CTO_Yaounde_17Oct23.pdf

CTO_Yaounde_17Oct23.pdf

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  Dr Christoph Stork,Yaounde, Cameroon 17 October 2023 A New Regulatory Philosophy Regulatory responses to evolving technologies Research ICT Solutions
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  Trends that requirea regulatory response Tend 1: Transition to a digital data- centric business model Tend 2: The global Internet Value Chain has turned into a self re- enforcing value circle Tend 3: The market value of the global Internet value chain quadrupled between 2008 and 2020 Tend 4: Explosion of data; user, object and AI generated Opportunity: Big data for precision regulation
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  Trend 1: Transitionto a digital, data-centric, business model Blockchain Accounting for data Big Data Combining data IoT Generating data Analogue Digital Business model Service Connectivity Metric Minutes and SMS Bandwidth or throughput Cost sensitivity Distance, duration and location matter Time, distance and location insensitive Billing Access and usage billing (voice and SMS o ff -net / on-net, peak / o ff -peak) Simple access billing Tra ffi c Monitoring Detailed tra ffi c monitoring as part of the billing system Usage monitoring limited to data use Postpaid subscribers Detailed vetting to reduce risk or revenue loss and expenses that arise from call termination and subsidized handsets • Postpaid risk limited to revenue of one billing cycle • No external expense risks • Prepaid and postpaid do not need to be distinguished by pricing • Postpaid may be extended without signi fi cant vetting Network infrastructure GSM 1G and 2G 2.5G, 3G, 4G, 5G • Telcos provided last-mile connectivity to their customers ever since the first phone call in 10 March 1876. Only the types of services have evolved. • Mobile 1G was about voice, 2G about SMS since then, any further iteration has been investment into data connectivity. • The transition to data-centric business model is inevitable.
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  Trend 2: Theglobal Internet Value Chain is becoming a self re-enforcing value circle • In the past, the data flow was from content owners to the end- users via radio, TV and the public Internet. • Today, users create content through social media applications and other ways of uploading data, contributing to the content segment of the value chain (YouTube, Facebook, TikTok, Instagram, etc.) • Network effects triggered by user generated content led to acceleration in broadband adoption and data use. • While streaming services such as Netflix are regular value chain, AI (ChatGPT, etc) will accelerate the self-reinforcing character of the Internet. THE INTERNET VALUE CIRCLE USERS Skills Content ONLINE SERVICES e-Retail Streaming Gaming Social media Search services Cloud services ENABLING TECHNOLOGIES & SERVICES Web design & hosting Payment platforms Advertising CONTENT RIGHTS Premium rights Professional content User-generated content CONNECTIVITY First Mile Middle Mile Last Mile Invisible Mile USER INTERFACE Access devices OS & software apps ONLINE SERVICES CONTENT ENABLING SERVICES CONNECTIVITY USER INTERFACE
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  Trend 3: Themarket value of the global Internet value chain quadrupled between 2008 and 2020. The connectivity segment more than tripled in market value. Segment Example activities USD billion Growth 2008 2015 2020 Content Rights Premium content rights 37 66 186 403% Online Services e-Travel, video and audio publishing, gaming, gambling, search, social media, information & reference, cloud based services, other online services 477 1,595 3,792 695% Enabling Technologies & Service Web design & hosting, payment systems, advertising exchanges, CDNs 188 442 812 332% Connectivity Mobile access, tower companies, fixed access 229 586 988 331% User Interface Hardware devices, software and systems 251 659 897 257% Total 1,182 3,348 6,675 465% Source: https://www.gsma.com/publicpolicy/wp-content/uploads/2022/05/Internet-Value-Chain-2022.pdf
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  Trend 4: Explosionof data from users, things and AI generated • The digitalisation of societies and economies is continuously generating record amounts of data. • Digitalisation is driven by increased and faster connectivity of people and of things. • Fibre to the home (FTTx) and fast mobile networks provide the opportunity to engage in digital activities, and social media and user-generated content provide the motivation for it. • At the same time, more objects become “smart”, i.e., connected to the Internet to receive and send data. • As a result of the explosion of data, new technologies have evolved that help to sift through data and derive value from combining and analysing large data sets. • Explosion of data poses regulatory challenges but also regulatory opportunities Explosion of Data Blockchain Accounting for data Big Data Combining data IoT Generating data AI Learning from data Cloud Storing data
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  The data protectionimplications across many different segments of the value chain and across borders requires collaboration between different regulators from different jurisdictions Tesla software updates data on driving behavior • An example to illustrate this: Tesla monitors the status of cars sold abroad and updates software remotely. • It could sell car usage data to a car insurance that the insurance can charge lower premiums to careful drivers and higher ones to reckless drivers. i. Usage data collected using mobile networks - overseen by the telecom regulator ii. Shared with car manufacturers - regulated by transport and safety authorities iii. Shared with insurance companies - overseen by the financial services regulator • What recourse do consumers have if they do not want their car usage data shared with third parties like insurance companies? Car insurance data on driving behavior Insurance premium
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  Regulatory time line LAST25 YEARS Landline Monopolies Mobile Oligopolies ISP Oligopolies NEXT 25 YEARS Multi-layered access providers (incl. Wifi at home, work, public spaces) FIRST 100 YEARS Landline Monopoly Voice Voice, SMS, Data Data Ministry regulates ICT Sector Specific Regulators Co-ordination of regulatory institutions within a country and across borders Business Model Regulatory Approach Market Structure
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  The lines betweensector- and subject-specific regulators may need to be redrawn and, in some cases, more specialised regulators may need to be established. • A sector-specific ICT Regulator is complemented by functional regulatory agencies that have responsibilities across all sectors of an economy. • The best set-up may differ for countries, the respective legal frameworks and will also change over time. • ICASA South Africa: • The allocation of high demand spectrum was delayed for 15 years. • At the start of COVID-19 pandemic it was allocated within 4 weeks. • The additional spectrum increased the quality of service and lowered prices. • An independent spectrum entity with sole responsibility for spectrum efficiency, similar to central banks could lead to more efficiently spectrum use, including secondary spectrum use and spectrum parks. Functional or horizontal regulators Sector specific or vertical regulators Consumer Protection Competition Commission Data Protection & Cyber Security ICT Sector Electricity Financial Agriculture Water Other Sectors Other cross-sector Regulators Environmental Protection Roads & Infrastructure
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  Precision regulation -Evidence based regulation - Big Data & AI Sector regulators Audited financial statements of licensees GIS maps of mobile coverage, roads, electricity and fibre infrastructure GIS Processing & Mapping National Statistical Office Admin boundaries Census data Survey data National accounts Public data Broadband speeds (Ookla) GIS maps of population layers ITU and World Bank indicators Telegeography capacity data Mobile Operators & ISPs RAN sites and antenna specifications Big data: cell level QOS in real time
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  Example heat maps •Heat maps can show upload and download speeds, CSSR, DCR, latency, traffic • Data is aggregated from cell level to RAN site to geographical units like regions, districts sub- counties, hexagon grid • Guiding fibre investment decisions • Resolving active infrastructure sharing disputes Population Density
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  Estimating unmet demandfor Universal Service Funds
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  Investment matching for Universal Service Funds •Systematically matching of cost of supply, the estimated unmet demand, hexagon by hexagon • Incorporating demand stimulation and direct subsidies to make a RAN site viable • Factoring in cost of electricity and back haul • Identifying profitable new RAN site locations and establishing subsidy requirements for unviable ones.
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  Conclusion • Evolving technologiesand changes in user preferences require ICT regulators to react dynamically and in an agile manner to facilitate fair competition and protect consumers • The lines between sector- and subject-specific regulators may need to be redrawn • In some cases, more specialised regulators may need to be established, eg a data protection agency or a spectrum agency • Evolving technologies also provide ICT regulators opportunities to become more effective and fine tune tools. Big data and advances in AI allow regulators to become agile and dynamic, enabling precision, evidence-based regulations
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  Dr. Christoph Stork, Partner, RIS +27 84 999 0002 [email protected] Steve Esselaar , Partner, RIS +1 778 865 5695 [email protected] Research ICT Solutions • Research ICT Solutions Ltd. is a boutique consultancy based in Canada, South Africa and Namibia. Started in 2013, we have built a select list of clients who need simple but effective tools to make better decisions. Our clients range from country regulators and policy makers, multilateral organizations and companies. • We track changing business models, prices, network performance and international best regulatory practices. This allows us to support policy-makers, regulators and telcos with evidence-based advice and decision tools. • We develop tools to monitor and evaluate the ICT sector ecosystems and support regulatory processes such as subsidizing network rollout out, infrastructure sharing, wholesale price regulation, market definitions and spectrum management.