Following his appointment as chairman of the Commonwealth Telecommunications Organisation, which has a membership of 58 countries, Anthony De Bono gave us some of his views on the overall fast-emerging telecommunications environment worldwide, with touches on the local scenario.
Anthony De Bono started off by referring to the European Union's ambitious objective to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion, by 2010.
At the national level Mr De Bono thinks that, irrespective of its size, Malta has had the political foresight to invest heavily in telecommunications development in the late Eighties. This, in turn, attracted the attention of the telecommunications world to its potential as an attractive hub for inward and outward economic activity.
It continued with this trend when, in the so called eEurope plan, its performance, manifested through its drive to succeed in eGovernance and general capacity-building activities, made it among the best EU accession countries and, in some areas, even surpassed the EU average.
On the international plane and when comparing the European telecommunications environment to the rest of the world, our achieved standards cannot be taken as the norm in all other countries. When viewed in the context of the global telecommunications evolution the tempo in Europe must be accelerated.
So much so that, on taking office last July, the Dutch Presidency stressed that, with a newly enlarged European Commission, the necessity to stimulate productivity growth and competitiveness of the European market, through the integration of ICT in the economy and society at large, assumed top priority for the Presidency.
The roll-out and installation of ICT infrastructures and applications are given states of fact in the European environment. Now that we are better connected than ever, it is a must to embed ICT in an effective way, notably in the processes of producing goods and services, thereby securing a successful transition to a network economy and a knowledge-based society, Mr De Bono said.
This was more important when, apart from the fact that the Lisbon targets are still far away, economic growth and worker productivity are lower than in many countries.
PricewaterhouseCoopers, who were commissioned by the Dutch Presidency to carry out an overall analysis of the situation, established the fact that countries like Korea, India, China, USA and Japan all outperform the EU in many aspects.
To cite examples of how remarkable the telecommunications market, including fixed lines, mobile subscribers and Internet users, soared in a number of countries, particularly across the Asia-Pacific region, albeit the Asia-Pacific region encompasses some of the most and least connected economies in the world, the latest official figures underscore that mobile subscribers, rocketed by 31% per year between 2000 and 2003 to reach 560 million, overtaking North America as the world's largest market.
The number of fixed lines grew by 14% in the same period, which also outshone single digit growth rates in the other regions. Next-generation services (including 3G) have been launched across the Asia-Pacific region, with Japan and the Republic of Korea emerging as the global leaders in this field.
In reality, Japan has the world's highest penetration of mobile Internet users. An outstanding 38% growth of Internet users in the Asia-Pacific, year on year from 2000-2003, is a recognised fact. But the broadband markets in these regions are exceptional.
Four of the top 10 broadband-connected economies in the world hail from this part of the world. The Republic of Korea, with a 23.3% penetration, and Hong Kong, China, with 18% penetration, top the global broadband connections, closely followed by Taiwan, China (13.4%) and Japan (11.7%).
The Dutch Presidency is therefore arguing that time is now right to enter a new phase in the integration of the ICT in our economies and society.
An international high level ministerial conference on future ICT policy which will be held in Amsterdam this week (on Wednesday and Thursday) and eventually the Telecoms Council in Brussels on December 9 will definitely debate the future European ICT agenda.
On both occasions the very provocative PricewaterhouseCoopers report, which identified ten potential breakthroughs that could be achieved for Europe to be as successful as the countries just mentioned, will be featuring prominently for extensive grilling!
Mobility
On mobility Mr De Bono said that Mobile broadband services are an economic engine in their own right but are also vital to sustain competitiveness throughout the economy. Building on Europe's strength in the mobile communications sector, these new services will increase productivity by boosting labour efficiency in public services and business.
Anywhere, anytime availability will be essential to a European information economy where the mobility of people, goods and services is increasing. All stakeholders, including member states of the Union, need to address these issues together to ensure that Europe does not miss out on the benefits that mobile broadband services can bring.
"The rapid growth in mobile communications has had an enormous economic and social impact in Europe and globally," he said. "Penetration levels in Europe are over 80% and rising.
"However we are now witnessing a paradigm shift as new mobile data services begin to come on stream. The latest generation of mobile and wireless technologies will combine the benefits of high speed broadband connections and high volume data carrying capacity with mobility."
He gave as an example mobile users who will be able to shop and pay on-line and receive a whole range of audiovisual services, such as music and video. The biggest benefits are likely to come from productivity gains.
The ability to link the mobile workforce with company headquarters and exchange data at high speed will change working processes and improve organisational efficiency.
VOIP developments
One of the many technologies that will affect the electronic communication sector in the coming years is VOIP. It offers the potential to increase competition, stimulate new and innovative services for the citizen, and reduce operators' cost, Mr De Bono said.
VOIP is changing the rules and revolutionising the telecoms industry. Traditional telephony is on its way out and, in the next year or so, VOIP will be going mainstream and will be the hot broadband topic.
One must be conversant with the threats and opportunities of VOIP in one's business model and organisations must be ready to take advantages of the changes that are brought about by IP communications, especially how to ensure to make money out of VOIP.
"It will be interesting to see how this technology will affect public network telephony and what are the technical and market issues surrounding this service," Mr De Bono said.
More than one in ten European companies are now deploying VOIP in their corporate networks and, consequently, it is necessary to appraise the prizes and pitfalls for such decisions.
Despite there being no security threats as yet, experts are announcing concerns that VOIP technology may be too insecure for many enterprises.
The EU regulatory framework is designed to facilitate market entry for new players and to accommodate changes in the underlying technologies. In fact, the EU issued two previous communications on VOIP (in 1998 and 2000) but they have been superseded by the new EU regulatory framework, which came into effect in July 2003.
Research and development efforts
The share of GDP that Europe spends on R&D lags well behind that of its main trading partners, Mr De Bono said. An R&D strategic agenda that supports innovation, including basic research, is needed. Among the areas that will come to the fore are:
interoperability - the telecoms industry is asked to take urgent steps to improve the interoperability of mobile broadband services to facilitate communication and the supply of services on different networks;
value-added content - the regulatory framework for intellectual property rights should be implemented so as to foster the creation of high value-added content;
e-payments - prudential rules governing the use of e-money, where relevant, to mobile payments need to be applied in a proportionate and risk-sensitive manner;
base stations and masts - action is needed to address regulatory barriers to their establishment in some Member States; and
spectrum policy - a co-ordinated European approach towards availability and flexible usage is needed.
On this spectrum issue which is becoming very topical, notably in Malta where the resource is scarce, I asked Mr De Bono what developments are taking place in the international scenario. "Spectrum in crude terms is the control of air ways to respect boundaries of neighbouring countries within the norms of the International Telecommunication Union regulations.
"The spectrum management process is another topic that is taking centre stage since it is regarded as a theme of high current policy interest.
"According to the research recently carried out, while governments have kept pace with spectrum demand over the last 50 years, by gradually increasing spectrum supply, the technological advances and economic liberalisation we are experiencing have dramatically increased the pace of spectrum consumption causing demand to increasingly outstrip supply."
As a result regulators are heavily pressured to correctly ration and balance spectrum demand between various competing uses. It stands to reason that shortcomings in the traditional centralised approach to spectrum management will be more evident in the near future and new trends have to be established.
Undoubtedly in the same way as the wave of liberalisation, deregulation and privatisation is eliminating the telecommunications sector as a whole, the regulatory approach to spectrum management must follow.
Today broadcasting has crossed over into mobile telephony and mobile telephony into wireless broadband access. This convergence is creating a hazy environment between traditional service definitions along which regulators allocated spectrum.
Where traditionally different radiocommunication services were regarded as separate, involving different spectrum allocations, a single platform can now be used to deliver a wide variety of services to customers.
Reactions
Commenting on how countries reacting to these rapid advances in technology and emerging new markets Mr De Bono said that in his experience in international involvement in different fora he noted that on one hand a number of countries retained centralised control over functions, such as spectrum allocation, while introducing market-based mechanisms, such as auctions to assign spectrum; on the other hand, some countries like Australia and New Zealand have gone further in deregulating spectrum management by allowing the market-based allocation of spectrum use.
In the UK until about five years ago the government practised what was coined as the 'command and control' form of spectrum management. Allocations were derived from international agreements made at the global and European level and assignments were made on what is usually termed as 'beauty contest' or 'first- come-first-served' approach with the management process undertaken by the Department for Trade and Industry.
Implementation was carried out by an agency within the department, responsible to the Secretary of State, the Radiocommunications Agency. However the increasing pressure of demand necessitated thorough changes. This extra demand came from various sources which included the growth of mobile communications but more importantly from digital broadcasting terrestrially and by satellite.
The UK government therefore responded to this increasing disjunction between the new spectrum needs and traditional methods of allocation and assignment by making proposals and bringing forward legislation to change the face of spectrum management.
So much so that the Communications Act 2003 has established a 'converged' regulator, the Office of Communications (OFCOM), which assumed the responsibilities as the UK's new regulator for television, radio, telecommunications and spectrum management.
It is responsible, among others, to look for the most efficient way to use spectrum. A primary objective is that the liberalisation of spectrum will enable spectrum to migrate towards applications and users providing the best benefit to the economy and society.
Attracting new investment
Asked whether Malta was attractive enough for new investment, Mr De Bono said every investor considered at least two factors as the basis for which they decided on the allocation of their financial resources: risk of investment; and the level of expected profit.
In general, operators - both incumbents and new entrants - will only invest in a market if they could earn a reasonable rate of return on their investments and their profitability was not decreased or questioned by regulatory tools.
It was of major importance to create a transparent and favourable regulatory environment in which rules were clearly defined and applied, and market specifics were also taken into account so that investment costs could be recovered by investors.
"Any inappropriate regulatory intervention may have a detrimental impact on the roll-out of service," he said. "For this reason broadband should be treated as an emerging market and should therefore be allowed to develop according to the normal dynamics of market forces, regulated only by the application of general competition law. This is even more important in the new EU accession countries."
The role of governments was also crucial. "Governments can take the stance to be the leader in the adoption of the technology within its operational activities," he said. "It can stimulate the development of an adequate national backbone of networks.
"Malta has been looked on as a leader itself in this respect. It can create initiatives for the establishment of competition and establish a firm bond with the private sector," he said.