Market Access Barriers in Mobile Communication Market Access Symposium Opening Borders to Businesses Paris, 27 November 2008 Christina Kaul, International Policy Director, Vodafone

About Vodafone Vodafone leading global telecom operator European communication industry overall global leader Revenue £35.5 billion (as at 31st March 2008) 270 million proportionate customers (as at July 2008) Market Capitalisation £73.1 billion (as at 9th September 2008) Present in over 15 emerging markets In most markets number 2 or 3 mobile operator In most markets top 3 foreign investor and crucial for development of local infrastructure Local regulatory expert teams in over 15 emerging markets providing local knowledge and horizontal perspective

Importance of Emerging Markets for Telecom Business Global mobile telecom annual revenues CAGR % 10.3 4.0 318 435 323 256 112 62 Emerging markets are ~60% of total expected growth over next 5 years £bn 2007 2013e Developed markets Emerging markets Source: Strategy Analytics

Market Access Barriers in Telecom Sector Liberalization of telecom markets has been major catalyst for growth in several developing countries (e.g. India and Bangladesh). Many emerging markets telecom operators are now looking at investments outside their home countries (e.g. Bharti in Sri Lanka and Africa, Essar in Kenya, MTN throughout Africa) Dynamic could be further stimulated with removal of FDI limits still present in several countries (e.g. Indonesia) Market access often hampered by fragile institutional frameworks (administrative transparency, judicial independence, rule of law, regulatory systems)

Market Access Barriers in Telecom Sector Three major areas of telecom-specific access / market barriers: Inadequate telecom-specific regulatory systems Lack of clarity about telecom policy goals of government Transfer of western regulatory systems without adaptation to local circumstances Lack of regulatory education / capacity to administer and implement regulatory system As a consequence regulatory systems lack transparency, predictability, reliability and equality Preferential treatment of state-owned incumbents / national preference (e.g. licensing fees as indirect state aids Taxation systems that are inequitable, unpredictable and relying on high taxation of infrastructure / heavy industry businesses Introduction of new services (e.g. mobile payments – M-PESA in Kenya) very difficult Impression that telecom sector is not high enough on bilateral EU trade agenda