1
Highlights of the OECD’s Communications Outlook 2007:
Focus on Mexico
Dimitri Ypsilanti
Directorate for Science, Technology and
Industry,
OECD
2
Objectives of Communications Outlook
Provide most recent comparable data on the performance of the communication sector –consistent time series;
Highlight main trends in recent policy issues and market structures;
Provide range of indicators showing developments in telecommunication market size, network dimensions, Internet and broadband infrastructure, and main trends in pricing;
3
Policy issues / market structure Changing landscape
– Substitution in market: fixed - mobile – Success of unbundling– Competition from new technologies (VoIP)– Mobile and broadband increase– Shift in policies to emphasise convergence
Convergence– Growth in “multiple play”– Network & service convergence beginning (FMC)
“Growth through transformation”– Telecommunication companies becoming media
companies– Media companies becoming telecommunication companies
4
Growth in Consumption: household expenditures on communication equipment and services
70
80
90
100
110
120
130
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Index 1995 = 100Communications
Health
Audio-visual; photographic and informationprocessing equipmentEducation
Transport
Restaurants and hotels
Recreation and Culture
Housing, water, electricity, gas and otherfuelsAlcoholic beverages, tobacco and narcotics
Furnishings, households equipment androutine maintenance of the houseFood and non-alcoholic beverages
Clothing and footwear
5
Access growth 1997-2005
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1997 1998 1999 2000 2001 2002 2003 2004 2005
Fixed telecommunciation paths (voice) Mobile Other broadband Cable DSL
Subscribers access (millions)
6
Growth in Main Lines: Selected Countries
GDP per capita, USD, 2005
Czech Republic 12 113
Hungary 10 941
Mexico 7 292
Poland 7 920
Turkey 5 045
OECD average 29 881
0
5
10
15
20
25
30
35
40
45
50
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Access lines per 100 inhab.
OECD
Hungary
Poland
Czech Republic
Turkey
Mexico
7
Telecommunication Investment as percentage of telecommunication revenue
0
20
40
60
80
100
1997 1998 1999 2000 2001 2002 2003 2004 2005
%
Mexico
OECD
Hungary
Poland
Czech Republic
Turkey
8
Telecommunication investment per capita
0
50
100
150
200
250
1997 1998 1999 2000 2001 2002 2003 2004 2005
USD
OECD average
Hungary
Czech Republic
Poland
Mexico
Turkey
9
Growth of mobile
0
100
200
300
400
500
600
700
800
900
1,000
1997 1998 1999 2000 2001 2002 2003 2004 2005
Mobile (subscription) Mobile (prepay) Mobile (3G)
Mobile subscribers (millions)
10
Growth in mobile subscribers (per 100 inhabitants)
0
20
40
60
80
100
120
140
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Mobile subs. per 100 inhab.
Czech Republic
Hungary
OECD average
Poland
Turkey
Mexico
11
Relative Market shares in mobile: 2005
41 45
78.9
35
63
40 33.2
14
31
22
19 21.84
34
15
0%
20%
40%
60%
80%
100%
Czech Republic Hungary Mexico Poland Turkey
4th operator
3rd operator
2nd operator
1st operator
12
Main trends in pricing Trends
– Prices for all telecommunications services falling– Surplus spent on new telecommunication services– Move towards flat-rate pricing – Broadband speeds increasing while prices fall
Bundling– Triple play bundled prices: video, voice, data– Bundling fixed and mobile services
• Orange, BT, KT, Swisscom
New telecommunication basket methodology– Fixed– Mobile
13
Fixed (residential): low usage
Source: OECD Communications Outlook 2007
0
100
200
300
400
500
600
700
800USD PPP
Fixed Usage
14
Fixed (residential): medium usage
Source: OECD Communications Outlook 2007
0
200
400
600
800
1000
1200
Polan
d
Czech
Rep
ublic
Turk
ey
Hungar
y
Slova
k Rep
ublic
Mex
ico
Portu
gal
Greec
e
New Z
eala
nd
Belgi
um
Austra
liaIta
ly
Fran
ce
Finl
and
Spain
Austri
a
Nether
land
s
Irela
nd
Germ
any
UK
Luxe
mbo
urg
Japan
Switzer
land
Korea
Norway
Sweden USA
Denm
ark
Icel
and
Canad
a
USD PPP
Fixed Usage
15
Fixed (residential): high usage
Source: OECD Communications Outlook 2007
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Polan
d
Czech
Rep
.
Turke
y
Hunga
ry
Slova
k Rep
.
Portu
gal
Mex
ico
Gre
ece
Belgiu
mIta
ly
Finlan
d
Austra
lia
Franc
eSpa
in
New Z
eala
nd
Korea
Japa
n
Austri
a
Nethe
rland
s
Luxe
mbo
urg
Unite
d Kin
gdom
Ger
man
y
Irelan
d
Switzer
land
Sweden
Icela
nd
Denm
ark
Norway
Unite
d Sta
tes
Canad
a
USD PPP
Fixed Usage
OECD basket of residential telephone charges, high usage, August 2006
16
Fixed (business): SOHO
Source: OECD Communications Outlook 2005
0
200
400
600
800
1 000
1 200
Czech
Rep
ublic
Poland
Austra
lia
Mex
ico
Slovak
Rep
ublic
Turke
y
Spain
New Z
ealan
d
Portu
gal
Hunga
ry
Belgium Ita
ly
United
King
dom
Franc
e
Japa
n
Finlan
d
Greec
e
Austri
a
Canad
a
Irelan
d
Nethe
rland
s
Germ
any
Switzer
land
Sweden
Luxe
mbo
urg
Denm
ark
Korea
Icela
nd
Norway
United
Sta
tes
USD PPP
Fixed Usage
OECD business basket for small office and home office (SOHO), August 2006
17
Fixed (business): SME
Source: OECD Communications Outlook 2005
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
Mex
ico
Czech
Rep
ublic
Polan
d
Austra
lia
Slova
k Rep
ublic
Turke
y
Spain
Gre
ece
Portu
gal
Japa
nIta
ly
Hunga
ry
Unite
d Kin
gdom
New Z
eala
ndO
ECD
Belgiu
m
Finlan
d
Korea
Franc
e
Austri
a
Nethe
rland
s
Irelan
d
Canad
a
Sweden
Switzer
land
Luxe
mbo
urg
Ger
man
y
Denm
ark
Icela
nd
Unite
d Sta
tes
Norway
USD PPP
Fixed Usage
OECD business basket for small and medium-sized enterprises (SME), August 2006
18
OECD Basket of international telephone charges, August 2006
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50USD PPP
Business
Residential
19
Broadband subscribers per 100 inhabitants (1999 – June 2006)
0
2
4
6
8
10
12
14
16
1999 2000 2001 2002 2003 2004 2005 Jun-06
OECD average
Czech Republic
Hungary
Poland
Turkey
Mexico
20
Broadband prices per Mbit/s, Oct. 2006
81.1337.47
34.0128.49
16.0313.98
12.498.90
6.506.07
5.315.04
4.544.18
3.623.383.303.18
2.982.782.74
2.612.20
1.891.76
0.820.59
0.420.35
0.22
Turkey
Greece
Mexico
Hungary
Czech Republic
Slovak Republic
Poland
New Zealand
Luxembourg
Austria
Ireland
Iceland
Canada
Switzerland
United Kingdom
Belgium
Netherlands
United States
Norway
Denmark
Germany
Portugal
Spain
Italy
Australia
France
Finland
Korea
Sweden
J apan
192.85163.72
222.31133.49
76.1861.58
236.4478.93
32.3957.89
22.2037.18
90.4713.7714.50
65.9243.87
20.7452.91
71.7042.67
146.2458.89
27.54165.02
27.3379.97
9.8397.47
77.64
0.1 1 10 100 1000
TurkeyGreeceMexico
HungaryCzech Republic
SlovakPoland
New ZealandLuxembourg
AustriaIrelandIcelandCanada
SwitzerlandUnited Kingdom
BelgiumNetherlands
United StatesNorway
DenmarkGermanyPortugal
SpainItaly
AustraliaFranceFinlandKorea
SwedenJapan
Range of broadband prices per mbit/s, October 2006, all platforms, logarithmic scale, USD PPP
21
Broadband prices per monthly subscription, Oct. 2006
52.3645.14
37.4437.1836.4536.3535.5635.51
33.0832.4431.50
29.0023.1622.4321.8521.1121.10
20.0119.9919.8719.49
18.1817.63
16.8616.8516.3615.93
12.5311.1110.79
Mexico
Spain
Portugal
Iceland
Hungary
Greece
Turkey
Korea
Poland
Czech Republic
Slovak Republic
United Kingdom
Canada
Belgium
Germany
Austria
Australia
Norway
Luxembourg
J apan
Finland
Ireland
Italy
New Zealand
Netherlands
France
United States
Switzerland
Denmark
Sweden
802.65226.95
74.1663.26
218.88334.36
288.2357.07
149.84372.23
265.1656.41
92.8367.56
58.02110.58
98.62148.79
88.2449.78
58.6744.02
47.10115.97
78.8338.31
191.2055.65
105.1046.74
1 10 100 1000
MexicoSpain
PortugalIceland
HungaryGreeceTurkeyKorea
PolandCzech RepublicSlovak RepublicUnited Kingdom
CanadaBelgium
GermanyAustria
AustraliaNorway
LuxembourgJapan
FinlandIreland
ItalyNew ZealandNetherlands
FranceUnited States
SwitzerlandDenmarkSweden
Broadband price ranges, October 2006, all platforms, logarithmic scale, USD PPP
22
Mexico’s Performance
Slow network growth – insufficient competition Insufficient investment High relative prices Weak performance in broadband Need to improve data on market performance Foreign investment restrictions (Canada, Korea,
Mexico); No local loop unbundling: Mexico, New Zealand
(2007); Switzerland (2007)