Houlin Zhao Deputy Secretary-General, ITU Digital Convergence: Challenges and Opportunities International Telecommunication Union IT Ministerial Conference, Seoul 19 April 2007

International Telecommunication Union 2 Opportunities: Paradigm Shifts Static market environments Divergence Circuit-switched Local Low-speed Switch-on Fixed Single medium Distinct Dynamic, fast- paced innovation Convergence Packet-switched Global High-speed Always-on Mobile + Fixed Multi-media Bundled TO

International Telecommunication Union 3 Challenges: Digital Convergence Institutional challenges: convergence of ministries, regulators etc. in telecom spectrum, IT/ICT, broadcasting, which is often a political issue. Regulatory & legislative challenges: difficulties to catch up technological innovation and convergence in the converged laws/regulations. Industrial challenges: balance between creating new employment and redundancy as well as convert from legacy networks/technologies to the converged ones with huge costs especially for the developing countries.

International Telecommunication Union 4 Challenges: Convergence (e.g., NGN) Pricing: Will offer prices that are significantly lower than those available today? Bundling and billing: How to distinguish real price of bundled services? Interconnection: Will current interconnection models (based on per-minute settlement) work ? Security: If much greater capacity is available at the edges of the network, how to guarantee security? Investment: Will unbundling discourage new infrastructural investment? Traffic prioritization: Is the Net really neutral ? Emergency services: What level of universal service obligation to impose? Competition policy: Significant market power will not go away in the converged (e.g., NGN) environment ? Consultation: compensation for stranded assets?

International Telecommunication Union 5 Opportunities NGNs provides an excellent opportunity to agree improved interfaces in ITU-T to better enable service providers to interconnect and cooperate Such interfaces, based on ITU-T defined global standards, opens the door to the provision of an unlimited range of applications and services NGN has the potential to accelerate the deployment of telecommunications networks and services in developing countries It offers the opportunity for developing countries to jump several generations of technology The capital costs of deploying NGN technology are significantly lower than circuit switched technologies Enables a more rapid expansion of network capabilities NGN will enable a range of multimedia services to be provided easier with less cost, and so increase potential revenues.

International Telecommunication Union 6 R.O.Korea s Leadership in Digital Convergence Korea (Rep.) Japan Denmark Iceland Singapore Netherlands Taiwan, China HK, China Sweden UK Finland Norway Luxembourg Israel Macao, China Switzerland Canada Austria Germany USA Source: ITU Digital Opportunity Platform. Provisional data for 2006 Digital Opportunity Index 2001: Korea s DOI = - Overall: 0.60 (rank #2) 2006: Korea s DOI = - Overall: 0.80 (rank #1) - Mobile: 0.65 (rank #2) - Fixed: 0.88 (rank #1)

International Telecommunication Union 7 R.O.Korea s ICT Sector: The mainspring of its economic growth Telecoms revenue as a percentage of GDP R.O.Korea 1990 = 2.0% 2005 = 4.8% World Average 1990 = 1.8% 2005 = 3.0% Source: ITU World Telecom Indicators Database.

International Telecommunication Union 8 ITU s mandates and leadership in digital information society ITU-R: allocation for the appropriate frequency/spectrum for the converged technologies, networks and services, and develop technical standards for radio access and other radiocommunication services. ITU-T: set international standards (i.e., Recommendations) to ensure interoperability, security etc. in the converged telecoms/ICts, bridge the standardization gap. ITU-D: assist members in developing and moving towards the converged telecom/ICT environment through providing expert support, trainings to equipments/facilities. Closer collaboration between the three ITU Sectors. More

International Telecommunication Union 9 ITU - WSIS Action Line C2 ICT infrastructure facilitation: ITU Information and Communication Infrastructure Main orientation for actions in C2: Facilitation of large scale initiatives Development of thematic activities. Strategy to link national, regional and international initiatives to facilitate large scale infrastructure projects. C2 Group, endorsed five (5) large scale ITU projects: Harmonization of ICT Policies for 43 African States Harmonization of ICT Policies for 17 Caribbean States Capacity Building on ICT Policies for 14 Pacific States International fibre optics: Infinity project West Africa, ICT Applications and Connectivity : Pacific Island States, studied by ITU, funding to be secured

International Telecommunication Union 10 ITU - WSIS Action Line C2 Plan of Action aims at the facilitation of the following core Activities: 1.Development of National e-Strategies; 2.Harmonization of the ICT Policies in the different regions; 3.Development of regional and large-scale national initiatives; 4.Launch of global thematic ICT Infrastructure initiatives for: Public Access ; ICT-Applications for Development ; Broadband Wireless Access ; Large-scale ICT backbones 5.Development of a virtual financing platform; 6.Deployment of an online tool for ICT Development Assessment.

International Telecommunication Union 11 October-November 2007: - Radiocommunication Assembly, and - World Radiocommunication Conference October 2008: - World Telecommunication Standardization Assembly, and - Worldwide Standardization Roundtable and Coordination Meeting

International Telecommunication Union 12 World Telecom Policy Forum 09 Topic: Convergence and emerging policy issues Timetable: 30 June 2007: Deadline for first contributions 1 September 2007: First draft of SG s report Spring / Autumn 2008: Two meetings of informal expert group 15 December 2008: Deadline for final draft 24 March 2009: Information Session for WTPF March 2009: 4 th WTPF

International Telecommunication Union 13 Thank you Houlin Zhao ITU Deputy Secretary-General Tel.: Fax: