2. The Address of Dr. Amr Badawi, NTRA Executive President to the Convergence of ICT and Broadcasting Conference 'Regional Prospective and Opportunities' Sharm El Sheikh, 19th of May, 2006 A Converged Egypt

3. Contents: Introduction Convergence at a Glance The ‘Converged’ Telecom Scene The Impact of Convergence on Regulation The Convergence Roadmap Convergence Challenges Issues for Debate

4. Introduction: Egypt possesses a number of comparative advantages which positively positions it as a promising market for ICT and Media convergence: infrastructure talented ICT professionals efficient service providers empowering regulatory framework. Content is a key word in the convergence game. Egypt has always been, and continues to be, the leading source of culture and entertainment in the Arab world. Egypt could become an exporter of content to the Arab world; consequently economies of scale could be achieved.

5. Convergence at a Glance: So what is convergence? In a nutshell, it is the ability to provide a range of services (voice, data, and broadcasting) over a single network (‘triple play’). Examples: Voice over IP, which makes very low and flat rate calling plans possible. Television over IP, which provides much more flexible access Radio over IP, which enable users to listen in real time or on demand Convergence is being applied to many fields; commerce, education, health, publishing, and manufacturing, etc.

6. Convergence at a Glance: (cont..) It has changed many aspects of our everyday life: the way we communicate, the way we access content and entertainment, the way we make our purchases, even our own mobility. A phone is no longer used for merely exchanging conversations, but also for watching movies, listening to MP3s or even watching and listening to the finals of the World Cup, live. The NTRA has been active in convergence: Cooperation between MCIT and RTU (Radio and Television Union) VoIP BGAN

7. The ‘Converged’ Telecom Scene: Since its introduction, convergence has had a profound impact on the telecommuncation field and media sector, dramatically changing its infrastructure, services and overall environment. Infrastructure: - digitalized Competition: –diversity of service providers and offers –low and affordable prices –wide range of complementary services Innovation: –new services –new business models –new devices –content creation industry to support demand –local loop unbundling

8. The ‘Converged’ Telecom Scene: (cont..) Examples: Gradual shift to VoIP and VOB (Voice over Broadband); now almost 15% of voice traffic is through VoIP. CATV (cable TV) systems are now offering video on demand, broadband access and voice telephony. Consequently, CATV operators are now competing with telecom operators. The current trend in several parts of the world is for service providers to offer triple play service bundles in inclusive packages (ex. monthly) There is a steady growth in 3G networks and wireless broadband services

9. The Impact of Convergence on Regulation: Convergence is reshaping regulation and policy and raising several implications: Convergence is leading to a rise in the number of wireless services, which in turn raises the need for spectrum management reform. Convergence entails revisiting current licensing regimes and favors regimes that are technologically neutral. Convergence might lead to the broadening of certain market definitions, with the result that several narrowly defined markets are replaced by a single more broadly defined market. Convergence may pose a threat on the industry if it induces mergers of large scale operators and drives out small local operators.

10. The Impact of Convergence on Regulation: (cont..) Access to communication channels and access to content New issues of competition and monopoly Privacy, security, IPR A transition from monopoly/oligopoly direction to maximizing participation via open access Target is not technological neutrality, but maximum development of all technology & services advantages Maximum opportunities for competing firms to achieve public interest goals Maximum stimulation to market development through both private and public participation

11. The Convergence Roadmap: For any country to successfully integrate convergence into its communication and media sector, it must develop the following convergence pillars: Technical: 1) Digitalized Infrastructure - Broadband - Wireless and mobile technologies High-speed backbone networks 2) Digitalized Media Content - DRM - DAM

12. E. The Convergence Roadmap: (cont..) Regulatory: - Conducive Market Conditions (supply, demand, competition) - Technological Neutrality -Intellectual Property Rights and GATS agreement Business: -Encourage investment -More service providers -Diverse services; options -Digital content creators

13. F. Convergence Challenges: Political and Legal: Law restrictions National security considerations Politically acceptable Business: Must find feasible business models: Revenue: from customers and advertisers Evidence of demand is still very unclear Which firms have the expertise to make profits in these areas? (telecom co. vs. content providers) Social: Socially acceptable content Literacy (traditional and ICT literacy)

14. F. Convergence Challenges: (cont) Economy: Income levels: low GDP per capita misdistributions of wealth within countries Spending capacity: Are people willing to spend on entertainment? And if so, how much? Infrastructure: which networks are best and cheapest? availability of electricity availability of computers availability of telecommunications networks availability of investment

15. G. Issues for Debate: Convergence is raising a wide array of regulatory and legislative issues that should be addressed by both policy makers and regulators The need to : - encourage investment - lower market entry barriers Policy should: -ensure competitive markets -encourage the provision of better and cheaper services - be responsive to market changes; updated upon need Need to avoid regulatory arbitrage and gamesmanship Reducing the digital divide: Universal Service

16. G. Issues for Debate: (cont…) Is the trend of institutional convergence (the example of Ofcom) really the best way to address Convergence? Are current telecom or ICT regulators competent to regulate “content”? Can content regulation be avoided? What is the most effective role for national telecom regulators?

17. Thank You abadawi@tra.gov.eg