 or shaky, forcing competition via mobile virtual network operators. It sounds good, but you need to see more. I mean, this is something really you have to analyze on a case by case. There is no general policy on that. Even more controversial, although some regulators like it, imposing uniform pricing, so not allowing on-net, cross-net price differentials at the retail level. This is a very intrusive type of regulation, which is not clear whether this is to the advantage of customers. If there are calling clubs on-net price discounts, ultimately, consumers can benefit if they can coordinate. So this is something where, again, I would not recommend unless there is a very strong case. Do we have two more minutes? One more minute. One more minute. I would say what kind of data, the type of data, before telling you what I think about it, you have to ask yourself what is the purpose of the data collection exercise. So in a place like ITU, you like ranking of countries, having cross-country comparisons. And so if you do like this exercise, like somebody earlier said, it's like the Eurovision Contest, which is very exciting, and those from Europe will understand what I'm talking about. So in this contest for becoming number one, so you can just follow a basket approach. So you have a representative type, and you see how this type will be fairing in different countries. To follow a basket approach, the limitation of the basket approach is that these are not actual consumption patterns of real people. These are hypothetical consumption, so you never face whether people behave in that way or not. So the upside is that you can compare countries. I wouldn't think these are very interesting, actually, for the ranking itself, number one, number two, it's more trends. So following a basket over time, but you need then the longitudinal aspect is very important. You need to collect comparable information across countries over the years. It will take time, okay? So the trends will be useful. The actual levels may be not because there may be country idiosyncratic factors that are very different. The alternative to a basket approach is to use microdata. Economists like me really love microdata. You understand consumer behavior, but microdata are plagued by what we call indigeneity issues, so you never understand really the chain of causation. So with microdata also, the problem is that regulators, like some of you may not have the time to analyze microdata in the appropriate way. So ultimately, you are gonna do some aggregation again, right? Because microdata is so much heterogeneity, so many consumer profiles, so what is what, right? So you're gonna aggregate, and ultimately you are led to follow a basket approach. Okay. Thank you, Tomas. I'd like to come back to a couple of those topics. I liked your allusion to the waterbed effect. I think it makes it quite clear. Sonya, in terms of developing countries, you have a lot of experience in that area. What do you see as the connection between regulation and policy and pricing and the impact that that has on the local markets in terms of availability and accessibility? Thank you, thank you again to our hosts and the ITU especially for organizing the event. Also thank you for making me the single female on the panel. I know it's not the ITU necessarily fault, but I hope that all of you regulators and ministers of the world will remember to bring all of your female representatives to the panels next year. I know there's many of you very incredibly wise women who should be represented here, but I'm pleased to be here and in no way, shape or form, do I represent all the women in regulators, but I do represent the Alliance for Affordable Internet, and just to give you an idea of what we do, we are a global coalition of public, private and civil society organizations that have come together to work on policy and regulatory reform in developing countries. And the reason why AFRAI has come to be, it's precisely because of the question that you asked Aaron, even though we see a lot of really interesting good practices and experiences spreading around the world, many of which you yourselves have implemented, some more successfully than others. The reality is that affordability and affordable access for the most part in developing countries is still a major, major problem. And by far, affordability is the single most important barrier to access in developing countries. In fact, our research, which I will share more details about with you, shows that if you are really considering affordable access for the masses and as a public good, as universal access for the entirety of the population in your countries, you have a very difficult job to do. Most of developing countries have very, very low steel penetration of mobile broadband, fixed broadband, prices are still very high, they are coming down, but not sufficiently. About of the 46 countries that we covered in our research last year and our new affordability report will come out at the end of this year, but our first annual report on affordability showed that of the 46 countries that we covered, about two billion people lived on less than $2 a day in just those 46 developing countries. That is the challenge we're trying to tackle, okay? And there's many more above those two billion that are just a bit above that poverty line. And so even when we think about entry-level access at about 5% of GNI per capita as we've been measuring and has the ITU just published today, the reality is that that's not enough for the populations that would like to bring online, the two-third unconnected people of the world. So how do we go about doing that and how do we connect policy and regulatory reform with some of the items that we were discussing? First, we believe that and I don't think we need to prove here that there are indeed some good practices around how competition can work and how it should work to lead to lowering prices. But most importantly, how regulation and policy should be looked at not just as a way to control and impose many different kinds of issues to the industry, but regulation as an innovative tool to create not only ways to incentivize the market to invest, but also to incentivize operators to work together and collaborate as a whole so that the countries can benefit from the development impact of ICTs. And we do that by focusing on and we suggest when we work directly with countries that we focus on the kinds of regulatory and policy actions that reduce the entire cost structure for the industry. And so while competition is kind of the first step and a very important one, it's certainly not the silver bullet. We know of many countries that have introduced competition in their markets, yet prices are still not as low as we wish to see. There are other factors that affect this, not just one issue, it's a larger piece of the puzzle. And that puzzle includes search policies and regulations as those around infrastructure sharing, effective infrastructure sharing, incentives for investment, proper spectrum policy as some of our colleagues here on the panel will discuss in detail, also effective universal service funds, not just funds that focus necessarily just on broadband infrastructure, but the entirety of the ecosystem that we want to make available to the citizens of the world, one where we can see they're both the supply and the demand side of the questions. And also one where we can clearly and on an ongoing and systematic basis measure the progress of those actions that we take. So there's no, if we don't have the ability of proving that any kind of policy or regulatory action that you take has an impact. You don't know that what you're doing is relevant or not and what kind of progress is contributing to. So for us is also very important as part of that whole puzzle that we are discussing that countries and regulators and many different stakeholders become fully responsible for not just very clear data collection frameworks but data collection frameworks that bring together all of those different aspects of the entire ecosystem. The supply side, which is mostly what you've been getting from a lot of the statistics here, but also the demand side with some of the countries here represented have done fantastic work including our colleagues from Brazil and a few other countries. I know Egypt has done some interesting work on that as well but we need a lot more so that we can understand how policy can best address the needs of the users and use regulatory instruments to then bring those together and reduce the entire cost structure. So ultimately users all across the different economic strata can benefit from affordable prices. So I'd like to ask you a quick follow-up question. We know that there's an evident correlation between connectivity or the correlations between connectivity and socioeconomic status but what are you doing to look at causality of access to information and future socioeconomic status? That's a good question and actually there's a person here in this room that will be on other panels that can share a lot with you. I'll share what I know and that's Allison who's been doing a lot of wonderful research in Africa with research ICT Africa. That's a very good question for several reasons. First, yes, we definitely want to see ICTs as a way to promote development and the only way to connect those unconnected is to make sure that not only prices are low enough that everyone can afford but also that those populations are prepared and understand the benefits of ICTs. So there's a few, and this is why the demand side aspects of what we're talking about are so important just as important as the supply because if you don't have a population that is fully literate in ICT use that fully understands the benefit of the opportunities that come from affordable internet broadband access then there's always gonna be a gap between the supply and the demand or the potential demand that we wish to exist so that markets continue to grow and that opportunities continue to exist. So I hope that is a good start. We can go a little bit more in depth in that but I can tell you that Allison I'm sure is gonna share some of her research and it clearly shows that income and education are two of the critical items to make sure that then affordable access can actually be as impactful. We have the, okay. And now we're going to turn to Juan Roldan and Juan has a significant experience in spectrum management and so how do you perceive spectrum management as affecting competition and prices and how can quantitative measurements contribute to making policy decisions on those particular issues? Okay, thanks a lot for that question and first of all, thank a lot for the organizers, for the ITU, the Georgian government for hosting this Excellence in Potion. And well, spectrum management has become very critical nowadays. When we see the ITU statistic report we see that mobile brand is leading the growth of broadband in developing countries and that actually makes a spectrum management very important because if the policies and regulations are crossed or building with the spectrum management are not well established well, these growth could be hindered, competition may be not developed as well and as you know, the benefits of having ICTs in broadband mobile will not further grow. So from a regulatory perspective we have seen that poor spectrum management for example, bad locations, ineffective locations to users or to users or services that are not efficient or are not valued the most by the people or by the society as well is bad. We also have seen that holding spectrum idle with no assignment is also bad. It's not giving the main resource the main factor for mobile or for mobile operators to grow. And also we have seen that assignment procedures that actually do not incentive or encourage new entrants new competitors, new providers is also a very important issue. So for each of those regulators have to, for example, in the case of allocations regulators have to study very well what are the technology trends? What are the market trends? What are the economies of scale that will actually bring those prices down not only in the development of the technology but also in the devices for the end user? So it's very important to know or get to know what are the world trends for developing countries because to have economies of scale we need to see what the developed world is doing right now how, what technologies are they adopting and what are the time frames of adoption for that? We also have to have assignment procedures that encourage new entrants, right? For those who have incumbent providers for a long time well it's been proven a lot that competition is the way to lower prices and to have increased affordability. So assignment procedures must include ways to promote new entrants in diverse ways. For example, we can have set-aside spectrum auctions in two steps, the first one for end-to-providers and then see what incumbents can do. We can also have price cups. All of those measurements can be used in very detailed or very express way to help increase competition in mobile sector, right? I mean, it's, if we don't have those instruments in place well, time means is that if you auction the spectrum most of it will become two providers who are incumbent who have the incentive to pay more for that and actually would not allow new entrants. That's the experience we have had in several countries. And finally regulations that also encourage competition like for example have spectrum sharing, infrastructure sharing, having mobile providers, mobile virtual network providers and B&Os also in the market encourage them to enter the market and having also policies that can go, let's say, against the market power that incumbents could have. For example, all net calls and all that kind of club effects that all that can have can bring market concentration and in that way we will not have competition as well. So from the quantitative perspective, all of these measurements, all of these, let's say, means of regulatory means should be based on sound, competitive analysis or sound quantitative analysis in each market having studied what are the market shares, what are the spectrum concentrations or spectrum holds of the providers, what has been the evolution from the last years and the trends to the following years in that specific market, let's say at the microeconomic level in those markets. And all that needs very detailed quantitative data data on prices, data on plans, on quality issues and so on that could actually help design what's the best policy in terms of spectrum management for each specific country, a specific place. Thank you. Could you briefly tell us about your experience with reallocation of spectrum and how those decisions are reached? Are they based on solid quantitative data from your experience? Based on what? Based on quantitative data in terms of making decisions for reallocation of spectrum. Yeah, well, when I work in the government of Columbia, we had those issues, for example, when we need to free some spectrum bands, right? Because there are more efficient uses for that specific spectrum band. And it's quite difficult, you know, because the providers, the incumbent providers those spectrum bands, well, they have a business, they have a business model that they're running, maybe not very effective as the new ones can be. But then you have to go to the quantitative data and show them what the benefits are, make the cost analysis, the cost benefit analysis of reallocating that spectrum and show very well, very specifically, how the community and the society will benefit of new reallocations. And we have done that, for example, in the 700 megahertz band. There have been studies around the world, in Columbia we did that one, that can show the benefits of using that spectrum for mobile services instead of broadcast services. And that's a very important, let's say, tool to convince governments and to show the way it needs to be. Thank you for those comments. And now we'll turn to Lydia, who comes to us from Costa Rica in 2008. Costa Rica, you deregulated your telecommunications industry. And I was wondering if you can speak to us about how that deregulation has impacted pricing, it has impacted competition in various telecommunications services and what data you're actually collecting to track the effectiveness of the deregulation process. Of course, thank you very much for your question. I will try to speak in Spanish, because I can express myself better. Let's see if translation is working. If not, I may turn to English again. It's very interesting the question. In fact, in 2008, they officially issued the laws that opened the telecommunications sector in Costa Rica. Until 2011, we had the entry of two new operators. It's an interesting case. In the case of Costa Rica, it was a national decision to open the market. Okay, I will try in English. Sorry because I am not as fond in English as in Spanish, but I will make my best. In the case of Costa Rica, we opened the market. We signed the law in 2008, but it was in 2011 the moment when the new two operators come to the market. We have some very interesting things to tell you today, mainly because it was a national decision. In the case of Costa Rica, we were signing a national free trade agreement, so we asked the population, if they want Costa Rica to sign this document, and most of the people wanted it, we ended up opening the market. So it is an interesting situation. The law creates two different institutions, MISIT, who is the one that I work for. We are in charge of public policy, and SUTEL, who is the regulator. They are in charge of regulating the market, and they are in charge of collecting most of the data. This year, they present a very good recopulation of information to us that we use as public policy makers. What do we have today? For example, after the opening of the market, in the case of Costa Rica, specifically in the case of Broadman, one of the categories we have a regulated price, and the market is 58% below that top. So we have a very interesting result, but not just in that category, but in many categories we have this difference, and what we have found is that the most different between the regulated price and the market price. The same we found in the case of telephony on the mobile phone market. We have this gap, this difference, and this is positive to us. But for this advantage, thinking about prices, I think one of the most important things is that we have new services. For example, pre-pay, in the case of mobile market, we didn't have pre-pay cell phones, and after this process of opening the market, now we have. What else may I try to say in English? Okay, we are... In this moment, this telecommunication market means 2% of people productive in terms of Bluetooth, like GDP. So this is kind of trying to... trying to tell in my English what is happening in Costa Rica during the last few years. And as I said before, it was in 2011 that we have this mobile market new in commerce in the market. Sonja has a follow-up question for you. Not so much a question. I just wanted to take advantage of something that both of them said, first on spectrum, but also on the example of Costa Rica, and linking that to the importance of evidence and data to decision-making. So as many of you know, there are many institutions, including the ITU and many of you in your own countries, are collecting information as to how different kinds of decisions have impacted the sector. So say, for example, we know the experience of Kenya, of how the reduction or the elimination of taxation on devices has increased penetration one year from 50 to 70% in 2009 when they eliminated taxes, which is one of the very, you know, important costs that we are trying to work at. Other issues like spectrum, as you were mentioning, it's also very important to see that when spectrum is correctly allocated, operators are also more efficient from a cost perspective, because they don't have to pay for licenses in spectrum bands that they otherwise wouldn't be using if they have the ability to use more effective spectrum for the needs that they have for broadband provision. And all of these things come together. Colombia also is a country that reduced also taxation on equipment and that really promoted the growth of the sector. In many other countries, there are experiences of how universal service funds became more effective in their distribution of the resources to expand access but at the same time increase what I was mentioning earlier as a digital literacy and the ability of their citizens to become more engaged with technology and the internet. And all of that experience, all of that evidence is very important to allow us to not only to identify what our good practice is, but then to figure it out how do we want to measure that across the board and across all the different countries. And I wanted to take advantage of, put a good plug to the research that we are conducting at AFRAI that I hope you look at on our website, AFRAI.org. Last year we published the very first report and we are going to publish the next report at the end of this year. And what we did was that we developed a new index that looks at affordability specifically, the drivers of affordability. And instead of looking at simply the secondary data that is available and that it's very important from institutions like the ITU or the World Economic Forum or other kinds of sources, we developed another set of indicators to inform our index that actually assesses to the extent that each of the countries that we research, which right now are 51 developing countries, to what extent those countries are moving in the path to good practices, good practices that were identified and established not just by ourselves but based on the evidence of the experience that is taking place around the world. So we know that one good practice is to have licensing regimes that are forward-looking. There are based on unified licenses that have much more realistic licensing fees, etc. So we assess how countries are doing in that regard. Are they still using antiquated licensing regimes or is their licensing regime one that is more open and one that more likely will lead to a greater competition in the market? So our index through expert surveys actually assesses the 51 countries and how are they doing on that path to what we can see their good practices at the policy and regulatory level. And by bringing all of that information together, you know, we rank countries, but to me what's important is not so much the ranking. What's important is, you know, if you look at a particular score that your country gets in our affordability index, which is really how are you doing in terms of making sure that the drivers of affordability are being actioned and are being taken care of in your country, it gives you a score that allows you to say, well, if I was in school, I'm kind of like, you know, if you use the afterweight grade or if you use a zero to 20, depending on which year country, you may say, well, I have a grade C or I have a grade 10, I'm doing some progress, I'm passing, but I'm really not doing that great if I'm only a 10 or C. I need to do much better to get a higher grade and to be on that correct path that will lead me to true affordability. So data is very important in that evidence, not just from the secondary data side and some of the evidence experiences that we're talking about, but I think really being more cognizance of the importance of assessing each of our actions against what we see, our policy and regulatory actions against what we expect specific outcomes should be, in this case, affordable access. So I hope that makes sense. We're going to allow the members of the panel to respond and then I'd like to open up to the floor for some questions. I would like to add a little bit that was telling us, and it's really important to have information about each country, affordability in each country, but once we were creating the National Broadband, we found that it was really difficult to find information about little districts. So we like to collect data to know the capacity that people have in little cities to buy internet and another kind of telecommunications advisor. And these first steps in this way are really difficult because we found that we were not collecting data at that level. So it's kind of important to us to start in that way. Okay, so yeah, I want to reply on what you have said and maybe ask some back, put some little bit of background. And let's say that affordability can be divided in three ways, right? First of all, what is the affordability to acquire a device? Which is the first barrier we find. Second of all, what is the affordability for the activation of the surface? Most of the time in fixed services when they have to drop the line to your house or in wireless when they have to build up the infrastructure, obviously that's a very lower cost infrastructure that monthly payment you have to do for the service. So at the end of the day, if we want to talk about affordability, we have to talk about a timeframe and see in four years, five years what is the cost for a household, for a person to have broadband access to have broadband service. So for the first one, I'm going to talk about tax exemptions that actually you bring up with Columbia and I also told, I was working at the government in Columbia when we started that issue and believe it or not the most pushback we received was from the main government. Why? Because when you go to the Ministry of Finance and tell him, you know what, we need exemptions in this sector. He goes crazy. He says, how come? If I'm going to give exemptions to the ICT sector then the tire sector will come then and they want exemptions for the tires for the cars then the cars will come and they want exemptions for the cars. They didn't know anything about ICT they didn't know anything about that transversality we have in all economic sectors and they didn't know math, you know and why is that? Because when you have exemptions for the device and you allow a fraction of the population to buy that device well, they buy that device not to type they buy that device to connect to the internet and once they connect to the internet and then start paying the monthly bill they will be paying taxes there so that percentage of people who actually now can afford the first device affordability will be then paying taxes for four or five years and the government will be actually receiving more taxes than without having the exemption on the device so that simple math took us one year to convince the government almost one year that was eight years ago so we tell the government okay, do not exempt all the devices let's put a price cap on that and the price cap was $1100 $1100 exemptions to any computer or laptop that had $1100 or below that had 16% tax exemption that blow up the rates in less than two years we passed from 5% penetration on computers to more than 10 in two years being 5% for the last five years so that's a good policy and that is very relevant right now because what I have seen is that there are governments in developing countries that want to implement a luxury tax on broadband devices on smartphones and well what are we playing at? do we really want to close the divide the digital divide or do we want to increase the establishment of more taxes so that's like I want to bring up the backup so we can share about it I have a quick question for Tommaso actually in relation to the availability of data on the developing world these regional areas which we have no data and from our experience it is more difficult and more expensive to go after that data and there's very little consumer interest in that kind of granular village based data how can we improve the affordability of collecting data on areas that are simply unconnected? simple answer it's going to be very difficult when it comes to developing countries obviously the quality of information we have is not very good sometimes there is no information at all even on basic things we don't know basic regulations if regulators exist they are independent how they are funded there is very little information we don't know the rules they are using there is a lot of work having said that developing countries represents also an opportunity because there is a lot of things going on in the sense there is quasi-natural experiments going on so we know a lot about the use of the impact that mobile technologies have had on things such as financial inclusion in Kenya because of MPSA we know a lot of the impact that these technologies can have on education we know a lot even on how mobile phones helped in the fishery industry in some parts of India so we can use some micro data together with some of the NGOs to learn a lot about natural experiments occurring at the regional level and this is very useful to inform us as to what is the impact of these technologies and this is something where developing countries have a plus a collection there is a lot of NGOs going there trying to collect this so what I am trying to say is that this kind of market experimentation that is sometimes happening in very innovative developing countries perhaps we could also allow it at this stage of regulation so what I am saying here will not resonate well with many other people in the audience so one question that you alluded to is about net neutrality net neutrality it has nothing to do with most of the stuff we talked about but it is very difficult to make an informed choice about net neutrality which is evidence based because we don't allow any business experimentation in that respect the market is frozen by a type of regulation that we have over several years that some particular prices are regulated that over the top don't pay we always have the world that was working in a certain way Google said in its own affidavit in the United States the internet is cool let's keep it that way but it's always been cool but we don't know what would happen if something else changes yet again I would expect another water bed if some money comes from a source these are platforms the mobile industry is a platform I wouldn't expect this money to be kept by themselves because there is some competition maybe they will invest more the prices of the end users which make it more affordable so these are all experiments that should happen we are not allowing them to happen so perhaps less developed countries think about having differences in regulation in different areas experiment with alternatives this doesn't resonate well because many of the public officials they want to have a uniform pricing policy in a country everybody has to be treated the same but then you don't learn much this is very different from business models that you have to listen to do experiments constantly the experiment Facebook is experimenting Google is experimenting because they can learn so also you guys, regulators and public officials you should experiment with changes only by experimenting with changes we learn something about the impact of a policy thank you for that I'd like to open it up to the floor for questions I'm sure there's a lot yes we have a gentleman from Uganda thank you chair I thank all the panelists for the good explanation on this particular topic my name is Umar Semakula I work with the regulator in the Uganda Communications Commission my question is about it goes to Professor Valeti what do you have to say about social networks like Skype Twitter which are offering calling rates vis-a-vis the MNOs in different countries these social networks are providing calling rates at a lower termination rate vis-a-vis to other MNOs which are regulated in the countries so what do you have to say about that in the context of competition and regulation in those particular countries thank you what do I have to say they are changing a little bit the ecosystem clearly the traditional business models of telecommunication operators is not sustainable in the sense that voice over IP or what's up some of these things are provided for free so this is actually inducing the mobile operators to change the pricing structure most likely we are converging we are going towards a model where the mobile operators are providing access you still need them because the what's up, the Skype etc without an infrastructure they are useless so these are complementary goods where you need both the infrastructure and the content some of this content is substitute some instead on Skype you can do video conferencing you can do things you cannot do over ordinary voice so I think we should say it's good it's a good trend economically speaking it's changing the revenue model of the mobile companies they are adapting to that mobile companies are still needed they are saying there's a lot of cannibalization but you still need access to the mobile network so as a customer you like a platform because it provides you this seamless access to all these applications as a customer if you have a good connectivity etc you may pay even more like a flat rate per month so I don't see a huge desperation for the mobile companies that want to regulate more so I wouldn't regulate the over the tops as well apart from specific circumstances perhaps if there is more competition coming from this application I would deregulate the mobile companies a bit more because there is extra competition so I'm more in line with deregulating rather than regulating more yes we have a question from the representative from Georgia hello we are the representative of a private company who is making internet provider and fixed telephone so I want to thank to our government and also ITU for this conference because it's really very interesting and especially concerning to the regulator measures what to you we are discussing right now at the point that we are agree totally on the thing that yes there is a puzzle of many things that makes the difference with the prices and customers affordability but I have with it two questions the first is do you have any results of research concerning to Georgia policy for the regulation if you have any researches for it and the next is concerning to the things that make in our point of view the real let's say price making points is the tax taxability as you mentioned and in Georgia unfortunately we have let's say double taxation for the regulations and also many other things that in our research really make big influence on the price so the main thing is to ask you if you have any researches concerning to Georgia and if you analyze any measures of regulation what we have in Georgia now how it infect in the policies and in affordability and in the future we will be able to do that in March thank you I apologize my research so far about Georgia has been on I will stop that which is food unfortunately I couldn't find any other researches concerning to Georgia then for food so unfortunately I don't have any research but I do hope we will we include other countries in the region certainly I hope you make enough noise that we and others should but unfortunately we don't have specifics it doesn't mean that there's nothing done on Georgia I think several researchers including some in your region have done some interesting work around regulation in Eastern European countries including some of the ITU work as reported on some of the experiences so I would say look at that as well we would be very grateful to cooperate on that field because we made our researches as a private sector what is the main thing that makes a big impact on our prices and why our prices are so high for the customers who really have no income let's say to get internet it's a shorty storage of internet but still some excess on internet and we make this research and we'll be really grateful if you'll help us to make analyze on it I'll be happy to talk to you about it I'm sure the colleagues from ITU also will be happy to do that ABI research also has some research specific to Georgia not directly relevant to how the policy is affecting Georgia but in terms of growth and the conversation they can be taken offline separately we had another question from this side could you raise your country card please so I can or at least tell us where you're from and I can't see that far Alison Gillwald researcher ICT Africa South Africa I just wanted to add a qualifier to some of the points that have been made in terms of the evidence that is available in developing countries particularly Africa with regard to the impacts on affordability I just wanted to remind us all and we all know that it's not just competition but effectively regulated competition that in infrastructure industries produces these positive effects and one of our biggest challenges certainly in Africa let me speak only of there but I think I can say more widely in the global south has been the lack of institutional capacity of evidence being fed into those institutions but also the capacity to analyse the data that they've got or that they receive and also the adoption the uncritical adoption of evidence from far more mature developed markets from the north into the south in ways particularly around broadband but voice too that have developed entirely differently with a whole set of different dynamics so I just wanted to particularly emphasise the point that professor Valetti made that the early evidence of waterbed effects or the early suggestions that there were waterbed effects with the reduction in termination rates certainly from our evidence and there's an article produced by Christoph Stork and myself Alison Gillwald in the spring edition of telecom policy actually demonstrates that there is no waterbed effect associated with mobile termination rate reductions across the African countries that we looked at in depth and certainly no evidence over the last few years across the international data that we received and I just want to emphasise this because this is the problem with the lack of local evidence and countering evidence and public institutions working in this area that can challenge dominant interests that are brought to regulatory processes and present evidence this has been held as a sword of damocles over regulators in Africa for a long period of time and I'm not really sure why Professor Valetti was suggesting that there's been over-regulation of prices in Africa, in fact for a long time there was no regulation of prices and you did see fabulous roll out of services mobile brought connectivity to the continent there's no doubt about that but the important thing is that we have to understand the evidence effects, the evidence that's there around reduction of termination rates for a long time there was no termination and we had the highest prices in the world across the global south with the reduction of termination rates we've seen these prices plummet across Africa, in Kenya, in Nigeria in Uganda, in Namibia and even slowly in South Africa so I just wanted to say it's really important to look at where that evidence is there are pockets of evidence in Africa just in terms of Valetti's comment on the importance of historical data and really to understand the pricing factors in terms of historical data there is a public pricing database that we produce every mobile company's prices are collected on African continent 46 countries at least are collected quarterly and that is how we've been able to track the positive impacts of termination rate reductions on retail prices I should also say it's not just not had a waterbed effect there hasn't only not been a recovery in the retail prices there's also not been job losses that have been predicted and mobile companies, EBITAS generally stay above 35% which most people outside of this industry would regard as very high so I think we do need to look at that I just want to say though that I think the voice and the mobile termination debates while it's obviously important in those countries that we don't have extensive access yet to the internet is kind of a regulation 0.1 and we really need to start preparing ourselves in countries where we are institutionally challenged for the regulation of data I think we need to understand as people have said the shift in revenues by mobile operators from voice to data services and begin to look without tampering with the very positive effects that have been of the internet and data and of course mobile networks and investment in these networks we need to look at where the wholesale aspects and bottlenecks are occurring particularly in relation to IP transit and as I said we need to be careful not messing with peering arrangements and that kind of thing but we do need to understand those impacts which takes me to our last point I just want to make very quickly is that how this is the ecosystem and we just understanding prices doesn't help and as we move from voice prices to understanding comparing and possibly indexing data prices we see the complexity of using baskets etc we've actually reduced a broadband value for money index that we simply look at one gigabyte of data because we were comparing apples with oranges and the lowest price in Cameroon is only 2.5 gigahertz so the issues of quality are becoming increasingly important for regulators issues as important as issues of pricing it's kind of the other side of it and for evidence based interventions we need to be beginning to get some evidence and understand those two relationships thank you for that question I do want to say that the data does show that across the board generally speaking regulators have a hard time thinking in terms of the market forces and thinking in terms of the ecosystem that's faced by OTT content providers and I have a question actually I'm going to lead this into a question for Manuel and in places where regulatory kind of sometimes heavy handed regulations have come into place that have created adversarial relationships with content providers where public-private partnerships would have worked much better and putting together programs and putting together mutually beneficial programmatic relationships that would offset the cost from both parties can work in the developing world I'm wondering if you have any examples for us Manuel where public-private partnerships between the governments and content providers private organizations have effectively solved problems in developing areas then coming back to Columbia actually I work for the Columbia government a lot so I know it very well and public-private partnerships are the way to follow where the government doesn't have the total amount of money to deploy infrastructure and the private sector doesn't want to do it because they don't have the commercial incentives to do it because the cost is too high so going back to Columbia recently with the plan B with digital they they made studies to see how can they deploy broadband fiber infrastructure to every municipality in Colombia right and it came out that the price was so high that they did an inverse auction and put some money in and call private operators to work jointly with the government and have that project running right so after that auction one provider won the license for that and the government put about 600 million dollars the provider has to put another money in the same amount or even more and by today or by 2015 I think 100% of the municipalities will have fiber optic broadband infrastructure right and obviously that's a monopoly but it also has to be regulated and in the terms and conditions on that private policy partnership there should be some kind of regulation to prevent vertical integration to prevent higher prices depending on who is the retail provider it should be transparent all the time there should be rules for everybody to see in the in the period agreement with retail providers for example in the paid period agreements so yes we have had that example I know that Peru right now it's also deploying that same public partnership that was implemented in Colombia and well I think that's the way to go I have more questions back here one first from Saudi Arabia thank you sir the issue of the price of telecom or ICT services it's interesting and complicated as well as we learned from the economic theory that the price it's a result from demand and supply that's in the competition or in the sufficient market however if a distortion arise now this is the rule for the government to intervene to make sure that the price it makes the equilibrium between the supply and demand and by intervening by tools or policies such as lowering the inter-correction rate or deregulate their policies to a level to make sure not to store the quality of service from the service providers now how to balance the market between the supply and demand from the supply side that the service providers trying to say that I'm putting a lot of investments and the huge money I want return on my investments on the other side the consumer or the subscribers trying their best to get more services at a lower price now what the government should do I think it's to make sure that their policies it's fair enough not to distort the quality of service and the return of investment of the service providers the experience of Saudi Arabia the regulator made a very sufficient policies and rules to make sure that this balance between the supply and demand in a sufficient way so that's why we improve our policies for for the inter-connection rate imposing now some rules for the ex-ante rules against the service providers nowadays we are interesting and experiencing a good full competition in the market this is kind of of experience that I want to express the other issue it's the issue of the OTT now the OTT players now playing a good role in the market and we have the service providers trying to say that we need we are uploading or uploading your applications and services on our network and we paid a lot of money for investment we have to pay for it on the other hand the OTT players saying without us you cannot gain more money or more revenue because we provide a good services so that's why a lot of demand comes from your subscribers and I think now the ITU should try their best to set a good rules or a good guidelines to make sure the network neutrality and to make sure that no distortion of the market and also to make sure that no price wars will arise against the consumer thank you thank you for your comments the response to that is probably best addressed in a separate forum yes Susan you had a comment I just would like to make a short comment thank you because I can see that there is a lot of interest in the subject matter and also I know that we are getting very close to the end of the session so I just wanted to draw the attention of everybody to chapter 4 in the report that was launched today the measuring the information society report which deals with pricing and affordability which has also this year a special analysis we did for the first time looking at the impact of competition and regulation on pricing and affordability and for those who are here on Wednesday morning we are going to have another discussion where we present in fact the results of the report and also of that analysis which will provide another opportunity to discuss the matter thank you let me ask professor Balati I think it's almost the same question from Saudi Arabia as you mentioned your comment the Korean telecom market is three telecommunication operators the ratio is 5 versus 3 versus 2 is the most competitive situation but we do not estimate the real cost of telecommunication not real just the proper cost of telecommunication whenever elections held every politician proposes that reduce the tariff reduce the price of telecommunication and then as Susan mentioned measuring the information society report contains two things one is the IDI the second one is tariff it tries basket maybe probably tomorrow Korean newspapers will announce that the telecommunication tariff in Korea is very expensive comparing to other countries and how do you have any methodology to estimate the proper telecommunication tariff that's all the question he wants to respond to that and then we'll go to the Costa Rica we'll have a quick response so there's no break in the question so that's I guess a question that we've I think here at the ITU been looking at for many many years I guess it's still valid in some countries what I would say very briefly so we can have more time to speak on other issues as well is that there are very clear good practice recommendations on how to set tariffs if tariff regulation is something that you engage in first and foremost would prefer if that doesn't exist because the market should be working on its own to make sure that whatever prices are in place are a result of a competitive market should that not be the case and regulators need to interfere then you want to use the kinds of methodologies that do look at cost long term forward looking type of costs that in some of the other forums of the ITU are discussed in great detail and so we would want to suggest a methodology that focuses on those kinds of forward looking total incremental cost type of methodologies that's the way to go but ideally you wouldn't have to get to that it doesn't mean that regulators don't necessarily have the responsibility and they should have in fact I've worked with many regulators and developed many cost models for regulators where they use cost models not necessarily to set tariffs but to use them not necessarily to monitor and evaluate how they are doing against what they perceive and what they see from the analysis are the true costs of providing the service in their market so that kind of methodology it's not just used to actually set tariffs and regulate but for the regulator to use in their own kind of monitoring and evaluation responsibility to ensure that the market prices are indeed much closer to cost and that you don't have situations as Allison was alluding to where margins of operators are so high that there is a lot of room for prices to come down and so regulators use those tools where data is extremely important, data on prices data on costs of infrastructure etc etc which is a whole not a set of data that is critical for regulatory purposes you use that data to make sure that you call attention to your operators when they are not behaving in a competitive way so that's something I don't know maybe I should stop there so Costa Rica can ask the question we have a follow up from Costa Rica ok thank you very much my name is Cynthia Arias and I work for SUTEL which is the regulator for telecom so I just want to add a small comment related to the comments that Elidia made at the beginning of his presentation is just related with data about the impact of the opening of the market in our case as Elidia said we have just three years with the market open so our figures are improving are showing the improve that we have made for example mobile penetration moves from 90% to 151% in two years and also as he said before prepaid subscribers move from 70% to 83% and as we know that means that more people and a specific group of people now has the the service that they don't have before and of course we have a lot of challenge as you said we are working on trying to improve our regulation related to sharing infrastructure and also we are reviewing our tariffs termination rates on all the wholesale market so at least I think we are on the right way thank you very much thank you for sharing the underlying data behind those examples and I do want to comment quickly about my own experience in recently two weeks ago in the Republic of Korea sitting in my hotel room on wifi getting over 100 megabytes download and 150 megabytes upload was phenomenal but probably there is an expense to that it was probably more than I needed so things to consider there we had an additional comment question from Botswana is that correct? that's correct I'm from the regulator but my question was partly answered what I wanted to ask was despite the fact that we see a lot of countries doing cost modeling why do we still have problems with high costs of broadband secondly the question that I wanted to ask was don't you think somehow such funds like universal access and service fund cause misalignment of access usage and of course empowerment that is to say don't you think when you do your researches and visit a lot of countries and do your reports don't you think somehow the fact that some communities which are not served are not perhaps already and are availed with such services which perhaps could have been availed in urban areas where people could have easily harnessed the importance of ICTs that is one important factor that I would like someone to kindly point out thank you very much and I'll try also to respond very quickly to some other questions so why are high prices high so one answer is there can be two reasons one can be a demand side one can be a supply side so supply side prices may be high because it is just the country is very expensive so you cannot imagine that the cost will be identical everywhere it's very costly to bring 100 megabits per second in the middle of a forest you may not want that and there's nothing you can do about it there's nothing good about this another supply reason is that maybe because the industry is not competitive so maybe you awarded only one license only two licenses maybe you awarded the license to a friend of yours you don't allow competitors in the country and you allow rents to be exploited in a country then you have a problem with the institutions the final and you want to have my easy answer is you should have more competition you should try to do that which means by the way the right cost at the network level so where I disagree with the gentleman from Saudi Arabia is that governments are not good in general at setting prices at all unless there is a market failure and the burden of proof is on the governments to show that they need to set prices but you have to show there is a market failure and the third and related possibilities it's too costly to bring it to the forest which is related also to the affordability people don't have the money given the underlying cost so this is an equity reasons universal service obligation and so forth which depends on what the country decides if the country is rich like south Korea they may afford actually subsidizing people and giving up money Saudi Arabia has a lot of oil and they decide to allocate some of this money to subsidize the demand side I'm not saying subsidizing the companies because that's not very good there's lots of problems give vouchers to the demand side if instead there is no money for instance I would love Italy where I come from to have a model like the Korean one but Italy has no money so we cannot afford having this kind of network which is available to everybody because it's simply too expensive and there are priorities so I have to ask myself in a world of scarce resources where I want those scarce resources to be allocated so ultimately and again we don't have the time here over the cocktail invitation we can continue the discussion I never said that I want necessarily to deregulate markets the question from the gentleman from Uganda was if we have Skype competing with mobile companies etc then I said if there is competition then what is the problem I didn't say you should always deregulate but again look at market failures first ask yourself why the market is not working is it because of institution is it because of supply there is no clear answer but at least there is a way of thinking about it and if you think about it maybe you find the right solution too without putting you on the spot I'd like to point out one example of this Indonesia is an archipelago of islands the cost of dropping submarine cable across those islands is prohibitive in a lot of but still they've risen to the challenge in many of the situations I don't know if you want to make a comment or if you want me to continue talking yourself from that experience and how you manage the cost thank you for the opportunity to explain and explain the experience in Indonesia we have experience from the monopoly regime to the more competitive now but we also now have the experience like the Korea Saudi Arabia for the OTT but in the middle of that we have also the universal service application to fund underdeveloped ICT infrastructure but still in the recent also how to do the best of the universal service obligation to build the infrastructure we tried using the public private partnership but that kind I don't know Puerto Rico I think the experience using the Costa Rica experience using the PPP scheme can use in our country because in our case we have the money from the operator but we cannot subsidize the private sector the PPP definition is usually the government don't have money and they make the cooperation with the private sector not the way around you know maybe the little bit experience in this year thank you for sharing that with us actually I was wondering if you could respond to that in terms of across with your experience in various developing countries what solutions and what data has supported those various solutions in general in terms of reaching developing areas thank you so actually I have a question that also you know our colleague from Costa Rica mentioned earlier how do we understand and how do we go about using information and data to make decisions about how to reach those hard to reach areas so it's not just the fact that they're hard to reach areas in rural areas but they're also populations that have very much more reduced incomes it's actually quite difficult but one of the things that many countries have started doing and I think there's going to be a panel about household surveys here at the forum as well one way that countries have started doing is to really invest on doing proper research detailed research at the household level in their countries again Brazil is an example some others have done Alison spoke from Research ICT Africa you know they do also household surveys in many countries in Africa and other partners of ours do identical research Asia and Latin America and the reality is that that kind of richness of information and detail comes from that kind of survey I know that I won't say too much because you're going to have a whole session about that I think on Tuesday or Wednesday I'm not sure but that is one way of getting that kind of detail to understand where are the populations, where are the gaps not just where are the access gaps but also where are the income gaps how do you bring them together and putting all of that information together it helps you make decisions not just for investment purposes but also in decisions around how to effectively use whatever scarce resources you may have even from universal service funds or other government resources or from public private partnerships how do you take advantage of a PPP arrangement has Colombia done and has Peru is doing and Malaysia has done are doing exactly to try to bring together the information these are the gaps, this is how much the government can put in, this is how much the private sector can put in if they have that kind of support so it becomes a collaborative approach but you do need that kind of really granular data to make those decisions and so in Africa some countries are doing that as well and I would say if you can make the investment we know that it's very expensive from the experiences of those that have done it but if you can make that investment as countries as regulators, as ministers you can start small but start, that kind of information is important for investment decisions is important for decisions around all sorts of other public policies and how you provide services how you make decisions around digital literacy there's many many different things and also to understand that different groups of the population may or may not have the need for targeted support being rural populations being women and men in rural areas being entrepreneurs etc etc but that kind of data is critical again to bring it down to the importance of data in our decision making processes First, Elidiar would you respond to that? Just to comment that Sonia was talking about in our experience the most important thing is to collect all the information from different institutions in our case to tell is a very good alley and also national census statistics so when we were creating this national broadband plan I think our first, our most important experience was to work with another institutions to bring all the information that we have so we can get to approximate some information at low level with this aggregation I want to make the last example this time with my experience working on the private sector back in 2011 with Intel Corporation back in 2011 we had this plan I don't know if maybe you already guys have heard about it reaching the third billion and we saw, we made a study and we saw that for a four year broadband connectivity 75% of the cost was the monthly payment more or less 20% 22% was the device and the rest was any other issues maybe activation issues or whatever software or whatever so that cost, that affordability cost divided on those three specific topics I mentioned before counted in some countries 34 countries was higher than the monthly income of that place of those developing countries so the cost is high so the solution was kind of being innovative of how to bring up the solution so from Intel we put the providers we call the providers we call the manufacturers of laptops and computers we call the government in and we try to make the synergy for everyone to put a little bit of a solution and try to reduce that total cost of ownership so from the computer perspective we came up with solutions that actually had the capacity to offer the services that people wanted and needed with basic technology and came up with computers below $300 and I think in 2013 they came below even $200 from the provider perspective he came to offer plans, prepaid plans broadband prepaid plans that were $2 per 700 megabytes if I remember well and I think that has improved because that was two years ago so that should have improved and we also came up with solutions of content and applications for the people to use and to learn to educate how to use technology on their benefit and if we joined all the three forces together we could actually reduce that total cost of ownership and try to offer services and broadband services to a population that couldn't actually do it before and that had reached as I know the impact has been in more than one million persons right up to date Tommaso do you want to provide a final comment and then we'll conclude thank you I'd like to thank the panelists here I would like to especially thank our chairman Mr. Kashi Badi for providing this today and thank you for the interesting discussion thank you all for participating have a good evening ladies and gentlemen at the end of a session today I would like to thank you all panelists, moderators audience for the important topics discussed today and I would like to thank the panelists raised there were some technical problems but I am sure that after Georgian wine during cocktail reception only important and good memories will be remembered from our session today our session will continue tomorrow at 9 a.m. and cocktail receptions will be provided in restaurant Felini hotel at the second floor thank you very much and see you tomorrow