Sep 2004

PILOT ASSESSMENT STUDY

ON

TELECOM REGULATORY ENVIRONMENT

By Sabina Fernando, Shan Manikkalingam, Amal Sanderatne

LIRNEasia Pilot Assessment Study

Pilot Assessment Study on Telecom Regulatory Environment

Test of the methodology suggested by the authors of the Sri Lanka case study

To assess the practical implications of carrying out such a study

To enable a broad based evaluation of the telecom regulatory environment (TRE)

LIRNEasiaDIMENSIONS

Evaluates the regulatory environment on the basis of five major dimensions

Dimensions modified version of the Reference Paper of the GATS Protocol.

Tariff regulation being important regulatory function substituted for universal service.

Independent regulator was also not considered on the basis that it was an overall measure and not a dimension.

Licensing was also renamed as market entry as were several other dimensions.

LIRNEasia

DIMENSIONS TABLE

Dimension Aspects Covered Market Entry Transparency of licensing, Applicants should know the

terms, conditions, criteria and length of time needed to reach a decision on their application, License conditions, exclusivity issues

Scarce Resources Timely, transparent and non-discriminatory access to spectrum allocation, numbering and rights of way; Frequency allocation, Telephone no allocation, Site rights

Interconnection Interconnection with a major operator should be ensured at any technically feasible point in the network, quality of interconnection comparable to own like services offered, reasonable charges for interconnection rates, interconnection be unbundled, interconnection offered without delay, Sharing of incoming and outgoing IDD revenue, Payment for cost of interconnection links and switch interface, Payment for cost of technical disruption of interconnection

Tariff Regulation Regulation of tariffs charged from consumers Regulation of Anti Competitive Practices-

Anti-competitive cross subsidization, using information obtained from competitors with anti-competitive results, not making available to competitors on a timely basis technical information about essential facilities and commercially relevant information, excessive prices, price discrimination and predatory low pricing, refusal to deal, vertical restraints, cross subsidies, technical disruption of interconnection , sharing of towers and facilities by parent company and subsidiaries in different segments of the market

LIRNEasiaRESPONDENTS

As a demonstration chose a small select group. Key stakeholders having both a direct and

indirect interest Banks, credit rating agencies, journalists, civil

society representatives, academics, telecom operators and equipment manufacturers

Individuals were identified as representatives of these stakeholder groups but chose known contacts if there was an option.

Facilitated access to these stakeholders as LIRNEasia is new entity

Need to draw together a regional network of contacts who are able in turn to identify and facilitate the process of obtaining data.

LIRNEasiaCOMMUNICATION

Personal contacts responded within deadlines reiterating importance of building regional networks.

Use of Fax and Email to deliver the Questionnaire

Repeated follow up calls

LIRNEasiaQUESTIONNAIRE DESIGN

Unique problem -10 year time period –removes current actors/corporate memory

Need to capture respondents mind and transport to period under assessment –hence in design of forms we provided brief history of each of the three periods under scrutiny

Need to reduce number of questions/pages and ensure that responding would occupy minimal time for “busy” people

Need for yearly assessments (ie assessments that focus on short time periods –enable better results as invariably within incidents/opinion within easy memory access

LIRNEasiaExample Form- Fixed Sector

2000-2002      

1997-1999     2000-2002     

Poor Un- Neutral Satisfactory Excellent

satisfactory 1 2 3 4 5

1997-1999

2000-2002

1997-1999

2000-2002

1997-1999

2000-2002

1997-1999

2000-2002

1997-1999

2000-2002Comments

Access to Scarce

Resources

Interconnection

Tariff Regulation

Regulation of Anti-competitive

practices

Fixed Sector

Dimension Period

Market Entry

LIRNEasiaExample Form- Mobile Sector

2000-2002      

Poor Un- Neutral Satisfactory Excellent

satisfactory 1 2 3 4 5

1993-19961997-19992000-20021993-19961997-19992000-20021993-19961997-19992000-20021993-19961997-19992000-20021993-19961997-19992000-2002

Comments

Access to Scarce Resources

Interconnection

Tariff Regulation

Regulation of Anti-competitive practices

Mobile Sector

Dimension Period

Market Entry

LIRNEasiaRESULTS

The number of responses was a little over 50%.

We have used a five point Lickert scale based on poor (equals 1), unsatisfactory (equals 2), neutral (equals 3), satisfactory (equals 4) and excellent (equals 5).

The respondent’s scores were aggregated and the results were averaged to arrive at the Lickert score for the assessment based on the Lickert scale.

LIRNEasiaFixed TRE, 1997-99

Dimension Panel Expert

Market Entry Neutral Unsatisfactory

Access to Scarce Resources Neutral Satisfactory

Interconnection Unsatisfactory Unsatisfactory

Tariff Regulation Neutral Excellent

Regulation of Anti-competitive practices Neutral Neutral

LIRNEasiaFixed TRE, 2000-02

Dimension Panel Expert

Market Entry Unsatisfactory Unsatisfactory

Access to Scarce Resources Unsatisfactory Unsatisfactory

Interconnection Unsatisfactory Poor

Tariff Regulation Neutral Poor

Regulation of Anti-competitive practices Unsatisfactory Unsatisfactory

LIRNEasiaMobile TRE, 1993-96

Dimension Panel Expert

Market Entry Unsatisfactory Unsatisfactory

Access to Scarce Resources Unsatisfactory Neutral

Interconnection Unsatisfactory Poor

Tariff Regulation Unsatisfactory Neutral

Regulation of Anti-competitive practices Unsatisfactory Neutral

LIRNEasiaMobile TRE, 1997-99

Dimension Panel Expert

Market Entry Neutral Satisfactory

Access to Scarce Resources Neutral Satisfactory

Interconnection Unsatisfactory Satisfactory

Tariff Regulation Neutral Satisfactory

Regulation of Anti-competitive practices Neutral Neutral

LIRNEasiaMobile TRE, 2000-02

Dimension Panel Expert

Market Entry Neutral Neutral

Access to Scarce Resources Unsatisfactory Satisfactory

Interconnection Unsatisfactory Neutral

Tariff Regulation Neutral Satisfactory

Regulation of Anti-competitive practices Unsatisfactory Neutral

LIRNEasiaKEY LESSONS AGAIN

Panel Study an important complement to expert opinion.

Panel Study captures multiplicity of views and diverse opinions

Response rate dramatically improves among known network of contacts

Questionnaire design is crucial: Need to be short and easy to fill out.

LIRNEasia

Thank You !