1. Mobile Cellular: Cutting the cord Tim Kelly & Michael Minges (ITU) CTO Annual Council, Gaborone, 21 September 1999 The views expressed in this presentation are those of the authors, and do not necessarily reflect the opinions of the ITU or its membership. Tim Kelly can be contacted by e-mail at: Tim.Kelly@itu.int.

2. Mobile Cellular: Cutting the cord The Mobile Revolution Supplying Mobile Regulating Mobile Mobile Access Pricing Mobile A Mobile Future Examples from SADC

3. A Mobile Revolution Source: ITU World Telecommunication Indicators Database. More than 300 million users 250000 new users added each day Users double every 20 months Competitive markets Worldwide mobile cellular subscribers (millions) 55 34 23 16 11 91 144 215 318 38% 9% 6% 4% 13% 3% 2% 20% 27% 19909192939495969798 Mobile as % of fixed-line telephone subscribers

4. Mobile growth in SADC region (excluding South Africa) Source: ITU Over 100% growth Almost as many new mobile and fixed-line subscribers added in 1998 Penetration rate doubling each year

5. Supplying Mobile Note: Analogue systems include: AMPS (Advanced Mobile Phone System), NMT (Nordic Mobile Telephony), TACS (Total Access Communications System). Digital systems include: CDMA (Code Division Multiple Access), GSM (Global System for Mobile), PDC (Personal Digital Cellular), PHS (Personal Handyphone System), TDMA (Time Division Multiple Access). Source: ITU, adapted from Ericsson, Dataquest, GSM MoU, CDMA Development Group. Worldwide cellular subscribers by technology, 1998 1 st generation, analogue 2 nd generation, digital 3 rd generation, IMT-2000 global roaming multimedia (Internet, data, video, voice) multi-mode (in-building, terrestrial, satellite) 7% TDMA/ D-AMPS 6% PDC 11% CDMA PHS 2% AMPS 23% NMT 2% TACS 5% GSM 44% Analogue 30% Digital 70%

6. Status of Mobile in SADC region Mobile cellular start-up SADC countries Angola Feb. 94 Namibia April 95 Botswana June 98 South Africa June 94 Zambia Aug.95 Tanzania Sep. 94 Zim- babwe Sep.96 Malawi Dec. 95 Swazi- land Nov.98 Lesotho May 96 Mauritius May 89 Mozam- bique Nov.97 Source: ITU. < 0.1% > 5% ~ 1% 0.2 -.05% Penetration Mobile established fairly recently in all countries of SADC region GSM is dominant standard Roaming agreements evolving

7. Regulating Mobile Source: ITU World Telecommunication Indicators Database. A relative lack of regulation <1% of world market under monopoly Key issues: Coverage and interconnect Number of countries with mobile cellular competition 28 38 49 61 72 93 199319941995199619971998

8. Market structures, SADC Private sector participation in all but one SADC country Competition in 6 SADC countries

9. Mobile Access Source: ITU World Telecommunication Indicators Database. Mobile can enhance access Pre-paid has given access a major boost, esp. in Europe Mobile is becoming preferred form of access in many developing countries Pre-paid mobile cellular subscribers, 1998, as % of total Total pre-paid (m) 15.2 2.0 1.6 1.3 0.4 0.8 0.7 0.6 74% 60% 53% 50% 40% 37% 35% Italy Mexico Portugal S. Africa Indonesia Austria Greece Philippines

10. Mobile as a tool in achieving Universal Service SADC operators have few Universal Service Obligations Except in South Africa where they had to install 30000 cellular payphones in 5 years Cellular is quicker to implement and less prone to copper theft

11. Pricing Mobile Note: Price basket based on monthly subscription plus 50 mins peak and 50 mins off-peak use. Source: ITU World Telecommunication Indicators Database. High prices stunt network development Specialist mobile companies doing better than integrated fixed/mobile Prices falling by around 4% p.a. Relationship between mobile price and density in Western Europe Mobile density (per 100 inhabitants) Price per 100 mins per month (US$) 0 10 20 30 40 50 60 70 102030405060 Switzerland Austria UK Ireland Finland Sweden Norway Germany Greece Spain Bel. Franc Italy Port. Neth. Denmark Iceland Lux.

12. Mobile prices in SADC region Prices still relatively high compared to other regions Significant variations within the region Pre-paid schemes are widening access base (e.g., >50% of Vodacoms subscribers)

13. A mobile future Source: 1990-1998 data from ITU World Telecommunication Indicators Database. 1999-2010 ITU projections. Mobile has overtaken fixed-lines in Cambodia, Finland and Italy Mobile subscribers to overtake fixed-line worldwide before 2010? Mobile revenue to overtake fixed-line after 2004? Fastest growth in developing countries Actual and projected subscriber growth, fixed-lines and mobile, millions, 1990-2010 0 500 1'000 1'500 2'000 199020002010 Fixed Mobile

14. Cross-over between fixed and mobile subscribers, S. Africa 0 5 10 15 20 25 30 199019921994199619982000 Fixed-line Mobile Subscribers per 100 inhabitants January 2000, at density 11.85 ??

15. For more information... Publication launch: 10 October 1999 (TELECOM 99) Available on paper and online (PDF format) World Telecom Indicators Database available online Website: http://www.itu.int/ti Other reports launched at TELECOM 99 Direction of Traffic 1999: Trading Telecom Minutes Trends in Telecom Reform 1999: Convergence Internet for Development (updated with latest data)