less responsive to some customers who are also competitors. For example, a problem regulators often have to face is that incumbents delay the provision of a leased line to a competitor. While competition can no doubt take care of such problems © OECD 2003

165

OECD Communications Outlook 2003

Figure 6.13.

Trends in leased line pricing over different distances (2 Mbit/s), 1992-2002 2 km

50 km

200 km

120

120

100

100

80

80

60

60

40

40

20

20

0

0 1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Note: Index, 1992 = 100. Source: OECD.

on major routes, there is much less competition available on thin routes and for local connections outside major cities. The previous Communications Outlook commented that regulators need to be vigilant in those areas where competition has not had time to mature and may need to consider quality of service indicators to monitor the provision of leased lines. It is therefore pleasing to note the increasing use of quality of service indicators in areas such as delivery times by telecommunication regulators. Local loop unbundling Comparing prices of unbundled local loops is difficult because the prices for line rental charges have different coverage from country to country. For example, the price could differ depending on whether the line rental charges include administrative and refurbishment costs. In addition, the monthly rental price often differs according to whether the line is existing (active) or new (non-active) and in some countries prices may be subject to price control. Recognising these complexities, the price for local loop unbundling (LLU) that each regulator or incumbent publishes can be used as a benchmark to compare relative price performance between countries. The monthly rental charges paid by new entrants to the incumbent for copper pairs often depend on the type of service offered, and the rental charge for providing broadband service is normally higher than that for voice telephony service. In Belgium, for example, the monthly rate for the raw copper loop to be used for the transmission of signals within the voice frequency band is USD 9.79 whereas the rate for a loop used to connect ADSL equipment is USD 11.48. In some countries, such as Australia and Canada, the price differs according to geographic areas. Normally, the price in less populated areas is higher than in urban areas. In Australia, for instance, the monthly rental charge for full unbundling is USD 12.89 in large cities in contrast with USD 22.29 on average in rural and remote areas. In the United States, different cost regulations (and costs) between states have resulted in different prices for LLU across the country.

166

Table 6.20 shows that there is a wide range in prices between OECD countries for local loop unbundling. In Denmark, where the price for full LLU is the lowest among the OECD countries, the monthly rental fee for full unbundling is USD 7.16; on the other hand, in the Netherlands, the monthly © OECD 2003

Main Trends in Pricing

rental fee is USD 11.67. The monthly rental fee for line sharing also varies to a great extent ranging from about USD 1.40 to USD 3.60 in Belgium, Denmark, France and Japan to more than USD 13 in Norway. These differences result largely from different approaches in calculating costs. The monthly rental charge for line sharing is normally not more than 50% of the full LLU price. This is the case in most OECD countries. In Austria, for example, the monthly rate of USD 4.71 for line sharing is just 50% of the USD 9.42 rate for full unbundling. In some countries, new entrants have been faced with a “price squeeze” with LLU prices set higher than retail prices. As a result of regulatory initiatives, prices for access to unbundled local loops have decreased over the past few years. In Canada, for example, monthly rental charges for local loops were reduced about 30% on average during 1998 to 2001. In France, France Telecom reduced its monthly prices for full unbundling from USD 12.25 to USD 9.07 and for line sharing from USD 5.30 to USD 2.51 in April 2002. In Japan, the establishment of interconnection rules by the Ministry led to a reduction of charges for LLU provided by incumbents. The charge for line sharing decreased from USD 1.56 in 2000 to USD 1.44 in 2001 and that for full unbundling from USD 17.18 in 2001 to USD 16.14 in 2002.

167

© OECD 2003

Local telephony

PSTN component of Internet access

Local telephony

Internet access

Per call

Per call

ISP dial-up fee includes unmetered local calls2

Unmetered dial-up for Internet access by October 2002

DSL pricing structure

Yes

Metered by bytes downloaded

© OECD 2003

Australia1

Unmetered (flat rate)

Austria

Metered

Metered

Seconds

Seconds

Flat rate

Belgium

Metered

Metered

Seconds

Seconds

Flat rate

Canada

Unmetered

Unmetered

None

None

Yes

Flat rate

Czech Republic

Metered

Unmetered/metered

Seconds

Seconds

Yes (weekends and holidays)

No service

Denmark

Metered

Metered

Seconds

Seconds

Finland

Metered

Unmetered/metered

Seconds

Seconds

France

Metered

Unmetered/metered

Seconds

Seconds

Germany

Metered

Metered

Units

Seconds

Greece

Metered

Metered

Units

Seconds

Hungary

Metered

Metered

Seconds

Seconds

Iceland2

Metered

Metered

Seconds

Seconds

Ireland

Metered

Unmetered/metered

Seconds

Seconds

Italy

Metered

Metered

Seconds

Seconds

Japan3

Metered

Metered

Units

Units

Yes (late night and ISDN)

Flat rate

Korea

Metered

Unmetered/metered

Units

Units

Yes

Flat rate

Luxembourg

Metered

Metered

Seconds

Seconds

Flat rate Yes (evening) Yes

Flat rate Flat rate

Unmetered option withdrawn

Flat rate No service

Unmetered option withdrawn

Flat rate Foreign bytes metered

Yes (evening)

Flat rate Flat rate

Flat rate

OECD Communications Outlook 2003

168

Table 6.1. Pricing structures for residential users in the OECD area, 2002

© OECD 2003

Table 6.1. Pricing structures for residential users in the OECD area, 2002 (continued)

Local telephony

Mexico

PSTN component of Internet access

Unmetered (First 100 calls free, then flat rate)

Local telephony

Internet access

Per call

Per call

ISP dial-up fee includes unmetered local calls

Unmetered dial-up for Internet access by October 2002

DSL pricing structure

Yes

Flat rate

Netherlands

Metered

Metered

Seconds

Seconds

New Zealand1

Unmetered

Unmetered

None

None

Norway

Metered

Metered

Seconds

Seconds

Poland

Metered

Metered

Units

Units

Yes (not TPSA)

Flat rate

Portugal

Metered

Unmetered/metered

Seconds

Seconds

Yes

Flat rate

Slovak Republic

Metered

Metered

Seconds

Seconds

Spain

Metered

Unmetered/metered

Seconds

Seconds

Sweden

Metered

Metered

Seconds

Seconds

Flat rate

Switzerland

Metered

Metered

Units

Seconds

Flat rate

Turkey4

Metered

Metered

Units

Units

Flat rate

United Kingdom

Metered

Unmetered/metered

Seconds

None/seconds

United States

Metered/flat rate/unmetered

Seconds/per call/none

Flat rate Yes

Metered by bytes downloaded Flat rate

No service Yes (evening)

Yes

Flat rate

Yes

Flat rate

Yes

Flat rate

1. Telstra (Australia) and Telecom New Zealand’s DSL pricing include a certain number of bytes followed by metered pricing. Some other providers cap allowances but at much higher levels of usage. 2. Siminn (Iceland) has a flat rate for usage within Iceland but meters bytes from foreign sources. 3. NTT East and NTT West offer a flat rate for late evening for certain specified numbers for which subscribers pay a higher rental. The companies are also have an unmetered option using ISDN. 4. Türk Telekom’s line rental includes 100 units. Source: OECD.

Main Trends in Pricing

169

OECD Communications Outlook 2003

Table 6.2. OECD Internet access basket for 20 hours at daytime discounted PSTN rates, September 2002 Including VAT PSTN fixed

Australia

PSTN usage

ISP

Total (excluding fixed)

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

USD

USD PPP

USD

USD PPP

11.86

15.45

2.38

3.11

13.51

17.61

27.75

36.17

15.89

20.71

Austria

15.63

17.00

0.00

0.00

12.22

13.29

27.84

30.29

12.22

13.29

Belgium

15.85

17.12

49.88

53.90

0.00

0.00

65.72

71.03

49.88

53.90

Canada

12.62

15.61

0.00

0.00

12.72

15.73

25.34

31.35

12.72

15.73

9.50

19.70

31.45

65.23

0.00

0.00

40.95

84.92

31.45

65.23

Czech Republic Denmark

15.41

13.87

0.00

0.00

18.30

16.47

33.71

30.34

18.30

16.47

Finland

12.18

11.19

14.08

12.94

0.00

0.00

26.26

24.14

14.08

12.94

France

12.71

13.53

0.00

0.00

14.67

15.61

27.38

29.15

14.67

15.61

Germany

13.04

13.95

0.00

0.00

14.47

15.48

27.51

29.43

14.47

15.48

Greece

11.52

15.87

8.12

11.19

16.88

23.26

36.53

50.32

25.01

34.45

Hungary

9.82

19.47

23.34

46.28

4.31

8.54

37.47

74.29

27.65

54.82

Iceland

11.66

10.47

20.90

18.77

11.50

10.32

44.06

39.56

32.40

29.09

Ireland

19.17

18.84

20.60

20.24

14.90

14.64

54.67

53.72

35.50

34.88

Italy

19.71

24.88

11.71

14.78

0.00

0.00

31.41

39.65

11.71

14.78

Japan

15.44

10.92

18.84

13.32

15.44

10.92

49.73

35.15

34.29

24.23

Korea

4.78

7.09

0.00

0.00

7.52

11.15

12.30

18.24

7.52

11.15

Luxembourg

18.00

20.07

33.45

37.31

4.40

4.91

55.84

62.29

37.85

42.22

Mexico

18.30

25.56

0.00

0.00

14.60

20.39

32.90

45.95

14.60

20.39

Netherlands

16.61

18.22

29.57

32.45

0.00

0.00

46.18

50.67

29.57

32.45

New Zealand

11.48

16.82

1.86

2.72

9.25

13.56

22.58

33.10

11.11

16.28

Norway

20.92

16.26

18.45

14.34

12.90

10.02

52.27

40.63

31.35

24.37

Poland

10.26

19.90

0.00

0.00

15.37

29.82

25.63

49.73

15.37

29.82

Portugal

13.56

19.67

27.27

39.56

0.00

0.00

40.82

59.23

27.27

39.56

Slovak Republic

6.30

17.93

12.14

34.57

5.27

15.00

23.70

67.51

17.41

49.58

Spain

13.24

17.11

26.39

34.09

0.00

0.00

39.63

51.20

26.39

34.09

Sweden

13.22

12.53

30.13

28.58

2.54

2.41

45.89

43.52

32.67

30.98

Switzerland

16.87

13.34

33.80

26.72

0.00

0.00

50.67

40.06

33.80

26.72

3.65

8.51

5.48

12.76

2.74

6.38

11.86

27.65

8.21

19.14

14.60

14.00

0.00

0.00

24.58

23.57

39.19

37.57

24.58

23.57

Turkey United Kingdom United States

12.60

12.60

2.33

2.33

18.65

18.65

33.58

33.58

20.98

20.98

OECD

13.35

15.92

14.07

17.51

8.89

10.59

36.31

44.01

22.96

28.10

14.96

16.52

16.75

19.00

8.20

8.64

39.91

44.17

24.94

27.65

EU Source: OECD.

170

© OECD 2003

Main Trends in Pricing

Table 6.3. OECD Internet access basket for 20 hours at evening discounted PSTN rates, 1 September 2002, off-peak Including VAT PSTN fixed

PSTN usage

ISP

Total (excluding fixed)

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

USD

USD PPP

USD

USD PPP

Australia

11.86

15.45

2.38

3.11

13.51

17.61

27.75

36.17

15.89

20.71

Austria

15.63

17.00

0.00

0.00

12.22

13.29

27.84

30.29

12.22

13.29

Belgium

15.85

17.12

20.54

22.20

0.00

0.00

36.38

39.32

20.54

22.20

Canada

12.62

15.61

0.00

0.00

12.72

15.73

25.34

31.35

12.72

15.73

Czech Republic

12.67

26.29

3.78

7.84

0.00

0.00

16.45

34.13

3.78

7.84

Denmark

15.41

13.87

0.00

0.00

18.30

16.47

33.71

30.34

18.30

16.47

Finland

12.18

11.19

14.08

12.94

0.00

0.00

26.26

24.14

14.08

12.94

France

12.71

13.53

0.00

0.00

14.67

15.61

27.38

29.15

14.67

15.61

Germany

13.04

13.95

0.00

0.00

14.47

15.48

27.51

29.43

14.47

15.48

Greece

11.52

15.87

4.06

5.60

16.88

23.26

32.46

44.72

20.95

28.85

Hungary

9.82

19.47

8.05

15.96

7.18

14.23

25.05

49.66

15.23

30.19

Iceland

11.66

10.47

10.87

9.76

11.50

10.32

34.03

30.55

22.37

20.08

Ireland

19.17

18.84

13.31

13.08

0.00

0.00

32.48

31.91

13.31

13.08

Italy

14.25

17.99

12.71

16.05

0.00

0.00

26.96

34.03

12.71

16.05

Japan

15.44

10.92

18.84

13.32

15.44

10.92

49.73

35.15

34.29

24.23

Korea

4.78

7.09

0.00

0.00

5.70

8.46

10.48

15.54

5.70

8.46

Luxembourg

18.00

20.07

18.19

20.29

4.40

4.91

40.59

45.27

22.59

25.20

Mexico

18.30

25.56

0.00

0.00

14.60

20.39

32.90

45.95

14.60

20.39

Netherlands

16.61

18.22

15.84

17.38

0.00

0.00

32.45

35.60

15.84

17.38

New Zealand

11.48

16.82

1.86

2.72

12.96

19.00

26.30

38.54

14.82

21.72

Norway

20.92

16.26

18.45

14.34

12.90

10.02

52.27

40.63

31.35

24.37

Poland

10.26

19.90

0.00

0.00

15.37

29.82

25.63

49.73

15.37

29.82

Portugal2

13.56

19.67

9.71

14.09

0.00

0.00

23.27

33.77

9.71

14.09

6.30

17.93

12.14

34.57

2.05

5.83

20.48

58.34

14.19

40.41

Slovak Republic Spain

13.24

17.11

12.91

16.68

0.00

0.00

26.15

33.79

12.91

16.68

Sweden

13.22

12.53

15.54

14.74

2.54

2.41

31.30

29.68

18.08

17.15

Switzerland

16.87

13.34

20.44

16.16

0.00

0.00

37.31

29.50

20.44

16.16

3.65

8.51

2.74

6.40

2.74

6.38

9.13

21.29

5.48

12.78

United Kingdom

14.60

14.00

14.13

13.55

0.00

0.00

28.73

27.55

14.13

13.55

United States

12.60

12.60

2.33

2.33

18.65

18.65

33.58

33.58

20.98

20.98

Turkey

OECD

13.27

15.91

8.43

9.77

7.63

9.29

29.33

34.97

16.06

19.06

EU

14.60

16.06

10.07

11.11

5.57

6.10

30.23

33.27

15.63

17.20

1. The off-peak time used for these calculations is 20:00 on a weekday. 2. In Portugal, off-peak pricing does not commence until 21:00. The tariffs in effect at 20:00 are used for this basket. Source: OECD.

171

© OECD 2003

OECD Communications Outlook 2003

Table 6.4. OECD Internet access basket for 40 hours at daytime discounted PSTN rates, September 2002 Including VAT PSTN fixed USD

USD PPP

PSTN usage USD

USD PPP

ISP

Total (excluding fixed)

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

Australia

11.86

15.45

4.77

6.21

13.51

17.61

30.14

39.27

18.28

23.82

Austria

15.63

17.00

0.00

0.00

27.29

29.68

42.91

46.68

27.29

29.68

Belgium

15.85

17.12

99.76

107.81

0.00

0.00

115.60

124.93

99.76

107.81

Canada

12.62

15.61

0.00

0.00

12.72

15.73

25.34

31.35

12.72

15.73

Czech Republic

9.50

19.70

65.76

136.38

0.00

0.00

75.25

156.08

65.76

136.38

Denmark

15.41

13.87

0.00

0.00

39.37

35.43

54.78

49.30

39.37

35.43

Finland

12.18

11.19

28.17

25.89

0.00

0.00

40.34

37.08

28.17

25.89

France

12.71

13.53

0.00

0.00

19.56

20.82

32.27

34.35

19.56

20.82

Germany

13.04

13.95

0.00

0.00

23.22

24.84

36.25

38.78

23.22

24.84

Greece

11.52

15.87

16.25

22.38

16.88

23.26

44.65

61.51

33.13

45.64

Hungary

9.82

19.47

46.69

92.56

4.31

8.54

60.81

120.57

50.99

101.10

Iceland

11.66

10.47

41.81

37.53

11.50

10.32

64.96

58.32

53.30

47.85

Ireland

19.17

18.84

41.19

40.48

14.90

14.64

75.26

73.96

56.09

55.12

Italy

19.71

24.88

23.62

29.81

0.00

0.00

43.33

54.69

23.62

29.81

Japan

15.44

10.92

36.85

26.04

17.21

12.16

69.50

49.12

54.05

38.21

Korea

4.78

7.09

0.00

0.00

15.04

22.31

19.83

29.40

15.04

22.31

Luxembourg

18.00

20.07

66.89

74.62

4.40

4.91

89.29

99.60

71.30

79.53

Mexico

18.30

25.56

0.00

0.00

14.60

20.39

32.90

45.95

14.60

20.39

Netherlands

16.61

18.22

59.15

64.90

0.00

0.00

75.75

83.12

59.15

64.90

New Zealand

11.48

16.82

3.71

5.44

9.25

13.56

24.44

35.82

12.96

19.00

Norway

20.92

16.26

32.80

25.50

12.90

10.02

66.62

51.79

45.70

35.52

Poland

10.26

19.90

0.00

0.00

20.49

39.76

30.75

59.67

20.49

39.76

Portugal

13.56

19.67

43.01

62.40

11.42

16.57

67.99

98.64

54.43

78.97

6.30

17.93

24.28

69.14

5.27

15.00

35.84

102.08

29.54

84.15

Slovak Republic Spain

13.24

17.11

50.80

65.64

0.00

0.00

64.04

82.74

50.80

65.64

Sweden

13.22

12.53

60.26

57.15

2.54

2.41

76.02

72.09

62.80

59.56

Switzerland

16.87

13.34

67.61

53.45

0.00

0.00

84.47

66.78

67.61

53.45

3.65

8.51

14.60

34.03

2.74

6.38

20.99

48.92

17.34

40.41

United Kingdom

14.60

14.00

0.00

0.00

24.58

23.57

39.19

37.57

24.58

23.57

United States

12.60

12.60

4.66

4.66

18.65

18.65

35.91

35.91

23.31

23.31

Turkey

OECD

13.35

15.92

27.75

34.73

11.41

13.55

52.51

64.20

39.17

48.29

EU

14.96

16.52

32.61

36.74

12.28

13.07

59.85

66.34

44.88

49.81

Source: OECD.

172

© OECD 2003

Main Trends in Pricing

Table 6.5. OECD Internet access basket for 40 hours at evening times discounted PSTN rates, September 2002 Including VAT PSTN fixed USD

USD PPP

PSTN usage USD

USD PPP

ISP USD

Total (excluding fixed)

Total USD PPP

USD

USD PPP

USD

USD PPP

Australia

11.86

15.45

4.77

6.21

13.51

17.61

30.14

39.27

18.28

23.82

Austria

15.63

17.00

7.63

8.30

17.51

19.04

40.76

44.34

25.13

27.34

Belgium

15.85

17.12

41.08

44.39

0.00

0.00

56.92

61.51

41.08

44.39

Canada

12.62

15.61

0.00

0.00

12.72

15.73

25.34

31.35

12.72

15.73

Czech Republic

12.67

26.29

14.58

30.24

0.00

0.00

27.26

56.53

14.58

30.24

Denmark

15.41

13.87

0.00

0.00

39.37

35.43

54.78

49.30

39.37

35.43

Finland

12.18

11.19

28.17

25.89

0.00

0.00

40.34

37.08

28.17

25.89

France

12.71

13.53

0.00

0.00

19.56

20.82

32.27

34.35

19.56

20.82

Germany

13.04

13.95

0.00

0.00

23.22

24.84

36.25

38.78

23.22

24.84

Greece

11.52

15.87

8.12

11.19

16.88

23.26

36.53

50.32

25.01

34.45

Hungary

9.82

19.47

12.76

25.29

10.76

21.34

33.34

66.10

23.52

46.63

Iceland

11.66

10.47

21.74

19.52

11.50

10.32

44.89

40.31

33.24

29.84

Ireland

19.17

18.84

26.62

26.16

0.00

0.00

45.79

44.99

26.62

26.16

Italy

14.25

17.99

25.75

32.50

0.00

0.00

40.00

50.49

25.75

32.50

Japan

15.44

10.92

36.85

26.04

17.21

12.16

69.50

49.12

54.05

38.21

Korea

4.78

7.09

0.00

0.00

11.40

16.91

16.19

24.00

11.40

16.91

Luxembourg

18.00

20.07

36.38

40.58

4.40

4.91

58.78

65.56

40.78

45.49

Mexico

18.30

25.56

0.00

0.00

14.60

20.39

32.90

45.95

14.60

20.39

Netherlands

16.61

18.22

31.69

34.77

0.00

0.00

48.29

52.99

31.69

34.77

New Zealand

11.48

16.82

3.71

5.44

12.96

19.00

28.15

41.26

16.67

24.44

Norway

20.92

16.26

32.80

25.50

12.90

10.02

66.62

51.79

45.70

35.52

Poland

10.26

19.90

0.00

0.00

20.49

39.76

30.75

59.67

20.49

39.76

Portugal

13.56

19.67

19.43

28.19

0.00

0.00

32.99

47.86

19.43

28.19

Slovak Republic

6.30

17.93

24.28

69.14

2.05

5.83

32.62

92.91

26.32

74.98

Spain

13.24

17.11

0.00

0.00

18.75

24.23

31.99

41.34

18.75

24.23

Sweden

13.22

12.53

31.08

29.48

2.54

2.41

46.84

44.42

33.62

31.89

Switzerland

16.87

13.34

40.88

32.32

0.00

0.00

57.75

45.66

40.88

32.32

Turkey

3.65

8.51

9.14

21.30

2.74

6.38

15.53

36.19

11.88

27.68

United Kingdom

14.60

14.00

0.00

0.00

19.97

19.15

34.57

33.15

19.97

19.15

United States

12.60

12.60

4.66

4.66

18.65

18.65

35.91

35.91

23.31

23.31

OECD

13.27

15.91

15.40

18.24

10.79

12.94

39.47

47.08

26.19

31.18

14.60

16.06

17.06

18.76

10.81

11.61

42.47

46.43

27.88

30.37

EU Source: OECD.

173

© OECD 2003

1998

© OECD 2003

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD EU Source: OECD.

1999

September 2000

September 2001

September 2002

Daytime

Evening

Daytime

Evening

Daytime

Evening

Daytime

Evening

Daytime

Evening

36.43 100.10 97.70 30.92 105.77 54.04 28.38 72.05 68.44 60.15 63.01 41.88 80.16 42.27 51.65 47.78 73.06 49.92 62.79 46.23 49.90 50.72 61.20 .. 42.09 48.01 66.99 44.30 70.01 39.77 58.13 64.03

36.43 64.03 46.59 30.92 74.60 31.73 19.77 48.27 68.44 60.15 63.01 31.31 50.57 35.64 51.65 47.78 52.98 49.92 40.23 46.23 35.36 50.72 46.12 .. 42.09 36.60 66.99 37.82 46.17 39.77 46.62 45.96

38.81 80.24 82.32 31.45 116.28 52.63 32.15 60.60 46.15 65.38 168.97 41.54 59.26 41.39 40.15 27.22 91.93 60.91 51.13 40.61 46.71 64.60 77.33 .. 50.66 38.81 54.13 46.81 60.57 35.18 58.75 59.37

38.81 48.59 41.94 31.45 77.71 27.99 26.77 38.15 46.15 65.38 95.29 28.26 29.84 29.45 40.15 22.08 61.86 60.91 33.38 40.61 39.37 64.60 60.12 .. 50.65 26.51 31.50 43.53 32.42 35.18 43.75 41.28

35.07 44.78 51.79 31.38 107.29 30.51 29.88 33.65 34.12 41.90 101.45 29.83 54.02 32.21 35.49 27.40 58.56 37.40 50.08 38.45 45.47 73.88 47.31 .. 45.53 35.33 39.10 20.44 40.75 33.07 44.35 41.99

35.07 32.40 35.80 31.38 53.69 30.51 27.78 33.65 34.12 36.77 66.30 24.38 31.04 26.38 35.49 27.40 37.87 37.40 35.49 38.45 38.70 43.55 45.82 .. 28.32 24.14 29.70 17.78 26.61 33.07 34.45 32.03

30.74 45.70 70.30 30.30 82.50 30.06 23.68 28.62 28.59 48.26 117.55 40.10 53.72 42.96 36.07 19.25 62.71 40.49 47.91 41.81 39.45 53.71 52.63 105.94 47.06 43.39 42.35 19.07 36.19 34.09 46.51 44.12

30.38 32.51 39.02 30.30 31.14 30.06 18.29 28.62 28.59 42.63 68.87 30.97 31.41 31.88 36.07 15.60 45.66 40.49 31.48 41.81 39.45 53.71 34.37 50.04 31.79 29.56 31.93 14.23 25.63 34.09 34.35 32.10

36.17 30.29 71.03 31.35 84.92 30.34 24.14 29.15 29.43 50.32 74.29 39.56 53.72 39.65 35.15 18.24 62.29 45.95 50.67 33.10 40.63 49.73 59.23 67.51 51.20 43.52 40.06 27.65 37.57 33.58 44.01 44.17

36.17 30.29 39.32 31.35 34.13 30.34 24.14 29.15 29.43 44.72 49.66 30.55 31.91 34.03 35.15 15.54 45.27 45.95 35.60 38.54 40.63 49.73 33.77 58.34 33.79 29.68 29.50 21.29 27.55 33.58 34.97 33.27

Change (%) 1998-2002 Daytime Evening -0.18 -25.83 -7.66 0.34 -5.34 -13.44 -3.97 -20.25 -19.02 -4.36 4.20 -1.42 -9.52 -1.59 -9.17 -21.39 -3.91 -2.05 -5.22 -8.01 -5.01 -0.49 -0.82 .. 5.02 -2.43 -12.06 -11.12 -14.41 -4.14 -6.72 -8.87

-0.18 -17.07 -4.15 0.34 -17.76 -1.11 5.12 -11.85 -19.02 -7.14 -5.78 -0.61 -10.87 -1.15 -9.17 -24.48 -3.85 -2.05 -3.01 -4.45 3.54 -0.49 -7.50 .. -5.34 -5.10 -18.54 -13.39 -12.11 -4.14 -6.94 -7.76

Change (%) 2001-2002 Daytime Evening 17.65 -33.74 1.04 3.44 2.94 0.92 1.91 1.85 2.94 4.26 -36.80 -1.36 0.00 -7.70 -2.54 -5.21 -0.66 13.48 5.77 -20.83 3.00 -7.42 12.54 -36.27 8.79 0.29 -5.41 45.03 3.84 -1.50 -5.36 0.12

19.03 -6.85 0.76 3.44 9.61 0.92 31.98 1.85 2.94 4.90 -27.89 -1.36 1.59 6.76 -2.54 -0.34 -0.86 13.48 13.11 -7.82 3.00 -7.42 -1.75 16.60 6.28 0.40 -7.61 49.62 7.49 -1.50 1.80 3.63

OECD Communications Outlook 2003

174

Table 6.6. OECD Internet access basket for 20 hours using discounted PSTN rates, 1998-2002 USD PPP, including VAT

© OECD 2003

Table 6.7. OECD Internet access basket for 40 hours using discounted PSTN rates USD PPP, including VAT 1999

September 2001

September 2002

Change (%) 1999-2002

Change (%) 2001-2002

Daytime

Evening

Daytime

Evening

Daytime

Evening

Daytime

Evening

Daytime

Evening

Daytime

Evening

49.33 128.15 147.00 31.45 187.90 91.53 43.73 95.73 76.78 88.46 332.04 63.44 83.22 67.91 54.64 44.31 152.06 60.91 85.66 47.23 64.28 120.46 124.27 .. 85.87 64.09 95.28 57.75 105.61 37.30 92.63 96.00

49.33 64.87 66.23 31.45 110.77 42.25 32.97 62.07 76.78 88.46 184.69 36.87 41.82 44.04 54.64 34.04 91.93 60.91 47.77 47.23 50.76 120.46 82.27 .. 85.87 39.48 50.02 51.19 49.31 37.30 63.30 61.07

42.94 70.51 81.35 31.38 173.92 48.09 41.18 59.50 50.71 52.16 150.17 45.34 75.38 45.71 49.01 44.62 99.94 37.40 81.63 38.45 63.90 134.54 77.24 .. 77.02 58.36 65.44 33.74 60.41 23.76 65.99 65.52

42.94 45.73 51.79 31.38 84.51 41.98 36.97 59.50 50.71 41.90 82.84 34.44 41.80 38.79 49.01 43.78 58.56 37.40 50.08 38.45 51.05 73.88 57.75 .. 31.27 35.98 46.63 25.76 27.13 23.76 46.06 44.15

33.44 72.83 123.56 30.30 153.60 49.13 36.28 57.19 42.40 58.35 168.23 59.13 74.45 70.68 48.45 30.74 100.04 40.49 77.92 41.81 50.56 81.91 82.52 179.23 76.80 71.85 71.54 35.20 36.19 36.42 69.71 68.68

32.73 46.45 61.02 30.30 50.88 49.13 25.48 57.19 42.40 48.26 86.28 40.86 41.87 48.52 48.45 24.08 65.95 40.49 45.06 41.81 50.56 66.83 48.57 79.72 39.76 44.19 50.69 25.52 28.85 36.42 46.61 46.18

39.27 46.68 124.93 31.35 156.08 49.30 37.08 34.35 38.78 61.51 120.57 58.32 73.96 54.69 49.12 29.40 99.60 45.95 83.12 35.82 51.79 59.67 98.64 102.08 82.74 72.09 66.78 48.92 37.57 35.91 64.20 66.34

39.27 44.34 61.51 31.35 56.53 49.30 37.08 34.35 38.78 50.32 66.10 40.31 44.99 50.49 49.12 24.00 65.56 45.95 52.99 41.26 51.79 59.67 47.86 92.91 41.34 44.42 45.66 36.19 33.15 35.91 47.08 46.43

-7.32 -28.58 -5.28 -0.11 -6.00 -18.64 -5.35 -28.94 -20.36 -11.41 -28.66 -2.76 -3.86 -6.96 -3.48 -12.78 -13.15 -8.97 -1.00 -8.81 -6.95 -20.88 -7.41 .. -1.23 4.00 -11.17 -5.38 -29.14 -1.25 -11.50 -11.59

-7.32 -11.91 -2.43 -0.11 -20.09 5.28 3.99 -17.90 -20.36 -17.14 -29.00 3.01 2.47 4.66 -3.48 -10.99 -10.65 -8.97 3.52 -4.41 0.67 -20.88 -16.52 .. -21.63 4.00 -2.99 -10.92 -12.39 -1.25 -9.40 -8.73

17.44 -35.91 1.11 3.44 1.61 0.36 2.22 -39.93 -8.53 5.41 -28.33 -1.36 -0.66 -22.63 1.38 -4.37 -0.44 13.48 6.67 -14.32 2.43 -27.15 19.54 -43.04 7.74 0.34 -6.65 38.98 3.84 -1.40 -7.90 -3.41

19.99 -4.54 0.81 3.44 11.10 0.36 45.51 -39.93 -8.53 4.26 -23.39 -1.36 7.47 4.06 1.38 -0.31 -0.59 13.48 17.59 -1.32 2.43 -10.72 -1.46 16.55 3.98 0.52 -9.93 41.79 14.93 -1.40 1.01 0.55

175

Main Trends in Pricing

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD EU Source: OECD.

September 2000

Company

Monthly charge (USD)

Monthly charge (USD PPP)

Mbytes included

Additional cost per mbyte (USD)

Additional cost per mbyte (USD PPP)

Speed of connection downstream (kbit/s)

Speed of connection upstream (kbit/s)

Australia

Telstra - Big Pond

32.47

42.31

300

0.09

0.11

256

64

Australia

Telstra - Big Pond

41.67

54.30

1000

0.08

0.11

512

128

© OECD 2003

Austria

Telekom Austria

39.73

43.21

1000

0.07

0.08

512

64

Belgium

Belgacom - Turbo Line

38.67

41.79

10000

0.12

0.13

750

128

Canada

Bell Canada Sympatico

22.28

27.56

5000

0.005

0.01

960

120

Czech Republic

Czech Telecom

0.00

0.00

0

0.00

0.00

0

0

Denmark

TDC

46.09

41.48

Unlimited

0.00

0.00

256

128

Denmark

TDC

57.28

51.55

Unlimited

0.00

0.00

512

128

Finland

Elisa

48.90

44.95

Unlimited

0.00

0.00

256

128

Finland

Elisa

60.64

55.73

Unlimited

0.00

0.00

512

256

France

France Telecom Wanadoo

44.42

47.28

Unlimited

0.00

0.00

512

128

Germany

Deutsche Telecom

44.00

47.07

Unlimited

0.00

0.00

768

128

Greece

OTE

0.00

0.00

0

0.00

0.00

0

0

Hungary

Matav

59.39

117.76

0

0.00

0.00

384

64

Hungary

Matav

248.64

492.97

0

0.00

0.00

768

128

Iceland

Iceland Telecom

29.03

26.06

0

0.14

0.13

256

128

Iceland

Iceland Telecom

58.06

52.13

0

0.14

0.13

512

256

Ireland

Eircom

105.32

103.50

3000

0.04

0.03

512

128

Italy

Telecom Italia

36.14

45.61

Unlimited

0.00

0.00

256

128

Italy

Telecom Italia

48.85

61.66

Unlimited

0.00

0.00

640

128

Japan

NTT

40.76

28.81

Unlimited

0.00

0.00

1500

512

Korea

Korea Telecom

27.58

40.90

Unlimited

0.00

0.00

1500

640

Korea

Korea Telecom

36.78

54.53

Unlimited

0.00

0.00

8000

640

Luxembourg

P&T

59.05

65.87

Unlimited

0.00

0.00

256

64

Luxembourg

P&T

84.35

94.09

Unlimited

0.00

0.00

512

64

OECD Communications Outlook 2003

176

Table 6.8. Internet access by DSL in OECD member countries, September 2002 Including VAT

© OECD 2003

Table 6.8. Internet access by DSL in OECD member countries, September 2002 (continued) Including VAT

Company

Monthly charge (USD)

Monthly charge (USD PPP)

Mbytes included

Additional cost per mbyte (USD)

Additional cost per mbyte (USD PPP)

Speed of connection downstream (kbit/s)

Speed of connection upstream (kbit/s)

Mexico

Telmex

58.32

81.46

Unlimited

0.00

0.00

256

128

Mexico

Telmex

92.72

129.51

Unlimited

0.00

0.00

512

256

Netherlands

KPN

34.18

37.51

1000

0.00

0.01

256

64

Netherlands

KPN

51.10

56.07

Unlimited

0.00

0.00

512

128

New Zealand

Telecom NZ

32.00

46.90

500

0.09

0.14

2000

250

New Zealand

Telecom NZ

41.27

60.50

1000

0.09

0.14

2000

250

Norway

Telenor

59.22

46.03

0

0.00

0.00

384

128

Norway

Telenor

72.38

56.26

0

0.00

0.00

704

128

Poland

TPSA

71.58

138.89

0

0.00

0.00

512

128

Poland

TPSA

155.36

301.48

0

0.00

0.00

1020

256

Portugal

Portugal Telecom

37.16

53.92

4000

0.13

0.18

512

128

Portugal

Portugal Telecom

66.50

96.48

7000

0.13

0.18

768

128

Slovak Republic

Slovak Telecom

0.00

0.00

0

0.00

0.00

0

0

Slovak Republic

Slovak Telecom

0.00

0.00

0

0.00

0.00

0

0

Spain

Telefonica

47.68

61.61

Unlimited

0.00

0.00

256

128

Spain

Telefonica

95.22

123.04

Unlimited

0.00

0.00

512

128

Sweden

Telia

39.65

37.60

Unlimited

0.00

0.00

512

400

Switzerland

Swisscom

32.73

25.88

3000

0.03

0.03

256

64

Switzerland

Swisscom

52.78

41.72

6000

0.03

0.03

512

128

Turkey

Turk Telekom

93.70

218.37

Unlimited

0.00

0.00

256

64

Turkey

Turk Telekom

285.98

666.46

Unlimited

0.00

0.00

512

128

United Kingdom

British Telecom

41.51

39.80

Unlimited

0.00

0.00

500

250

United States

Verizon

39.95

39.95

Unlimited

0.00

0.00

768

128

177

Main Trends in Pricing

Notes: Commercial ADSL service was not available in the Czech Republic, Greece and the Slovak Republic. Modem rentals, where applicable, are excluded as in most countries these can be purchased by users. Source: OECD.

OECD Communications Outlook 2003

Table 6.9. OECD basket of residential telephone charges, August 2002 Fixed

Australia

Usage

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

155.88

199.85

196.86

252.38

352.74

452.23

Austria

205.09

238.48

134.30

156.16

339.39

394.64

Belgium

209.38

237.93

193.56

219.96

402.94

457.88

Canada

226.05

279.08

45.49

56.16

271.54

335.23

Czech Republic

210.93

458.55

66.88

145.39

277.82

603.95

Denmark

209.55

199.57

140.87

134.17

350.42

333.73

Finland

181.08

175.81

221.51

215.06

402.59

390.86

France

159.81

179.56

219.32

246.43

379.13

425.99

Germany

163.72

183.95

205.26

230.63

368.98

414.58

Greece

144.73

206.75

179.48

256.40

324.21

463.15

Hungary

169.28

352.66

153.56

319.92

322.84

672.58

Iceland

145.77

138.83

75.04

71.46

220.80

210.29

Ireland

244.78

257.66

136.73

143.93

381.51

401.59

Italy

185.32

250.43

165.14

223.16

350.46

473.59

Japan

217.70

162.46

211.57

157.89

429.27

320.35

Korea

68.53

107.07

121.79

190.30

190.32

297.37

Luxembourg

226.79

269.99

83.29

99.15

310.08

369.14

Mexico

239.87

328.59

169.11

231.66

408.98

560.25

Netherlands

210.24

244.47

128.70

149.66

338.95

394.12

New Zealand

218.95

321.99

79.96

117.58

298.91

439.57

Norway

278.81

232.34

185.20

154.34

464.01

386.68

Poland

149.85

277.51

240.95

446.20

390.80

723.71

Portugal

181.90

284.21

235.88

368.57

417.78

652.78

87.86

251.03

190.54

544.39

278.40

795.42

Slovak Republic Spain

180.19

250.27

179.79

249.70

359.98

499.97

Sweden

179.39

179.39

124.42

124.42

303.81

303.81

Switzerland

201.58

167.99

147.09

122.57

348.67

290.56

44.51

92.73

182.05

379.26

226.55

471.99

United Kingdom

222.38

224.63

88.41

89.30

310.79

313.93

United States

163.37

163.37

242.74

242.74

406.11

406.11

Turkey

OECD 182.78 230.57 158.18 211.30 340.96 441.87 Note: Residential basket excludes international calls and calls to mobile networks. Source: OECD and Teligen.

178

© OECD 2003

Main Trends in Pricing

Table 6.10. OECD composite basket of residential telephone charges, August 2002 Fixed

Usage

USD

USD PPP

Australia

155.88

Austria

205.09

Belgium Canada Czech Republic

Total

USD

USD PPP

USD

USD PPP

199.85

331.76

425.34

487.64

625.19

238.48

246.85

287.04

451.94

525.52

209.38

237.93

294.40

334.55

503.78

572.48

226.05

279.08

155.91

192.48

381.96

471.56

210.93

458.55

190.67

414.49

401.60

873.04

Denmark

209.55

199.57

250.36

238.44

459.91

438.01

Finland

181.08

175.81

359.53

349.06

540.61

524.86

France

159.81

179.56

334.56

375.91

494.37

555.47

Germany

163.72

183.95

318.23

357.57

481.95

541.52

Greece

144.73

206.75

356.08

508.69

500.81

715.44

Hungary

169.28

352.66

332.86

693.47

502.14

1046.13

Iceland

145.77

138.83

207.66

197.77

353.42

336.59

Ireland

244.78

257.66

240.99

253.67

485.77

511.33

Italy

185.32

250.43

317.58

429.16

502.90

679.59

Japan

217.70

162.46

485.33

362.19

703.03

524.65 646.83

Korea

68.53

107.07

345.44

539.75

413.97

Luxembourg

226.79

269.99

162.68

193.66

389.47

463.65

Mexico

239.87

328.59

508.10

696.03

747.97

1024.61

Netherlands

210.24

244.47

222.46

258.67

432.70

503.14

New Zealand

218.95

321.99

241.36

354.94

460.31

676.92

Norway

278.81

232.34

267.69

223.07

546.50

455.42

Poland

149.85

277.51

504.97

935.12

654.82

1212.63

Portugal

181.90

284.21

390.93

610.82

572.82

895.04

87.86

251.03

314.76

899.32

402.62

1150.34

Spain

180.19

250.27

293.61

407.79

473.80

658.06

Sweden

179.39

179.39

220.75

220.75

400.14

400.14

Switzerland

201.58

167.99

254.40

212.00

455.98

379.98

44.51

92.73

413.83

862.15

458.34

954.87

United Kingdom

222.38

224.63

191.28

193.21

413.66

417.84

United States

176.57

176.57

392.35

392.35

568.92

568.92

Slovak Republic

Turkey

OECD 183.22 231.01 304.91 413.98 488.13 644.99 Note: Composite basket includes international calls and calls to mobile networks. Source: OECD and Teligen.

179

© OECD 2003

OECD Communications Outlook 2003

Table 6.11. OECD basket of business telephone charges, August 2002 Fixed

Australia

Usage

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

201.21

257.97

570.29

731.13

771.50

989.10

Austria

347.62

404.21

364.12

423.39

711.74

827.60

Belgium

173.04

196.63

617.72

701.96

790.76

898.59

Canada

318.59

393.32

240.74

297.21

559.33

690.53 1779.94

Czech Republic

272.38

592.13

546.39

1187.81

818.77

Denmark

167.64

159.65

412.18

392.55

579.82

552.21

Finland

151.95

147.52

564.67

548.22

716.62

695.74

France

203.10

228.20

577.74

649.15

780.84

877.35

Germany

141.14

158.58

723.45

812.86

864.58

971.44

Greece

122.65

175.21

438.63

626.61

561.28

801.83

Hungary

200.82

418.38

480.67

1001.39

681.49

1419.76

Iceland

201.98

192.36

249.91

238.01

451.88

430.37

Ireland

202.30

212.94

549.00

577.90

751.30

790.84

Italy

190.28

257.14

543.80

734.86

734.08

992.00

Japan

293.30

218.88

635.00

473.88

928.30

692.76

Korea

62.30

97.34

363.88

568.56

426.18

665.90

Luxembourg

197.21

234.78

307.66

366.26

504.87

601.03

Mexico

279.16

382.41

1061.45

1454.04

1340.61

1836.45

Netherlands

176.67

205.44

417.62

485.60

594.29

691.03

New Zealand

332.45

488.90

376.62

553.85

709.07

1042.75

Norway

224.85

187.37

496.09

413.41

720.93

600.78

Poland

122.83

227.47

673.62

1247.44

796.45

1474.91

Portugal

152.85

238.84

625.26

976.96

778.11

1215.80

79.50

227.14

644.86

1842.44

724.35

2069.58

Slovak Republic Spain

155.34

215.75

500.16

694.67

655.50

910.42

Sweden

163.83

163.83

365.35

365.35

529.19

529.19

Switzerland

187.35

156.12

578.63

482.19

765.97

638.31

Turkey

37.72

78.58

626.72

1305.67

664.44

1384.25

United Kingdom

294.85

297.82

560.36

566.02

855.21

863.85

United States

274.29

274.29

561.14

561.14

835.43

835.43

OECD 197.64 Source: OECD and Teligen.

249.64

522.46

709.35

720.10

958.99

180

© OECD 2003

Main Trends in Pricing

Table 6.12. OECD composite basket of business telephone charges, August 2002 Excluding VAT Fixed

Australia

Usage

Total

USD

USD PPP

USD

USD PPP

USD

USD PPP

201.21

257.97

897.11

1150.14

1098.32

1408.11

Austria

347.62

404.21

567.33

659.69

914.95

1063.89

Belgium

173.04

196.63

900.29

1023.06

1073.33

1219.70

Canada

318.59

393.32

500.66

618.10

819.25

1011.42

Czech Republic

272.38

592.13

840.98

1828.22

1113.36

2420.34

Denmark

167.64

159.65

669.95

638.05

837.59

797.70

Finland

151.95

147.52

921.13

894.30

1073.08

1041.82

France

203.10

228.20

837.67

941.20

1040.77

1169.40

Germany

141.14

158.58

987.05

1109.05

1128.19

1267.63

Greece

122.65

175.21

834.57

1192.24

957.22

1367.46

Hungary

200.82

418.38

875.56

1824.08

1076.38

2242.45

Iceland

201.98

192.36

533.78

508.36

735.76

700.72

Ireland

202.30

212.94

812.54

855.30

1014.83

1068.25

Italy

190.28

257.14

898.00

1213.52

1088.28

1470.65

Japan

293.30

218.88

1442.93

1076.82

1736.23

1295.70 1556.17

Korea

62.30

97.34

933.65

1458.83

995.95

Luxembourg

197.21

234.78

507.05

603.63

704.26

838.40

Mexico

279.16

382.41

1909.87

2616.26

2189.03

2998.67

Netherlands

176.67

205.44

672.73

782.25

849.41

987.68

New Zealand

332.45

488.90

680.01

1000.02

1012.46

1488.92

Norway

224.85

187.37

680.20

566.83

905.05

754.21

Poland

122.83

227.47

1253.15

2320.65

1375.98

2548.11

Portugal

152.85

238.84

997.82

1559.10

1150.68

1797.93

79.50

227.14

911.11

2603.17

990.61

2830.31

Spain

155.34

215.75

770.69

1070.40

926.03

1286.15

Sweden

163.83

163.83

605.53

605.53

769.36

769.36

Switzerland

187.35

156.12

884.68

737.23

1072.02

893.35

37.72

78.58

1200.41

2500.85

1238.13

2579.44

United Kingdom

294.85

297.82

918.77

928.05

1213.61

1225.87

United States

274.29

274.29

874.36

874.36

1148.65

1148.65

OECD 197.64 249.64 877.32 1191.98 1074.96 Note: Composite basket includes international calls and calls to mobile networks. Source: OECD and Teligen.

1441.62

Slovak Republic

Turkey

181

© OECD 2003

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

100.00

109.18

112.66

112.76

112.82

122.39

125.91

112.97

115.50

119.27

132.02

129.13

133.33

Residential Fixed Usage

100.00

104.17

98.45

96.77

94.05

98.55

90.09

81.29

78.69

70.54

60.61

55.83

53.55

Total

100.00

106.17

104.13

103.16

101.56

108.09

104.42

93.97

93.42

90.03

89.18

85.15

85.46

Fixed

100.00

104.30

107.45

107.59

107.99

108.07

106.37

113.07

118.68

123.37

128.42

127.16

132.38

Usage

100.00

103.50

96.88

94.18

91.29

92.52

83.26

86.46

84.31

75.18

60.13

55.53

54.18

100.00

103.66

98.99

96.86

94.63

95.63

87.88

91.78

91.18

84.82

73.79

69.86

69.82

Business

Total Source: OECD.

OECD Communications Outlook 2003

182

Table 6.13. OECD time series for telephone charges

© OECD 2003

Main Trends in Pricing

Table 6.14. OECD basket of international telephone charges, August 2002 Business excluding VAT

Residential including VAT

USD

USD PPP

USD

USD PPP

Australia

0.79

1.01

1.11

1.42

Austria

0.85

0.99

1.29

1.50

Belgium

0.56

0.63

0.66

0.75

Canada

0.67

0.83

0.92

1.14

Czech Republic

0.78

1.70

1.08

2.34

Denmark

0.56

0.53

0.89

0.85

Finland

0.87

0.84

1.12

1.09

France

0.37

0.42

0.73

0.82

Germany

0.46

0.52

0.69

0.78

Greece

0.86

1.23

1.30

1.86

Hungary

1.05

2.18

1.68

3.50

Iceland

0.74

0.71

1.17

1.12

Ireland

0.56

0.59

0.78

0.82

Italy

0.86

1.16

1.24

1.67

Japan

2.90

2.16

2.93

2.18

Korea

2.31

3.61

2.75

4.29

Luxembourg

0.41

0.48

0.55

0.65

Mexico

3.07

4.21

3.73

5.11

Netherlands

0.35

0.40

0.50

0.58

New Zealand

0.85

1.25

1.14

1.67

Norway

0.31

0.26

0.48

0.40

Poland

1.56

2.89

2.44

4.53

Portugal

0.79

1.24

1.09

1.70

Slovak Republic

0.63

1.79

1.15

3.27

Spain

0.79

1.09

1.13

1.57

Sweden

0.38

0.38

0.60

0.60

Switzerland

0.33

0.27

0.41

0.34

Turkey

1.62

3.38

2.00

4.17

United Kingdom

1.28

1.29

1.75

1.76

United States

0.51

0.51

0.97

0.97

OECD 0.94 1.29 1.28 Note: Average call charge for one single call, weighted by traffic. Source: OECD and Teligen.

1.78

183

© OECD 2003

OECD Communications Outlook 2003

Table 6.15. OECD basket of low user mobile telephone charges, August 2002 Including VAT Fixed USD Australia, Optus

Free Time Plan

Usage USD PPP

0.00

0.00

Total

USD

USD PPP

USD

USD PPP

143.28

183.69

143.28

183.69 281.32

Austria, Mobilkom

A1 Xcite

182.42

212.12

59.51

69.20

241.94

Belgium, Proximus

Pay & Go Student

0.00

0.00

202.67

230.31

202.67

230.31

Canada, Telus Mobility

Pay & Talk $50

2.20

2.72

133.51

164.83

135.71

167.54

Czech Republic, Eurotel

Relax

82.96

180.34

16.20

35.22

99.16

215.56

Denmark, Sonofon

Taletid Profil A

4.38

4.17

113.42

108.02

117.81

112.20

Finland, Radiolinja

Tandem Aina

41.58

40.37

116.07

112.69

157.65

153.05

France, SFR

La Carte Soir et Weekend

0.00

0.00

202.24

227.23

202.24

227.23

Germany, T-Mobile

XtraGo

0.00

0.00

240.41

270.12

240.41

270.12

Greece, Vodafone

Vodafone 30

121.65

173.79

55.86

79.81

177.52

253.60

Hungary, Westel 900

Domino 7

1.06

2.20

146.29

304.78

147.35

306.98

Iceland, Iceland Telecom

Frelsi

0.00

0.00

124.40

118.47

124.40

118.47

Ireland, Vodafone

Ready to Go Work & Leisure

Italy, Omnitel

Euro 4 You

0.00

0.00

175.01

184.22

175.01

184.22

13.02

17.59

150.46

203.32

163.47

220.91

Japan, NTT DoCoMo

Cityphone O-Hanashi Plus S

286.02

213.45

75.97

56.70

361.99

270.14

Korea, SK Telecom

Family Standard Plan

175.00

273.43

28.16

44.00

203.16

317.44

Luxembourg, Tango

Pronto

6.51

7.75

95.66

113.88

102.16

121.62

Mexico, Pegaso

Tarjetas Basico

0.00

0.00

227.96

312.27

227.96

312.27

Netherlands, Vodafone

iZi Pre-pay Dal-en-piek

0.00

0.00

213.20

247.91

213.20

247.91

New Zealand, Vodafone

Text 150

0.00

0.00

172.94

254.33

172.94

254.33

Norway, Netcom

Kontant

0.00

0.00

247.32

206.10

247.32

206.10

Poland, Plus GSM

SimPlus TEAM

0.00

0.00

168.39

311.83

168.39

311.83

Portugal, TMN

Spot

0.00

0.00

125.74

196.47

125.74

196.47

Slovak Republic, Eurotel

20More

60.90

174.01

33.03

94.38

93.94

268.39

Spain, MoviStar

Plus Eleccion

7.94

11.03

177.69

246.78

185.62

257.81

Sweden, Teliamobile

Refill

3.53

3.53

203.07

203.07

206.60

206.60

Switzerland, Sunrise

Sunrise Pronto

0.00

0.00

252.27

210.23

252.27

210.23

Turkey, Turkcell

HERO

17.87

37.23

131.17

273.27

149.04

310.50

UK, Vodafone

Pay As You Go Original

USA, AT&T Free2Go Local $10 Source: OECD and Teligen.

0.00

0.00

196.40

198.38

196.40

198.38

0.00

0.00

152.46

152.46

152.46

152.46

184

© OECD 2003

Main Trends in Pricing

Table 6.16. OECD basket of medium user mobile telephone charges, August 2002 Including VAT Fixed

Usage

USD

USD PPP

260.40

Grand total

USD

USD PPP

USD

333.85

152.85

195.97

413.25

USD PPP

Australia, Telstra

More4business $40 Off-peak Saver

Austria, Mobilkom

A1 Xcite Remix

130.17

151.36

321.42

373.74

451.59

525.10

Belgium, Mobistar

Optimum For Me 4H

427.62

485.93

61.01

69.33

488.62

555.26

Canada, Telus Mobility

Talk 20

248.12

306.32

72.44

89.43

320.56

395.75

Czech Republic, T-Mobile

Tariff 80 Start

185.44

403.13

140.01

304.37

325.45

707.50

Denmark, TDC Mobil

MobilTalk

122.65

116.81

326.04

310.52

448.69

427.33

Finland, Radiolinja

Tandem Aina

41.58

40.37

343.77

333.76

385.35

374.13

France, SFR

Formule 16¼ EUR 0.16 per additional minute

216.74

243.53

183.47

206.14

400.20

449.67

Germany, T-Mobile

TellyActive More Talk

241.26

271.08

329.56

370.29

570.81

641.36

Greece, Cosmote

Privaleged Cosmote 150

428.42

612.02

48.97

69.95

477.38

681.97

Hungary, Pannon GSM

Momentum

205.36

427.83

376.56

784.49

581.92

1212.32

Iceland, Iceland Telecom

Almenaskrift

85.44

81.37

356.57

339.59

442.01

420.96

Ireland, O2

Select 1 Weekender Plus

270.05

284.26

335.02

352.65

605.07

636.91

Italy, Omnitel

Euro Italy

60.45

81.69

459.45

620.88

519.91

702.58

529.81

Japan, NTT DoCoMo

Cityphone Chotoku Plan

333.81

249.11

263.49

196.64

597.30

445.74

Korea, SK Telecom

Family Standard Plan

175.00

273.43

131.91

206.11

306.91

479.55

Luxembourg, Tango

Twist

140.59

167.36

221.24

263.38

361.83

430.75

Mexico, Pegaso

Pegaso 50

245.78

336.68

360.92

494.41

606.70

831.09

Netherlands, KPN

Mobile 120

292.40

340.00

185.00

215.12

477.40

555.12

New Zealand, Telecom 025 TDMA

GO FREE 100

139.79

205.57

424.79

624.69

564.58

830.27

Norway, Telenor

Primær

253.48

211.23

395.78

329.82

649.26

541.05

Poland, Plus GSM

Czasami 150

255.51

473.17

142.34

263.60

397.86

736.77

Portugal, Vodafone

Privado 120

166.48

260.12

116.79

182.48

283.27

442.60

Slovak Republic, Eurotel

55Plus

107.30

306.56

137.85

393.87

245.15

700.43

Spain, MoviStar

Plus Planes 30

Sweden, Comviq

Lokal

7.94

11.03

495.15

687.71

503.09

698.74

132.79

132.79

347.44

347.44

480.22

480.22

Switzerland, Sunrise

Sunrise 75

328.21

273.51

294.66

245.55

622.87

519.05

Turkey, Telism

Gold 90

264.93

551.94

188.77

393.27

453.70

945.21

UK, Vodafone

Leisure 200 + Text 50

329.97

333.30

216.26

218.44

546.23

551.75

409.07

409.07

46.20

46.20

455.27

455.27

USA, Cingular Nation 300 Source: OECD and Teligen.

185

© OECD 2003

OECD Communications Outlook 2003

Table 6.17. OECD basket of high user mobile telephone charges, August 2002 Including VAT Fixed

Australia, Telstra

More4business $70 Off-peak saver

Usage

USD

USD PPP

455.70

584.23

Total

USD

USD PPP

USD

USD PPP

386.72

495.79

842.42

1080.02

Austria, Mobilkom

A1 Xcite Remix

130.17

151.36

626.84

728.88

757.01

880.25

Belgium, Proximus

ProxiPro Anytime 300

730.76

830.41

113.77

129.28

844.52

959.69

Canada, Telus Mobility

The BIG Deal

292.15

360.68

229.72

283.60

521.87

644.28

Czech Rep., T-Mobile

Tariff 200 Start

364.27

791.89

188.42

409.62

552.69

1201.51

Denmark, Sonofon

Kvantum

502.35

478.43

204.82

195.07

707.18

673.50

Finland, Radiolinja

Tandem Aina

41.58

40.37

685.82

665.84

727.40

706.21

France, SFR

SFR Pro 300

609.21

684.50

87.23

98.02

696.44

782.52

Germany, T-Mobile

ProTel

397.38

446.50

715.29

803.70

1112.67

1250.20

Greece, Vodafone

Vodafone 300

770.85

1101.21

73.74

105.34

844.58

1206.55

Hungary, Westel 900

Westel 400

422.60

880.42

599.25

1248.44

1021.85

2128.86

Iceland, Iceland Telecom

Almenaskrift

85.44

81.37

721.00

686.66

806.43

768.03

Ireland, O2

Select 2 Weekender Plus

449.94

473.62

597.04

628.46

1046.98

1102.08

Italy, Omnitel

Euro Italy

60.45

81.69

890.62

1203.53

951.07

1285.23

Japan, NTT DoCoMo

Cityphone Chotoku Plan

333.81

249.11

598.88

446.93

932.69

696.04

Korea, SK Telecom

Family Standard Plan

175.00

273.43

310.53

485.20

485.53

758.64

Luxembourg, Tango

Twist

140.59

167.36

427.66

509.12

568.25

676.49

Mexico, Pegaso

Pegaso 100

368.66

505.02

659.60

903.56

1028.26

1408.58

Netherlands, KPN

Mobile 360

585.29

680.57

108.25

125.87

693.54

806.44

New Zealand, Vodafone

Daytime 200

672.33

988.73

313.18

460.56

985.52

1449.29

Norway, Netcom

ActiveTalk

324.93

270.77

702.28

585.23

1027.20

856.00 1687.97

Poland, Era GSM

Biznes 220

711.75

1318.06

199.75

369.91

911.50

Portugal, Vodafone

Privado 480

406.06

634.47

50.19

78.42

456.25

712.89

Slovak Rep., Eurotel

200Plus

322.41

921.17

136.35

389.56

458.75

1310.72

Spain, MoviStar

Plus Planes 60

7.94

11.03

886.22

1230.86

894.16

1241.89 817.03

Sweden, Comviq

Lokal

132.79

132.79

684.25

684.25

817.03

Switzerland, Sunrise

Sunrise 300

966.89

805.74

102.84

85.70

1069.73

891.44

Turkey, Telism

VIP 210

513.03

1068.80

280.33

584.02

793.35

1652.82

UK, Vodafone

Leisure 500 + Text 50

348.31

351.83

443.03

447.51

791.35

799.34

USA, AT&T National Network 500 Source: OECD and Teligen.

475.07

475.07

55.44

55.44

530.51

530.51

186

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Main Trends in Pricing

Table 6.18. OECD basket of national leased line charges, August 2002 Excluding VAT M1020

64 kbit/s USD PPP

USD

2 Mbit/s USD PPP

USD

USD

USD PPP

Index 2 Mbit/s

Australia

299 114

383 480

344 118

441 177

3 164 345

4 056 852

129

Austria

490 999

570 929

373 843

434 701

1 770 219

2 058 394

66

Belgium

533 936

606 745

430 624

489 345

1 753 417

1 992 520

64

Canada

..

..

347 186

428 624

3 063 297

3 781 848

121

Czech Republic

395 465

859 706

563 733

1 225 506

3 688 108

8 017 626

256

Denmark

127 610

121 534

202 805

193 148

842 950

802 810

26

Finland

..

..

..

..

..

..

France

515 453

579 161

433 800

487 416

1 904 103

2 139 441

68

Germany

302 331

339 698

338 989

380 887

1 609 628

1 808 571

58

Greece

253 032

361 475

290 698

415 283

1 633 266

2 333 236

74

Hungary

246 052

512 609

422 623

880 464

2 441 971

5 087 439

162

Iceland

138 785

132 176

139 950

133 286

546 097

520 092

17

Ireland

221 749

233 420

285 713

300 751

1 716 171

1 806 495

58

Italy

403 607

545 415

414 815

560 561

2 392 583

3 233 221

103

Japan

865 234

645 697

1 110 999

829 104

6 175 474

4 608 563

147

Korea

310 460

485 093

636 207

994 073

3 999 538

6 249 278

199

Luxembourg

172 800

205 714

236 010

280 964

1 089 780

1 297 357

41

..

..

342 992

469 852

3 646 218

4 994 819

159

Netherlands

209 049

243 080

406 184

472 307

2 096 484

2 437 772

78

New Zealand

322 160

473 765

660 989

972 043

3 241 961

4 767 590

152

Norway

239 862

199 885

208 862

174 052

752 885

627 405

20

Poland

225 934

418 396

342 586

634 418

2 485 906

4 603 529

147

Portugal

443 122

692 378

378 745

591 789

2 584 705

4 038 602

129

Slovak Republic

297 125

848 928

454 426

1 298 361

2 435 080

6 957 370

222

Spain

477 621

663 362

425 045

590 340

2 816 252

3 911 461

125

72 926

72 926

259 322

259 322

558 405

558 405

18

Mexico

Sweden Switzerland Turkey United Kingdom United States

466 783

388 986

307 113

255 928

1 332 957

1 110 798

35

95 019

197 955

174 949

364 478

1 446 655

3 013 864

96

366 731

370 435

506 569

511 686

2 111 228

2 132 554

68

..

..

671 386

671 386

1 942 800

1 942 800

62

OECD 326 652 Source: OECD and Teligen.

428 960

403 837

542 802

2 249 741

3 134 163

100

187

© OECD 2003

OECD Communications Outlook 2003

Table 6.19. Trends in leased line pricing over different distances, 1992-2002 OECD average

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

56/64 kbit/s 2 km

100

100

123

132

139

120

121

78

70

65

61

50 km

100

101

103

94

89

76

68

41

44

39

37

200 km

100

101

108

106

77

71

63

41

42

37

35

54

2 Mbit/s 2 km

100

102

110

111

112

107

101

63

62

60

50 km

100

101

92

87

83

77

64

42

46

42

38

200 km

100

101

98

91

82

77

65

44

48

41

37

Source: OECD.

188

© OECD 2003

Main Trends in Pricing

Table 6.20. Monthly prices for LLU and retail price for PSTN line rental (as of April 2002) USD

Australia (lowest) Australia (highest) Austria Belgium

Full LLU

Line sharing

One-off connection cost

Residential retail price

6.981

..

..

9.0735

..

..

2

31.68 9.42

4.71 3

11.7635 21

94.20/47.10

22

9.79/11.48

2.78

Canada (lowest)

3.914

..

..

14.7337

Canada (highest)

33.545

..

..

14.7337

39.14/154.2923

10.46

86.42-276.53/25.92216.0424

10.16

93.27/231.4625

10.85

Czech Denmark

68.00/71.02

12.0536 13.50

LLU has not been implemented. 7.16

3.58 6

Finland

10.37/12.96

France

9.07

15

6.48-9.51 2.51

26

9.45

Germany

10.78

4.12

101.22/136.23

Greece

9.92

5.95

106.62/122.6127

7.10

Hungary

11.41

11.20

..

8.62

Iceland

8.72-14.037

2.88/5.3116

34.01

..

Ireland

14.53

7.78

105.01/106.6528

13.02

9.32/10.898

3.75

70.74/84.3929/81.5430

11.7838

..

17.53

Italy

17

Japan

16.14

Korea

7.18

4.76

..

..

11.46/13.659

6.52

78.75/116.6931

10.28

4.8418

68.26/77.0632

13.39

13.49

130.60

..

6.76/6.8419

71.55/129.4533

10.16

Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak

1.44

LLU has not been implemented. 11.6710 LLU has not been implemented. 10.79/18.1211 LLU has not been implemented. 10.34/11.9112 LLU has not been implemented.

Spain

9.70

4.1220

17.28

10.09

Sweden

10.02

4.75

142.5934

9.51

12.62

Switzerland

LLU has not been implemented.

Turkey

LLU has not been implemented.

United Kingdom

13.97

6.05

120.56

United States (Montana)

23.7213

..

..

..

United States (Ohio)

7.0114

..

..

..

1. In the case of built-up areas. USD 1=AUD 1.86254. 2. In the case of rural areas. 3. For PSTN and ISDN/for ADSL. 4. In the case of MTS, Band A. 5. In case of TCBC, Band G. USD1=CAD 1.5448. 6. For PSTN and ISDN/for broadband. These are average prices. 7. Up to 64 kbps: 10.09/up to 2 Mbps: 13.43/up to 8 Mbps: 16.23. 8. For PSTN and ISDN/for ADSL. 9. For voice telephony/for broadband. 10. Excluding a broadband service charge of EUR 4.54, which has not been authorised by OPTA. 11. For PSTN/for broadband. 12. For PSTN and ISDN/for broadband use. 13. Montana is one of the highest states in the US. This is a geographical average. 14. Ohio is one of the lowest states in the US. This is a geographical average. 15. Without splitter/with splitter. These are average prices. 16. Up to 2 Mbps/up to 8 Mbps. 17. USD 1=JPY 119.775. 18. Excluding a broadband service charge of EUR 4.54, which has not been authorised by OPTA. 19. For PSTN/for ISDN. 20. From January 2003, the monthly price for line sharing will be USD 3.02. 21. New lines/exiting lines. 22. Active for PSTN/non-active for PSTN. 23. For full unbundling/for line sharing. 24. For full unbundling/for line sharing. 25. Where loop continuity exists/where loop continuity needs to be established. 26. Line transfer/new line. USD 60.9 for most frequently required options, simple transfer of a two-wire copper pair without work at the customer end/USD 145 for most expensive one-off connection with work at the customer end. 27. For full unbundling/for line sharing. 28. For full unbundling/for line sharing. 29. Active pair/inactive pair. For full unbundling. 30. For line sharing. 31. To active loops/to non-active loops. 32. For full unbundling/for line sharing. 33. For full unbundling/for PSTN line sharing. 34. Copper access S300, S600, A1100, V12. 35. In case of Telstra’s price for residential users. 36. National average, CAD 22.75. 37. Including VAT. 38. Until June 2002. Source: OECD.

189

© OECD 2003

Chapter 7

QUALITY OF SERVICE

Abstract. The waiting time for a new telecommunication connection is negligible in most OECD countries. In many countries these data are no longer available as most users can receive a fixed telephone connection on request, within one or two days, where there are lines in place. This chapter examines the quality of service provided by the telecommunications industry. These services include connection time, availability of payphones, network maintenance, directory assistance, and answer seizure ratios.

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Connections The waiting time for a new telecommunication connection is negligible in most OECD countries (Table 7.1). In many countries these data are no longer available as most users can receive a fixed telephone connection on request, within one or two days, where there are lines in place. Accordingly, a number of countries now measure the proportion of agreed appointments that are met by carriers in installing new connections. In the United Kingdom, for example, the data indicate that BT is able to meet 97% of customer requests by the date agreed with customers. For a number of countries, where data are available for new connections, they continue to show remarkable progress from a decade earlier. In the Czech Republic, the average waiting time was reduced from 2 170 days in 1993 to 25 days in 2001. In Hungary, the average waiting time over the same period was reduced from 1 058 days to 13 days. More recently, the Slovak Republic has witnessed waiting times reduced from 296 days in 1996 to 20 days in 2001. In Mexico, waiting times have been reduced from 72 days in 1995 to 33 days in 2000. All these results are positive but it should be possible for all these countries to reach higher performance levels in the next several years. One surprising result is that the average waiting time for a connection in Luxembourg is relatively high. Luxembourg has one of the highest fixed network penetration rates and the highest mobile network penetration rate in the OECD. This suggests the average is based on a very small number of new connections each year, albeit significant for those customers that are impacted. In some countries, regulators establish rules on the maximum amount of time expected for a new connection, and in other cases this is specified by the carriers themselves. The goals for new installations generally range up to five working days for urban areas. In other cases telecommunication carriers report the average number of days for new connections, as in New Zealand and the United States. In countries with no waiting time, this simply means that most new connections can be installed on request (in practice this is within two working days). In Sweden, the country with the highest telephone penetration rate, delivery times for new installations for permanent residences may only exceed 17 days under certain conditions. In Australia, the standard timeframes vary depending on the location (e.g. urban, major rural, minor rural, remote) and whether there is an existing line in place. For a user in an area of Australia with greater than 10 000 inhabitants, the specified standard is five working days for connections with a line already in place. If no cabling is in place, the specified period is one month. The specified period for a new connection in an area of Australia with between 2 500 and 10 000 inhabitants is 10 days or one month if no line is in place. For areas with fewer than 2 500 inhabitants, the specified period is up to 40 working days or six months if no connection is in place. For remote areas with fewer than 200 inhabitants, the specified period is up to 40 days for locations with a line in place and, prior to September 2001, up to 12 months for those without existing infrastructure. In September 2001, a change was made to set the maximum time for new connections to six months for remote areas. In Canada, the standard performance measure for connections is that in urban areas some 90% or more of connections should be completed within five working days. For rural areas the standard is that 90% or more should be completed within 10 working days. In the first half of 2002, Bell Canada completed 99% of urban orders within five days and 99% of rural orders within 10 days.

192

In Germany, the indicator used to monitor performance is the “supply period” defined as the proportion of requests for installations and the proportion that were met by Deutsche Telekom within two, three and four weeks. Only a small number of OECD countries now report a waiting list of applicants for new connections. In most OECD countries this is because carriers can meet requests © OECD 2003

Quality of Service

within their specified timeframe. It also reflects the fact that users in areas with cellular wireless coverage can generally have a mobile connection on demand. Accordingly, the series for fixed line waiting lists is no longer reported in the Communications Outlook. Payphones The number of payphones continues to decrease across the OECD area. The decrease is evident, based on the latest data available, in about two-thirds of member countries. The countries that recorded an increase in payphones tend to be those with lower fixed and mobile network penetration rates. In the previous editions of the Communications Outlook, the impact of increasing cellular mobile penetrations had not greatly impacted the number of payphones. More recently, the high prevalence of mobile phones is beginning to have an impact both on the number of payphones and the revenues earned by telecommunication carriers. In the United Kingdom, Oftel has reported that BT’s revenues from public call boxes (PCBs) declined by 40% in the period 1999-2001. Oftel also noted that BT had a 17% decline per annum for the period 1999-2001 for payphones located on private property. In Australia, the Australian Communications Authority (ACA) reported that Telstra’s revenue per payphone, which included Telstra and customer-operated payphones using standard Telstra payphone access lines, decreased by 24% between 1997-98 and 2001-02. If these trends continue it will clearly be a challenge for telecommunication carriers to offer payphones, on a widespread basis, as a purely commercial undertaking. The decreasing use and availability of payphones poses challenges for regulators. In a number of OECD countries the provision of payphones is mandated under universal service obligations. In Australia, universal service obligations require that payphones are reasonably accessible to all people in Australia on an equitable basis. Some EU member states have adopted prescriptive targets for numbers of payphones (for example, the Netherlands requires at least one PCB per 5 000 inhabitants). In the United Kingdom, the provision of PCBs forms an integral part of universal service. Put simply, the requirement in relation to PCBs is for reasonable access to PCBs at an affordable price. In addition, regulation may also apply to the design of payphones. In the United Kingdom, BT needed to ensure that by October 2001 at least 75% of its PCBs were accessible by reasonable means to users in wheelchairs. BT and Kingston Communications also needed to ensure that, by October 2002, at least 70% of their PCBs contained telephones incorporating additional receiving amplification. One important role of payphones is to provide service to those individuals who do not have a fixed or mobile phone in their household. In the United Kingdom, in May 2001, Oftel research indicated that of the 7% of citizens without a fixed line phone, approximately 15% considered the payphone as their main method of making and receiving calls. Australian Bureau of Statistics (ABS) data indicate that 73 000 households in Australia do not have either a fixed or mobile phone. A second important role played by payphones is in the provision of emergency services. In 2001, more than 200 000 calls to emergency services were made in Australia using Telstra-operated payphones. One countertrend to the falling number of payphones is that some operators are equipping them to provide Internet services. In the latter half of 2002, BT installed more than 1 000 new Internet kiosks and the company plans to increase that number over the next five years to more than 20 000. More than 80% of BT’s Internet kiosks will be fitted with broadband connections. At the same time, BT and other carriers are rolling out wireless local area networks (e.g. WiFi) with services that may also substitute for things once provided by payphones. This may be particularly so in private property locations, such as shopping centres and cafes. In these cases, payphones are operated by the owner of the business rather than directly by the telecommunication carrier. In the United Kingdom, in 2001, there were more than 97 000 PCBs together with more than 58 500 operator-managed payphones (payphones that look very similar to PCBs but which are located on private land). One of the most common qualities of service indicators across OECD countries is the percentage of payphones that are in working order (Table 7.3). The performance of payphones has remained stable or © OECD 2003

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OECD Communications Outlook 2003

Figure 7.1. Payphones per 100 inhabitants in the OECD area, 1995 and 2001 1995 Number of payphones per 1 000 inhabitants 12

2001 Number of payphones per 1 000 inhabitants 12

8

8

6

6

4

4

2

2

0

0

at

St

Ko r

d te ni U

e G s Sw ree itz ce er la nd C an ad a Ja pa n Ita l Po y rtu H gal un ga Au ry st ra lia C ze Fr ch an R ce ep ub li Sl ov Au c st ak R ria U ep ni te ub d Ki lic ng do m Po la nd Ire la n Ic d el an Fi d nl a Be nd lg G ium er m an D en y m ar k T Lu urk e xe m y b N et ou he rg rla nd s

10

ea

10

Source: OECD.

tended to increase over recent years in most countries. Denmark is one country where performance appears to have deteriorated. One reason carriers have been able to raise performance are design improvements that are less susceptible to vandalism. Card phones, for example, attract less theftmotivated vandalism. In terms of quality of service statistics, Australia has an interesting distinction in respect to dual mode payphones (i.e. card and coin-enabled). In its 2002 survey, the ACA noted that while 99% of payphones audited had at least one payment mechanism working, some 13% had at least one faulty payment mechanism, meaning either the cards or coins feature did not work. Telstra also reports the clearance of payphone faults to the ACA. For the period 2001-02, Telstra reported that one-third of urban payphone faults were repaired within 24 hours and that one-third of faults in rural areas were repaired in 48 hours. In remote areas of Australia, Telstra cleared around half in 72 hours. Network faults and maintenance The available data indicate network modernisation continues to decrease the amount of fault incidence although there are invariably fluctuations due to calamities (Table 7.4). The standard caveat applies in that definitions of faults vary greatly from one country to another. Some telecommunication operators only measure faults detected by their own network monitoring and management systems. Other operators include reports of faults by customers. In the latter case, there is also a difference between operators that report this as a total number and those that report verified faults. The most useful application of this indicator is to compare the change in the performance of operators over time. Some of the countries that have made the most significant gains over recent years are the Czech Republic, Greece, Hungary and Portugal. The Slovak Republic and Turkey have also made improvements although the fault rate remained relatively high in 2002. 194

While being a simpler indicator than fault incidence, the indicators of fault repair times also vary across OECD countries. The indicator used by the OECD records the percentage of faults repaired © OECD 2003

Quality of Service

within 24 hours of being reported. However, some telecommunication operators only record faults repaired over longer time periods. Other countries, like the United States, report the average time for repairs. In Canada, the percentage of faults cleared within 24 hours is reported as carriers are required to file information providing reasons if agreed levels of performance are not met. In rural areas, the agreed performance level for Bell Canada is clearance of 80% of reported problems within 24 hours. In 2002, this level was generally exceeded but dipped below the agreed benchmark to 77% in October 2002. Bell Canada attributed this dip in performance to bad weather conditions experienced in Quebec and Northern Ontario during that month. The CRTC’s reporting system also requires carriers to state what remedial action they propose for any performance falling short of targets. Canadian telecommunication carriers also report the response time to calls to the repair bureau if it falls below 80% being answered within 20 seconds. Directory assistance The price for calls to directory assistance varies a great deal across OECD countries but has exhibited a common trend to rise over recent years as operators seek direct cost recovery (Table 7.6). There are exceptions, however. In Australia calls to directory assistance are free of charge from residential lines and payphones. In the United States, operators generally allow one or two calls per month free of charge and then charge for subsequent calls. In some countries the price varies depending on whether the user wants a domestic or an international number. In Japan, the price varies depending on whether a user calls an automated service or an operator-assisted service. Some telecommunication carriers limit the amount of numbers given out per call. A number provide valueadded services. For example, some services will directly connect users to the requested number for an additional price. KPN says that, as a general rule for European countries, the number of calls to directory assistance is seven calls per person. In Belgium, the number of calls to directory assistance is 140 000 per day or around five calls per person per annum. In Australia, while calls are free from residential lines and payphones, there are charges for business lines and mobiles. Prior to the introduction of such charges Australians made 1.2 million calls per day to directory assistance or 23 calls per person per annum. Only a small proportion of users were responsible for the bulk of these calls, with 9% of users making 80% of the calls to directory assistance. Prior to the introduction of a pricing change, some Australian business lines averaged 200 to 500 calls per day. In Belgium, during 2002, Belgacom introduced directory assistance via SMS. Belgacom charges customers the standard SMS rate (USD 0.15 per SMS) per directory look-up. In October 2001 Belgacom began offering a number of innovative directory assistance services including the “Talking Yellow Pages” and the earlier introduction, in February 2001, of special directory assistance for customers requiring the numbers of doctors on duty. Answer seizure ratios Telecommunication carriers measure how much of their outgoing international traffic (including voice, data, telex, 800 numbers, etc., but not Internet which takes place over private leased lines) is successfully terminated in the public switched networks of other operators or countries. This is measured by the answer seizure ratio (ASR), which is the percentage of calls that seize an international circuit and are answered at the terminating side. Telecommunication carriers measure ASRs in their switches and pool the results among measured carriers. The ASRs for the OECD countries are computed as an unweighted average of all participating carriers. For 19 OECD countries, the ASRs fall between 60% and 70% (Table 7.7). This means that for every ten calls made to these countries, between six and seven will be terminated. Outside the OECD area, the average ratio for ASRs was 41% in 2001. The main reason a call will not be terminated is because the line is in use or because the call has gone unanswered. Other reasons can include a wrong number being dialled, time differences © OECD 2003

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OECD Communications Outlook 2003

Figure 7.2. Answer seizure ratios, 2001 % 80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

U

D

en

m ar ni Fra k te n d c N St e et a he te rla s n C ds an ad Ja a pa Au n st r Ko ia U re ni te Ire a d Ki lan ng d d Be om lg i N um or w Fi ay nl Sw and Sw e itz den er la n S d C G pa ze er in c m O h R an EC e y D pub N ave lic ew r a L Ze ge Sl uxe ala ov m nd ak bo R urg ep u Au blic st ra Ic lia el an Po d la Po nd rt H uga un l ga ry It G aly re e M ce ex ic Tu o rk ey

% 80

Source: ITU.

between countries which results in calls terminating at peak time when there may be congestion while the time in the originating country is made at off-peak time, technical failures in the network, lack of capacity or some type of calamity. Therefore, interpretation of ASRs should be made with care as they are not a straight measure of quality. Recognising that these caveats apply, ASRs are still of great interest to network operators. This is because, with the rare exception of carriers that charge for call attempts, it is only by terminating calls that revenue is generated. Non-completed calls incur a cost in terms of network resources. It is also reasonable to assume that a higher ASR is in the interest of the customer. In 2001, Denmark continued to have the highest ASR ratio with 68.4%. This was the third year in a row that Denmark had recorded the highest ASR ratio in the OECD. Denmark, however, like two-thirds of OECD countries, witnessed a reduction in the ratio for 2001. In past editions of the Communications Outlook the question of how the increasing penetration of mobile networks might impact on this indicator has been raised. On the one hand, an increase in ASRs might be expected given high mobile penetrations as users call people rather than a location (i.e. a fixed telephone). In addition, mobile telephones tend to have a higher deployment or take-up of services such as voice mail and call forwarding than the fixed network. On the other hand, it is noticeable that the two countries that recorded the largest declines in ASRs for 2001 had among the highest mobile penetration rates. Luxembourg recorded a decline in the ratio of 8% and Italy a 5.1% decline in 2001. Despite this, some of the countries with an increase in their ASR ratio also have high mobile penetration rates, so that may not be the main factor. Exceptional years do occur with ASRs for various reasons and it may only be a cause for concern if there was a consistent decrease in performance. For example, in the case of Luxembourg, 2001 was the first year where the ASR ratio was lower than 60%.

196

For countries that have dramatically increased the ASR ratio during the 1990s, the most important factor is likely to be improvements in the quality of the network. Over this time some of the countries that have made the biggest gains were Poland, the Czech Republic, Slovak Republic, Hungary, Greece, Spain and Portugal. An example of a network improvement, which might be having an impact on ASRs, © OECD 2003

Quality of Service

Figure 7.3. Answer seizure ratio, 1990-2001 Non-OECD

OECD

World

% 70

% 70

60

60

50

50

40

40

30

30

20

20

10

10

0 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

0 2001

Source: ITU.

is the level of digitalisation. It would be expected that as digitalisation increases the ASRs would also be boosted. This is not just because of improved quality or reliability, but also because new services are made possible by digitalisation, such as call forwarding and voice mail when a telephone is unattended. These services might be expected to increase ASRs. A number of factors not related to the network can also increase a country’s ASR. These can include the penetration of answering machines and fax machines which go some way to explain why the United States and Japan began the 1990s a long way ahead of other OECD countries. Paradoxically, the increased use of terminal equipment attached to the network may now be having the opposite effect. If users are logged onto the Internet, an incoming call may, of course, fail to terminate. The calling party may try a number being used to access the Internet even with a second residential line. If Internet access is having an impact, it may help explain the dip in New Zealand from 1998 onwards and in the United States from 1995 to 1999. These two countries have the longest dial-up Internet sessions in the OECD. The increase in Korea’s ratio between 1999 and 2001 is noticeable. Recent improvement in Korea’s performance may reflect that 1999 was an exceptional year. On the other hand, it may also be that the increasing deployment of broadband means that telephone lines are free to receive international calls. The same forces may also be at work in the United States, where the ASR ratio has increased since 2000.

197

© OECD 2003

OECD Communications Outlook 2003

Table 7.1. Network access: waiting time for new connection Number of days 1993

1994

1995

1996

1997

1998

1999

2000

Australia

..

..

..

..

..

5

5

5

5

Austria1

..

45

40

..

..

..

13

11

13

Belgium

28

..

7

5

4

5

5

5

5

Canada2

3

3

4

..

..

5

5

5

5

2170

1183

847

523

218

58

38

25

25

Denmark

8

9

8

..

..

..

..

..

..

Finland

5

5

6

4

5

5

4

5

..

France

8

8

7

6

6

..

..

..

..

Germany

..

..

..

..

..

..

..

..

..

Czech Republic

Greece Hungary Iceland

2001

..

220

30

9

5.0

7.0

7.0

..

6.4

1058

839

803

657

475

115

63

47

13

..

..

..

..

..

..

..

..

..

..

..

13

..

11

..

..

..

..

12

10

8

..

..

..

10

9

..

Japan

..

..

..

..

..

..

..

..

..

Korea

..

..

..

..

..

..

..

..

..

Ireland Italy

30

30

30

..

..

..

16

11

11

Mexico

..

..

72

36

30

30

36

33

..

Netherlands

..

..

5

..

1

..

..

..

..

Luxembourg

3

New Zealand

2

2

2

2

2

2

2

2

2

Norway

..

..

..

..

..

..

..

..

..

Poland

..

..

..

..

..

1080

810

..

..

60

19

8

9

9

4

6

4

3

..

..

..

296

175

280

149

240

20

Portugal Slovak Republic4 Spain

8

5

3

4

5

5

5

..

..

Sweden

..

..

5

..

..

..

..

..

.. ..

Switzerland Turkey United Kingdom

5

4

4

4

3

3

..

..

..

12

10

9

8

8

8

8

7

7

..

..

..

..

..

..

..

..

..

5 0 3 2 2 2 2 2 1 United States6 1. Number of days for 95% of connections. 2. Urban orders completed within five days and rural within 10 days. 3. In 2001, Telecom NZ met all but 0.2% of service requests for connections of intact lines within 48 hours. 97.8% of service requests with intact lines are reconnected within 24 hours. 87.6% requests for new connections were met in the agreed time. 4. Working days. 5. 97% of orders are met at the time agreed upon with the customer. 6. Data are for the average number of days to complete business and residential installations. Source: OECD.

198

© OECD 2003

© OECD 2003

Table 7.2. Payphones in the OECD area Number of public payphones Number of payphones per 1000 people 1995 1996 1997 1998 1999 2000 2001 1995 1996 1997 1998 1999 2000 Australia 84 000 81 680 81 679 80 170 78 853 78 300 75 100 4.6 4.5 4.4 4.3 4.2 4.1 Austria 33 816 34 143 34 172 29 295 28 728 27 704 26 800 4.2 4.2 4.2 3.6 3.6 3.4 Belgium 14 873 15 685 15 685 15 888 16 696 19 157 16 736 1.5 1.5 1.5 1.6 1.6 1.9 Canada 181 842 181 417 178 116 180 382 182 345 172 078 169 626 6.2 6.1 5.9 6.0 6.0 5.6 Czech Republic 21 104 26 349 28 438 37 387 36 870 36 444 34 458 2.0 2.6 2.8 3.6 3.6 3.5 Denmark 8 084 7 950 7 938 7 765 6 275 5 909 5 930 1.5 1.5 1.5 1.5 1.2 1.1 Finland 25 267 24 995 23 766 21 291 16 292 12 427 8 851 4.9 4.9 4.6 4.1 3.2 2.4 France 206 000 211 000 226 000 242 872 243 274 231 048 215 471 3.6 3.6 3.9 4.2 4.1 3.9 Germany 165 000 164 100 162 000 148 000 137 000 113 300 112 000 2.0 2.0 2.0 1.8 1.7 1.4 Greece 40 536 41 665 51 283 62 090 64 535 64 000 69 471 3.9 4.0 4.9 5.9 6.1 6.0 Hungary 36 528 40 504 42 408 43 883 43 242 43 900 44 500 3.6 4.0 4.2 4.3 4.3 4.4 Iceland 1 502 1 067 948 947 940 720 600 5.6 4.0 3.5 3.5 3.4 2.6 Ireland 6 592 7 000 8 000 8 400 9 287 11 036 9 634 1.8 1.9 2.2 2.3 2.5 2.9 Italy 383 900 385 326 386 186 380 802 361 261 295 000 277 812 6.8 6.8 6.8 6.7 6.3 5.2 Japan 801 135 793 870 778 470 756 265 736 622 708 547 680 791 6.4 6.3 6.2 6.0 5.8 5.6 Korea 327 839 339 240 420 782 504 771 564 906 538 983 538 983 7.3 7.5 9.2 10.9 12.1 11.5 Luxembourg 412 449 509 525 451 447 451 1.0 1.1 1.2 1.2 1.0 1.0 Mexico 246 546 238 562 259 561 316 596 .. .. .. 2.7 2.6 2.8 3.3 .. .. Netherlands 19 000 21 000 22 098 22 600 19 200 .. 13 000 1.2 1.4 1.4 1.4 1.2 .. New Zealand1 4 100 4 599 5 000 5 000 5 317 5 215 5 403 1.1 1.2 1.3 1.3 1.4 1.4 Norway 14 672 13 889 12 504 14 338 13 831 10 640 .. 3.4 3.2 2.8 3.2 3.1 2.4 Poland 58 912 67 602 61 200 69 899 91 000 98 000 99 500 1.5 1.8 1.6 1.8 2.4 2.5 Portugal 33 081 34 904 37 525 40 045 44 205 47 733 45 491 3.4 3.5 3.8 4.0 4.4 4.8 Slovak Republic 8 401 11 071 12 894 13 175 13 723 14 375 15 060 1.6 2.1 2.4 2.4 2.5 2.7 Spain 52 466 58 234 63 578 64 410 66 889 .. .. 1.3 1.5 1.6 1.6 1.7 .. Sweden2 .. .. .. .. 14 000 .. .. .. .. .. .. 1.6 .. Switzerland 58 112 57 597 61 220 54 850 52 350 45 064 40 215 8.3 8.1 8.6 7.7 7.3 6.3 Turkey 58 126 63 376 70 698 79 166 78 086 72 343 71 149 0.9 1.0 1.1 1.2 1.2 1.1 United Kingdom 140 100 145 600 146 900 143 000 152 000 152 000 155 000 2.4 2.5 2.5 2.4 2.6 2.5 United States3 1 432 843 1 540 813 1 748 004 1 745 058 2 121 526 2 063 718 1 919 640 5.4 5.8 6.5 6.5 7.8 7.5 OECD 4 464 789 4 613 687 4 947 562 5 088 870 5 199 704 4 868 088 4 651 672 4.1 4.2 4.5 4.6 4.7 4.3 Note: For the following countries, public payphones installed in private places are included: Austria, Finland, Switzerland, United Kingdom and United States. 1. Telecom New Zealand payphone based on 30 June year end. 2. Telia card phones only. 3. Data up to 1998 is only for local exchange carriers reporting to the FCC. 1999-2001 is national total. Source: OECD.

2001 3.9 3.3 1.6 5.5 3.3 1.1 1.7 3.6 1.4 6.5 4.4 2.1 2.5 4.8 5.4 11.4 1.0 .. 0.8 1.4 .. 2.6 4.5 2.8 .. .. 5.6 1.0 2.6 6.7 4.1

Quality of Service

199

OECD Communications Outlook 2003

Table 7.3. Quality of service: payphones % of payphones in working order 1995

1996

1997

1998

1999

2000

2001

Australia

96.0

96.0

96.0

94.0

98.0

98.0

98.0

Austria

97.0

97.0

97.5

98.0

98.5

98.7

98.2

..

95.0

..

84.5

97.0

94.0

96.1

Belgium Canada Czech Republic Denmark

..

..

..

..

..

..

..

99.0

99.0

99.5

99.5

99.5

98.0

..

..

95.0

..

..

..

..

90.0

Finland

..

..

..

..

..

..

..

France

100.0

100.0

100.0

..

..

..

..

..

..

..

..

..

..

..

Greece

95.0

96.0

97.0

..

..

..

95.0

Hungary

91.3

94.6

95.4

95.5

95.8

96.2

96.9

Iceland

..

..

..

..

100.0

100.0

100.0

Ireland

92.0

95.0

95.0

..

..

..

..

Italy

98.7

Germany

96.0

96.0

96.0

..

98.9

99.0

Japan

..

..

..

..

..

..

..

Korea

80.7

82.0

85.9

87.0

88.0

90.0

91.0

Luxembourg

99.0

98.0

..

..

..

..

..

Mexico

93.0

95.5

96.6

97.9

98.2

98.3

98.4

Netherlands

95.0

96.0

98.0

..

..

..

..

New Zealand

99.3

96.4

97.9

98.4

98.7

98.8

99.2

Norway

..

..

..

..

..

..

..

Poland

..

..

..

..

..

..

..

99.8

99.8

99.8

99.2

99.2

99.2

99.0

Portugal 1

..

..

92.0

92.0

92.0

95.0

95.0

Spain

..

96.2

96.0

97.3

97.2

..

..

Sweden

..

94.0

..

..

..

..

..

Slovak Republic

Switzerland

..

..

..

..

98.0

98.0

98.0

Turkey

44.0

88.0

82.0

89.0

92.0

96.0

98.0

United Kingdom

95.0

94.8

95.6

96.1

96.3

95.4

94.6

..

..

..

..

..

United States .. .. 1. Slovak Republic: Estimated data for 2001. Source: OECD.

200

© OECD 2003

Quality of Service

Table 7.4. Quality of service: fault incidence Faults per 100 lines per year 1993 Australia Austria Belgium 1

Canada

Czech Republic2 Denmark

1994

1995

1996

1997

1998

1999

2000

2001

..

..

..

..

..

..

..

..

..

18.0

19.0

17.0

8.0

7.0

7.0

7.0

5.4

5.2

3.0

2.0

7.4

..

..

4.7

4.0

3.5

4.8

2.0

2.0

..

..

..

..

..

2.0

2.0

35.0

11.0

11.0

38.0

34.0

32.0

20.0

17.0

10.0

..

..

..

..

..

..

..

0.0

0.0

Finland

10.0

8.0

8.0

7.0

9.0

8.0

..

..

..

France

7.0

6.0

6.3

5.9

6.2

..

..

..

..

Germany3

13.0

9.0

8.7

..

..

..

..

..

..

Greece4

51.0

43.0

34.0

36.0

31.0

24.0

17.0

11.3

12.1

Hungary

0.8

51.0

39.0

40.0

27.0

24.0

..

1.3

1.2

Iceland

..

..

..

..

..

..

..

..

..

Ireland

19.0

17.0

..

14.0

15.0

..

..

..

..

Italy

17.1

12.0

13.0

13.0

..

17.0

16.0

17.0

17.7

Japan

2.0

2.0

1.7

..

..

1.4

..

..

..

Korea

12.4

17.2

17.9

15.2

14.2

1.0

1.1

1.0

1.4

Luxembourg

14.0

13.0

5.0

8.0

3.0

10.0

4.0

4.0

5.0

Mexico

7.5

6.0

4.6

3.7

3.3

2.8

2.2

2.0

1.8

Netherlands

3.0

3.0

2.5

2.2

2.4

2.7

..

..

..

..

..

..

15.4

..

..

12.1

11.5

12.1

Norway

14.0

14.0

14.0

13.0

14.0

..

..

..

..

Poland

..

..

..

..

29.0

26.0

..

..

..

Portugal

52.0

46.0

38.0

36.5

35.9

14.2

11.2

10.5

12.1

Slovak Republic

46.0

44.0

41.5

41.7

32.5

27.3

27.9

27.0

27.5

..

..

..

..

14.8

13.8

15.4

..

..

9.0

8.0

8.0

4.0

4.0

..

..

..

..

Switzerland

16.0

14.0

14.0

14.0

14.0

..

18.5

22.0

16.0

Turkey

61.0

60.0

58.0

58.6

58.4

56.1

55.73

55.37

48.43

United Kingdom

15.0

14.0

14.0

14.0

15.3

13.6

14.3

15.0

11.0

New Zealand

Spain Sweden

.. .. .. 13.5 14.5 15.0 13.7 14.0 12.0 United States5 1. Initial trouble reports for Bell Canada. 2. Including CPE. 3. Includes CPE faults for 1993 and 1994. 4. Public payphone faults are included. 5. Simple average taken of all carriers (not a weighted average of number of access lines owned by each carrier). Faults per 100 lines. Source: OECD.

201

© OECD 2003

% of faults repaired within 24 hours 1993

1994

1995

1996

1997

1998

1999

2000

2001

Australia

..

..

..

..

..

80/83

83/86

90.0

90.0

Telstra national average for fault clearance for 2000 and 2001. Prior data show an urban/rural split. These data show fault clearance for (a) urban faults within one working day; (b) rural faults within two working days; (c) remote area faults.

Austria

..

93.0

92.0

93.0

..

97.0

95.8

92.9

90.4

Within 24 working hours.

Belgium

82.0

87.0

87.0

..

90.0

90.0

90.0

90.0

80.5

Canada

85.0

85.4

..

..

79.8

79.5

72.0

74.0

86.0

1997 figures are average of Bell and BC Tel, urban and rural for 1st quarter 1998. Data for 1998-2001 are an average for Bell Canada.

Czech Republic

89.0

90.0

90.3

91.6

88.5

98.0

99.0

98.0

98.0

Data are for repairs within 72 hours prior to 1996, 66 hours in 1996-97, 58 hours in 1998, and 54 hours in 1999.

Denmark

85.0

86.0

91.7

91.0

..

..

..

..

..

Within 12 working hours.

Finland

66.0

69.0

69.1

75.5

75.5

71.4

74.1

..

..

In one working day.

France

87.0

88.0

88.3

90.6

87.3

..

..

..

..

Germany

83.0

93.0

83.4

71.0

83.2

..

85.9

..

..

Greece

57.0

58.0

58.4

64.6

77.4

83.0

90.5

89.6

86.9

Hungary

..

..

78.1

62.2

81.3

..

93.7

95.0

98.0

Iceland

..

..

..

..

..

..

..

..

..

Ireland

..

100.0

75.0

78.0

76.0

..

..

..

..

92.0

93.0

93.3

..

..

..

92.0

87.0

86.2

Japan

100.0

100.0

..

..

..

..

..

..

..

Korea

98.8

95.9

92.7

98.6

97.6

99.0

99.0

99.4

96.8

..

90.0

91.0

94.0

93.0

93.0

95.0

90.0

95.0

74.1

78.7

78.8

83.9

84.4

77.8

72.9

74.3

68.7

Italy

© OECD 2003

Luxembourg Mexico

Notes

Within three working days.

For 1997, within two working days. Higher fault clearance within 48 hours. Fault repair % is approximate.

OECD Communications Outlook 2003

202

Table 7.5. Quality of service: repair time

© OECD 2003

Table 7.5. Quality of service: repair time (continued) % of faults repaired within 24 hours 1993

1994

1995

1996

1997

1998

1999

2000

2001

Netherlands

..

87.0

97.0

99.0

98.0

98.0

..

..

..

New Zealand

..

73.0

73.0

60.0

67.0

79.2

79.5

82.2

85.7

Norway

75.0

74.0

73.7

76.0

73.0

..

..

..

..

Poland

..

..

..

..

..

..

..

..

..

90.0

91.0

91.0

91.8

91.9

84.7

88.9

88.9

76.3

Slovak Republic

..

..

..

..

81.0

85.3

77.3

89.1

90.6

Spain

..

..

..

94.4

97.2

95.8

95.5

..

..

Sweden

..

85.0

85.0

..

77.0

..

..

..

..

Switzerland

92.0

94.0

94.0

92.5

92.5

..

97.0

96.0

94.0

Turkey

94.0

95.0

90.0

92.0

90.0

90.0

61.0

57.6

61.5

United Kingdom

..

82.0

84.0

84.5

82.4

72.0

92.0

76.7

78.0

United States

..

..

..

..

..

..

..

..

..

Portugal

Notes Within 48 hours. Only 2% of faults are not repaired within 96 hours. For 1993-95: within eight hours.

Until 1997 data refer to percentage of faults repaired within two working days. Since 1998, they refer to the percentage of faults repaired within 12 working hours.

Faults for urban areas until 1997. In rural areas: 9.7 per 100 lines in 1996 and 8.2 per 100 in 1997. Faults repaired within two working days. In 1997, 81% repaired within two working days in rural areas. In 1998 Telia aimed to repair 55% of faults within eight hours and the majority of faults within two working days. The latter goal was not met in 1998.

1993-95: BT only; within five or nine working hours.

Source: OECD.

Quality of Service

203

Australia

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001 USD PPP

2001 USD

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Austria

0.07

0.07

0.07

0.07

..

..

..

0.05

0.85

0.84

0.71

Belgium

0.13

0.13

0.00

0.00

..

0.82

1.19

1.20

..

2.46

1.96

Notes Directory assistance calls are free from a residential fixed phone or Telstra payphone. Two requests per call at fixed rate of USD PPP 2.38, tax included.

Canada

0.47

0.40

0.40

0.63

0.63

0.64

0.63

0.63

0.62

0.63

0.48

Czech Republic

0.12

0.17

0.19

0.18

0.18

0.18

0.24

0.38

..

0.39

0.14

Denmark

0.76

0.80

0.80

0.83

..

..

0.00

1.21

..

..

..

Finland

0.94

0.99

..

..

..

0.33

..

..

..

..

..

France

..

..

0.60

0.57

0.56

0.57

0.57

0.71

..

1.11

0.91

This is the price for an inquiry from a fixed line. From a payphone the charge is 10 call units.

Germany

..

..

..

0.11

0.30

0.96

0.96

0.96

..

..

..

The first 30 seconds of DT’s domestic information cost USD 0.49 and every further 3.8 seconds cost USD 0.06. International information costs a further USD 0.06 per 3.8 seconds.

0.04

0.04

0.04

0.04

0.06

0.06

..

0.18

0.16

0.20

0.14

..

..

..

..

0.21

0.21

0.42

0.46

0.43

0.46

0.17

Iceland

0.19

0.19

..

0.37

0.36

0.36

0.29

0.37

0.32

0.41

0.38

Ireland

0.00

0.00

0.00

0.00

0.00

0.61

..

..

..

0.59

0.54

Greece Hungary

This is the off-peak rate per minute including a call set up charge. Call set-up charge is USD 0.41. Off-peak rate USD 0.80 per minute. Peak rate charge is USD 1.12 per minute.

Calls to 11 8 11 cost 0.47 USD PPP per call (incl. VAT) for up to three numbers.

Italy

0.26

0.25

0.65

0.63

0.51

0.52

..

0.54

..

..

..

Japan

0.16

0.16

0.17

0.17

0.18

0.18

0.30

0.38

..

0.40

0.49

This is the price for the first operator-assisted enquiry per month between 8:00-23:00. The price of subsequent enquiries during this time is USD PPP 0.57 per call. Automated calls can be made for USD PPP 0.10 plus the local telephone charge.

Korea

0.00

0.00

0.00

0.00

0.00

0.13

0.12

0.12

0.11

0.11

0.06

First three calls are free for residential subscribers. The fee shown is for subsequent calls.

0.12

0.25

0.26

0.25

..

..

..

..

..

Mexico

0.00

0.00

0.00

0.00

0.00

0.00

..

..

..

..

..

Netherlands

0.00

0.47

0.47

0.48

0.49

0.46

..

0.98

0.97

0.98

0.80

Luxembourg

© OECD 2003

Price per call to manual operator. USD PPP 0.43 to automated service.

OECD Communications Outlook 2003

204

Table 7.6. Directory assistance charges USD PPP

© OECD 2003

Table 7.6. Directory assistance charges (continued) USD PPP

1992 New Zealand Norway Poland Portugal Slovak Republic

1993

1994

1995

..

..

0.30

0.45

0.45

0.44

1998

1999

2000

2001 USD PPP

2001 USD

0.34

..

0.35

0.35

0.34

0.21

This price includes two number requests.

0.85

1.06

1.02

1.05

1.03

1.05

Initial charge of USD PPP 0.99 + USD PPP 0.05 per minute Same as price for a local call.

1996

1997

0.31

..

0.43

0.86

..

..

..

..

..

0.12

..

0.16

0.16

0.15

0.07

0.20

0.21

0.32

0.34

0.36

0.39

0.41

0.43

0.43

0.49

0.32 0.12

Notes

..

..

..

..

..

..

..

0.37

0.34

0.39

Spain

0.33

0.34

0.38

0.37

0.36

0.37

0.37

0.37

..

..

..

Sweden

0.51

0.51

1.11

1.13

1.16

1.17

1.17

1.17

..

..

..

Switzerland

0.46

0.47

0.95

0.99

..

..

..

0.94

0.94

0.96

1.09

In 2001 the access price to call directory assistance included two inquiries for the minimum charge of USD PPP 0.84 and USD PPP 0.13 for first 60 seconds. After 60 seconds the fixed network long distance rate (peak or off-peak as applicable) is applied.

Turkey

0.20

0.29

0.22

0.17

0.16

0.21

0.18

0.19

0.26

0.83

0.31

Price per minute.

..

..

..

..

0.37

0.39

0.39

0.38

..

0.62

0.58

BT charges in 2002: National: USD PPP 0.61 per minute. International: USD PPP 2.31 per minute.

United States

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

In some areas Verizon provides two free calls per month for residential and one free call for business customers and charges USD 0.55 for subsequent requests. Qwest allows its residential customers one free call per month and charges USD 1.25 for subsequent calls. Sprint provides one free call and then charges USD 0.95 per call.

OECD average Source: OECD.

0.24

0.27

0.31

0.32

0.32

0.39

0.46

0.52

0.44

0.61

0.48

United Kingdom

Per minute charge. In 1996 a set-up fee was introduced.

Quality of Service

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OECD Communications Outlook 2003

Table 7.7. Answer seizure ratios

Destination

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

CAGR 19902001

Australia

55.1

54.6

57.5

57.0

58.7

60.0

55.8

57.7

61.5

58.7

58.9

56.6

0.2

Austria

53.2

54.0

54.5

54.0

58.7

61.3

61.3

63.3

65.6

65.4

65.3

65.9

2.0

Belgium

61.1

58.6

61.6

59.4

62.5

64.8

65.2

65.9

66.5

63.6

65.6

64.1

0.4

Canada

61.6

64.9

64.3

69.3

69.5

70.7

69.4

69.4

67.9

69.3

67.3

67.2

0.8

Czech Republic

34.8

36.0

34.5

32.8

37.7

41.4

44.8

53.8

57.2

61.4

62.1

61.0

5.2

Denmark

60.2

60.4

64.5

63.4

66.6

66.9

67.2

70.1

67.7

70.4

70.1

68.4

1.2

Finland

56.6

58.3

61.5

62.4

63.2

64.3

61.6

65.1

67.3

67.3

63.2

63.2

1.0

France

61.1

61.1

63.1

63.2

66.5

67.3

65.1

65.6

69.5

66.3

66.2

67.8

1.0

Germany

54.4

55.0

57.3

57.5

60.1

60.4

61.8

62.3

63.4

61.4

61.7

61.8

1.2

Greece

33.3

37.2

38.0

39.8

44.6

46.8

49.1

52.2

51.8

50.4

54.1

51.6

4.1

Hungary

31.9

35.4

37.6

40.0

42.9

47.7

49.2

53.8

49.8

52.6

55.8

54.7

5.0

Iceland

48.2

52.0

53.5

53.6

58.3

50.5

54.1

57.2

56.7

59.1

57.9

56.1

1.4

Ireland

54.2

55.6

58.3

58.4

60.5

61.3

65.0

69.3

68.7

67.8

66.4

64.8

1.6

Italy

49.2

51.5

54.2

56.3

58.6

60.0

60.0

59.2

60.2

60.1

58.9

53.8

0.8

Japan

67.3

68.1

68.1

66.6

68.3

68.4

69.1

67.9

69.1

69.2

65.8

66.9

-0.1

Korea

50.6

52.1

57.8

59.7

60.1

60.9

62.7

62.4

64.6

55.9

63.5

65.5

2.4

Luxembourg

65.2

65.5

64.3

64.9

64.0

63.8

64.7

65.6

65.5

65.5

67.6

59.6

-0.8

Mexico

40.2

40.6

42.5

44.9

44.8

48.8

52.2

50.2

52.7

51.8

49.9

48.8

1.8

Netherlands

61.5

62.1

62.2

63.8

65.6

65.3

64.2

64.7

67.8

67.1

67.5

67.3

0.8

New Zealand

54.8

53.3

56.8

60.4

60.1

60.3

64.4

64.1

67.1

61.6

60.3

60.1

0.8

Norway

61.4

60.8

63.5

55.8

60.0

63.9

63.5

63.1

63.2

66.0

65.8

64.1

0.4

Poland

16.3

18.9

32.6

32.6

41.1

43.8

46.1

46.2

49.3

55.8

58.2

55.9

11.9

Portugal

40.1

44.3

49.1

52.4

54.6

60.0

60.1

57.2

59.4

59.0

56.7

55.4

3.0

Slovak Republic

34.8

36.0

34.5

32.8

37.7

38.7

42.7

47.1

49.6

53.5

57.1

57.7

4.7

Spain

45.7

48.1

51.4

52.7

57.1

60.1

60.0

59.4

64.2

61.6

61.9

62.5

2.9

Sweden

62.2

59.4

63.6

62.9

64.6

65.4

65.3

66.2

63.8

65.2

64.9

63.1

0.1

Switzerland

58.4

58.3

58.9

59.0

61.1

60.1

60.1

61.6

62.8

62.5

62.6

62.7

0.6

Turkey

33.5

40.6

41.9

36.9

41.4

45.2

45.7

43.1

47.4

42.3

44.3

44.4

2.6

United Kingdom

62.2

63.0

65.0

65.3

66.4

66.3

64.9

63.1

65.8

66.5

64.5

64.3

0.3

United States

69.4

69.9

70.0

69.7

66.6

67.8

66.1

64.1

67.9

63.3

65.6

67.4

-0.3

OECD average

51.9

53.1

55.5

55.7

58.1

59.4

60.0

60.8

62.2

61.6

61.7

60.8

1.5

Non-OECD average

36.3

36.5

39.7

39.9

41.0

40.4

42.5

42.2

43.3

41.0

39.9

41.0

1.1

World average Source: ITU.

39.3

39.5

42.5

42.7

44.1

43.6

45.4

45.3

46.4

44.5

43.6

44.4

1.1

206

© OECD 2003

Chapter 8

EMPLOYMENT AND PRODUCTIVITY

Abstract. At the end of 2001, 3 million people were employed in telecommunication services in OECD countries. Growth in telecommunication employment peaked in 2000 and there has since been a decrease in total employment in the industry. Nevertheless, at the end of 2001 there were more people employed in telecommunications in the OECD area than at any time during the 1990s. This chapter examines employment in the telecommunications industry and labour productivity. Skill level within the industry is also discussed.

207

© OECD 2003

OECD Communications Outlook 2003

A

t the end of 2001, 3 million people were employed in telecommunication services in OECD countries. Growth in telecommunication employment peaked in 2000 and there has since been a decrease in total employment in the industry. Nevertheless, at the end of 2001 there were more people employed in telecommunications in the OECD area than at any time during the 1990s. Despite significant job losses in the industry during 2002, telecommunications employment in the United States was 23%, or more than 200 000 jobs, higher in July 2002 than it was a decade earlier. Competition, technological change and restructuring have brought sustained improvements in productivity. The number of access paths per employee in OECD counties increased more than two and half times between 1990 and 2001. Over the same period, communications revenue per employee increased by 120%. Employment The United States continues to provide the largest number of telecommunications jobs, with almost 1.2 million at the end of 2001 (Table 8.1). Japan, the United Kingdom and Germany each had around 200 000 people employed in telecommunications at that time, while France had in excess of 160 000. During the decade to 2001, Mexico, Luxembourg, the Netherlands, Austria, Finland, the United States, Ireland, Denmark and Norway experienced significant growth in telecommunications employment. Those countries experiencing falls in telecommunications employment over that time included New Zealand, Spain, the Czech Republic, Japan, Turkey, Sweden, Canada and Italy. Employment changed little elsewhere. Mobile telecommunications has been one area of strong employment growth. Between 1995 and 2001, mobile communications employment in OECD countries increased from around 185 000 to almost 500 000, or by almost 18% per annum (Table 8.2). The United States accounted for more than 40% of all mobile communication employment at the end of 2001, with 219 000 jobs. Other countries with relatively large numbers employed in mobile communications at that time included Germany, the United Kingdom, France, Italy and Japan. Figure 8.1 reveals how mobile communications have contributed to overall telecommunications employment since 1989. During the early 1990s, employment in mobile communications compensated for some decline in employment in fixed line operations. During the later years of the decade, mobile communications employment contributed to a resurgence of employment growth in the sector. In 2001, employment in mobile communications accounted for around 17% of total employment in the sector. Communications as a share of national employment In 2001, telecommunications accounted for a larger share of total employment in OECD countries than at any time during the preceding decade. Across the OECD, telecommunications accounted for 0.59% of total employment at the end of 2001 (Table 8.3). Countries with a relatively high level of employment in telecommunications included Finland, Ireland, Norway, the United States, Australia, Denmark, United Kingdom and Iceland. Despite high absolute employment in some cases, telecommunications accounted for relatively low share of total national employment in Mexico, Japan, Spain, Korea, Turkey, Japan and the Czech Republic. Trends in telecommunications employment 208

It is notable that available OECD data reveal a softening of employment growth in telecommunications from 2000 onwards, but do not suggest a major downturn until late 2001. For most © OECD 2003

Employment and Productivity

Figure 8.1. OECD telecommunications employment trends, 1989-2001 Fixed

Mobile

Employees 3 500 000

Employees 3 500 000

3 000 000

3 000 000

2 500 000

2 500 000

2 000 000

2 000 000

1 500 000

1 500 000

1 000 000

1 000 000

500 000

0 1989

500 000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

0 2001

Source: OECD.

OECD countries, the latest employment data available are for the end of 2001, with some countries reporting annual average employment levels during the year. Hence, the recent downturn is not yet fully visible in these data. However, monthly employment data are available from the United States, making it possible to explore more recent trends in telecommunication employment in that country. Overall, telecommunications employment in the United States shows much the same trends as it does for the OECD as a whole – with mobile communications making an increasing contribution to overall employment in the sector, and growth in overall telecommunications employment throughout the 1990s and 2000 (Figure 8.2). In January 1992, there were 883 700 people employed in the telecommunications sector (SIC 481) in the United States, of whom some 49 500 were employed in mobile communications. Employment in the sector peaked at more than 1.2 million during the period between February and July 2001, and declined thereafter. Employment in mobile communications in the United States peaked slightly earlier (i.e. between February and March 2001) at more than 232 000. Over the year from July 2001 to July 2002, employment in telecommunications in the United States declined from 1.2 million to 1.09 million (9%), with employment in mobile communications declining from 230 000 to 210 000. Despite this recent decline, telecommunications employment was 23% higher in July 2002 than it had been in July 1992, having added more than 200 000 jobs over the last decade. Employment in communication equipment manufacturing in the United States turned down somewhat earlier and has fallen further. From 244 000 in January 1992, US communication equipment manufacturing employment reached 290 000 at the end of 2000. During the subsequent 18 months, communication equipment manufacturing employment fell to 216 500 or by 25%, shedding some 73 500 jobs. Whereas telecommunications services employment in the United States was higher in July 2002 than it had been in July 1992, employment in communication equipment manufacturing was lower than at any time during the preceding decade. Figure 8.4 shows the United States’ employment in fixed line telecommunications services (SIC 4813), mobile communications (SIC 481 minus 4813) and communication equipment manufacturing (SIC 366) from July 1992 to July 2002, indexed (July 1992 = 100). It clearly demonstrates the strength of employment growth in mobile communications, steady growth over the period in fixed line © OECD 2003

209

OECD Communications Outlook 2003

Figure 8.2. US telecommunications employment, January 1992 to July 2002 Thousands Fixed Employees (000) 1 400

Mobile Employees (000) 1 400

1 200

1 200

1 000

1 000

800

800

600

600

400

400

200

200

0

0 January 1992

July 2002

Source: OECD.

Figure 8.3. US communications equipment manufacturing employment, January 1992 to July 2002 Thousands Employees (000) 350

Employees (000) 350

300

300

250

250

200

200

150

150

100

100

50

50

0

0 January 1992

210

July 2002

Source: OECD.

© OECD 2003

Employment and Productivity

Figure 8.4.

US telecommunications employment, 1992-2002

Mobile communications

Fixed line communications

Equipment manufacturing

Index 1992 = 100 500

Index 1992 = 100 500

450

450

400

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0 1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: OECD.

telecommunications services employment, and the decline in communication equipment manufacturing employment since late 2000. Productivity Liberalisation and the subsequent globalisation of communication services make data collection and analysis at both the firm and national levels increasingly difficult. Moreover, recent trends, such as contracting out and the operation of different networks, with different business mixes vis-à-vis fixed telephony, mobile and internet services, are making it increasingly difficult to develop and analyse labour productivity indicators. Nevertheless, looking at revenue earned per employee and the number of access paths (fixed and mobile) supported per employee does reveal some interesting trends. It suggests that there has been continued improvement in productivity. Access paths per employee In the past, it has been common for analysts to use the number of fixed lines (access lines) per employee or, more recently, the number of mobile subscribers and access lines per employee as the major indicator of partial labour productivity (a preferable measurement would be productivity per hour of work but data are not available). Recently, however, there has been considerable development of new access technologies. Consequently, the OECD uses “access paths” instead of lines, where access paths are the sum of all forms of access – including traditional fixed lines, mobile subscribers and ISDN channels (64 Kbit/s voice equivalents). Broadband has yet to be incorporated. The number of access paths per employee in OECD countries continues to rise – indicating continued improvements in partial labour productivity in the communications sector (Figure 8.5). Access paths per employee increased more than two and a half times from 152 in 1990 to 422 in 2001 – an annual rate of 6.8%. New technologies have made a major contribution in recent years. The number of standard PSTN access paths per employee increased by 1.4% per annum across OECD countries between 1990 and 2001. By contrast, the number of ISDN access paths per employee increased by 73% © OECD 2003

211

OECD Communications Outlook 2003

Figure 8.5. Access paths per employee, 1990-2001 PSTN

ISDN

Mobile

Access channels per employee 450

Access channels per employee 450

400

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

0 2001

Source: OECD.

per annum and the number of mobile access paths per employee increased by more than 43% per annum. More recently still, new means of broadband access have become available and their rapid adoption is likely to contribute to further improvements in productivity. Revenue per employee Revenue per employee continues to be a useful indicator of partial labour productivity, although different business mixes between firms and countries make simple comparisons difficult. Across OECD countries, telecommunication revenue per employee increased from around USD 128 000 in 1990 to more than USD 280 000 in 2001, or by 119% (Table 8.4). Over the same period, mobile communications revenue per mobile employee increased from USD 234 000 to USD 526 000, or by 125%. In 2001, revenue per communications employee averaged USD 282 000 (Table 8.5). Countries with relatively high levels of revenue per employee included Japan, Spain, Switzerland, New Zealand, Italy and the United States. At the other end of the scale were the Slovak Republic, Turkey, Poland and the Czech Republic. However, some of these latter countries have experienced higher levels of growth in revenue per employee (i.e. higher rates of labour productivity improvement). Over the decade to 2001, the Czech Republic and Hungary experienced annual increases in revenue per employee in excess of 20%, while increases of more than 10% per annum were achieved in Turkey, Poland, Japan, Greece, Portugal, New Zealand, Spain and Korea. Productivity in mobile communications

212

There are a number of difficulties involved in developing and analysing labour productivity indicators for mobile communications: different business mix large fixed network carriers with mobile communications divisions and specialist mobile carriers; there are variations in the way they report mobile employment (inclusion or exclusion of administrative and management support staff), differences in the extent and reporting of firms’ retail outlets, and different mixes of postpaid and © OECD 2003

Ko re a Ja pa Tu n rk e Sp y ai n It Sw aly ed G en re ec Fr e an c M e e G xic er o m an B y N e ew lg i Ze um al an d Po EU rt H uga un l ga U ni te O r y d E Ki C ng D d Sl ov N om ak or w C ze Re ay ch pu R bli Sw epu c itz blic er la n Po d la n Lu Ire d xe la n N mb d et ou he rg rla nd Au s st U Ca ria ni te na d da St D ate en s m a Fi r k nl an d Ja pa Sw Sp n U itze ain ni te rla d nd St at N es e O w It EC Ze al D ala y av n er d a Sw ge ed Lu K en xe or m ea b U ni C our te a g d na Ki d ng a P do EU ort m av uga e l G rag er e m Be any lg iu N No m et rw he a rla y n Au ds st G ria r D eec en e m Fr ark a Au nce st H ral un ia ga Fi ry nl a M nd ex i Ire co la C ze I nd ch ce R lan ep d ub Po lic Sl la ov n ak Tu d r R ke ep y ub lic

Employment and Productivity

Figure 8.6.

Mobile subscribers per employees 4 000

Source: OECD.

© OECD 2003 Telecommunications revenue per employee, 2001 USD

USD 800 000 USD 800 000

700 000 700 000

600 000 600 000

500 000 500 000

400 000 400 000

300 000 300 000

200 000 200 000

100 000 100 000

0 0

Source: OECD.

Figure 8.7. Mobile subscribers per employee, 2001 Mobile subscribers per employees 4 000

3 500 3 500

3 000 3 000

2 500 2 500

2 000 2 000

1 500

1 500

1 000

1 000

500

0

500

0

213

OECD Communications Outlook 2003

Figure 8.8. Mobile revenue per employee, 2001 USD USD per employees 4 000 000

USD per employees 4 000 000

3 500 000

3 500 000

3 000 000

3 000 000

2 500 000

2 500 000

2 000 000

2 000 000

1 500 000

1 500 000

1 000 000

1 000 000

500 000

500 000

0 Ja pa Sw Ko n itz rea er la n Sp d ai Ire n la nd Ita O ly E Be CD lg Sw ium e Po den rtu N gal o G rwa er y m a G ny re ec e N F EU ew ra Ze nce al a Au nd s U Hu tria n U ite nga ni d te S ry d ta Ki te ng s do Po m la n N Can d et he ada rla n Lu Me ds C xe xi ze m co Sl ch R bou ov e rg ak pu R bli ep c ub Fi lic nl D an en d m a Tu rk rk ey

0

Source: OECD.

prepaid customers. Consequently, data on productivity in mobile communications should be interpreted with caution. Most countries fell relatively close to the OECD average of 1 200 mobile subscribers per mobile employee in 2001 (Table 8.6). Countries with a relatively high number of subscribers per employee during 2001 included Korea, Japan, Turkey, Spain and Italy. Much the same pattern can be seen in mobile revenue per employee, with most countries achieving something close to the OECD average of USD 526 000 in mobile revenue per mobile employee during 2001 (Figure 8.8). Again, Japan, Korea and Spain are among those countries achieving higher levels of mobile revenue per mobile employee – higher levels of partial labour productivity in their mobile communications industries. These rankings are influenced by a number of factors. One is business mix. For example, high revenue per employee in Japan is due, in part, to the inclusion of equipment sales (worth around USD 7.64 billion to NTT DoCoMo during 2001) and relatively high levels of mobile Internet revenues (with i-mode revenues worth almost USD 500 million to NTT DoCoMo during 2001) combined with relatively low levels of lower revenue per subscriber earning prepaid subscriptions. Excluding equipment sales, NTT DoCoMo’s revenue per employee during 2001 would have been around USD 1.6 million – less than half the level shown in Figure 8.8. Another factor influencing these rankings is the relative popularity of prepaid mobile subscriptions (notably in Italy, Spain and Turkey), which tends to result in relatively high numbers of subscribers per employee but relatively lower levels of revenue per employee. Productivity among major incumbent carriers

214

It is also possible to explore partial labour productivity indicators at the firm level. Again it should be noted that different firms have different business structures, with some having large mobile communications and cable television networks and others having none. They also operate within © OECD 2003

Employment and Productivity

different regulatory regimes and face different economic conditions. Comparisons of productivity performance should, therefore, take such factors into account. A sample of major incumbent carriers in OECD countries in 2001 achieved an average revenue per employee of USD 234 000, compared to an average of USD 217 000 in 1999 (Table 8.7). Total revenue across the sample was up from USD 419 billion in 1999 to USD 449 billion in 2001, whereas the level of employment across the sample was down a little, to just over 1.9 million. Adjusting for missing company data, total personnel costs across the sample were up from USD 49.3 billion in 1999 to USD 52.9 billion in 2001, and average personnel costs per employee increased from USD 25 037 to USD 27 564. During 2001, Swisscom (Switzerland), Telia (Sweden), BT (United Kingdom), TDC (Denmark) and Telenor (Norway) were the PTOs with relatively high personnel costs per employee – in excess of USD 50 000. Those with relatively low personnel costs per employee included Telmex (Mexico), Slovak Telecom (Slovak Republic), Matav (Hungary), Czech Telecom (Czech Republic) and TPSA (Poland, see Box 8.1). Those PTOs with high revenue per employee during 2001 included NTT (Japan), Swisscom (Switzerland), TDC (Denmark), TCNZ (New Zealand) and Telia (Sweden) – implying that they were achieving relatively high levels of labour productivity. Slovak Telecom (Slovak Republic), Turk Telekom (Turkey), TPSA (Poland) and Czech Telecom (Czech Republic) were among those firms at the opposite end of the scale in terms of revenue per employee. Revenue per employee minus personnel costs per employee is a crude indicator of “value added”. Data are incomplete for Eircom (Ireland), Verizon (United States), NTT (Japan) and P&T (Luxembourg). Among the other PTOs in Table 8.7, revenue per employee ranged from less than USD 100 000 for Slovak Telecom (Slovak Republic), TPSA (Poland) and Czech Telecom (Czech Republic), to more than USD 250 000 for Swisscom (Switzerland), TCNZ (New Zealand), TDC (Denmark), Telia (Sweden), BT

Figure 8.9. PTO revenue per employee, 2001 USD USD 500 000

USD 500 000

450 000

450 000

400 000

400 000

350 000

350 000

300 000

300 000

250 000

250 000

200 000

200 000

150 000

150 000

100 000

100 000

50 000

50 000

0 (J ap itz an) e TC rla C N Z (De nd ) (N n ew ma Ze rk) T BT ei la ala Ve (Un (Sw nd) riz ite d ede o n K n ( Ki KP ore Un ngd ) ite a om N Te Tel d S ) e le co com tate s) m (N (Ko Po T rtu ele eth re ga com er a) la lT n It el ec alia ds) om (It (P aly Te ) o le no rtu Te r ( gal N ) ls tra orw B ay Te elg (A a ) u le ko com str al m i ( Be Au Be a) lg s ll C tria ium an ad (Au ) s a (C tria ) a O TE na d Fr an Son (G a) re ce e ec Te ra ( Fi e) le co nla Te m ( nd) D lm Fra eu e ts n T ch el x ( ce M ) ef e ex Te on ic i le ko ca ( o) Sp m ( Si Ge ain) m rm in an C n ze y Ei ( ch rc Ice ) om la Te n M le d co at (Ire ) m av la (C (H nd ) Tü u z rk ech nga Sl r Te ov R ep y) le ak ko u Te m blic le co TP (Tu ) m rk S ey (S A ( ) lo va Pol an k R ep d) ub lic ) w

TD

TT N

(S

m co is s Sw

0

Source: OECD.

© OECD 2003

215

OECD Communications Outlook 2003

Box 8.1.

Restructuring: the case of TPSA Poland

TPSA has sought to improve productivity through structural change, as well as staff reductions. From 1999 to 2001, TPSA reduced staff numbers by more than 13 800. At the same time, the educational level of TPSA staff has increased (Figure 8.10). The impact of these changes on productivity is apparent, with a reported 18% increase in revenue per employee between 2000 and 2001, and a 21% increase in the number of lines per employee.

Figure 8.10. Staff education levels, TPSA Poland % 100

Primary

14.7

Vocational

Secondary

17.3

Tertiary

% 100

22.5

80

80

60

60 59.5

59.3 61.1

40

40

20

20 18.7

17

7.1

6.4

13.3 0

1999

2000

3.1 2001

0

Source: OECD.

(United Kingdom), Portugal Telecom (Portugal), Telecom Italia (Italy), KPN Telecom (Netherlands), Korea Telecom (Korea) and Telstra (Australia). These PTOs appear to be enjoying higher levels of productivity. Skills and occupational change in telecommunications Competition, technological and organisational changes are leading to significant changes in the occupational mix of those employed in telecommunications, and in the skills required in the sector. Some occupations are in decline, while in other areas there are new job opportunities requiring new skills.

216

Digitalisation and related technological changes reduced the need for traditional skills in such areas as maintenance and repair. At the same time, however, there is increased demand for computer and electronic engineering professionals. The US Bureau of Labor Statistics (BLS) regularly publishes occupational and industry career guides, which forecast demand for labour by occupation in various industries in the United States. For the decade 2000 to 2010, the BLS forecast a 12% increase in telecommunications industry employment (Table 8.8). The most rapid growth is expected to be in © OECD 2003

Employment and Productivity

professional and related occupations, followed by management, business and financial occupations. Much slower growth is expected in office and administrative support occupations, and installation, maintenance and repair occupations. The BLS forecast a 33% increase in professional and related occupations over the decade 2000 to 2010, adding more than 45 000 new jobs, and a 16% increase in management, business and financial occupations, creating 37 000 additional jobs. At the specific occupational level, the major areas of forecast growth over the decade from 2000 to 2010 include: – Computer support specialists, for which the BLS predicted a 78% increase, creating 10 900 jobs. – Computer software engineers (systems software), increasing 60% and creating 9 000 jobs. – Computer and information systems managers, increasing 48% and creating 4 300 jobs. – Marketing and sales managers, increasing 31% and creating 3 400 jobs. – Customer service representatives, increasing 23% and creating 32 000 jobs. – Financial specialists, increasing 23% and creating 3 800 jobs. At the same time, a forecast 40% decline in the number of telephone operators would see the loss of more than 16 000 jobs in that occupational category, and a 5% decline in the number of telecommunications equipment installers and repairers (excluding line installers) would see the loss of more than 6 000 jobs.

217

© OECD 2003

OECD Communications Outlook 2003

Table 8.1. Employment in telecommunications, 1991-2001

1991

1993

1995

1997

1999

2000

2001

Annual growth 1991-2001 %

Australia

81 106

70 273

75 516

79 654

74 471

76 000

77 275

-0.5

Austria

18 305

18 144

17 273

17 820

22 986

23 975

24 431

2.9

Belgium

26 087

25 344

24 908

23 611

25 074

28 495

28 580

0.9

Canada

104 403

92 413

90 392

91 636

82 965

84 481

82 167

-2.4

Czech Republic

28 870

24 742

26 097

25 821

23 685

18 810

18 493

-4.4

Denmark

18 100

16 891

16 476

17 268

18 864

21 330

22 401

2.2

Finland

19 112

15 153

16 405

17 976

21 601

24 190

25 015

2.7

France

156 100

154 548

169 498

170 043

165 446

165 835

162 914

0.4

Germany

225 628

234 000

217 900

215 624

221 400

240 700

241 800

0.7

Greece

27 593

26 349

24 581

22 741

25 966

25 631

26 033

-0.6

Hungary

0.01

20 898

22 463

22 657

21 765

21 732

21 047

20 870

Iceland

985

995

1 010

932

1 458

1 379

1 305

2.9

Ireland

13 544

12 818

12 025

11 705

15 000

20 000

17 000

2.3

Italy

104 714

93 172

91 802

93 782

100 026

95 809

90 880

-1.4

Japan

266 261

255 938

236 819

210 864

216 694

193 866

193 866

-3.1

Korea

60 877

63 929

66 921

73 323

87 025

73 978

68 779

1.2

760

790

799

828

1 356

1 478

1 487

6.9

Mexico

50 046

49 819

50 413

65 675

88 684

97 124

99 103

7.1

Netherlands

30 794

34 359

32 288

31 229

47 500

47 500

52 171

5.4

New Zealand

14 925

9 778

10 354

9 536

7 047

7 802

7 459

-6.7

Norway

18 159

18 561

18 771

21 268

23 727

22 756

22 323

2.1

Poland

66 548

71 500

73 267

73 100

77 187

69 013

65 498

-0.2

Portugal

23 287

22 499

21 006

20 807

19 647

18 401

22 573

-0.3

Luxembourg

Slovak Republic

..

15 824

15 633

15 871

15 883

15 111

14 651

..

Spain

78 815

74 389

69 543

73 000

52 046

52 046

49 065

-4.6

Sweden

34 191

26 059

32 825

34 035

29 289

30 340

26 537

-2.5

Switzerland

20 705

20 521

19 560

22 145

24 150

24 119

24 772

1.8

Turkey

90 783

93 897

74 837

73 177

72 463

72 412

69 940

-2.6

United Kingdom

224 197

185 505

153 166

168 740

206 500

230 300

231 500

0.3

United States

909 200

881 600

895 400

992 800

1 114 300

1 203 500

1 156 800

2.4

2 734 993

2 632 273

2 578 142

2 696 776

2 904 172

3 007 428

2 945 688

0.7

OECD

EU 1 001 227 940 020 900 495 919 209 972 701 1 026 030 1 022 387 0.2 Note: Data for 2001 are incomplete for Iceland (includes only Siminn), Japan (data is for 2000), Netherlands (excludes UPC, Equant and United Pan-Europe Communications and may overstate KPN’s domestic workforce), Poland (excludes Polkomtel), Spain (excludes Auna and may underestimate Telefonica’s domestic workforce). Data for 2000 relates to 1999 for Iceland, Netherlands and Spain. Source: OECD.

218

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Employment and Productivity

Table 8.2. Employment in mobile communications, 1995-2001 1995 Australia

1997

1999

2000

Annual growth 1995-2001 %

2001

3 279

3 538

..

..

..

..

Austria

320

1 978

4 593

4 603

7 721

70.0

Belgium

433

1 652

3 664

4 557

5 206

51.4

Canada

6 330

11 000

12 308

13 006

13 840

13.9

Czech Republic

713

1 397

2 656

4 750

6 036

42.8

Denmark

510

1 712

3 775

..

7 162

55.3

Finland

530

1 388

2 585

..

10 350

64.1

France

3 500

8 288

12 017

..

22 503

36.4

11 900

19 200

28 300

34 800

37 900

21.3

Germany Greece

800

1 100

2 618

3 570

4 375

32.7

Hungary

..

1 932

2 540

3 246

3 735

..

Iceland

22

..

210

..

..

..

Ireland

650

970

1 000

2 200

2 700

26.8

5 280

10 116

18 311

21 405

21 787

26.6

Japan

15 992

18 138

18 165

19 798

20 138

3.9

Korea

3 013

7 827

9 960

8 484

7 804

17.2

Italy

Luxembourg

22

..

58

..

189

43.1

1 397

5 527

11 013

14 170

14 241

47.3

Netherlands

600

2 300

8 000

..

13 788

68.6

New Zealand

811

..

1 024

..

1 643

12.5

Norway

979

1 751

2 458

..

2 869

19.6

Poland

..

..

3 918

..

3 399

..

1 081

1 734

3 463

3 705

5 633

31.7

236

997

1 531

1 603

1 802

40.3

..

8 950

8 950

10 517

10 788

..

2 685

..

4 198

..

3 752

5.7

Mexico

Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom

..

..

4 550

..

4 634

..

50

..

3 785

4 200

5 583

119.4

9 769

14 600

24 103

..

37 766

25.3

United States

114 000

161 300

194 300

230 200

219 100

11.5

OECD

184 902

287 395

394 053

384 814

496 444

17.9

EU 38 080 73 988 125 635 85 357 191 620 30.9 Notes: Totals from partial data. Data for 2001 are incomplete for Austria (excludes Tele.ring), Luxembourg (excludes PT Luxembourg), Norway (excludes Sense), and Poland (excludes TPSA and Polkomtel). Source: OECD.

219

© OECD 2003

OECD Communications Outlook 2003

Table 8.3. Telecommunications employment as a share of national employment, 1992-2001 1991

1993

1995

1997

1999

2001

Australia

1.06

0.92

0.92

0.96

0.85

0.85

Austria

0.53

0.51

0.46

0.48

0.62

0.65

Belgium

0.70

0.69

0.67

0.63

0.65

0.72

Canada

0.81

0.72

0.68

0.67

0.57

0.54

Czech Republic

0.60

0.52

0.53

0.53

0.50

0.39

Denmark

0.69

0.66

0.64

0.65

0.71

0.83

Finland

0.81

0.74

0.78

0.83

0.94

1.06

France

0.71

0.71

0.77

0.77

0.72

0.68

Germany

0.61

0.65

0.61

0.61

0.61

0.66

Greece

0.76

0.71

0.64

0.59

0.66

0.66

Hungary

..

0.60

0.63

0.61

0.58

0.55

Iceland

0.72

0.73

0.71

0.66

0.95

0.82

Ireland

1.18

1.09

0.95

0.85

0.95

0.99

Italy

0.49

0.46

0.46

0.47

0.49

0.43

Japan

0.42

0.40

0.37

0.32

0.34

0.30

Korea

0.33

0.33

0.33

0.35

0.43

0.32

Luxembourg

0.39

0.39

0.37

0.37

0.55

0.54

Mexico

0.17

0.16

0.16

0.18

0.24

0.26

Netherlands

0.48

0.52

0.47

0.43

0.62

0.66

New Zealand

1.02

0.65

0.62

0.55

0.40

0.41

Norway

0.92

0.94

0.92

0.98

1.06

0.99

Poland

0.43

0.48

0.50

0.48

0.52

0.46

Portugal

0.51

0.51

0.48

0.46

0.41

0.46

..

..

0.73

0.72

0.74

0.69

Slovak Republic Spain

0.61

0.61

0.56

0.55

0.36

0.31

Sweden

0.78

0.66

0.82

0.87

0.72

0.63

Switzerland

0.53

0.54

0.51

0.58

0.62

0.62

Turkey

0.48

0.52

0.38

0.36

0.34

0.35

United Kingdom

0.85

0.73

0.59

0.63

0.76

0.83

United States

0.77

0.73

0.72

0.77

0.83

0.86

OECD EU Source: OECD.

0.61

0.58

0.55

0.56

0.59

0.59

0.66

0.64

0.61

0.61

0.62

0.63

220

© OECD 2003

Employment and Productivity

Table 8.4. OECD telecommunications employment and revenue per employee, 1990-2001

Employment

Revenue per employee (USD)

Revenue per employee (indexed)

Mobile employment

Mobile revenue per employee (USD)

Mobile revenue per employee (indexed)

1990

2 755 551

128 386

100

42 371

233 619

100

1991

2 734 993

139 827

109

56 947

214 901

92

1992

2 663 442

154 715

121

79 700

257 112

110

1993

2 632 273

163 795

128

105 235

258 906

111

1994

2 614 275

179 462

140

124 826

344 696

148

1995

2 578 142

209 107

163

184 902

380 466

163

1996

2 643 383

220 661

172

233 192

439 864

188

1997

2 696 776

231 329

180

287 395

442 067

189

1998

2 657 300

252 182

196

340 724

424 074

182

1999

2 904 172

259 675

202

394 053

482 642

207

2000

3 007 428

270 975

211

384 814

615 668

264

2001 2 945 688 282 207 Note: Totals are from partial data. Source: OECD.

220

496 444

526 144

225

221

© OECD 2003

OECD Communications Outlook 2003

Table 8.5. Telecommunications revenue per employee, 1991-2001 USD

Australia

1991

1993

1995

1997

1999

2001

CAGR 1991-2001

117 790

120 357

147 391

169 018

189 309

173 179

3.9

Austria

160 307

183 655

249 289

209 627

217 375

206 434

2.6

Belgium

108 090

126 511

173 146

179 766

235 159

234 998

8.1

Canada

121 326

130 489

134 745

186 391

222 653

244 651

7.3

Czech Republic

16 807

24 347

38 141

56 232

89 083

138 319

23.5

Denmark

131 975

166 819

226 412

201 836

219 798

188 227

3.6

Finland

111 951

107 370

154 373

170 816

187 073

169 208

4.2

France

131 496

144 728

177 764

168 311

200 388

179 663

3.2

Germany

126 005

155 659

212 133

202 659

229 027

236 044

6.5

Greece

48 745

71 550

113 808

144 472

163 848

191 868

14.7

Hungary

22 300

45 133

68 024

98 217

141 334

173 105

22.7

Iceland

90 434

103 237

131 222

162 155

130 962

143 710

4.7

Ireland

93 816

99 883

146 757

182 066

163 181

145 750

4.5

Italy

173 375

182 763

201 359

254 629

266 888

296 325

5.5

Japan

195 729

272 218

450 227

521 464

631 119

732 169

14.1

Korea

100 404

115 202

158 735

124 071

155 782

263 607

10.1

Luxembourg

202 344

285 081

375 962

369 516

268 086

250 335

2.2

Mexico

107 707

158 275

128 777

133 536

118 815

150 245

3.4

Netherlands

168 604

186 015

262 273

252 657

225 653

222 483

2.8

New Zealand

99 457

138 037

202 496

235 892

308 306

283 849

11.1

Norway

121 345

132 343

166 871

169 707

206 941

229 795

6.6

Poland

17 437

21 093

29 450

35 476

59 487

100 513

19.1

Portugal

71 763

98 685

145 115

190 290

240 737

240 608

12.9

..

12 986

20 225

28 437

27 976

64 274

..

Slovak Republic Spain

127 722

128 881

158 301

195 255

349 736

443 185

13.2

Sweden

167 194

174 347

213 034

203 020

253 370

272 031

5.0

Switzerland

249 850

295 120

412 247

306 783

312 022

318 072

2.4

Turkey

30 229

27 078

24 370

54 431

75 373

84 186

10.8

United Kingdom

116 107

129 824

186 411

212 054

246 036

241 156

7.6

United States

169 316

196 075

222 411

258 663

270 706

298 031

5.8

OECD average

139 827

163 795

209 107

231 329

259 675

282 207

EU average 128 683 145 762 191 732 201 533 234 995 237 834 Notes: EU and OECD are simple averages from partial data. 2001 data for Iceland refer to Siminn only. Source: OECD.

7.3 6.3

222

© OECD 2003

Employment and Productivity

Table 8.6. Mobile employment and productivity indicators, 1999-2001 Mobile employees 1999 Australia

Mobile revenue per employee 1999 (USD)

Mobile subscribers per employee 1999

Mobile employees 2001

Mobile revenue per employee 2001 (USD)

Mobile subscribers per employee 2001

..

..

..

..

..

..

Austria

4 593

396 822

936

7 721

389 329

875

Belgium

3 664

436 681

870

5 206

519 970

1 477

Canada

12 308

256 309

562

13 840

309 743

785

Czech Republic

2 656

319 988

732

6 036

234 311

1 151

Denmark

3 775

263 041

696

7 162

144 140

553

Finland

2 585

614 346

1 266

10 350

173 493

403

France

12 017

532 011

1 716

22 503

391 178

1 645

Germany

28 300

580 504

828

37 900

427 553

1 484

Greece

2 618

597 377

1 488

4 375

411 966

1 820

Hungary

1 330

2 540

300 945

630

3 735

351 287

Iceland

210

219 821

822

..

..

..

Ireland

1 000

987 225

1 600

2 700

610 893

1 026

Italy

18 311

479 760

1 642

21 787

550 170

2 293

Japan

18 165

3 304 602

3 129

20 138

3 743 282

3 715

Korea

9 960

731 286

2 354

7 804

1 383 897

3 722

58

1 393 063

3 592

189

241 191

984 1 528

Luxembourg Mexico

11 013

122 566

702

14 241

298 230

Netherlands

8 000

322 450

849

13 788

299 497

943

New Zealand

1 024

470 100

1 506

1 643

372 602

1 474

Norway

2 458

549 071

1 117

2 869

433 876

1 203

Poland

3 918

361 312

996

3 399

311 820

1 118

Portugal

3 463

447 291

1 349

5 633

442 938

1 416

Slovak Republic

1 531

8 246

434

1 802

196 565

1 192

Spain

8 950

703 407

1 663

10 788

829 951

2 734

Sweden

4 198

365 042

1 221

3 752

472 383

1 908

Switzerland

4 550

555 311

672

4 634

716 942

1 138

Turkey

3 785

177 133

2 060

5 583

135 825

3 299 1 225

United Kingdom

24 103

327 894

993

37 766

314 139

United States

194 300

258 116

443

219 100

349 037

586

OECD

394 053

482 642

912

496 444

526 144

1 232

EU 125 635 478 383 1 183 191 620 408 684 1 466 Notes: Totals from partial data. Data for 2001 are incomplete for Austria (excludes Tele.ring), Luxembourg (excludes PT Luxembourg), Norway (excludes Sense), and Poland (excludes TPSA and Polkomtel). Source: OECD.

223

© OECD 2003

1999 Company

Employees

Personnel costs (USDm)

Personnel costs per employee (USD)

2001 Revenue (USDm)

Revenue per employee (USD)

Employees

Personnel costs (USDm)

© OECD 2003

Telstra (Australia) 50 761 2 083 41 027 12 800 252 162 44 977 1 679 Telekom Austria (Austria) 19 347 836 43 206 3 964 204 915 16 586 573 Belgacom (Belgium) 22 071 1 382 62 629 5 152 233 428 22 296 1 073 Bell Canada (Canada) 43 995 1 605 36 475 8 445 191 953 43 724 1 599 Czech Telecom (Czech Republic) 21 742 219 10 068 1 501 69 053 15 194 199 TDC (Denmark) 17 464 1 098 62 880 5 762 329 913 19 130 1 105 Sonera (Finland) 9 512 339 35 598 1 841 193 592 10 482 457 France Telecom (France) 174 262 3 845 22 063 29 000 166 414 211 554 8 466 Deutsche Telekom (Germany) 203 268 9 172 45 125 35 325 173 786 257 058 10 816 OTE (Greece) 21 588 732 33 905 3 622 167 760 18 545 697 Matav (Hungary) 15 377 241 15 677 1 623 105 558 16 633 188 Siminn (Iceland) 1 333 49 36 645 191 143 222 1 180 42 Eircom (Ireland) 12 606 .. .. 1 947 154 452 13 121 .. Telecom Italia (Italy) 122 662 5 155 42 026 29 425 239 891 109 956 4 166 NTT (Japan) 223 900 20 192 90 181 91 485 408 600 213 000 .. Korea Telecom (Korea) 52 533 2 611 49 702 9 914 188 720 48 668 2 293 P&T (Luxembourg) 856 .. .. 327 382 003 .. .. Telmex (Mexico) 72 321 .. .. 10 075 139 315 67 550 381 KPN Telecom (Netherlands) 38 550 1 714 44 449 9 722 252 185 45 720 1 959 TCNZ (New Zealand) 5 717 257 44 979 2 299 402 216 6 901 252 Telenor (Norway) 23 470 1 149 48 950 4 291 182 819 21 000 1 127 TPSA (Poland) 74 682 768 10 280 3 315 44 386 60 120 950 Portugal Telecom (Portugal) 16 188 555 34 275 3 429 211 815 20 887 465 Slovak Telecom (Slovak Republic) .. .. .. .. .. 12 089 83 Telefonica (Spain) 165 397 4 700 28 417 24 459 147 879 161 029 4 813 Telia (Sweden) 30 643 1 462 47 722 6 310 205 921 17 149 1 110 Swisscom (Switzerland) 21 777 1 515 69 554 7 440 341 645 21 328 1 456 Türk Telekom (Turkey) 72 463 905 12 489 5 479 75 611 69 545 766 BT (United Kingdom) 136 800 6 929 50 651 35 327 258 241 108 600 6 703 Verizon (United States) 260 000 .. .. 64 707 248 873 247 000 .. Total 1 931 285 69 511 .. 419 179 .. 1 921 022 53 416 Average (mean of partial totals) 64 376 2 317 35 992 13 973 217 047 64 034 1 781 Notes: Personnel costs include all wages, salaries and personnel-related costs. For Telmex, only payments to employees are included. Source: OECD.

Personnel costs per employee (USD)

Revenue (USDm)

Revenue per employee (USD)

37 325 34 533 48 131 36 564 13 070 57 778 43 612 40 018 42 076 37 573 11 285 35 214 .. 37 889 .. 47 111 .. 5 638 42 846 36 470 53 647 15 804 22 263 6 843 29 887 64 725 68 277 11 021 61 721 .. .. 27 806

10 778 3 521 5 013 9 203 1 470 6 500 1 953 38 416 43 133 3 643 1 912 187 1 927 27 516 96 121 12 351 .. 11 881 11 481 2 326 5 121 4 236 5 113 416 27 726 5 537 8 513 5 138 31 616 67 190 449 939 14 998

239 639 212 286 224 847 210 485 96 716 339 793 186 289 181 590 167 795 196 448 114 945 158 868 146 847 250 246 451 272 253 774 .. 175 882 251 121 337 121 243 869 70 454 244 812 34 405 172 177 322 869 399 147 73 883 291 123 272 024 .. 234 218

OECD Communications Outlook 2003

224

Table 8.7. PTO labour productivity by company, 1999-2001

Employment and Productivity

Table 8.8. US telecommunications employment by occupation, 2000, and projected change to 2010

Share %

Change 20002010 %

20.2

15.8

11

1

30.6

9

0.7

48

General and operations managers

23

1.9

12.1

Human resources managers

10

0.8

8.9

Management analysts

19

1.6

16.9

Financial specialists

17

1.4

22.5

137

11.7

33.3

Occupation

Employed (’000)

Management, business, and financial occupations Marketing and sales managers Computer and information systems managers

Professional and related occupations

235

Computer software engineers, systems software

15

1.3

60.4

Computer support specialists

14

1.2

77.9

Electrical and electronics engineers Electrical and electronic engineering technicians

Sales and related occupations

8

0.7

15.6

10

0.8

6.5

143

12.3

14.3

Retail salespersons

11

0.9

18.8

Sales representatives, wholesale and manufacturing, technical and scientific products

33

2.9

14.6

Sales representatives, wholesale and manufacturing, except technical and scientific products

19

1.6

6.8

First-line supervisors/managers of non-retail sales workers

21

1.8

7

9

0.8

18.9

374

32

6.8

First-line supervisors/managers of office and administrative support workers

30

2.6

18.9

Telephone operators

41

3.5

-40.5

Telemarketers

Office and administrative support occupations

Bill and account collectors Bookkeeping, accounting, and auditing clerks Customer service representatives

8

0.7

12.4

10

0.8

2.2

141

12.1

22.7

Material recording, scheduling, dispatching, and distributing occupations

21

1.8

14.5

Office clerks, general

30

2.6

4.8

Executive secretaries and administrative assistants

13

1.1

6.7

265

22.7

4.7

18

1.5

18.9

126

10.8

-4.9

Installation, maintenance, and repair occupations First-line supervisors/managers of mechanics, installers, and repairers Telecommunications equipment installers and repairers, except line installers Electrical power-line installers and repairers

10

0.9

18.9

Telecommunications line installers and repairers

68

5.8

10.1

1 168

100

12.2

Total (all occupations) Note: Totals may be affected by the omission of occupations with little employment. Source: Bureau of Labor Statistics (http://www.bls.gov)

225

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Chapter 9

TRADE IN COMMUNICATION EQUIPMENT

Abstract. OECD trade in communication equipment increased strongly through the 1990s, growing at more than twice the rate of overall merchandise trade. This chapter examines the importation and exportation of communications equipment, and the balance of trade of communications equipment. It also provides statistics on the composition of trade in communications equipment and the direction of this trade.

227

© OECD 2003

OECD Communications Outlook 2003

O

ECD trade in communication equipment increased strongly through the 1990s, growing at more than twice the rate of overall merchandise trade. Trade in communication equipment (the sum of exports and imports) increased from USD 102 billion in 1991 to USD 328 billion in 2001, at a compound annual rate of almost 12% (Figure 9.1). By comparison, total merchandise trade increased by around 6% per annum. Since 2000, however, there has been a downturn. Between 2000 and 2001, communication equipment trade declined by almost 9%, while total merchandise trade declined by less than 3%. Both the upswing and collapse of the “dot.com” phenomenon are clearly evident, adding to the effects of the underlying economic cycle. Exports of communication equipment Exports of communication equipment from OECD countries increased from USD 49 billion in 1991 to USD 165 billion in 2001, at a compound annual rate of 13% (Table 9.1). In 2001, the OECD’s largest exporters of communication equipment were the United States (at USD 24.9 billion), Mexico (USD 17.6 billion), the United Kingdom (USD 17 billion), Germany (USD 16 billion), Japan (USD 13.2 billion), Korea (USD 12.5 billion), France (USD 10.7 billion), Sweden (USD 6.8 billion) and Canada (USD 5.5 billion). The United States accounted for more than 15% of all OECD communication equipment exports during 2001, Mexico for 10.7%, the United Kingdom 10.3% and Germany 9.7%.

Figure 9.1. Communication equipment and merchandise trade, 1991-2001 USD current prices, indexed 1991 = 100 Communication equipment trade

Total merchandise trade

Index 1991 = 100 400

Index 1991 = 100 400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0 1991

228

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Source: OECD.

© OECD 2003

Trade in Communication Equipment

Box 9.1.

Notes on trade data

OECD trade data are incomplete in two ways: – For some countries data are unavailable prior to them joining the OECD. Others are recently established. For these reasons there are no data for the Czech Republic prior to 1993, Hungary prior to 1992, Korea prior to 1994, Poland prior to 1992, and the Slovak Republic prior to 1997. – Data for 2001 are not yet available for Portugal and Turkey. Data shown for 2001 relate to 2000 in these cases. All discussion relates to these partial data. Communication equipment includes SITC (Rev. 3): – 761 Television receivers. – 762 Radio-broadcast receivers. – 7641 Electrical apparatus for line telephony or telegraphy (including 76411 telephone sets, 76413 teleprinters, 76417 other apparatus for carrier-current liner systems, 76419 other telephonic or telegraphic apparatus, and 76415 telephonic or telegraphic switching apparatus). – 7643 Transmission apparatus. – 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc. – 76491 Parts and accessories for apparatus of heading 7641. – 76493 Parts and accessories of 761, 762, 7643, and 7648.

The relative intensity of communication equipment exporting can be seen by looking at a country’s communication equipment exports as a share of its total merchandise exports. In 2001, communication equipment accounted for just over 4% of total merchandise exports from OECD countries (Figure 9.2). However, for some countries communication equipment exports were more significant. They accounted for 18.2% of Finland’s merchandise exports, 11.2% of Mexico’s, 9.7% of Hungary’s, 9% of Sweden’s, 8.3% of Korea’s and 6% of the United Kingdom’s. In contrast, communication equipment accounted for less than 1% of merchandise exports from Iceland, New Zealand, Australia and Switzerland. Between 1991 and 2001, communication equipment increased its share of the OECD’s total merchandise exports by 7.0%. Among those countries experiencing strong growth in communication equipment exports over the period were Mexico, Poland, Iceland, the Czech Republic and Hungary. Finland, Greece, Ireland, the United Kingdom, Canada, Netherlands and Korea also experienced an above average increase in their communication equipment exporting intensity. Conversely, communication equipment accounted for a smaller share of merchandise exports from Japan and Austria in 2001 than they had a decade earlier. Export growth trends vary considerably, with some countries enjoying rapid growth in their communication equipment exports while others have experienced a decline (Table 9.1). Of those countries for which data are complete, Mexico achieved the fastest growth in communication equipment exports (Figure 9.3). From just USD 108 million in 1991, Mexico’s communication equipment exports increased to more than USD 17.6 billion by 2001 at a compound annual rate of more than 66.5%. Poland (57.8%), Iceland (52.3%), the Czech Republic (51.9%) Hungary (50.5%), Finland (27.2%), Greece (24.2%), Ireland (23.3%), the United Kingdom (15.8%), Canada (15.2%), the Netherlands (14.1%) and Sweden (10.7%) are the other substantial exporting countries to have experienced high rates of growth in communication equipment exports. Germany, Norway, the Slovak Republic and Switzerland experienced only single-digit growth in communication equipment exports, while exports from Japan have been steady and those from Austria have fallen. In 1991, Japan accounted for 27% of total OECD communication equipment exports. By 2001, Japan’s share had fallen to 8%. Conversely, Mexico’s share of total OECD communication equipment exports increased from 0.2% in 1991 to 10.7% in 2001. © OECD 2003

229

ex i Po co la C ze I nd ch ce R lan ep d u H bli un c ga Fi ry nl a G nd re U e ni te Ire ce d l a Ki n ng d d C om N an et he ada rla nd Ko s re O a EC Tu D rk ey EU Sp ai U n ni te It Be d aly St lg iu at m -L Fr es ux an em ce bo Po urg rtu D N en gal ew m Ze ark al a Sw nd ed Au en st G ralia er m Sl ov N an ak o y R rwa e Sw pu y itz blic er la n Ja d pa Au n st r ia

M nl a M nd ex H ico un g Sw ary e U de ni te K n d o Ki re ng a do Ire m la n O d EC Po D rt D uga en l m ar k U ni Fra te nc d e St at C es ze T ch ur k R ey ep ub l Ja ic pa N Po n et la he nd rla n G Be er ds lg m iu a m n -L Gr y ux ee em ce bo ur Sp g C ain an ad Au a st Sl ria ov ak I R taly ep ub N lic Sw or itz wa er y la n N Aus d ew tr a Ze lia al a Ic nd el an d

Fi

OECD Communications Outlook 2003

Figure 9.2.

230

Communication equipment share of merchandise exports, 2001 Percentage

% 20 % 20

18 18

16 16

14 14

12 12

10 10

8 8

6 6

4 4

2 2

0 0

Source: OECD.

Figure 9.3. Communication equipment export growth, 1991-2001 Percentage

% 70 % 70

60 60

50 50

40 40

30 30

20 20

10

10

0

0

-10

-10

Source: OECD.

© OECD 2003

Trade in Communication Equipment

These trends reflect a complex picture, in which some communication equipment manufacturing has shifted to relatively lower-wage countries (e.g. Mexico and Hungary). Other countries have benefited from the cellular mobile revolution (e.g. Finland and Sweden), from the strong performance of particular manufacturers (e.g. Finland, Sweden and Canada), and/or from strong inward direct investment in ICT manufacturing (e.g. Ireland and Mexico). Recent years have seen a significant downturn in communications equipment trade. Data are incomplete, but it is clear that OECD exports of communication equipment fell between 2000 and 2001, from around USD 183 billion to USD 165 billion, or by 10%. The largest falls were experienced by Canada (down 50%), Sweden (down 49.7%), Greece (down 23%), Japan (down 20%) and New Zealand (down 19.7%). Against the trend, the Czech Republic, Hungary, Poland, the Slovak Republic, Italy, Korea and Norway appear to have increased their communication equipment exports over the period. Imports of communication equipment Total OECD communication equipment imports increased from USD 53 billion in 1991 to USD 163 billion in 2001, at 12% per annum (Table 9.2). In 2001, the OECD’s largest importers included the United States (at USD 47.8 billion), Germany (USD 14.8 billion), the United Kingdom (USD 13.4 billion), Japan (USD 9.5 billion), the Netherlands (USD 8.5 billion) and France (USD 8.4 billion). In 2001, the United States accounted for 29% of all OECD imports of communication equipment, Germany for 9%, the United Kingdom for 8%, Japan for 5.8%, and France and the Netherlands for 5% each. The relative level of imports, the share of communication equipment in total merchandise imports, reflects levels of both infrastructure development and communication equipment manufacturing activity. In 2001, communications equipment accounted for 3.5% of total merchandise imports into OECD countries (Figure 9.4). Finland (6%), Ireland (5.2%) and Sweden (4.9%) had relatively high levels of

Figure 9.4. Communication equipment share of merchandise imports, 2001 Percentage % 7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

Fi

nl an Ire d la n N Tu d et rk he ey rla Sw nds e Au den st r D alia en m U M ark n U ite exic ni d te S o d ta K t N ing es ew d Ze om al H and un ga Po ry la n O d EC G D re e N ce or w a Sp y a C in a G nad er a m Po any rtu g Ic al el an Fr d an C ce ze ch Ja R pan ep ub lic Ita Be lg Au ly iu st m ri -L ux Ko a em re a S b Sl wi our t ov ze g ak rl R and ep ub lic

% 7

Source: OECD.

© OECD 2003

231

OECD Communications Outlook 2003

Figure 9.5. Communication equipment import growth, 1991-2001 Percentage % 25

20

20

15

15

10

10

5

5

0

0

-5

-5

Tu rk e Ire y la M nd e H xic un o ga Ja ry C pa ze ch Po n R lan ep d ub l F N in ic U eth la ni nd e te rl d an Be Ki d lg n s iu m A gdo -L u m ux str e a U mb lia ni te our d g St a C tes an ad O a EC Ko D r G ea re e D en ce m ar k N EU or Sw way ed e Fr n an c Sp e G ain er m an y Ita Po ly rtu N A gal ew us Z tri Sw eal a itz and er Sl l ov I and ak ce R lan ep d ub lic

% 25

Source: OECD.

communication equipment imports, reflecting their relatively high levels of communication equipment manufacturing activity. The relatively high levels of communication equipment imports into Turkey (5.1%) and Mexico (4.5%) reflect the relatively high levels of network expansion whereas Australia’s 4.7% of communication equipment imports reflects the high level of household consumption. Communication equipment import trends vary, with countries at different stages of infrastructure development experiencing marked differences in the extent to which they import and (re-)export equipment. Hence, Turkey experienced the most rapid growth in communication equipment imports over the period 1991 to 2001, with imports increasing from USD 375 million to USD 2.8 billion, or by 22% per annum (Figure 9.5). Ireland (21%), Mexico (18.7%), Hungary (17.5%), Japan (16.5%), the Czech Republic and Poland (16%) have also experienced strong growth in communication equipment imports. Falling imports can reflect a decline in equipment manufacturing and of imports that are (re)exported in the context of the recent downturn, and/or a more direct in-country downturn in telecommunications capital expenditure. In 2001, Iceland’s imports of communication equipment were down 36.5% on the year 2000, New Zealand’s and Australia’s imports were down 28%, Korea’s down 22.7%, Sweden’s down 20%, and Austria and the United Kingdom’s down 19.6%. It is clear that these countries witnessed a significant decline in communications activity following a levelling in growth in some areas (e.g. cellular mobile) and financial difficulties among new entrants. Balance of trade in communication equipment

232

In 2001, the OECD enjoyed a surplus on trade in communication equipment of almost USD 2 billion (Table 9.3). Mexico enjoyed the highest surplus, at USD 10 billion. Other countries with a substantial surplus on trade in communication equipment included Korea (USD 8.9 billion), Finland (USD 6 billion), Sweden and Japan (USD 3.7 billion) and the United Kingdom (USD 3.6 billion). The © OECD 2003

Trade in Communication Equipment

United States had the largest deficit on trade in communication equipment in 2001, at almost USD 23 billion. The Netherlands (USD 3.2 billion), Spain and Australia (USD 2.3 billion) also experienced relatively large deficits. A country’s surplus or deficit on trade in communication equipment per capita indicates relative comparative advantage in the sector. On a per capita basis Finland stands out, with a communication equipment trade surplus per capita in 2001 in excess of USD 1 000 (Figure 9.6). Sweden, Korea, Hungary, Mexico, Ireland and the United Kingdom also enjoyed substantial per capita surpluses on their trade in communication equipment. A number of smaller countries with developed communication networks, but little or no communication equipment manufacturing capacity, were at the opposite end of the scale. Those countries with substantial per capita deficits included Iceland (USD 220), the Netherlands (USD 202), Switzerland (USD 151), Australia (USD 119), New Zealand (USD 111) and Norway (USD 105). Trends in the balance of trade in communication equipment over time vary considerably. Some countries with a surplus on trade in communication equipment in 2001 have experienced significant growth in that surplus over time. Most notable are Finland, Korea, Mexico and Sweden. From USD 172 million in 1991, Finland’s surplus on trade in communication equipment reached USD 6 billion in 2001 (Table 9.3). Similarly, Sweden increased its surplus on trade in communication equipment from USD 1.2 billion in 1991 to USD 3.7 billion in 2001. Conversely, Japan’s surplus on trade in communication equipment has been declining – falling from more than USD 12 billion in 1992 to USD 3.7 billion in 2001. Canada, Ireland and Mexico stand out as countries that have turned around a net deficit on trade in communication equipment to become significant net exporters. In addition, Germany transformed a net deficit of USD 1.2 billion in 1991 into a net surplus of USD 1.2 billion in 2001. Other countries have experienced a reversal in communication equipment trade. The United States has seen its deficit on communication equipment trade increase from USD 6.8 billion in 1991 to slightly under USD 23 billion in 2001. Australia, Austria, Netherlands, New Zealand, Norway, Poland,

Figure 9.6. Communication equipment trade surplus/deficit per capita, 2001 USD current prices USD 1 200

USD 1 200

1 000

1 000

800

800

600

600

400

400

200

200

0

0 -200

-400

-400

Fi nl a Sw nd ed e Ko n H rea un ga M ry ex U ni i te Ir co d el Ki an ng d do Fr m a nc Be lg Ja e iu pa m n -L ux em E bo U C ze Ge urg r ch m R an ep y ub l O ic EC Sl ov ak Pol D R and ep u Po blic r tu g Tu al rk ey D Ital en y m C ark an ad Sp a G ain re ec U ni Aus e te d tr ia St a N No tes ew r Ze way a Au lan Sw str d it ali N zer a et la he nd rla n Ic ds el an d

-200

Source: OECD.

© OECD 2003

233

OECD Communications Outlook 2003

Switzerland and Turkey are the other countries to have experienced a widening deficit on trade in communication equipment over the last decade. Composition of trade in communication equipment Communications equipment trade is composed of exports and imports of television and radio receivers, transmission equipment, telecommunications equipment and parts. Composition of communication equipment exports In 2001, total exports of communication equipment from OECD countries reached USD 165 billion, of which transmission equipment accounted for 33% (USD 54.4 billion), telecommunication equipment for 21% (USD 34.3 billion), television receivers 13% (USD 22 billion), radio receivers 4% (USD 6.9 billion), and parts 29% (USD 47 billion) (Table 9.4 and Figure 9.7). The largest exporters of television receivers in 2001 were Mexico (at USD 6.2 billion), Japan (USD 3.2 billion), France (USD 1.6 billion), Korea (USD 1.5 billion), the United States (USD 1.5 billion) and the United Kingdom (USD 1.2 billion). The major exporters of radio receivers were Mexico (at USD 1.5 billion), the United States (USD 920 million) and Japan (USD 738 million). The largest exporters of transmission equipment in 2001 were Germany (at USD 8.4 billion), the United Kingdom (USD 8.3 billion), Korea (USD 7.5 billion), the United States (USD 6.2 billion), Finland and Mexico (USD 4.8 billion) and France (USD 3.4 billion). It is notable that despite their relatively high levels of overall communication equipment exports, Ireland, Canada and Finland were minor exporters of television and radio receivers. The largest exporters of telecommunication equipment in 2001 were the United States (at USD 5.9 billion), the United Kingdom (USD 4.8 billion), Mexico (USD 2.9 billion) and the Netherlands (USD 2.7 billion). Other major exporters of telecommunications equipment included France (USD 2.6 billion), Germany (USD 2.3 billion), Sweden (USD 2 billion), Finland (USD 1.7 billion), Italy and Ireland (USD 1.6 billion) and Japan (USD 1 billion). Major exporters of related parts during 2001 included the United States (at USD 10.4 billion), Japan (USD 6.3 billion), Germany (USD 3.9 billion),

Figure 9.7. Composition of communication equipment exports, 2001 Television receivers 13% Parts 29%

Radio receivers 4%

Transmission equipment 33% Telecommunication equipment 21%

234

Source: OECD.

© OECD 2003

Trade in Communication Equipment

France (USD 2.7 billion), the United Kingdom (USD 2.6 billion), Canada (USD 2.5 billion), Korea (USD 2.4 billion), Mexico (USD 2.3 billion) and Sweden and Italy (USD 2.2 billion). A decade ago, television receivers, radio receivers and parts made up larger shares of OECD communication equipment exports, while transmission and telecommunication equipment shares were smaller. In 1991, television receivers accounted for 22% of OECD communication equipment exports (USD 10.5 billion), telecommunication equipment for 20% (USD 9.9 billion), transmission equipment 14% (USD 6.9 billion), radio receivers 11% (USD 5.1 billion) and parts 33% (USD 16.3 billion). In 2001, these categories accounted for 13%, 21%, 33%, 4% and 29% respectively. Composition of communication equipment imports In 2001, total imports of communication equipment into OECD countries cost USD 163 billion, of which transmission equipment accounted for 28% (USD 46.9 million), telecommunication equipment 22% (USD 35 billion), television receivers 14% (USD 23.4 billion), radio receivers 10% (USD 16.3 billion) and parts 26% (USD 42.3 billion) (Table 9.5 and Figure 9.8). In 2001, the largest importers of television receivers were the United States (USD 8 billion), Germany (USD 2.2 billion), Japan (USD 1.9 billion), the United Kingdom (USD 1.7 billion), the Netherlands (USD 1.4 billion) and France (USD 1.3 billion). The largest importers of radio receivers were the United States (USD 6.5 billion), Germany (USD 1.4 billion) and Japan (USD 1.2 billion). At USD 17 billion in 2001, the United States was by far the largest importer of transmission equipment. Germany (USD 4 billion), the United Kingdom (USD 3.7 billion), France (USD 2.6 billion) and Mexico (USD 2.2 billion) were the other major importers of transmission equipment during 2001. The largest importers of telecommunication equipment in 2001 were the United States (at USD 7.7 billion), the United Kingdom (USD 3.7 billion), Germany (USD 3.1 billion) and the Netherlands (USD 2.8 billion). The largest importers of communication equipment parts during 2001 were the United States (at USD 8.8 billion), Japan and Germany (USD 3.6 billion), the United Kingdom (USD 3.4 billion), and Canada and Mexico (each at around USD 2.5 billion).

Figure 9.8.

Composition of communication equipment imports, 2001

Television receivers 14% Parts 26% Radio receivers 10%

Telecommunication equipment 21%

Source: OECD.

© OECD 2003

Transmission equipment 29%

235

OECD Communications Outlook 2003

Box 9.2.

Communication equipment in US merchandise trade, 1999-2001

Over recent years communication equipment has made a significant contribution to both increases and decreases in overall US merchandise trade. Between 1999 and 2000, US communication equipment trade increased by USD 21.3 billion and total merchandise trade by USD 280 billion, with communication equipment contributing 7.6% of the annual increase in trade. Composition of US communication equipment trade, 1999-2001 199 USD m

Television receivers Radio receivers Transmission equipment Telecommunication equipment Parts Total communications equipment Total merchandise trade Source:

7 414 7 178 15 631 12 391 17 378 60 798 1 720 013

2000 USD m

2001 USD m

Change 1999-2000 %

Change 2000-2001 %

8 683 8 390 22 577 18 192 23 564 82 125 1 999 764

9 493 7 382 22 958 13 598 19 257 72 689 1 863 542

17.1 16.9 44.4 46.8 35.6 35.1 16.3

9.3 –12.0 1.7 –25.2 –18.3 –11.5 –6.8

OECD ITS Database (August 2002).

Over the year 2000 to 2001 both total merchandise trade and communication equipment trade declined −by 6.8% and 11.5%, respectively. Communication equipment contributed 6.9% of the overall decline in US merchandise trade.

A decade ago, television and radio receivers made up larger shares of OECD communication equipment imports, while transmission and telecommunication equipment shares were smaller. In 1991, television receivers accounted for 27% of OECD communication equipment imports (almost USD 14 billion), radio receivers for 21% (USD 11 billion), telecommunication equipment 17% (USD 9.1 billion), transmission equipment 10% (USD 5.5 billion), and parts 25% (USD 13.5 billion). In 2001, these categories accounted for 14%, 10%, 22%, 28% and 26%, respectively. Direction of trade in communication equipment The direction of trade in communication equipment reveals evolving patterns of trade between OECD and non-OECD countries. Direction of communication equipment exports During the 1990s, OECD communication equipment exports increased by 13.6% per annum. OECD exports to other OECD countries have grown faster (13.7% p.a.) than have exports to non-OECD countries (11.4% p.a.) (Table 9.6). However, as Figure 9.9 clearly shows, OECD communication equipment exports to non-OECD countries grew more quickly than exports to OECD countries during the early 1990s, whereas the opposite has been the case since 1997.

236

Between 1991 and 1997, OECD communication equipment exports to OECD countries increased 116% while exports to non-OECD countries increased 164%. Between 1997 and 2001, OECD communication equipment exports to OECD countries increased 67%, while exports to non-OECD countries increased by just 12%. These trends appear to reflect the impact of the “Asian Crisis” and the strength of communication infrastructure development in OECD countries in the years before the recent © OECD 2003

Trade in Communication Equipment

Figure 9.9. Direction of OECD communication equipment exports, growth 1991-2001 USD current prices, indexed 1991 = 100 OECD

Non-OECD

Index 1991 = 100 450

Index 1991 = 100 450

400

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Source: OECD.

telecommunications downturn. In the three years between 1997 and 2000, OECD exports to OECD countries increased by 90%, while OECD exports to non-OECD countries increased by just 10%. In 1991, OECD countries took 72% of OECD communication equipment exports and non-OECD countries took 26%. By 1997 the non-OECD countries’ share had increased to 31%, but between 1997 and 2001 their share fell to 23% – with OECD countries taking USD 126 billion worth of OECD communication equipment exports compared to non-OECD countries’ USD 38 billion. While 77% of OECD communication equipment exports went to other OECD countries in 2001, there was considerable variation from country to country (Table 9.7, Figure 9.10). More than 99% of Mexico’s communication equipment exports went to OECD countries during 2001. By contrast, just 16% of communication equipment exports from Greece went to OECD countries and 84% went to non-OECD countries. Other countries with a high proportion of the communication equipment exports going to OECD countries included Portugal, the Czech Republic and Hungary (96%), the Netherlands and Denmark (93%) and the Slovak Republic and Poland (92%). New Zealand, Sweden, Korea, Iceland, Finland, Japan, Italy and the United States are at the other end of the scale, with more than 30% of their communication equipment exports going to non-OECD countries in 2001. Over the five years from 1996 to 2001, OECD communication exports to OECD countries increased 14% per annum, while exports to non-OECD countries increased 5.6% per annum. However, there were considerable differences between countries. Australia’s communication equipment exports to OECD countries increased by 7.8% a year, while its exports to non-OECD countries fell by more than 8% a year. Other countries with similar growth in OECD exports and falls in non-OECD exports included Canada, Denmark, Japan and Spain. Some countries experienced opposite trends, with relatively strong growth in exports to non-OECD countries (e.g. Iceland, Greece, Hungary, Austria and Ireland). Direction of communication equipment imports Communication equipment import trends are less varied than are export trends. Imports of communication equipment into OECD countries grew at 12% per annum through the decade, with OECD © OECD 2003

237

OECD Communications Outlook 2003

Figure 9.10.

Direction of OECD communication exports, 2001 Unrecorded 0.39%

Non-OECD 22.94%

OECD 76.66%

Source: OECD.

countries supplying around 75% and non-OECD countries around 25% throughout the period (Table 9.8 and Figure 9.11). There is a somewhat higher growth in imports from non-OECD countries during the period 1991 to 1997 and a somewhat higher growth in imports from OECD countries between 1997 and 2000, but the differences are not as marked as are those for exports (compare Figures 9.9 and 9.11). Portugal, Denmark, Switzerland, Austria, Italy, Turkey and Iceland all sourced 90% or more of their communication equipment imports from other OECD countries during 2001 (Table 9.9). Japan was the only OECD country to source more than 50% of its communication equipment imports from non-OECD countries in 2001. Finland (45%), the United States (33%), Korea (31%) and Australia (27%) were the other countries with relatively high levels of communication equipment imports from non-OECD sources. In recent years, Mexico, Hungary, Finland, Ireland, Sweden, the Netherlands and Austria have experience relatively strong growth in communication equipment imports from non-OECD countries, while Ireland has experienced strong import growth from both OECD and non-OECD sources. Recent trends While there has been strong growth in trade in communication equipment over the last decade, it is clear that there was a significant fall in trade following the telecommunications downturn that began in 2000. Total exports of communication equipment from those OECD countries for which data were available at the time of writing declined by more than 10% between 2000 and 2001. Some countries experienced much larger declines. Communication equipment exports from Japan in 2001 were 20% down on 2000, exports from Australia down 19%, from Finland down 18%, from France down 16% and from the United States down 12%. The detailed picture from the United States is illustrative (Table 9.10).

238

The US Department of Commerce reported that telecommunication equipment imports into the United States in 2000 were 62% higher than in 1999, while exports from the United States were 19% higher. However, between 2000 and 2001, imports into the United States fell 14% and exports from the United States fell by almost 18%. There was a USD 4.3 billion decline in the value of telecommunication equipment exports from the United States between 2000 and 2001, and an almost USD 4.9 billion © OECD 2003

Trade in Communication Equipment

Figure 9.11.

Source of OECD communication equipment imports, growth 1991-2001 USD current prices, indexed 1991 = 100 OECD

Non-OECD

Index 1991 = 100 400

Index 1991 = 100 400

350

350

300

300

250

250

200

200

150

150

100

100

50

50 0

0 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Source: OECD.

decline in the value of imports. Between 2000 and 2001, there was a 40% decline in US exports of parts and telephonic apparatuses, a 30% decline in exports of radio transceivers, a 24% decline in exports of modems and a 22% decline in exports of parts and switching equipment. Over the same period, US imports of telecommunication line systems equipment declined 61%, imports of telephonic apparatus and parts declined 37% and imports of TV transmitters declined 33%. European suppliers of cellular mobile equipment enjoyed rapid sales growth during the 1990s, but they too have been affected by the downturn. For example, Nokia’s net sales of mobile phones during the first half of 2002 were down 3.1% on the previous year, Siemens’ second quarter 2002 sales of information and communication mobiles were down 1.5% on the previous year, and Ericsson’s mobile systems sales for the first half of 2002 were down almost 23% on the previous year. All indications are that in late 2000 surging growth in communication equipment sales came to an abrupt end.

239

© OECD 2003

Australia Austria Belgium-Luxembourg Canada Czech Republic* Denmark Finland France Germany Greece Hungary* Iceland Ireland Italy Japan Korea* Mexico Netherlands New Zealand Norway Poland* Portugal Slovak Republic* Spain Sweden Switzerland Turkey United Kingdom United States OECD EU

1991

1992

1993

1994

1995

1996

216 1 350 1 510 1 341 .. 628 722 3 461 6 466 28 .. 0.01 374 1 440 13 160 .. 108 1 423 28 265

266 771 1 463 1 646 .. 697 871 3 465 6 061 40 74 0.17 338 1 560 14 187 .. 3 447 1 447 36 303 19 436 .. 912 2 607 433 220 3 569 9 128 53 995 24 236

265 815 2 072 1 961 39 560 1 200 3 434 5 807 75 82 0.02 373 1 684 14 430 .. 4 024 1 684 47 268 26 393 .. 1 085 3 077 435 183 3 452 10 890 58 360 25 710

470 934 2 368 2 358 59 761 1 954 3 787 7 493 57 159 0.06 556 1 708 15 003 5 141 5 512 1 682 67 315 66 506 .. 1 280 4 260 547 197 4 928 13 377 75 547 32 274

456 266 2 583 2 859 39 962 3 449 5 331 9 326 68 213 0.00 637 2 324 13 707 5 447 6 539 2 350 86 525 124 657 .. 1 813 6 588 656 241 6 900 16 297 90 445 43 255

408 377 2 724 3 666 132 1 068 4 045 5 842 9 512 67 162 0.01 805 2 695 11 213 5 702 7 255 2 758 99 518 251 642 .. 1 865 8 429 650 296 9 666 16 708 97 553 50 494

305 .. 768 2 481 401 279 3 939 8 054 48 747 24 894

1997

1998

1999

2000

2001

537 690 2 534 4 263 121 1 326 4 733 6 809 10 935 106 479 0.03 1 229 3 000 12 099 5 197 8 834 2 777 121 634 512 588 147 2 101 9 919 682 453 8 678 20 453 109 957 55 425

389 809 3 178 4 445 253 1 583 6 327 8 999 10 840 152 743 0.08 1 756 3 316 11 776 4 914 10 711 2 931 112 632 751 673 169 2 358 10 622 705 840 13 673 22 151 125 806 67 215

460 873 3 143 6 033 205 1 734 7 151 10 064 12 947 171 935 0.22 3 564 3 471 12 982 7 705 12 552 4 171 94 590 747 859 129 2 446 12 539 659 747 13 356 23 518 143 845 76 490

694 1 262 4 251 11 132 497 1 846 9 732 12 773 15 264 316 1 938 0.60 3 098 3 714 16 601 10 662 17 248 6 108 98 583 852 902 155 2 396 13 555 744 938 17 063 28 384 182 807 92 280

561 1 196 4 474 5 525 1 108 1 838 8 024 10 692 15 992 244 2 948 0.55 3 031 4 560 13 210 12 488 17 621 5 300 78 638 1 133 902 202 2 542 6 835 740 938 17 012 24 930 164 765 82 643

CAGR 19912001 10.0 -1.2 11.5 15.2 51.9 11.3 27.2 11.9 9.5 24.2 50.5 52.3 23.3 12.2 0.0 13.5 66.5 14.1 10.7 9.2 57.8 11.5 8.4 12.7 10.7 6.3 12.9 15.8 12.0 13.0 12.7

© OECD 2003

*Growth rates for available years. Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

OECD Communications Outlook 2003

240

Table 9.1. Communication equipment exports, 1991-2001 USD millions

© OECD 2003

Table 9.2. Communication equipment imports, 1991-2001 USD millions

Australia Austria Belgium-Luxembourg Canada Czech Republic* Denmark Finland France Germany Greece Hungary* Iceland Ireland Italy Japan Korea* Mexico Netherlands New Zealand Norway Poland* Portugal Slovak Republic* Spain Sweden Switzerland Turkey United Kingdom United States OECD EU

1991

1992

1993

1994

1995

1996

1997

834 1 046 1 242 2 142 .. 697 550 3 673 7 669 324 .. 40 385 3 579 2 035 .. 1 333 2 389 295 458 .. 662 .. 2 224 1 300 1 154 375 3 805 14 855 53 068 29 545

1 034 882 1 248 2 469 .. 717 422 3 198 6 843 386 292 41 353 2 808 2 045 .. 2 027 2 128 284 551 476 749 .. 2 063 1 210 988 270 3 804 16 638 53 925 26 811

1 189 864 1 507 2 752 301 646 341 3 162 6 567 610 283 29 387 2 224 2 817 .. 2 036 2 196 278 571 520 594 .. 1 528 1 228 919 328 3 429 17 833 55 138 25 283

1 511 966 1 550 3 122 407 818 566 3 515 7 407 594 396 45 433 2 602 4 286 1 670 2 697 2 054 387 709 477 568 .. 1 853 1 688 1 114 346 4 568 21 996 68 344 29 182

2 074 1 131 1 949 3 640 539 1 156 763 4 471 8 820 581 363 49 460 3 309 6 427 2 023 2 006 3 004 544 978 587 680 .. 2 526 2 472 1 395 554 6 438 23 359 82 297 37 759

2 221 1 147 2 115 4 084 842 1 371 870 4 928 8 039 477 470 54 600 3 664 7 712 2 466 2 382 3 425 529 944 894 678 .. 3 565 2 537 1 481 739 8 735 23 716 90 685 42 152

2 153 1 299 2 305 4 861 762 1 465 878 5 752 8 179 712 565 57 787 4 832 6 915 2 471 3 369 3 815 499 979 1 247 795 338 3 165 3 019 1 622 1 041 7 777 25 570 97 229 44 779

1998

1999

2000

2001

2 000 1 904 2 750 5 226 701 1 691 1 134 6 758 9 652 1 145 759 78 1 083 5 804 6 298 1 422 4 264 4 416 455 1 123 1 541 1 009 336 3 957 3 744 1 772 1 428 10 739 31 066 114 253 55 786

3 127 2 224 3 516 6 033 724 1 793 1 307 7 321 10 628 1 224 921 79 1 890 6 318 7 241 2 628 5 382 6 337 623 1 109 1 795 1 181 219 5 570 3 478 1 844 2 204 12 848 37 280 136 843 65 635

3 998 2 270 3 942 8 436 1 076 2 063 2 323 8 488 13 144 1 154 1 380 100 2 228 6 996 9 887 4 609 7 661 8 154 706 1 178 1 969 1 157 236 5 730 4 246 2 061 2 804 16 641 53 741 178 378 78 536

2 880 1 823 4 274 6 846 980 2 014 2 001 8 397 14 761 952 1 245 63 2 680 6 424 9 510 3 563 7 388 8 538 506 1 111 1 818 1 157 313 4 813 3 091 1 835 2 804 13 379 47 758 162 927 74 306

CAGR 1991-2001 13.2 5.7 13.2 12.3 15.9 11.2 13.8 8.6 6.8 11.4 17.5 4.7 21.4 6.0 16.7 11.4 18.7 13.6 5.5 9.3 16.1 5.7 -1.9 8.0 9.0 4.7 22.3 13.4 12.4 11.9 9.7

241

Trade in Communication Equipment

*Growth rates for available years. Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

Australia Austria Belgium-Luxembourg Canada Czech Republic* Denmark Finland France Germany Greece Hungary* Iceland Ireland Italy Japan Korea* Mexico Netherlands New Zealand Norway Poland* Portugal Slovak Republic* Spain Sweden Switzerland Turkey United Kingdom United States OECD EU

1991 -618 304 268 -801 .. -68 172 -212 -1 202 -296 .. -40 -11 -2 139 11 126 .. -1 225 -966 -267 -193 .. -358 .. -1 457 1 181 -753 -96 134 -6 801 -4 321 -4 651

1992 -768 -112 215 -823 .. -20 449 267 -782 -346 -218 -41 -14 -1 249 12 142 .. 1 421 -682 -248 -248 -457 -312 .. -1 151 1 397 -556 -50 -235 -7 510 69 -2 575

1993 -923 -49 565 -791 -262 -86 859 272 -760 -535 -201 -29 -14 -541 11 613 .. 1 988 -512 -231 -303 -494 -201 .. -443 1 849 -483 -145 23 -6 943 3 222 427

1994 -1 040 -32 818 -764 -348 -57 1 387 272 86 -537 -237 -45 122 -893 10 718 3 471 2 815 -372 -320 -393 -411 -62 .. -573 2 572 -567 -149 360 -8 619 7 203 3 092

1995 -1 618 -865 634 -780 -501 -195 2 686 860 506 -513 -150 -49 178 -985 7 280 3 425 4 534 -654 -459 -452 -463 -23 .. -713 4 117 -739 -313 462 -7 062 8 148 5 496

1996 -1 813 -770 609 -418 -710 -304 3 175 913 1 473 -410 -309 -53 204 -969 3 501 3 236 4 873 -666 -430 -426 -643 -36 .. -1 700 5 892 -832 -443 932 -7 008 6 869 8 342

1997 -1 617 -609 229 -598 -641 -139 3 855 1 057 2 756 -606 -86 -57 442 -1 831 5 184 2 726 5 465 -1 037 -378 -345 -735 -207 -192 -1 064 6 900 -940 -588 901 -5 117 12 727 10 646

1998 -1 611 -1 095 428 -781 -448 -108 5 193 2 242 1 188 -993 -15 -78 674 -2 489 5 478 3 492 6 447 -1 485 -342 -492 -790 -336 -167 -1 599 6 878 -1 067 -588 2 934 -8 915 11 554 11 430

1999 -2 667 -1 351 -373 0 -519 -59 5 844 2 744 2 319 -1 052 14 -78 1 674 -2 846 5 741 5 076 7 170 -2 166 -529 -519 -1 048 -322 -90 -3 124 9 060 -1 185 -1 457 508 -13 761 7 002 10 855

2000 -3 304 -1 009 309 2 696 -579 -218 7 409 4 285 2 120 -838 558 -99 870 -3 281 6 714 6 053 9 587 -2 046 -609 -594 -1 117 -255 -81 -3 333 9 309 -1 317 -1 866 422 -25 358 4 428 13 745

2001 -2 319 -627 199 -1 321 128 -177 6 024 2 295 1 231 -708 1 703 -63 351 -1 864 3 700 8 925 10 233 -3 238 -428 -473 -686 -255 -111 -2 271 3 745 -1 095 -1 866 3 633 -22 828 1 838 8 337

© OECD 2003

*Growth rates for available years. Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

OECD Communications Outlook 2003

242

Table 9.3. Balance of trade in communication equipment, 1991-2001 USD millions

Trade in Communication Equipment

Table 9.4. Composition of communication equipment exports, 2001 USD millions Television receivers Australia

9

Radio receivers 12

Transmission equipment

Telecom equipment

8

309

Parts

Total

222

561

Austria

158

67

215

489

267

1 196

Belgium-Luxembourg

625

677

853

705

1 613

4 474

61

33

1 329

1 619

2 483

5 525

Canada Czech Republic

551

11

117

298

132

1 108

Denmark

250

74

1 022

137

355

1 838

Finland

59

6

4 786

1 742

1 431

8 024

France

1 562

394

3 429

2 625

2 683

10 692

823

620

8 393

2 251

3 906

15 992

6

15

65

10

147

244

Hungary

536

219

1 360

200

633

2 948

Iceland

0.03

0.02

0.21

0.12

0.17

0.55

Ireland

23

6

367

1 606

1 030

3 031

150

22

558

1 634

2 196

4 560

Japan

3 236

738

1 910

1 021

6 305

13 210

Korea

1 546

441

7 484

620

2 398

12 488

Mexico

6 241

1 455

4 751

2 879

2 295

17 621

Netherlands

134

312

8

2 745

2 101

5 300

New Zealand

Germany Greece

Italy

0.01

0.14

44

8

27

78

Norway

98

3

208

142

187

638

Poland

907

0.9

36

38

151

1 133

Portugal

149

642

27

18

66

902

94

0.57

7

14

87

202

1 006

59

380

341

756

2 542

299

42

2 271

1 986

2 238

6 835

11

5

220

207

297

740

840

0.9

34

25

39

938

1 178

96

8 289

4 800

2 649

17 012

Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD

1 469

920

6 245

5 872

10 424

24 930

22 021

6 872

54 416

34 341

47 115

164 765

EU 6 421 3 033 30 662 21 089 21 438 82 643 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radiotelephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

243

© OECD 2003

OECD Communications Outlook 2003

Table 9.5. Composition of communication equipment imports, 2001 USD millions Television receivers

Radio receivers

Transmission equipment

Telecom equipment

Australia

352

290

845

788

605

2 880

Austria

249

171

573

346

484

1 823

Belgium-Luxembourg

479

806

959

1 227

805

4 274

Canada

917

787

1 280

1 364

2 499

6 846

Czech Republic

107

69

337

104

364

980

Denmark

232

72

730

478

503

2 014

Finland

136

60

665

262

877

2 001

France

1 256

643

2 620

1 718

2 160

8 397

Germany

2 150

1 414

4 492

3 141

3 563

14 761

Greece

151

60

334

104

303

952

Hungary

113

42

460

98

531

1 245

Iceland

14

3

16

17

13

63

Ireland

102

40

518

1 056

964

2 680

Parts

Total

Italy

1 072

411

1 779

1 580

1 582

6 424

Japan

1 946

1 233

226

2 487

3 619

9 510

Korea

222

173

205

1 273

1 691

3 563

Mexico

625

854

2 244

1 054

2 611

7 388

1 431

605

1 439

2 837

2 227

8 538

59

35

160

89

164

506

Norway

183

64

269

238

357

1 111

Poland

212

127

702

404

374

1 818

Portugal

145

77

377

168

390

1 157

43

34

103

27

107

313

Spain

661

466

1 269

1 401

1 015

4 813

Sweden

369

227

642

468

1 385

3 091

Switzerland

283

110

701

350

391

1 835

Turkey

178

106

1 565

462

493

2 804 13 379

Netherlands New Zealand

Slovak Republic

United Kingdom

1 684

847

3 707

3 741

3 399

United States

8 024

6 462

16 712

7 727

8 833

47 758

23 395

16 289

45 927

35 007

42 309

162 927

OECD

EU 10 118 5 901 20 103 18 526 19 657 74 306 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radiotelephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

244

© OECD 2003

© OECD 2003

Table 9.6. Direction of communication equipment exports, 1991-2002 USD millions

From

1997

1998

1999

2000

2001

Annual growth %

97 553

109 957

125 806

143 845

182 807

164 765

13.0

65 719

75 514

92 870

111 629

143 616

126 316

13.7

28 146

28 748

33 756

32 291

30 685

37 087

37 801

11.4

1 314

1 667

3 086

687

645

1 531

2 105

648

-3.4

To

1991

1992

1993

1994

1995

1996

OECD

World

48 747

53 995

58 360

75 547

90 445

OECD

OECD

35 025

37 797

39 745

50 337

60 631

OECD

Non-OECD

12 808

15 278

17 868

23 896

OECD

Unrecorded

914

920

748

Values:

Shares: OECD

World

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

OECD

OECD

71.9

70.0

68.1

66.6

67.0

67.4

68.7

73.8

77.6

78.6

76.7

OECD

Non-OECD

26.3

28.3

30.6

31.6

31.1

29.5

30.7

25.7

21.3

20.3

22.9

OECD Unrecorded 1.9 1.7 1.3 1.7 1.8 3.2 0.6 0.5 1.1 1.2 0.4 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

Trade in Communication Equipment

245

OECD Communications Outlook 2003

Table 9.7. Direction of communication equipment exports, 1996-2001 USD millions 1996

2001

World

OECD

NonOECD

Australia

408

156

198

54

561

227

128

Austria

377

306

71

0

1 196

841

355

0

Belgium-Luxembourg

2 724

2 333

388

3

4 474

3 724

749

0.9

Canada

3 666

2 946

720

0

5 525

5 012

513

0

From:

Unrecorded

World

OECD

NonOECD

Unrecorded

To:

Czech Republic

206

132

114

17

0.001

1 108

1 058

50

0

1 068

929

139

0.05

1 838

1 705

131

1

Finland

4 045

2 828

1 216

0

8 024

5 385

2 640

0

France

5 842

4 007

1 775

61

10 692

7 153

3 159

380

Germany

9 512

6 081

3 429

2

15 992

12 094

3 897

0.70

Denmark

Greece

67

45

23

0.06

244

39

205

0

Hungary

162

128

19

14

2 948

2 808

140

0

Iceland

0.01

0.002

0.01

0

1

0.36

0.19

0

Ireland

805

699

102

4

3 031

2 642

387

2

Italy

2 695

1 992

700

3

4 560

3 184

1 370

6

Japan

11 213

6 457

4 756

0

13 210

9 058

4 152

0.02

Korea

5 702

2 635

3 065

2

12 488

7 358

5 128

2

Mexico

7 255

7 148

107

0

17 621

17 457

161

3

Netherlands

2 758

1 867

358

533

5 300

4 942

358

1

99

58

40

0

78

41

38

0

Norway

518

352

166

0

638

472

167

0

Poland

251

221

26

4

1 133

1 038

87

8

Portugal

642

622

20

0

902

862

40

0.06 11

New Zealand

Slovak Republic

..

..

..

..

202

186

5

Spain

1 865

1 310

555

0.10

2 542

2 152

390

0

Sweden

8 429

5 355

3 074

0

6 835

4 022

2 814

0

650

487

162

0

740

525

215

0

Switzerland Turkey

296

215

79

1.3

938

785

128

25

9 666

5 960

1 300

2 406

17 012

14 039

2 972

0

United States

16 708

10 465

6 243

0

24 930

17 508

7 422

0

OECD

97 553

65 719

28 748

3 086

164 765

126 316

37 801

648

United Kingdom

EU 50 494 34 334 13 149 3 011 82 643 62 783 19 466 393 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radiotelegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

246

© OECD 2003

© OECD 2003

Table 9.8. Source of communication equipment imports, 1991-2002 USD millions

To

1998

1999

2000

2001

Annual growth %

97 229

114 253

136 843

178 378

162 927

11.9

73 413

88 097

107 355

138 124

121 854

11.7

22 904

23 696

26 041

29 362

40 163

40 844

12.5

1 126

1 956

121

114

126

91

229

..

From

1991

1992

1993

1994

1995

1996

1997

OECD

World

53 068

53 925

55 138

68 344

82 297

90 685

OECD

OECD

40 168

39 759

39 505

48 363

59 435

65 825

OECD

Non-OECD

12 552

13 774

15 414

19 474

21 735

OECD

Unrecorded

348

393

220

506

Values:

Shares: OECD

World

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

OECD

OECD

75.7

73.7

71.6

70.8

72.2

72.6

75.5

77.1

78.5

77.4

74.8

OECD

Non-OECD

23.7

25.5

28.0

28.5

26.4

25.3

24.4

22.8

21.5

22.5

25.1

OECD Unrecorded 0.7 0.7 0.4 0.7 1.4 2.2 0.1 0.1 0.1 0.1 0.1 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radio-telegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics Database.

Trade in Communication Equipment

247

OECD Communications Outlook 2003

Table 9.9. Source of communication equipment imports, 1996-2001 USD millions 1996

2001

World

OECD

NonOECD

Australia

2 221

1 583

Austria

1 147

1 085

Belgium-Luxembourg

2 115

Canada

From:

Unrecorded

World

OECD

NonOECD

638

0.3

2 880

2 093

786

0.4

62

0

1 823

1 668

155

0

1 741

369

4

4 274

3 719

556

0

4 084

3 507

577

0

6 846

5 658

1 188

0

842

731

110

0.2

980

862

117

1

1 371

1 238

133

0.3

2 014

1 907

107

0

Unrecorded

To:

Czech Republic Denmark Finland

870

752

118

0

2 001

1 096

905

France

4 928

3 812

1 045

71

8 397

6 722

1 543

132

Germany

0.9

14 761

11 435

3 324

1.5

952

846

107

0

1 245

925

320

0

8 039

6 297

1 741

Greece

477

417

61

0

Hungary

470

430

40

0.01

0

Iceland

54

48

5

0

63

57

6

Ireland

600

532

69

0

2 680

2 345

335

0.05

0 0.04

Italy

3 664

3 290

372

2

6 424

5 874

550

Japan

7 712

3 961

3 751

0

9 510

3 339

6 172

Korea

2 466

1 983

483

0.1

3 563

2 453

1 110

0

Mexico

2 382

2 295

87

0

7 388

6 168

1 212

8

Netherlands

3 425

2 722

702

0.01

8 538

6 616

1 903

20

New Zealand

529

364

165

0

506

381

126

0

Norway

944

854

90

0

1 111

991

120

0

Poland

894

708

178

8

1 818

1 521

286

12

Portugal

678

630

48

0.1

1 157

1 101

56

0 14

Slovak Republic

0

..

..

..

..

313

270

29

Spain

3 565

3 136

430

0

4 813

4 126

687

0

Sweden

2 537

2 352

185

0

3 091

2 526

565

0

Switzerland

1 481

1 343

138

0

1 835

1 703

131

0

739

607

130

1.7

2 804

2 523

241

40 0

Turkey United Kingdom

8 735

5 425

1 444

1866

13 379

11 050

2 329

United States

23 716

13 982

9 734

0

47 758

31 880

15 878

0

OECD

90 685

65 825

22 904

1956

162 927

121 854

40 844

229

EU 42 152 33 429 6 778 1945 74 306 61 031 13 122 153 Notes: Communication equipment includes: SITC (Rev. 3) 761 Television receivers; 762 Radio-broadcast receivers; 7641 Electrical apparatus for line telephony or telegraphy (including 76411 Telephone sets, 76413 Teleprinters, 76417 Other apparatus for carrier-current liner systems, 76419 Other telephonic or telegraphic apparatus, and 76415 Telephonic or telegraphic switching apparatus); 7643 Transmission apparatus; 76481 Reception apparatus for radio-telephone, radiotelegraphy, etc.; 76491 Parts & accessories for apparatus of heading 764; and 76493 Parts & accessories of 761, 762, 7643, and 7648. Data for 2001 are incomplete. Data shown for 2001 relate to 2000 for Portugal and Turkey. Totals are partial totals of available data. Source: OECD International Trade Statistics (ITS) Database.

248

© OECD 2003

Trade in Communication Equipment

Table 9.10. US communication equipment trade, 1999-2001 USD millions Exports

1999

2000

2001

Imports

1999

2000

2001

Radio transceivers

3 350

3 908

2 746

Cellular telephones

3 115

6 179

8 596

Misc. radio parts

2 236

2 869

2 721

Radio transceivers

2 168

3 913

3 782

Parts/telephonic apparatus

2 669

3 760

2 275

Set top boxes

1 182

2 198

2 215

Line system equipment

1 526

2 311

2 043

Cordless telephones

2 165

2 131

1 738

Fibre optics

1 081

1 888

1 689

Line system equipment

1 831

4 368

1 714

Parts/telegraphic apparatus

578

1 006

1 130

Modems

954

2 074

1 559

Switching equipment

1 201

1 145

1 072

Parts/telephonic apparatus

1 491

2 248

1 418

Cellular phones

1 737

1 085

981

Misc. radio parts

1 374

1 834

1 364

816

1 122

851

Optical fibre

737

1 416

1 256

1 017

1 087

850

Modems Parts/switching equipment

Subtotal

16 211

20 180

16 358

747

1 247

985

Telephone sets

TVROs

1 087

1 045

906

TV transmitters

1 153

1 219

822

18 003

29 870

26 356

Subtotal

Total equipment exports 20 628 24 545 20 202 Total equipment imports 21 435 34 824 29 950 Note: US Department of Commerce data are based on the harmonised classification. Hence these data are not directly comparable with OECD data used elsewhere in this chapter. Source: US Department of Commerce.

249

© OECD 2003

GLOSSARY .. 2G 3G ACA ADSL APNIC ARIN AS ASN ASR BB BLS CAGR ccTLD CPE CPI CRTC CWTA DNS DSL EPO EU FCC FTP GDP GFCF GPRS GSM gTLD HICP HTML HTTP IP ISDN ISP ITS ITU JPO Kbit/s LAN LLU Mbit/s MIC MiTT OBS PC PCB PCS PPI PPP PSTN

© OECD 2003

Data not available Second generation of mobile communications technology Third generation of mobile communications technology Australian Communications Authority Asymmetric digital subscriber line Asia Pacific Network Information Centre American Registry for Internet Numbers Autonomous systems Autonomous system numbers Answer seizure ratio Broadband Bureau of Labor Statistics (USA) Compound annual growth rate Country code top level domain Customer premise equipment Consumer price index Canadian Radio-television and Telecommunications Commission Canadian Wireless Telecommunications Association Domain name system Digital subscriber lines European Patent Office European Union Federal Communications Commission (USA) File transfer protocol Gross domestic product Gross fixed capital formation General packet radio service Global system for mobile communications Generic top level domain Harmonised indices of consumer prices Hypertext mark-up language Hypertext transfer protocol Internet protocol Integrated services digital network Internet service provider International trade statistics International Telecommunication Union Japanese Patent Office Kilobits per second (Kbps) Local area network Local loop unbundling Megabits per second (Mbps) Ministry of Information and Communications (Japan) Minutes of international telecommunication traffic European Audiovisual Observatory Personal computer Public call boxes Personal communications service Producers price index Purchasing power parities Public switched telecommunication network

251

OECD Communications Outlook 2003

PTO R&D RIPE NCC SIC SITC SMEs SMS SNA SSL TCBC TCP/IP TLD UMTS URL USPTO VAT VoIP WAP WiFi W-LAN

Public telecommunications operator Research and development RIPE Network Coordination Centre Standard industrial classification Standard industrial trade classification Small and medium-sized enterprises Short message service Statistics of national accounts Secure sockets layer Telus Communications British Colombia Inc. (Canada) Transmission control protocol/Internet protocol Top level domain Universal mobile telecommunications system Uniform resource locator United States Patent Office Value added tax Voice over Internet protocol Wireless application protocol Wireless fidelity Wireless local area network

252

© OECD 2003

ANNEX

© OECD 2003

1990 1991 1992 1993 1994 1995 Australia 1.28 1.28 1.36 1.47 1.37 1.35 Austria 0.83 0.85 0.80 0.85 0.83 0.73 Belgium 0.83 0.85 0.80 0.86 0.83 0.73 Canada 1.17 1.15 1.21 1.29 1.37 1.37 Czech Republic 21.15 27.92 28.37 29.15 28.79 26.54 Denmark 6.19 6.40 6.04 6.48 6.36 5.60 Finland 0.64 0.68 0.75 0.96 0.88 0.73 France 0.83 0.86 0.81 0.86 0.85 0.76 Germany 0.83 0.85 0.80 0.85 0.83 0.73 Greece 0.47 0.53 0.56 0.67 0.71 0.68 Hungary 63.21 74.74 78.99 91.93 105.16 125.68 Iceland 58.28 59.00 57.55 67.60 69.94 64.69 Ireland 0.77 0.79 0.75 0.86 0.85 0.79 Italy 0.62 0.64 0.64 0.81 0.83 0.84 Japan 144.79 134.71 126.65 111.20 102.21 94.06 Korea 707.76 733.35 780.65 802.67 803.45 771.27 Luxembourg 0.83 0.85 0.80 0.86 0.83 0.73 Mexico 2.81 3.02 3.09 3.12 3.38 6.42 Netherlands 0.83 0.85 0.80 0.84 0.83 0.73 New Zealand 1.68 1.73 1.86 1.85 1.69 1.52 Norway 6.26 6.48 6.21 7.09 7.06 6.34 Poland 0.95 1.06 1.36 1.81 2.27 2.42 Portugal 0.71 0.72 0.67 0.80 0.83 0.75 Slovak Republic .. .. .. 30.77 32.04 29.71 Spain 0.61 0.62 0.62 0.76 0.81 0.75 Sweden 5.92 6.05 5.82 7.78 7.72 7.13 Switzerland 1.39 1.43 1.41 1.48 1.37 1.18 Turkey 2 609 4 172 6 872 10 985 29 609 45 845 United Kingdom 0.56 0.57 0.57 0.67 0.65 0.63 United States 1.00 1.00 1.00 1.00 1.00 1.00 Note: Data for EMU member countries are given in euros (EUR). Data relating to years prior to currencies into euros by applying the irrevocable euro/national currency conversion rates. Source: OECD Main Economic Indicators.

1996 1997 1998 1999 2000 2001 1.28 1.35 1.59 1.55 1.72 1.93 0.77 0.89 0.90 0.94 1.09 1.12 0.77 0.89 0.90 0.94 1.09 1.12 1.36 1.38 1.48 1.49 1.49 1.55 27.14 31.70 32.28 34.57 38.60 38.04 5.80 6.60 6.70 6.98 8.08 8.32 0.77 0.87 0.90 0.94 1.09 1.12 0.78 0.89 0.90 0.94 1.09 1.12 0.77 0.89 0.90 0.94 1.09 1.12 0.71 0.80 0.87 0.90 1.07 1.12 152.65 186.79 214.40 237.15 282.18 286.49 66.50 70.90 70.96 72.34 78.62 97.42 0.79 0.84 0.89 0.94 1.09 1.12 0.80 0.88 0.90 0.94 1.09 1.12 108.78 120.99 130.91 113.91 107.77 121.53 804.45 951.29 1 401.44 1 188.82 1 130.96 1 290.99 0.77 0.89 0.90 0.94 1.09 1.12 7.60 7.92 9.14 9.56 9.46 9.34 0.77 0.89 0.90 0.94 1.09 1.12 1.45 1.51 1.87 1.89 2.20 2.38 6.45 7.07 7.55 7.80 8.80 8.99 2.70 3.28 3.48 3.97 4.35 4.09 0.77 0.87 0.90 0.94 1.09 1.12 30.65 33.62 35.23 41.36 46.04 48.35 0.76 0.88 0.90 0.94 1.09 1.12 6.71 7.63 7.95 8.26 9.16 10.33 1.24 1.45 1.45 1.50 1.69 1.69 81 405 151 865 260 724 418 783 625 218 1 225 590 0.64 0.61 0.60 0.62 0.66 0.69 1.00 1.00 1.00 1.00 1.00 1.00 year of euro zone accession (1999) have been converted from national

OECD Communications Outlook 2003

254

Table A.1. Average annual exchange rates In national currency units per USD

© OECD 2003

Table A.2. Purchasing power parities In national currency units per USD 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Australia 1.39 1.37 1.37 1.35 1.34 1.29 1.30 1.30 1.31 1.30 1.32 1.34 Austria 1.02 1.03 1.02 1.01 1.01 1.00 0.99 0.96 0.96 0.95 0.91 0.92 Belgium 0.98 0.97 0.94 0.92 0.92 0.91 0.91 0.90 0.94 0.93 0.92 0.89 Canada 1.30 1.29 1.28 1.26 1.25 1.18 1.19 1.18 1.19 1.19 1.21 1.20 Czech Republic 5.24 7.65 8.35 9.46 10.39 10.81 11.69 12.39 13.42 13.54 14.00 13.99 Denmark 9.39 9.18 9.15 8.79 8.71 8.42 8.33 8.27 8.16 8.24 8.34 8.46 Finland 1.07 1.06 1.07 1.02 1.03 0.99 0.99 0.98 1.02 1.00 0.99 0.99 France 1.01 0.99 0.98 1.00 1.01 0.98 1.00 0.99 0.99 0.97 0.94 0.92 Germany 1.07 1.07 1.06 1.08 1.06 1.03 1.04 0.99 0.99 0.98 0.94 0.96 Greece 0.41 0.47 0.50 0.54 0.58 0.60 0.63 0.66 0.67 0.68 0.70 0.74 Hungary 26.09 32.65 37.08 43.22 51.17 60.55 72.55 84.30 92.53 98.37 105.53 108.34 Iceland 82.63 85.72 83.13 82.93 84.03 75.87 76.76 77.54 79.97 81.21 83.19 90.00 Ireland 0.88 0.85 0.81 0.83 0.81 0.81 0.85 0.83 0.90 0.92 0.96 0.99 Italy 0.73 0.76 0.75 0.79 0.79 0.80 0.82 0.82 0.81 0.80 0.80 0.80 Japan 195.30 193.06 188.16 184.31 180.59 169.94 165.62 163.01 167.66 162.04 155.55 149.77 Korea 562.17 601.34 631.77 660.59 696.76 730.50 744.40 753.06 785.89 754.89 731.19 723.82 Luxembourg 0.98 0.98 0.96 0.98 0.99 0.96 0.98 0.99 0.98 0.98 0.98 1.00 Mexico 1.53 1.89 2.02 2.12 2.28 2.96 3.79 4.37 4.99 5.63 6.18 6.36 Netherlands 0.98 0.99 0.97 0.97 0.96 0.92 0.93 0.89 0.89 0.89 0.93 0.91 New Zealand 1.61 1.56 1.51 1.51 1.50 1.47 1.48 1.45 1.47 1.43 1.44 1.47 Norway 9.73 9.60 8.98 8.93 9.12 9.14 9.11 9.02 8.87 9.25 9.00 9.18 Poland 0.30 0.47 0.60 0.76 1.00 1.14 1.36 1.62 1.69 1.77 1.86 1.88 Portugal 0.52 0.55 0.58 0.58 0.59 0.59 0.61 0.59 0.63 0.63 0.67 0.68 Slovak Republic .. .. .. 9.94 11.08 11.90 12.20 12.75 12.99 13.55 14.92 15.28 Spain 0.66 0.66 0.69 0.70 0.73 0.73 0.74 0.74 0.74 0.75 0.76 0.76 Sweden 9.34 9.95 9.80 9.83 9.90 9.73 9.68 9.47 9.76 9.64 9.47 9.78 Switzerland 2.20 2.23 2.16 2.13 2.10 2.01 2.05 1.92 1.92 1.89 1.91 1.92 Turkey 1 491 2 280 3 667 5 990 12 096 22 334 39 275 69 928 129 259 197 157 297 337 453 515 United Kingdom 0.60 0.64 0.62 0.64 0.65 0.65 0.64 0.63 0.65 0.65 0.65 0.64 United States 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Note: Data for EMU member countries are given in euros (EUR). Data relating to years prior to year of euro zone accession (1999) have been converted from national currencies into euros by applying the irrevocable euro/national currency conversion rates. Source: OECD Main Economic Indicators.

Annex

255

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Australia

310 459

317 270

313 019

303 728

344 050

372 465

413 973

415 725

372 070

405 943

389 552

347 165

Austria

160 967

168 505

189 789

184 634

199 290

236 010

231 227

205 040

211 041

209 211

187 928

188 126

Belgium

196 796

201 318

224 611

215 194

234 988

277 156

269 044

244 316

250 970

250 572

227 831

229 099

Canada

572 621

586 645

569 679

554 722

554 071

582 701

605 913

629 695

608 345

647 946

704 328

693 920

29 607

26 997

29 701

35 001

41 083

52 037

57 736

52 994

56 671

54 594

50 766

56 417

133 330

134 008

146 998

138 913

151 842

180 314

182 912

169 140

172 449

173 867

160 413

161 597

Czech Republic Denmark Finland

137 450

123 509

109 193

86 303

99 825

130 073

127 968

122 861

128 854

128 176

120 394

120 587

France

1 216 078

1 220 326

1 341 180

1 281 020

1 345 085

1 555 064

1 554 074

1 405 801

1 450 946

1 441 598

1 299 887

1 306 895

Germany

1 680 657

1 767 294

2 016 500

1 946 118

2 090 964

2 467 534

2 381 429

2 102 921

2 143 778

2 100 319

1 858 257

1 841 964

83 215

91 136

99 713

93 840

100 425

117 540

123 734

121 544

121 578

125 178

113 566

108 496

..

33 740

37 603

38 960

41 896

44 669

45 162

45 723

47 050

48 043

46 604

51 926

Iceland

6 286

6 718

6 882

6 038

6 200

6 903

7 206

7 301

8 081

8 496

8 490

7 702

Ireland

47 158

47 695

53 379

50 278

54 709

66 704

73 492

79 782

86 640

94 712

94 927

103 069

Greece Hungary

Italy

1 100 247

1 162 550

1 224 647

996 743

1 028 808

1 098 871

1 228 054

1 166 233

1 192 243

1 179 252

1 068 594

1 086 334

Japan

3 052 111

3 483 259

3 802 460

4 375 172

4 812 007

5 291 722

4 695 738

4 313 261

3 940 377

4 493 347

4 765 092

4 141 393

Korea

252 623

295 235

314 737

345 717

402 523

489 258

520 205

476 486

317 079

406 070

461 519

422 167

11 023

11 689

13 308

13 535

15 307

18 110

18 110

17 561

18 861

19 561

18 773

18 949

Mexico

262 953

314 287

364 186

402 627

420 166

286 140

332 313

400 792

420 826

480 511

579 849

587 299

Netherlands

293 092

301 678

333 555

326 399

346 822

414 019

409 168

374 972

393 549

397 515

367 972

379 292

New Zealand

43 520

42 149

40 470

44 055

51 669

60 973

66 835

65 981

54 101

56 006

50 807

46 965

Norway

115 448

117 811

126 398

116 178

122 884

146 490

157 611

155 045

147 659

153 520

161 803

158 383

Poland

58 976

76 305

84 518

86 066

99 162

127 316

143 639

144 009

159 069

154 941

157 454

167 464

Portugal

71 573

81 092

98 176

86 484

90 287

107 769

111 987

106 900

112 141

114 618

105 543

109 558

..

..

..

12 694

14 551

18 379

19 775

20 407

21 310

19 713

19 270

18 349

512 170

552 576

595 137

502 300

501 247

583 716

610 857

561 523

586 619

601 578

558 520

580 529

Luxembourg

Slovak Republic Spain Sweden

238 278

247 412

255 177

192 499

206 782

240 297

261 752

239 030

239 667

242 694

229 089

209 796

Switzerland

228 276

233 329

242 811

236 350

260 922

307 906

295 027

256 119

262 061

259 046

239 285

246 742

Turkey

150 676

151 041

159 095

180 422

130 652

169 319

181 465

189 878

200 307

184 858

199 264

148 017

United Kingdom

995 179

1 028 332

1 071 674

958 697

1 048 195

1 141 549

1 190 959

1 329 618

1 433 008

1 453 660

1 431 686

1 433 701

United States

5 750 800

5 930 700

6 261 800

6 582 900

6 993 300

7 338 400

7 751 100

8 256 500

8 720 200

9 206 900

9 810 200

9 810 200

OECD

17 711 570

18 754 605

20 126 395

20 393 587

21 809 712

23 929 402

24 068 463

23 677 160

23 877 552

25 112 444

25 487 664

24 782 103

Source: OECD Main Economic Indicators.

OECD Communications Outlook 2003

256

Table A.3. Gross domestic product USD millions, using current exchange rates

© OECD 2003

© OECD 2003

Table A.4. Total population In thousands 1990 1991 Australia 17 065 17 284 Austria 7 718 7 823 Belgium 9 967 10 005 Canada 27 701 28 031 Czech Republic 10 362 10 309 Denmark 5 141 5 154 Finland 4 986 5 029 France 56 709 56 976 Germany 63 254 79 984 Greece 10 089 10 200 Hungary 10 365 10 346 Iceland 255 258 Ireland 3 503 3 524 Italy 56 737 56 760 Japan 123 480 123 960 Korea 42 869 43 296 Luxembourg 384 390 Mexico 81 250 83 265 Netherlands 14 947 15 068 New Zealand 3 363 3 477 Norway 4 241 4 262 Poland 38 119 38 245 Portugal 9 877 9 865 Slovak Republic 5 298 5 283 Spain 38 851 38 920 Sweden 8 559 8 617 Switzerland 6 712 6 800 Turkey 56 203 57 305 United Kingdom 57 561 57 808 United States 249 973 252 665 OECD 1 025 539 1 050 909 Source: OECD Annual Labour Force Statistics.

1992 17 495 7 884 10 045 28 377 10 318 5 171 5 042 57 240 80 595 10 322 10 324 261 3 549 56 859 124 430 43 748 395 84 902 15 182 3 514 4 287 38 365 9 833 5 307 39 011 8 668 6 875 58 401 58 006 255 410 1 059 816

1993 17 667 7 993 10 084 28 703 10 331 5 189 5 066 57 467 81 179 10 380 10 294 264 3 563 56 442 124 830 44 195 401 86 613 15 290 3 554 4 312 38 459 9 840 5 325 39 096 8 719 6 938 59 491 58 198 258 119 1 068 002

1994 17 855 8 031 10 116 29 036 10 336 5 206 5 088 57 659 81 422 10 426 10 261 266 3 583 56 623 125 180 44 642 407 88 402 15 381 3 602 4 337 38 544 9 840 5 347 39 166 8 781 7 019 60 573 58 401 260 637 1 076 167

1995 18 072 8 047 10 157 29 354 10 331 5 233 5 108 57 844 81 661 10 454 10 229 267 3 601 56 745 125 470 45 093 413 90 164 15 460 3 656 4 359 38 588 9 847 5 364 39 223 8 827 7 041 61 646 58 612 263 082 1 083 948

1996 18 311 8 059 10 158 29 672 10 316 5 263 5 125 58 026 81 895 10 465 10 193 269 3 626 56 826 125 864 45 525 416 92 159 15 523 3 714 4 381 38 618 9 866 5 374 39 279 8 841 7 072 62 695 58 807 265 502 1 091 840

1997 18 538 8 072 10 181 29 987 10 304 5 285 5 140 58 207 82 052 10 498 10 155 271 3 661 56 941 126 166 45 954 421 93 938 15 607 3 761 4 405 38 650 9 878 5 383 39 348 8 846 7 089 63 745 59 014 268 048 1 099 531

1998 18 760 8 078 10 203 30 248 10 294 5 304 5 153 58 398 82 029 10 516 10 114 274 3 705 57 040 126 486 46 287 427 95 676 15 707 3 792 4 431 38 666 9 968 5 391 39 453 8 851 7 110 64 789 59 237 270 509 1 106 865

1999 18 984 8 092 10 226 30 499 10 283 5 322 5 171 58 623 82 087 10 538 10 068 277 3 745 57 078 126 686 46 617 433 97 586 15 812 3 811 4 462 38 654 9 988 5 395 39 626 8 858 7 144 65 819 59 501 272 945 1 114 283

2000 19 225 8 110 10 251 30 770 10 272 5 340 5 181 58 893 82 205 10 601 10 024 281 3 787 57 189 126 926 47 008 439 97 379 15 926 3 831 4 491 38 646 10 008 5 401 39 927 8 872 7 184 67 461 59 756 275 372 1 120 688

2001 19 485 8 128 10 263 31 082 10 287 5 359 5 195 59 191 82 311 10 623 10 185 285 3 839 57 348 127 210 47 343 441 99 109 15 987 3 850 4 514 38 641 10 061 5 379 40 266 8 896 7 231 68 610 60 012 285 023 1 136 056

Annex

257

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

70 521 38 073 44 198 123 808 7 489 26 543 39 309 274 398 375 153 19 223 .. 1 236 8 825 236 011 982 446 94 226 2 505 47 015 65 886 8 584 24 954 12 380 18 770 .. 132 434 54 856 61 766 34 459 204 107 998 800 4 007 977

66 515 40 854 42 218 116 877 6 503 25 586 30 121 267 887 419 847 20 557 7 432 1 338 8 171 244 606 1 106 231 115 234 2 984 58 624 66 048 6 920 24 294 14 882 20 228 .. 138 806 51 072 59 422 35 993 184 525 958 500 4 142 274

67 236 44 981 46 485 108 455 8 290 26 322 21 735 280 788 484 813 21 234 7 863 1 257 8 996 250 692 1 159 079 116 325 3 029 71 374 72 014 6 759 25 176 14 189 23 284 .. 137 619 45 925 55 764 37 600 176 461 1 014 300 4 338 043

66 980 42 902 42 964 101 608 9 935 23 813 14 125 248 280 448 224 19 009 7 741 999 7 791 183 768 1 277 422 125 026 3 280 74 737 67 375 8 127 23 724 13 673 19 231 4 010 106 782 29 467 50 959 47 840 150 787 1 100 400 4 320 978

79 817 46 893 45 772 105 807 11 801 26 256 15 451 256 587 483 675 18 721 8 873 1 001 9 048 185 182 1 356 966 144 921 3 177 81 320 70 373 10 501 25 407 17 791 20 098 4 114 105 799 31 147 57 458 32 164 166 637 1 207 500 4 630 254

82 666 54 977 55 058 104 378 16 671 33 546 21 189 292 234 553 753 21 863 8 954 1 096 11 458 201 573 1 468 511 179 494 3 937 46 216 84 037 13 086 30 366 23 721 24 609 4 854 128 333 37 190 65 800 40 360 186 425 1 297 100 5 093 455

91 866 53 910 53 449 110 249 18 446 33 934 21 783 287 147 518 312 24 090 9 666 1 384 13 795 225 206 1 335 959 191 405 3 852 59 353 86 209 14 559 33 522 29 774 26 134 6 770 132 088 41 172 59 584 45 530 196 503 1 409 600 5 135 254

95 905 48 285 49 828 126 696 16 230 33 153 22 097 252 346 450 719 24 060 10 166 1 458 16 205 212 940 1 211 649 167 258 3 901 78 219 80 539 13 715 35 657 33 797 27 323 7 332 122 818 36 284 50 268 50 165 220 321 1 545 200 5 044 533

86 606 49 759 51 662 122 862 15 938 35 566 24 091 267 361 458 422 25 687 11 122 1 957 19 133 220 328 1 059 361 94 408 4 013 87 965 84 699 10 680 38 340 40 001 30 139 8 098 133 921 38 351 52 426 49 244 252 565 1 694 700 5 069 407

96 165 48 743 52 295 131 072 15 247 35 250 24 288 277 029 453 234 27 217 11 489 1 866 22 243 225 638 1 176 533 112 844 4 746 101 862 89 588 11 008 34 676 39 469 31 417 6 069 144 620 41 262 52 557 40 428 250 658 1 831 300 5 390 812

82 120 44 509 48 141 140 897 14 370 34 726 23 201 261 394 401 917 25 720 11 269 1 990 22 424 211 883 1 253 148 131 042 3 945 123 266 83 426 9 670 32 052 39 179 30 155 5 775 141 462 39 660 50 431 44 541 248 188 1 984 100 5 544 602

73 185 42 947 47 855 139 669 15 825 33 922 23 876 263 922 373 045 24 571 12 163 1 674 21 823 215 167 1 068 658 114 252 4 033 124 850 83 394 8 939 31 375 41 670 30 117 5 499 145 479 36 700 50 939 26 372 243 099 1 984 100 5 289 119

Source: OECD Main Economic Indicators.

OECD Communications Outlook 2003

258

Table A.5. Gross fixed capital formation USD millions

© OECD 2003

© OECD 2003

Table A.6. Households In thousands

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States OECD Source: ITU.

1990 5 900 3 000 3 860 9 624 .. 2 288 2 000 21 500 34 000 3 200 3 839 93 1 029 20 000 41 036 11 355 145 16 035 5 974 1 170 1 751 12 183 3 050 .. 11 260 3 830 3 205 11 189 21 900 93 347 347 763

1991 6 173 3 025 3 890 9 873 3 983 2 309 2 010 21 800 34 701 3 204 3 832 95 1 047 19 909 41 633 11 659 148 16 667 6 103 1 178 1 780 12 200 3 149 1 833 11 279 3 931 3 296 11 500 22 391 94 312 358 909

1992 6 302 3 030 3 949 10 122 3 980 2 325 2 100 22 131 35 700 3 460 3 824 92 1 065 19 948 42 239 11 971 151 17 152 6 216 1 200 1 800 12 406 3 160 1 787 11 753 3 970 3 355 11 800 22 600 95 669 365 257

1993 6 445 3 058 4 007 10 371 3 980 2 339 2 130 22 400 36 230 3 480 3 813 93 1 084 21 179 42 854 12 291 154 17 654 6 285 1 220 1 830 12 517 3 170 1 830 11 928 4 009 3 386 12 100 22 853 96 391 371 081

1994 6 578 3 096 4 044 11 051 3 975 2 358 2 160 22 700 36 669 3 500 3 800 94 1 103 21 074 43 478 12 620 157 18 174 6 421 1 240 1 835 12 800 3 180 1 865 12 076 4 048 3 439 12 400 23 100 97 107 376 142

1995 6 690 3 131 4 081 11 100 3 880 2 374 2 181 23 000 36 938 3 510 3 795 95 1 123 21 168 44 108 12 958 160 18 500 6 559 1 260 1 845 13 050 3 190 1 893 12 224 4 087 3 493 12 700 23 302 98 990 381 386

1996 6 762 3 151 4 095 11 200 3 790 2 332 2 199 23 286 37 281 3 520 3 780 96 1 160 21 192 44 678 13 251 164 19 400 6 620 1 276 1 850 13 055 3 215 1 896 12 243 4 005 3 434 13 446 23 517 99 627 385 520

1997 6 956 3 182 4 106 11 221 3 706 2 410 2 221 23 500 37 457 3 540 3 768 97 1 192 21 193 45 256 13 569 167 20 000 6 704 1 302 1 865 13 090 3 240 1 899 12 000 4 165 3 472 13 300 23 900 101 020 389 498

1998 7 015 3 189 4 100 11 385 3 705 2 420 2 247 23 700 37 532 3 570 3 775 98 1 227 21 200 45 841 13 905 170 20 300 6 783 1 303 2 049 13 100 3 200 1 842 11 855 4 204 3 508 13 600 24 289 104 100 395 212

1999 7 127 3 243 4 104 11 553 3 810 2 434 2 375 23 810 37 795 3 580 3 773 99 1 257 21 189 46 434 15 442 174 20 900 6 868 1 309 2 064 13 108 3 230 1 938 12 179 4 244 3 542 13 900 24 684 105 100 401 265

2000 7 250 3 260 4 238 11 699 3 822 2 445 2 399 23 900 38 124 3 590 3 751 100 1 287 21 176 47 031 15 512 177 21 513 6 954 1 316 2 164 13 130 3 670 1 932 12 503 4 285 3 577 14 400 25 085 106 500 406 790

Annex

259

OECD PUBLICATIONS, 2, rue André-Pascal, 75775 PARIS CEDEX 16 PRINTED IN FRANCE (93 2003 02 1 P) ISBN 92-64-19984-5 – No. 52863 2003