TABLE OF CONTENTS Chapter 1. Introduction... 11 The Road to Regulatory Reform... 11 Communication Markets in the OECD Area... 15 Leading PTOs in OECD Area... 16 Chapter 2. Recent Communication Policy Developments... 25 A Decade of Change... 25 Regulatory Safeguards... 28 Future Regulatory Challenges... 37 Chapter 3. Telecommunication Market Size... 45 Market Drivers... 45 Chapter 4. Network Dimensions and Development... 65 Growth in Countries with Low Network Penetration... 66 Developments in Countries with High Network Penetration... 66 Digitalisation... 68 Network Investment... 69 Chapter 5. Internet Infrastructure... 85 Number of Internet Users... 85 Internet Hosts... 85 Internet Servers... 88 Domain Names... 91 IP Addresses... 93 The Internet and Convergence... 96 The World Wide Web... 98 Chapter 6. Broadcasting Services... 109 Broadcasting Market... 109 Regulatory Framework... 112 Emerging Trends: Digital Television... 114 Chapter 7. Telecommunication Pricing... 155 Main Trends in Pricing... 155 Business, Residential and International Baskets... 161 Internet Access Prices... 175 Leased Lines... 186 Cellular Mobile Communication... 188 5
Communications Outlook 1999 Chapter 8. Quality of Service... 193 Connections... 193 Pay Phones... 195 Network Faults and Maintenance... 198 Value-added Service... 198 Answer Seizure Ratios... 200 Chapter 9. Employment and Productivity... 207 Chapter 10. Trade in Communication Equipment... 219 Chapter 11. Communication Aid... 237 Lower aid volumes... 237 Donor countries and organisations... 237 Recipients of communication aid... 241 Application of communication aid... 242 Associated financing... 244 Statistical Annex... 247 List of Tables 6 1.1. Status of telecommunication facilities competition in the OECD, January 1999... 12 1.2. Major public telecommunication operators in the OECD area with revenues greater than US$1 billion, 1997... 17 1.3. Major cellular mobile telecommunication operators in the OECD area, 1997... 20 1.4. Main indicators for incumbent and new public telecommunication operators in the OECD.... 22 2.1. National long distance market shares of new operators... 27 2.2. International market share of new market entrants... 29 2.3. Status of major telecommunication network operators (November 1998)... 32 2.4. Interconnection frameworks... 34 2.5. Foreign ownership restrictions in telecommunications... 38 2.6. Treatment of Internet telephony... 40 3.1. Public telecommunication revenue in the OECD area... 54 3.2. Major growth areas in telecommunication revenue: mobile telecommunication... 55 3.3. Public telecommunication revenue ratios... 56 3.4. Cellular mobile telecommunication revenue per cellular mobile subscriber... 57 3.5. Major areas of PTO expenditure, 1997... 58 3.6. Public telecommunication revenue as a percentage of GDP... 59 3.7. Major growth areas of telecommunication revenue: international telecommunication revenue, 1997... 60 3.8. International telecommunication traffic... 61 3.9. Telephone traffic between OECD countries, 1996... 62 3.10. R&D expenditures for PTOs and telecommunications equipment manufacturers, 1997... 63 3.11. Revenues and R&D expenditures for manufacturers of Internet equipment, 1995-97... 63 3.12. US Patent Office: Number of patents granted in electronic equipment and components industry... 64 4.1. Telecommunication access lines in the OECD area... 73 4.2. Access lines per 100 inhabitants in the OECD area... 74 4.3. Cellular mobile subscribers in the OECD area... 75 4.4. Cellular mobile development, 1997... 76 4.5. Digitalisation in the OECD area... 77 4.6. Deployment of fibre optic cable in the OECD area... 78
Table of Contents 4.7. ISDN subscribers in the OECD area... 79 4.8. Public telecommunication investment in the OECD area... 80 4.9. Telecommunication investment by region... 80 4.10. Public telecommunication investment as a percentage of revenue... 81 4.11. Public telecommunication investment as a percentage of GFCF... 81 4.12. Public telecommunication investment per access line... 82 4.13. Public telecommunication investment per access path... 83 4.14. Public telecommunication investment per capita... 84 4.15. Expenditure on switching and transmission infrastructure, 1997... 84 5.1. Internet hosts in OECD countries... 86 5.2. Web servers in OECD countries... 88 5.3. Secure Web servers for electronic commerce... 90 5.4. Second, third domain registered domain names in OECD area (July 1998)... 92 5.5. Domain name pricing, May 1998... 93 5.6. Leading IP allocations and reservations by IANA, May 1998... 96 5.7. Leading IP allocations from RIPE, April 1998... 97 5.8. Leading IP allocations from APNIC, January 1998... 97 5.9. Leading IP assignments from APNIC and RIPE, by country... 98 5.10. Comparative World Wide Web development (June 1998)... 99 5.11. World Wide Web links between TLDs and gtlds (July 1998)... 100 5.12. Percentage of all World Wide Web links between TLDs and gtlds (July 1998)... 102 5.13. Percentage of World Wide Web links between TLDs and gtlds (excluding intra-domains) (July 1998)... 104 5.14. Balance of World Wide Web links between TLDs and gtlds (July 1998)... 106 6.1. Broadcasting market revenue in OECD countries... 116 6.2. Television broadcasting market revenue in OECD countries... 117 6.3. Ranking by audiovisual turnover of the 50 leading companies in the world, 1996... 118 6.4. Advertising revenue in the television broadcasting market... 119 6.5. Subscription revenue in the television broadcasting market... 120 6.6. Public funding in the television broadcasting market... 121 6.7. Broadcasting market revenue as percentage of GDP and revenue per inhabitant... 122 6.8. Number of broadcasting companies in the OECD area... 123 6.9. Status of major terrestrial television broadcasting companies in the OECD area... 124 6.10. Number of television channels viewable in the OECD area... 125 6.11. Penetration rate of households with television sets and television sets per household in OECD countries... 126 6.12. Average household television viewing time per day (in hours)... 127 6.13. Number of cable television subscribers in OECD countries... 127 6.14. Number of Direct Broadcast Satellite (DBS) subscribers in OECD countries... 128 6.15. Number of subscribers to major satellite television channel packages... 128 6.16. Definition of broadcasting in OECD countries... 129 6.17. Must carry rules in the OECD area... 131 6.18. Major domestic and local content requirements in the OECD area... 133 6.19. Regulatory treatment of webcasting service in OECD countries... 135 6.20. Broadcasting administration and regulation in the OECD area... 136 6.21. Specific cross sector ownership restrictions in OECD countries... 139 6.22. Ownership restrictions on television services in OECD countries... 141 6.23. Cross media ownership restrictions in OECD countries... 144 6.24. Foreign ownership restrictions on broadcasting services in OECD countries... 146 6.25. Scheduled plans for digital broadcasting in OECD countries... 148 6.26. Major digital direct broadcasting satellite (DBS) services in the OECD area... 151 6.27. Preparation for digital terrestrial television in selected OECD countries... 152 7.1. Charging practices for residential users in the OECD area, 1998... 157 7
Communications Outlook 1999 8 7.2. OECD basket of business telephone charges, August 1998... 163 7.3. OECD basket of residential telephone charges, August 1998... 164 7.4. Tariff regulation in OECD countries... 166 7.5. Collection charges per minute (peak rate), August 1998... 169 7.6. Collection charges per minute (off-peak rate), August 1998... 170 7.7. OECD International Tariff Basket, August 1998... 174 7.8. OECD International Tariff Basket, August 1998... 175 7.9. OECD trends in collection charges... 177 7.10. OECD basket of national and international business telephone charges, August 1998... 178 7.11. OECD basket of national and international residential telephone charges, August 1998... 179 7.12. Monthly basket of local PSTN residential charges, May 1998... 180 7.13. PTO monthly Internet access charges, July 1998... 183 7.14. PTO monthly Internet access charges, July 1998... 184 7.15. Peak rate Internet access basket, 1998... 185 7.16. Off-peak rate Internet access basket, 1998... 186 7.17. Times series of leased line tariffs for OECD countries... 188 7.18. OECD basket of national leased line charges, August 1998... 188 7.19. Basket of national and international leased line charges, August 1998... 189 7.20. Basket of international leased line charges, August 1998... 189 7.21. OECD basket of packet switched data communication charges, August 1998... 190 7.22. OECD basket of analogue mobile telecommunication tariffs, August 1998... 190 8.1. Network access: waiting time for new connection... 194 8.2. Network access: outstanding applications for connection... 195 8.3. Pay phones in the OECD area... 196 8.4. Quality of service: pay phones... 197 8.5. Quality of service: fault incidence and repair time... 199 8.6. Itemised billing... 201 8.7. Cost of itemised billing... 201 8.8. Caller line identification... 202 8.9. Directory assistance charges... 202 8.10. Answer seizure ratios... 203 9.1. Number of PTO employees in the OECD area... 208 9.2. PTO employment as per cent of total national employment... 208 9.3. PTO access lines per employee... 209 9.4. PTO employment data by company, 1997... 211 9.5. Public telecommunication revenue per employee... 213 9.6. Number of employees in mobile telecommunications... 214 9.7. Total PTO expenditure on wages and salaries... 215 9.8. Total PTO wages and salaries per employee and per access line... 216 9.9. Telecommunications in the workplace... 217 10.1. Breakdown of OECD communication equipment exports... 220 10.2. Breakdown of OECD communication equipment imports... 221 10.3. Communication equipment exports in OECD countries, by value, 1996... 224 10.4. Communication equipment imports in OECD countries, by value, 1996... 225 10.5. Trade balances (export-imports) of OECD countries for communications equipment... 228 10.6. Evolution of the trade surplus/deficit per capita for the OECD countries for communications equipment... 229 10.7. Exports of modems from the United States... 234 10.8. Imports of modems into the United States... 235 11.1. Leading donors of total aid and communication aid... 238 11.2. ODA and other official flows from multilateral organisations... 240 11.3. Export credits for associated financing of communication projects... 245 11.4. Export credits for associated financing of communication projects, by country, 1985-96... 245
Table of Contents Statistical Annex A.1. Average annual exchange rates... 249 A.2. Purchasing power parities... 250 A.3. Consumer price index... 251 A.4. Total population... 252 A.5. Households... 253 List of Figures 1.1. Fixed network infrastructure competition... 13 1.2. Cellular mobile communication infrastructure competition... 13 1.3. Proportions between incumbents and new entrants, 1997... 23 1.4. Proportions between incumbents and new entrants, 1995... 23 2.1. New entrants international market share... 29 2.2. Share of mobile subscribers by operator, 1997... 30 3.1. Trends in telecommunication revenue, investment and access paths, 1980-97... 46 3.2. Mobile telecommunication revenue in OECD countries, 1997... 47 3.3. Public telecommunication revenue per access line, 1987 and 1997... 48 3.4. Public telecommunication revenue per capita, 1987 and 1997... 48 3.5. Cellular mobile telecommunication revenue per cellular mobile subscriber, 1995 and 1997... 49 3.6. PTO revenue by sector... 51 3.7. Minutes of outgoing international telecommunication traffic (MiTT), 1997... 52 3.8. US Patent Office: number of patents granted in electronic equipment and components industry... 53 4.1. Access lines per 100 inhabitants in OECD countries, 1990, 1995 and 1997... 65 4.2. Cellular mobile subscribers in OECD countries... 67 4.3. Cellular mobile subscribers per 100 inhabitants, 1997... 68 4.4. Digitalisation in the OECD area, 1990-97... 69 4.5. Telecommunications investment by region, 1985-97... 70 4.6. Telecommunication investment as a percentage of PTO revenue and of GFCF, 1997... 71 4.7. Public telecommunication investment per access line... 72 4.8. Public telecommunication investment per capita... 72 5.1. Internet hosts per 1 000 inhabitants (incl..com,.net,.org), July 1998... 87 5.2. Web servers per 1 000 inhabitants (incl..com,.net,.org), July 1998... 89 5.3. Secure Web servers for electronic commerce per 100 000 inhabitants, August 1998... 91 5.4. Domain name registration costs... 94 7.1. OECD tariff rebalancing by distance... 159 7.2. Iceland Telecom: price of domestic telephone calls, 1988-97... 160 7.3. AT&T standard and discount prices, mid-1998... 162 7.4. OECD business tariff basket, August 1998... 165 7.5. OECD residential tariff basket, August 1998... 165 7.6. OECD business and residential tariff basket trends... 171 7.7. OECD business tariff basket trends in different markets... 171 7.8. OECD residential tariff basket trends in different markets... 172 7.9. OECD tariff basket trends in different markets (total price)... 172 7.10. OECD tariff rebalancing by distance... 173 7.11. Time series of international collection charges and traffic... 176 7.12. Off-peak rate Internet access basket, 1998, in US$ PPP... 187 8.1. Pay phones in the OECD area, 1997... 196 8.2. Quality of service: faults per 100 lines per annum... 200 8.3. Answer seizure ratios, 1997... 204 8.4. Answer seizure ratio and digitisation of access lines, 1990-97... 204 9
Communications Outlook 1999 9.1. PTO access lines per employee... 210 9.2. PTO access lines and mobile subscriptions per employee in the OECD area, 1980-97... 210 9.3. Public telecommunication revenue per employee... 213 9.4. Number of employees in mobile telecommunications... 214 9.5. PTO wages and salaries per employee and per access line, 1997... 216 10.1. OECD trade in communications equipment, 1990-96... 219 10.2. OECD communications equipment exports, 1996... 222 10.3. OECD communications equipment imports, 1996... 222 10.4. Evolution of communications equipment exports, imports and trade balance of OECD with selected Asian economies, 1990-96... 226 10.5. Evolution of the trade balance of communications equipment for selected OECD regions/countries, 1990-96... 227 10.6. Communications equipment trade surplus/deficit per capita, 1996... 230 10.7. Communications equipment exports and imports in OECD countries by selected SITC categories.. 231 10.8. Trade of modems with the United States, 1994-97... 233 11.1. Total aid and communication aid per year... 238 11.2. Communication aid as a share of total aid, 1985-96... 239 11.3. Communication aid by destination region, as a percentage of total communication aid from DAC countries... 241 11.4. Communication aid by region and by donor country, 1990-97... 242 11.5. Aid by DAC country group... 243 11.6. Communication aid by DAC aid recipients and by type of communication aid, 1990-97... 244 10