|Issue:||North America 2007|
|Topic:||Broadband – globalizing communications and content|
|Author:||Grant E. Seiffert|
|Organisation:||Telecommunications Industry Association, TIA-USA|
Grant E. Seiffert is President of the Telecommunications Industry Association, TIA-USA. Mr Seiffert joined TIA as Director of Government relations, representing the equipment industryís interests, particularly regarding competitive issues. He was later promoted to Vice President and directed the TIAís domestic and global policy. Prior to joining the TIA, Mr Seiffert served five years with Senator John McCain. Mr Seiffert holds a Bachelor of Science degree in political science from Radford University, where he served as Vice President of his sophomore class and as a Senator in student government.
Broadband is growing impressively in North America and throughout the world. It is an indispensable tool in building sustainable economic development. A number of factors – competition, regulatory encouragement, government promotion of economic development, high-speed fixed and wireless infrastructure expansion, the growth of public telephony, and technology, especially VoIP – drive the growth of broadband. Wireless telephony is driving much of this growth; outside the United States, it will account for 59 per cent more subscribers than landline by 2010.
Thereís been much talk recently about North Americaís world position in broadband, about wireless deployment, and about the introduction of new services brought on by the convergence of countless sectors and technologies throughout the world. To be sure, other regions can clearly point to their impressive accomplishments in the communications and entertainment arena: high growth rates for wireless, very advanced broadband services, spectacular mobile penetration exceeding 100 per cent in some countries, and other recent expansion that is stunning to behold. In fact, North America has much to learn and emulate from other countriesí information, communications and entertainment technology, ICET, policies and progress. North America is in an enviable position as well. The future is bright, with our leadership in basic telephone service penetration and infrastructure development, with a rapid shift to wireless, with the steady spread of broadband and the introduction of new services, with the convergence of information and communications technology with the entertainment and content industry, and with service that is affordable relative to the cost of living. North Americans can justifiably feel proud of our successes in the ICET arena, too, but itís worth looking to advances and accomplishments elsewhere. Travelling around the globe, one sees the ubiquitous mobile services in Europe, the advanced broadband applications so popular in Asian countries, the spectacular growth rates in some African countries, and the focused e-policies and e-strategies of activist governments abroad. It takes true leadership to recognize the critical value of high-speed Internet access and other advanced services in bridging the digital divide, creating long-term development opportunities, reducing poverty, improving medical care and advancing education. Itís impossible to overstate the importance of communications services to any country or regionís development and economic health. The International Telecommunication Unionís, ITU, new Secretary-General, The Honorable Hamadoun TourÈ, celebrated the anniversary of his agencyís 1865 formation on May 17, restating the ITUís commitment to developing: ìinfrastructure and facilitating interoperability, interconnection and global connectivity of networks and services, strengthening the development of an enabling environment, and instilling confidence in the use of information and communications technology by promoting cyber-securityî. He added that the ITU is also committed to extending the benefits of ICET to people any time, anywhere. Well spoken! International growth drivers Broadband and networking are the keys to this effort. The Telecommunications Industry Association, TIA, in the United States believes there are several international growth drivers. ï In Europe, competition in some markets is driving investment in broadband, while regulators are encouraging competition in other markets. ï In the Asia-Pacific region, governments are actively promoting broadband to facilitate economic growth, and the region is a major research and development centre. ï The Middle East/Africa region is focusing its efforts on expanding basic infrastructure. ï In Latin America, an improved economy is driving telecommunications, which is experiencing rapid growth in public network equipment and telephone penetration. ï Newly launched voice over Internet protocol, VoIP, triple-play as well as quadruple-play service introductions and investment in high-speed wireless networks are fuelling growth. The TIAís 2007 Telecommunications Market Review and Forecast notes broadband revenue will be the fastest growing international telecommunications sector, expanding at a 17.6 per cent annual rate through 2010. Likewise, the report projects broadband will comprise 84 per cent of the Internet access market in 2010, up from 74 per cent in 2006. Huge wireless expansion Wireless is also a major international growth driver, with a projected 12.2 per cent annual growth fueled by an estimated 975 million increase in subscribers, bringing the wireless total to 3.13 billion. Nearly two-thirds of that expansion will be in the Asia-Pacific region, and nearly 80 per cent of Asiaís growth will come from China and India, which will add 491 million wireless subscribers during the next four years. It is interesting to note that outside the United States the number of wireless telephony subscribers passed landline subscribers in 2006 and will be 59 per cent larger than landline by 2010. A few additional comments and data points are relevant regarding the global market, including North America. ï TIA projects global growth of the telecommunications industry at 9.1 per cent compounded through 2010. ï Spending will rise from US$3 trillion in 2006 to US$4.3 trillion in 2010, including US$1.2 trillion in the United States. ï Increases will be less dramatic than in the late 1990s, but long-term prospects are positive. ï Growth will be demand-driven rather than supply-induced. ï The industry has returned to a path of sustained growth. In the US market, we project compound average annual increase to be 7.6 per cent through 2010. Broadband and wireless are two of the primary growth drivers, along with Internet protocol technology and public network equipment. Landline is being bundled with other services, and broadband, television and wireless are becoming key elements of the landline package. VoIP is becoming significant – growing to 34 per cent of residential subscriptions in 2010 from ten per cent in 2006. Within the wireless segment, data and multimedia applications are the principal drivers, and new applications will boost the handset market. For example, wireless data revenue will grow at an annual 36 per cent rate through 2010. On the enterprise side in the United States, convergent technologies are gaining momentum. IP is replacing legacy equipment. Data transport is shifting to IP virtual private networks and gigabit Ethernet is growing. IP-related revenue is increasing rapidly, while legacy-related revenue is declining rapidly. On the broadband side, entertainment applications are fuelling demand, while competition is driving down prices and boosting speeds. Broadband benefits The introduction of broadband and the development of broadband applications/services are absolutely essential to dissolving the digital divide – a primary goal of the ITU and dear to the heart of Secretary-General TourÈ. Broadband will accelerate social and economic developments by: ï connecting communities and enterprise customers with essential infrastructure; ï sustaining, reinventing, creating and multiplying jobs; ï enhancing productivity and enabling teleworking; ï boosting manufacturing; ï offering new tools for public safety and homeland security; ï improving public health facilities through telemedicine; ï facilitating e-government; ï fostering powerful classroom educational tools and enhancing distance learning; and, ï making the power of communications accessible to all. The TIA believes that every country needs a well-defined, aggressive national broadband policy to drive widespread deployment. The United States could take a lesson or two from South Korea, Japan and China in that regard. Affordable, highly advanced and secure communications services should be available to all Americans. Competitive market forces, not regulation, should be the principal means of achieving this goal. Governments should intervene only where it is necessary to address a specific, critical problem effectively and where the intervention is targeted to foster competitive market forces. Further, the association believes governments should implement policies that encourage investment in new and diverse communications technologies. Governments should also make the necessary radio spectrum available for deployment of advanced communications services, but all players – government, private sector and consumers – should participate in the formulation of broadband policy. Broadband strategies Strategically, we advocate minimal regulation of broadband networks both in the United States and globally to promote ubiquitous deployment and work for the removal of barriers to deployment, such as legacy requirements on next-generation broadband services. We support incentives such as tax credits, grants, pilot-project funding and low-interest loans. Further, we assist international organizations to realize the economic and social benefits of broadband, and we encourage deployment of all broadband access technologies. In addition, we seek a more globally harmonized spectrum allocation. On broadband video, TIA believes regulatory barriers can discourage and/or impede investment in networks, while deregulation leads to increased investment, competition and innovation. In addition, local government franchise processes are a regulatory barrier to entry into the video market, impeding timely investment in new facilities and slowing delivery of competitive and innovative services. In the United States, the local franchise process should be replaced with a uniform federal system managed by the Federal Communications Commission with limited input from existing local franchise authorities. Conclusions Broadband and wireless will be – they must be – the global connection that bridges the digital divide. Content, including entertainment, will be a primary driver in both developed and developing countries. National e-strategies need to provide incentives to change through competition. Societyís youth will lead the way by demanding new services, new applications, the latest technology and access to instant information as well as instant communications. The ICET industry, the 600 members of TIA, the ITU itselfÖ are ready for the challenge and well on our way to meeting it.