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March 18, 2015

Mobile money, OTT and roaming: Will ITU members define fair competition and pricing?

By Chaesub Lee

Established in 1865, one of the founding principles of ITU was to provide a neutral venue for countries’ negotiation of interconnection rates for telegraph networks. The essence of this work lives on in ITU-T Study Group 3 (SG3), our standardization expert group responsible for ‘economic and policy issues’. SG3 is meeting this week in Geneva, 16-20 March; however, the issues to be discussed will be quite different to those debated in the early days of the Union, not to mention a great deal more complex.

The relationship between revenue, traffic and subscriptions continues to transform with the rise of mobile-wireless technologies and the shift from circuit-switched to packet-based networks.

SG3’s study of the financial aspects of telecommunications and ICT is very much a study of convergence, and in particular how convergence has affected the business of network operators as new players have entered the fold of the ICT industry.

Contributions from Africa propose that SG3 establish a new work stream (‘Rapporteur Group’) to guide the costing and pricing of mobile money services. 

The proposal is motivated by concerns that a lack of regulatory guidance on fair access to communications infrastructure could open the door to abuses of market dominance, which some see as responsible for the prohibitively high prices of mobile money transactions in some countries.

Should this proposal be accepted by SG3, the new Rapporteur Group would focus on the enabling factors of healthy market competition. This would include the development of a transaction cost model to make mobile money services more affordable. Here, the work of the ITU-T Focus Group on Digital Financial Services, an open platform which aims to increase financial inclusion by propelling the use of digital financial services, is expected to feed into the work of SG3.

Contributions from Asia and Oceania, Africa, and the Arab States will feed into SG3 work on the economic impact of over-the-top (OTT) services, particularly as it relates to regulatory frameworks and competition policy.

Contributions from Asia and Oceania propose a definition for OTT services as well as three approaches to their regulation. African contributions call for ITU-T to distribute a survey on the impact of OTT services on data traffic and associated demands on network infrastructure. In addition, the African region has requested that ITU-T revisit the cost model put forward by Recommendation ITU-T D.50, specifically in the context of the impact of OTTs on the cost of international Internet connectivity.

Africa, the Arab States, Asia and Oceania, and Latin America and the Caribbean have submitted regional contributions to SG3 efforts to outline common principles for mobile-roaming cost methodologies.

The study of international mobile roaming is a key SG3 work stream. The group’s upcoming meeting will consider the development of a new international standard on mobile roaming tariffs, a proposal supported by the majority of the ITU-T members submitting contributions on the topic. Should this proposal be accepted by SG3, it would not preclude the potential revision of Recommendation ITU-T D.98 “Charging in international mobile roaming service”.

SG3 is also expected to gather members’ views on the publication of a Technical Paper which reports on the findings of a study into a potential cost model for international roaming tariffs. This study was commissioned by ITU in response to the recommendations of the ITU High-Level Workshop on Regulatory and Economic Aspects of Roaming, 23-24 September 2013, an event that brought greater clarity to the positions of various stakeholders.

SG3 has received a record number of contributions this year which ITU members can access via the SG3 homepage. 

Chaesub LeeChaesub Lee is the Director of ITU’s Telecommunication Standardization Bureau, following his election at the 2014 Plenipotentiary Conference in Busan, Republic of Korea. He took office on 1st January 2015. He acted as Vice-Chairman of ITU-T Study Group 13 ‘Future Networks and Cloud’ from 2001 until 2008, becoming Chairman of that group in 2009.
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Mobile money, OTT and roaming: Will ITU members define fair competition and pricing?

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