Macro Environment and Telecommunications

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Macro Environment and Telecommunications

• Lecture slides

University of Fort Hare, South Africa
Compiled by Toks Oyedemi NetTel_at_Africa 2003
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Module 1 Information and Information
Revolution
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Essence of Information and Information Technology

• information has become the defining feature of
  the modern world, mainly due to
• The use of information in socio-political
• and economic spheres
• The rapid developments of information
• technologies to create, analyse, store,
  communicate, and disseminate information.

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Information Revolution

• The explosion of information,
• facilitated by the technological
• revolution in computer applications
• and telecommunication networks.
• The increasing development in ICTs
• has revolutionized various socio-political and
  economic sectors, such as manufacturing,
  business, science and technology, schools and
  homes.
• The information revolution indicates the massive
  production of information

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Critiques of Information revolution

• Invention of Printing
• critics argue that the current information
  revolution is the 'second information
  revolution'. The invention of the printing
  machine in 1444 sparked the first information
  revolution.

Read more about Gutenbergs invention
Gutenbergs printing invention
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Critiques of Information revolution

• Historical Perspective of the Information
  Revolution
• Every society creates information to suit the
  needs of that particular epoch in human
  civilization. The history of civilization points
  to various levels and usages of information in
  everyday life.
• The argument is that the 'explosion' in
  information today is apt for present day society

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Impacts of Information Revolution

• Technological advancement computers, fibre optic
  cables, satellite, mobile phones etc
• Economic, business and finalcial implication
  E-commerce, employment boost in the info sector,
  infor as income generator
• Education E-education
• Management and Control Regulation and Policy in
  the info sector
• The Nation State Virtual society, information
  society, national issues are discussed on global
  arena e.g ITU, WTO
• Urban Migration Ideas and information
  move,making it less for people to move

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The Information Society

• cogent points that characterize the 'information
  society'
• The importance of information and the creation of
  knowledge,
• The prominence of the role of IT in the
  production
• and dissemination of information,
• The use of information networks for the
  distribution of information
• The radical changes in people's lives as a result
  of increasing integration of information and
  communication technologies (ICTs) into all
  spheres of public and private lives and
• The necessity for citizens to be trained in new
  skills to allow them benefit from the access to a
  massively expanding store of information
• Nassimbeni (1998)

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Defining Information Society

• The society that is currently being put in place,
  where low cost information and data storage and
  transmission technologies are in general use. The
  generalisation of information and data use is
  being accompanied by organisational, commercial,
  social and legal innovations that will profoundly
  change life both in the world of work and in
  society generally (Nassimberi 1998 154
• Webster (1997) provides five analytical criteria
  in defining the information society
• technological economic occupational spatial
  and cultural
• Go to the dynamic content on KEWL for different
  definitions

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Meaning of ICT

• ICTs refer to the various technologies that
  enhance the creation, storage, processing,
  communication and dissemination of information.
  ICTs also refer to the different infrastructures
  used in these processes, their applications and
  the numerous services these infrastructures
  render. We identify the following technologies as
  the elements of ICTs
• Media of Communication (e.g radio, television)
• Information machine (e.g Computers)
• Telecommunications technologies and equipment
  (Satellites, fibre optic cables, phones,
  Facsimile machines)
• Telecommunications infrastructures in particular
  have become the driving forces of ICTs they have
  the capability to link all various ICT elements
  together

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Potential uses of ICTs

• Facilitating public and
• private sector activities in
• areas such as in
• Public administration ICTs facilitate the
  provision public information that is useful to
  the community at large. E.g e-Government
• Urban and Rural Development ICT applications are
  useful in facilitating development programs in
  many countries. E.g The establishment of
  telecenters in rural communities can facilitate
  economic empowerment.
• Transport.
• In the transport sector, ICT applications
  can be used to improve road, air and rail
  transportation.

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Potential uses of ICTs

• 2. Improving the quality of life for citizens
  such as in
• Health E.g Telemedicine
• Special Needs (for the Physically Challenged)
  Braille keyboards and printers, SMS etc

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Potential uses of ICTs

• Education E.g Libraries have migrated from the
  traditional Dewey cataloguing system to a
  web-based cataloguing and search application.
  E-Learning

• Agriculture There are expert system designed
  to handle agricultural issues such as water
  utilisation and management, pest control, harvest
  management and so forth.
• Environment E. g GIS is an automated system
  that enables the capture, storage, checking,
  integration, manipulation, analysis, display, and
  modelling of complex spatial data

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Potential uses of ICTs

• 3. Sharing Knowledge and Improving Access to
  Information
• E-mail, The web and other platform of
  information communication
• Facilitating Activities in the Business Sector
  such as
• Manufacturing ICTs applications are linking the
  process chains in manufacturing as opposed to
  improving or facilitating single steps in the
  production lines. For instance, the use of
  Computer-aided-design (CAD) has improved the
  design stages of machine tools.
• Electronic Commerce

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Potential uses of ICTs

• Travel and Tourism
• ICTs in this industry consist of various
  components that include computerised reservation
  systems, teleconferencing, video, video
  brochures, management information systems,
  airline electronic information systems,
  electronic funds transfer, digital telephone
  networks, smart cards, mobile communication,
  e-mail, and Internet.

Integrated Information Technologies for
Integrated Tourism and Local Economy Management.
Source Mansel When (1998
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The Telecommunication Revolution

• Telecommunications can be defined as the process
  of communicating information via electronic means
  over a distance.
• The development in telecommunications is
  increasing at a spectacular rate
• Today, innovations in satellite and wireless
  telephony, coupled with solid state components
  for digital switching and end user equipment,
  have spectacularly lowered the costs of providing
  telecommunications facilities to any location,
  from the buzzing city center to rural villages

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Factors Responsible for the Growth of the
Telecommunications Sector

• Technology
• Competition

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Factors Responsible for the Growth of the
Telecommunications Sector

• Technology
• Capacity New technologies such as optical
  fibre have
• enormous capacity to carry information.
• Digitization Telecommunication networks are
  becoming totally digital, so that any type of
  information, including voice and video, may be
  sent as a stream of bits in a compressed form
  and reconstructed for use at the receiving end.
• Ubiquity Advances in wireless technology
  such as cellular radio, Personal Communications
  Services (PCS), and low earth orbiting (LEO)
  satellites will provide mobile and personal
  communications virtually anywhere.
• Convergence The convergence of
  telecommunications, data processing, and imaging
  technologies has ushered the era of
  multimedia.

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Factors Responsible for the Growth of the
Telecommunications Sector

• Competition
• There was a time when telecommunications seemed
  to be natural monopoly worldwide. Now, the trend
  is changing more and more national governments
  are liberalizing and introducing competition.
• The liberalization of the telecom sector has
  brought competition to the telecom markets.

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Telecommunication System

• Users Devices
• Transmission Systems
• Wire and cable technology
• Wireless technology

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Wire and Cable Technology

• Copper Wire
• One of the oldest transmission
• channels currently in use today
• Basically used for voice transmission
• Easy to install and cheap to acquire
• Maintenance cost high and susceptible to
  corrosion, rain and theft.

In South Africa, in the year 2000, over 740
copper theft incidents were reported, due to
this, more than 44 000 Telkom's customers were
left without communication for days.
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Wire and Cable Technology

• Coaxial Cables
• Consist of two wires The first, a copper wire,
  surrounded by an insulator, the second is
  surrounded by a metallic cylinder called the
  shield.
• provides a higher capacity than the copper
  cables

• Electrical interference is reduced
• It has the potential to also carry television
  signals

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Wire and Cable Technology

• Fibre Optics
• Fibre optic utilizes thin strands of glass fibre
  through which light waves travel
• not susceptible to any electromagnetic
  interference common to most electrical systems.
• it provides a higher transmission capacity it
  provides broad bandwidth

• provides capacity to transmit all forms of
  communication (voice, data and video).

A fiber-optic connection is faster than wireless
by many orders of magnitude. A single optical
fiber can carry about 3 trillion bits per second
(bps). The fastest wireless service (fixed
wireless access) approaches 2 million bps. So,
fiber optics can be more than a million times
faster.
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Wireless Technologies

• Microwave
• Microwave systems transmit voice and data through
  the atmosphere as super-high-frequency radio
  waves
• One particular characteristic of the microwave
  system is that it cannot bend around corners
  therefore microwave antennas must be in "line of
  sight" of each other
• The following are some of the characteristics of
  the microwave system
• High Volume
• Long distance transmission
• Point to point transmission
• High frequency radio signals are transmitted from
  one terrestrial transmitter to another
• Satellites serve as a relay station for
  transmitting microwave signals over very long
  distances. See image next slide

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Wireless Technologies

• Low-Orbit Satellite and Microwave Transmission

Source Telecom Networks. http//myphliputil.pears
oncmg.com/student/bp_laudon_mis_7/ch08.ppt
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Wireless Technologies

• Satellite System
• Satellites work by receiving and
• transmitting radio signals from one earth
  station to another
• Satellite system has the advantages of
  transmission from point to multipoint systems,
  which means transmissions can be beamed to areas
  that are geographically dispersed.
• Has the potential to beam signals across
  different countries this has improved
  international telephony enormously
• Has also improved television signal transmission
  as well

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Telecommunications in Africa

• The telecommunication sector is steadily growing
  in Africa
• more than 36 countries have created a separate
  regulatory body for the telecom sector
• fixed lines services have very low penetration in
  Africa
• 2.78 main telephone lines per 100 inhabitants
• Some Reasons for the low penetration are
• Lack of investment,
• Investment inefficiencies,
• Inadequate private sector involvement,
• foreign exchange scarcity,
• poor management incentives and
• Insufficient regional development

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Telecommunications in Africa

• Africa is witnessing a thriving cell phone market
• The liberalization of the African Telecom market
  has brought increased growth in the cell phone
  market
• Many African countries have introduced active
  competition in the cell phone market
• MTN and Vodacom are two of the major cellular
  operators in Africa

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Telecommunications in Africa

• Telkom's (South Africa) installed telephones and
  lines account for about 40 percent of the total
  lines installed in Africa
• Nigeria, with a population of over 120 million,
  has the potential for Africas largest telecom
  market. The Nigerian market has witnessed
  impressive development, especially in mobile
  telecom market.

                                               
                                                  
                                                  
           
Nigeria Telecoms Market Growth, 1991 - 2001
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The Internet

• The Internet is the largest computer network on
  the planet
• The many uses of the Internet include
• 1. Electronic Mail (e-mail)
• 2. World Wide Web (WWW)
• 3. The connection of remote computers
• 4. Remote control of remote equipment
• 5. Remote data acquisition

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The Fundamental Concept of the Web

• The Hypertext Concept works by means of
  hyperlink, usually in non-linear sequence
• Web Browser displays a web document and enables
  users to access web documents
• Web Server looks for the requested information,
  retrieves it and send it to the browser
• Uniform Resource Locators (URLs) These are the
  web addresses.

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Structure of web addresses
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Internet Use in Africa

• Considerable development has been made in terms
  of the expansion of the use of the Internet in
  Africa.
• The African market grew by 126 percent in the
  year 2000
• About 66 percent, of Internet users on the
  African continent are in South Africa
• Read more http//www3.sn.apc.org/africa/afstat.h
  tm

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• End of Module 1

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• Module 2
• Basic principles and scope of regulations 

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Why Regulate ICTs?
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Types of Regulators

• .

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The industry-specific regulator (Telecom
regulator)

• Determine the size of the telecom market
  (providing licenses)
• Foster healthy relations between the different
  service providers (Overseeing interconnection
  agreement)
• Address consumer complaints and
• solve them

• Protect consumers against high prices,
• poor quality of service, inadequate
• infrastructure, limited services, unsafe
• equipment

Crispin Hughes/Panos Pictures
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The industry-specific regulator (Telecom
regulator)

• Resolve disputes, regulate for fair competition
  (avoid the abuse of dominance in the market
  place)
• Ensure efficient use of the frequency spectrum
• Encourage investment, innovation and optimum
  growth of the sector
• Administer the numbering plan so that there are
  sufficient numbers available.
• Monitor compliance with national and
  international telecommunications equipment
  suppliers and service providers

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Economy-wide competition regulator

• Apply competition policy evenly across all
  sectors, particularly where it concerns mergers,
  horizontal and vertical integration
• Resolve disputes via the courts when complainants
  present complaints to the competition
  authority/commission.

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Attributes of a regulator

• Regulator should not be providing services in the
  sector it regulates
• Regulator must be independent
• independent of other interest in the telecom
  sector
• independent of political interest (e.g Govt.)
• Regulator must conduct its activities in an open
  and transparent manner.

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Two forms of Regulatory Structure in the ICT
Sector in Africa

• Independent Regulator
• Regulatory activity located within government
  line ministries.

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Models of Regulation in the ICT Sector

• Government owns and operates the network, while
  also assuming the roles of policy maker and
  regulator

Common in many developing countries prior to the
liberalization of the telecom sector
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Models of Regulation in the ICT Sector
Networks are privately owned and operated, but
the government, through one entity, makes the
policy for and regulates the market.
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Models of Regulation in the ICT Sector
Networks are privately owned, while the
government sets policy for the industry.
Regulation is given to an independent body that
either reports to the government or acts as an
independent commission
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Models of Regulation in the ICT Sector
This is the model in which networks are privately
owned, with little specific industry regulation.
National competition laws regulate all sectors
and telecommunications disputes are settled by
the courts.
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Regulatory ProcessesThe Licensing Process

• Bidding Process
• Preceded by an Invitation To Apply (ITA)
• States criteria for assessment and selection of
  winner

Source Kim, Park, Ko and Lee (200222).
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Regulatory ProcessesThe Licensing Process

• Auction
• Criteria are set and license offer to the
  highest bidders
• 2 types
• One round or simple auctions (open and closed)
• Multiple-round auctions

• Germany used auction to award UMTS spectrum in
  2000
• U.K raised 32.58 billion from the UMTS
  spectrum auction in 2000
• The Netherlands auctioned off five licenses for
  2.3 billion in 2000
• Spain raised only raised 425 million from its
  sale of four UMTS licenses in 2000

The first Telecommunications Auction process in
Africa was in Nigeria in 2001
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Regulatory ProcessesThe Licensing Process

• Lotteries
• Fast, inexpensive and transparent approach for
  selecting from substantially similar or equally
  qualified applicants.
• Should generally be preceded by a formal
  qualification process to select lottery
  participants

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Regulatory ProcessesThe Licensing Process

• Comparative Evaluation process
• (Beauty Contest)
• An approach for choosing among multiple
  applications that are substantially equal.
• Criteria for selection always published in
  advance, and

applicants strive to demonstrate how their
applications meet the criteria better than other
applications
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International Role players and
Telecommunications /ICT Regulation

• WTOs GATS provides schedules on trade in
  telecommunications services.
• Included in GATS is the Annex on
  Telecommunications which deals with

• Liberalization
• Competition prevention of anti-competitive
  practices
• Interconnection
• universal service obligations
• Making licensing criteria publicly available
• Establishment of an independent regulator
• Allocation of scarce resources

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International Role players and
Telecommunications /ICT Regulation
The Policy domain of the ITU aims to promote, at
the international level, the adoption of a
broader approach to the issues of
telecommunications
The ITU-D provides resources on trends in the
global telecom sector. E.g The Annual Trends in
Telecommunication Reform Which is based on the
annual Telecommunication Regulatory Survey. These
are valuable resources for governments reforming
their telecommunications sectors.
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• What role can regional Organizations in Africa
  play in the telecommunications regulation and
  reform in the continent ?

TRASA, ATU, WATRA, COMESA
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• End of Module 2

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• Module 3
• Global Trends in Telecommunications and ICT

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• Slide development in progress