Slajd 1

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VoIP and its Impact on Competition in the
Telecommunications Sector Monika Podplonska
V-ce Director of Retail Electronic
Communications Market Department/UKE Geneva,15 -
16th January, 2007
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Regulatory activities in EU

• Lack of concrete definitions of VoIP services in
  EU
• IP Telephony service is analysed case by case
  for each service (public telephony service)
• European regulators conduct public consultations
  in terms of regulatory remedies

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The classification of VoIP services shows
different regulatory approaches (1-3)
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The classification of VoIP services shows
different regulatory approaches (2)
5
The classification of VoIP services shows
different regulatory approaches (3)
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Key regulatory challenges (1)

• to ensure that consumers are aware of both the
  benefits and limitations of the particular VoIP
  services like
• lack of number portability services
• lack of access to directory services
• lack of calls to emergency services

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Key regulatory challenges (2)

• to ensure the most important factors for VoIP
  providers
• allocation of new numbering ranges for VoIP
  services
• ability to port existing numbers
• interconnection issues

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Regulators' stances on numbering ranges for VoIP
in major European countries (Source Analysys
Research, 2006) (1)
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Regulators' stances on numbering ranges for VoIP
in major European countries (Source Analysys
Research, 2006) (2)
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Regulatory status of VoIP in some EU countries in
2006

• 11 countries with separate numbering range for
  VoiP
• Regualtions mostly in terms of retail relevant
  markets for calls 3 6
• Additional separate market for VoiP services
  based on broadband access in Germany
• VoiP service is planned to be analysed together
  with naked DSL service in UK

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Impact of VoIP services on competition in
telecoms markets

• Retail fixed-line VoIP services already pose a
  threat to incumbents fixed telephony revenues
• Substitution of fixed telephony
• Growing number of users - forecasts
• New opportunities created for VoIP over BWA

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Substitution of fixed telephony
Source TeleGeography Inc. 2006, PriMetrica Inc.
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Revenue from international calls
mld USD
USD
62
0,7
Revenue (in mld USD)
0,63
60
Price for a minute (USD)
0,6
0,58
58
0,51
0,5
56
0,44
0,4
0,39
54
0,35
0,32
52
0,3
50
0,2
48
0,1
46
44
0
1998
1999
2000
2001
2002
2003
2004
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Prices for VoIP calls (to mobile numbers)
Poland
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Prices of VoIP calls (to fixed numbers) Poland
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Cost of VoIP services in Poland

• Most of providers do not charge their clients
  with one off fee and monthly subscribers fee
• Certain providers assign free off charge PSTN
  number to their subscribers
• Polish providers keep similar level of prices for
  calls to fixed network - average price is
  approx. 0,1 PLN ( less than 0,1 euro)
• Differences are bigger when it comes to provision
  of calls to mobile networks average price is
  between 0,61- 1,09 PLN (up to 0,25 euro)

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Number of users forecast (broadbrandtrends.com)
180 000
160 000
140 000
120 000
Subscribers (thousands)
100 000
80 000
60 000
40 000
20 000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
1 264
4 977
11 787
23 820
43 612
66 162
94 209
123 341
161 242
VoIP Optimistic
VoIP Intermidiate
1 264
4 977
11 787
21 552
38 212
57 451
80 589
104 221
134 258
1 264
4 977
11 787
17 398
30 701
46 320
63 988
80 895
102 308
VoIP Pessimistic
VoIP Optimistic
VoIP Intermidiate
VoIP Pessimistic
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Number of users forecast (IDATE)
mln
300
18
16
250
14
200
12
10
150
8
100
6
4
50
2
0
0
2005
2006
2007
2008
2009
2010
2011
VoIP users
Share of VoIP users in the number of all users
of main lines
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Number of users forecast for Poland
20 000
100
18 000
90
16 000
80
14 000
70
12 000
60
Residental customers (td)
10 000
50
Non - Residental customers (td)
8 000
40
6 000
30
Residental customers td
4 000
20
Non - Residental customers td
2 000
10
0
0
2006
2007
2008
2008
2010
2011
2012
2013
2014
2015
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VOIP OVER BWA COULD BE AN ATTRACTIVE SERVICE FOR
NEW-ENTRANT OPERATORS

• Bigger impact New fixed operators, ISPs, WISPs
  and VoIP providers. VoIP services will
  significantly enhance the business case for BWA
  system deployment by these players.
• Less impact Mobile operators are expected to
  deploy cellular technologies, rather than
  alternatives, and not to use BWA systems to
  compete directly with fixed DSL/cable services
  for Internet access. New competition from BWA
  service providers (e.g. WiMAX) is expected to
  have a limited effect on mobile operators voice
  revenues.
• Less impact Incumbent fixed operators are
  expected to deploy fixed broadband (e.g. DSL)
  solutions and only to consider the use of BWA for
  rural areas. New competition from BWA service
  providers (e.g. WiMAX) is expected to have
  limited effect on fixed voice revenues.

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Thank you for your attention

• Monika Podplonska
• V-ce Director of Retail Telecommunications Market
  Department/UKE
• e-mail M.Podplonska_at_uke.gov.pl
• Telephone [phone]