Saud Bin Mohamed Al Tiwaniy Regional Workshop on COSITU ITU–T STUDY GROUP 3 Saud Bin Mohamed Al Tiwaniy Financial Expert Omantel Regional Workshop on COSITU for the Arab Region Cairo – Egypt, 9-13 March 2003

AGENDA What is ITU-T ? Function Management Team Organization of the Work Documentation Participation Output Major Achievements

ITU-T Is one of the three sectors of ITU It was established on 1st March 1993 Formerly known as CCITT Headed by Mr. HOULIN ZHAO – from China as its Director CCITT: International Telegraph and Telephone Consultative Committee

Function To provide Global Telecom Standards Studying Tariffs issues & Technical issues Results in ITU - Recommendations

ITU – T STUDY GROUP 3 Functions Responsible for studies relating to: Tariff and Accounting Principles for International Telecommunication Services Study of related Telecommunication economic and policy issues Study Group 3 shall in particular foster collaboration among its members with a view to the establishments of rates at levels as low as possible Consistent with an efficient service and taking into account the necessity for maintaining independent financial administration of telecom on a sound basis

ITU –T Study Group3 Management Team Study Period 2001-2004 Study Group 3 Chairman: Mr. Richard Thwaites form Australia Study Group 3 Vice -Chairman : Mr. Edmond Blausten From USA Study Group 3 others members; Mr. Alexander I. Kustuev : Vice – President rostelecom – Geneve Mr. Hassane K. Hamani : Directeur Exploitation Affaires – Niger Mr. Gerard TSOLKVITCH: Director Gen. For Industry – France

ITU-T Activities ITU-T Study Groups Study Group 2 – Operational aspects of service provision, networks and performance Study Group 3- Tariff and accounting principles including related telecommunications and economic and policy issues Study Group 4 – Telecommunication management, including TMN Study Group 5 – Protection against electromagnetic environment Study Group 6- Outside plant Study Group 9 – Integrated broadband cable networks and television and sound transmission Study Group 11- Signaling requirements and protocols Study Group 12 – End-to end transmission performance of networks and terminals Study Group – 13 Multi-protocol and IP-based networks and their internetworking Study Group – 15 Optical and other transport networks Study Group – 16 Multimedia services, systems and terminals Study Group – 17 Data networks and telecommunication software SSG – Special Study Group “IMT-2000 and beyond

ITU-T Study Group - 3 List of questions Under Study (Study period 2001-200) 1/3 Development of charging and accounting/ settlement mechanisms for network capabilities and services features made available by new technology 2/3 Adaptation of the D-series recommendations to he evolving market environment 3/3 Regional studies for the development of cost models together with related economic and policy issues 4/3 Terms and identifications for recommendations dealing with tariff and accounting principles

Study Group 3 Working Party 1/3 Chairman : Mr. Edmond Blausten: Capital one Services – USA Vice – Chairman : Mr. Agoston Foldvari: Matav Hungarian Telcom – Hungary Study Group 3 Working Party 2/3 Chairman: Mr. Gerard Tsalkovitch : Director General for Industry and info. – France Vice- Chairman: Mr. Cleveland Thomas: Telecom Services of Trinidad – Spain

Organisation of the work of ITU-T A.1 Work method for Study Groups of the ITU Telecom Standardisation Sector (ITU-T) A.2 Presentation of contributions relative to the study of questions assigned to the ITU-T A.3 (Withdrawn) Elaboration and presentation relative of texts and development of terminology and other means of expression for recommendations of ITU Telecom Standardusation A.4 Communication process between ITU-T and Forum and Consortia A.5 Generic procedures for including references to documents of other organisations in ITU-T Recommendations A.6 Cooperation and exchange of information between ITU-T and national and regional standards development organisations A.7 Focus groups: Working methods and procedures A.8 Alternative approval process for new and revised Recommendations A.9 Provision working procedures for the Special Study Group on IMT-2000 and beyond A.11 Publication of ITU-T Recommendations and WTSA proceedings A.12 Identification and layout of ITU-T Recommendations A.13 Supplements to ITU-T Recommendations A.23 Collaboration with International Organisation for Standardisation (ISO) and the International Electrotechnical Commission (IEC) on information technology A.30 (Withdrawn) Major degradation or disruption of service

Organisation of the work of ITU-T Part 2 A.Sup1 Guidelines on quality aspects of protocol related Recommendations A.Sup2 Guidelines on interoperability experiments A.Sup3 IETF and ITU-T Collaboration guidelines

FINANCE Sector Membership Financial Contribution are met Primary by member states and sector members Annual amount set for one contributor by unit is 63000 SFr per year Contribution unit is voluntary Amount agreed every two years determined by ITU- Council The maximum class can by chosen is 40 units

Documentation White Contribution translated into 3 working languages ( 2 months before meeting) English, French, Spanish Arabic, Russia and Chinese are also used Delayed Contributions less 2 months but 7 days before meeting Temporary Documents are reports from Chairman,working doc etc. During the meeting Liaison statements Doc transmitted from one group to another.

Participation Participation is through a circular letter addressed to member state and sector members from Directors of TSB

Output Recommendations complement treaties and give the more detailed provisions. D- Series recommendations are released

Administration Regulations (ITR’S) Inter government treaties which carry obligations for countries which sign them. Article 6 - Charging & Accounting Appendix 1 - The settlement of Accounts. ITU-T SG3 contributes ideas into ITR’s but are not mandated to SG3

ITU–T SG-3 Major achievements New Remuneration system Termination charge system Settlement rate system Special arrangement Difficulty to quickly implement those systems Condition is to reach cost-orientated rate, but No cost data or model for some administrations Regional Tariff Groups developed cost model SG3 is now developing cost principles and guidelines for negotiation Transitional arrangements To facilitate staged reduction to cost based rate to avoid sudden fall of revenue (smooth transition)

June 9, 2000 Annex E to Recommendation D.140 “indicative target rates” by Teledensity (T) Band, in SDR (and US cents) per minute. ( (end 2001) (end 2001) (end 2001) (end 2001) end 2001) (end 2001) (end 2001) FCC : 19 ¢ (January 2001) FCC : 15 ¢ (January 1999) FCC : 23 ¢ (January 2002/2003) 19 ¢(J.2000) Note: The correspondence between teledensity band and income group shown in the bottom row is intended to be approximate, not precise. Source: ITU-T SG3 Report. 1 SDR = US$1.39. © 2000 Arthur Andersen All rights reserved.

Annex E Recommends also That transit Administrations move towards the indicative target rate (upper limit) of 0.05SDR (0.07US $) per minute. To negotiate asymmetrical accounting rate (other than 50/50) if both administrations agree to move to below the indicative target rate. Example: Operator A belong to teledensity band E Operator B belong to teledensity band F A and B agree to achieve TAR 0.2SDR (<0.118x2) A can request settlement rate of 0.09 SDR B accepts to pay 0.11SDR to A

Termination charge Destination operator (or Government) set the charge Charge should be established based on costs Termination Charge includes International exchange National extension, including local loop And if appropriate, international circuit Other costs imposed on carriers by the national regulation Those components should be separately identified (Unbundled) Charge applies to all traffic from any source However if significant variation in costs, charge may vary (volume discount) Termination charge may be introduced on bilateral agreement basis

Normally symmetric(50/50) Not necessarily symmetric (if costs differ) Accounting rates and Termination Charges What’ s the difference Accounting rate Termination charge Normally symmetric(50/50) Not necessarily symmetric (if costs differ) Bilaterally negotiation In theory, set unilaterally (need agreement to implement) Discriminatory (different rates negotiated with different correspondents) Non-discriminatory (same rate for all correspondents) Half-circuit regime (would not normally be unbundled) Full-circuit regime (could be unbundled)

International call terminating on mobile network SG3 revised D.93 in year 2000, allowing to negotiate a separate rate for traffic terminating on a mobile network however, this is by bilateral negotiation and when the rate is cost orientated The difference between the two rates should be as small as possible Many countries now request very high settlement rates (3 – 5 times) A review is now going on in the SG3

Interconnection Rates in selected European countries under CPP (in US $ / minute, end year 2000) In 2001, there is an estimate indicating that the average of Fixed-mobile decreased to 0.136 and mobile to fixed has not changed

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