ICT Sector & Regulatory Performance Indicators for Developing Asia Rohan Samarajiva & Sriganesh Lokanathan

Objectives Benchmark regulatory and sector performance Empower all stakeholders (regulators, government, private sector, civil society groups, business associations, think- tanks and investors) to improve governance based on accurate and comparable cross country benchmark indicators

End goal LIRNEasia mission: To improve the lives of the people of Asia by facilitating their use of information and communication technologies; by catalyzing the reform of the laws, policies and regulations to enable those uses; by building Asia-based human capacity through research, training, consulting and advocacy

LIRNEasia & indicators: Past, present, future LIRNEasia has piloted regulatory performance indicators  R. Samarajiva & A. Dokeniya with Sabina Fernando, Shan Manikkalingam & Amal Sanderatne, Regulation and investment: Sri Lanka case study, in Stimulating investment in network development: Roles for regulators, eds. A.K Mahan and W.H. Melody, pp Monte Video: World Dialogue on Regulation. Will focus on neglected/unavailable supply-side performance & regulatory indicators Link to demand-side data from “shoestrings” (teleuse by those < USD 100/mo.) research 2006 research focus is sector and regulatory performance indicators

Telecom Regulatory Environment (TRE) Perception of efficacy  Five dimensions derived from WTO reference paper Market entry Scarce resources Interconnection Tariffs Anti-competitive practices Panels of representative and informed respondents Multi-country, comparative

TRE Methodology Constitute panel  Country teams; same methodology Senior management of operators Civil society and/or educational/research organizations Govt. entities Financial institutions & private investment houses/banks & credit rating agencies Journalists Consultants Former members/senior staff of regulatory agency Identify the sector (fixed, mobile, etc.) Previous year as period of study

Supply-side indicators: Priorities Identification of relevant indicators for developing countries  E.g., Rural vs Urban teledensities, Household teledensities  E.g., Business ICT usage surveys Utilization of basket methodologies where possible instead of disparate indicators e.g., OECD basket methodologies vs. ITU indicators

National Leased Line Tariffs: South Asian Case Study Utilization of OECD methodology

National Leased Line Tariffs: South Asian Case Study (contd.)

Mobile Tariffs Baskets (modified OECD basket methodology)  Low user (25 MOU/mth + 30 SMS)  Medium user (75 MOU/mth + 35 SMS)  High user (150 MOU/mth + 42 SMS) Basket components  Connection (deprc. over 3 years)  Rental  Usage  SMS Additions  Account for prepaid & postpaid  Account for RPP + CPP

Mobile Tariffs: Methodology Issues Weights : ratios need to be applied in the Asian context  Usage ratios b/w peak, off-peak, weekend  Usage ratios b/w local, national, on-net, off-net RPP  Some countries are RPP; Can be easily accounted for by assuming same # of incoming & outgoing minutes Prepaid is the market driver in developing countries and should be accounted for

Mobile Tariffs: South Asian Case Study

Employment Indirect Employment by telecom sector growth  E.g., Pakistan indicates 400k indirect jobs in past 3 years IT Enabled Services (ITES)  Improved ICT sector performance translates into more opportunities in the ITES sector.  Example: India’s employment in ITES continues to grow Source: NASSCOM

Taxation & Investment Comparable indicators required to capture direct and indirect taxes on ICT sector A reduction in taxes will induce growth GSM Association Mobile Tax Report  Need to independently assess method and data

Tax as a share of Total Mobile Service Cost

Challenges Priority indicators Buy-in from regulators Quality assurance Competitive/confidentiality issues

Meeting the challenges Indicators workshop, New Delhi, March 2-3, 2005  LIRNEasia will organize a meeting of government and private sector representatives, along with researchers  Co-hosted by Telecom Regulatory Authority of India

Objectives of Delhi meeting Long-term  Establish a sustainable system for measuring and benchmarking ICT sector input and output indicators for South Asia that can be extended to developing Asia. Short-term (6-9 mo.):  Prepare a draft comprehensive report and indicators manual similar to the European Commission Methodological Manual for Telecommunication Services [ embs/telecommunications1439.doc] that will provide a coherent framework for the producers of telecommunications statistics; embs/telecommunications1439.doc  Facilitate the application of indicators and concepts developed in the course of preparing Manual and Report in six country studies conducted with IDRC and other support that will in turn inform the conceptual work