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February 13, 2013

Global Patchwork of Telecom Regulations is Stifling Investment, Says Ovum

By Tracey E. Schelmetic, TMCnet Contributor

One of the many challenges global telecom companies find when expanding to all corners of the world is the patch work of telecom regulations. Each region, and each nation within it, has not only a variety of rules and regulatory issues to consider, but an entirely different structure: some nations have very free-market telecom systems, others are rigidly controlled by government.

Analyst group Ovum (News - Alert), which last month released its second annual Regulatory Scorecard, found that competition and investment in the global telecoms industry is being stifled by inconsistent regulatory frameworks. Ovum analyzed the regulatory performance of 11 countries across three geographic areas and concluded that the nations that received the worst rankings were those with less competitive markets, and this lack of competition is centered around uncertainty of existing regulations.

“In Japan and South Korea, for example, the relationship between the government and the regulator could be perceived as too close. Independence from political involvement is important in ensuring a credible NRA, whose decisions may be challenged through an effective appeals process,” said analyst James Robinson, co-author of the Scorecard, in a statement.

The regulation of the wholesale fixed sector differs from country to country, and from region to region, said Ovum, mainly due to the varying uptake of copper- and fiber-based fixed broadband.

Ovum found better consistency in the area of wireless spectrum. With the boom in growth in wireless use, many nations, even the ones with burdensome regulations on fixed broadband, have moved to make wireless policy freer to encourage growth. Ovum’s Scorecard found that regulators are awarding more frequencies for the development of next-generation mobile broadband.

“No one country appears willing to be left out from the opportunities of 4G. This is particularly true in South and Central America, where mobile connections go a very long way toward getting people online,” concluded Schiavoni.

The goal of Ovum’s Regulatory Scorecards is to provide global telecom companies with a deeper understanding of the impact of regulatory issues that shape the future of the telecoms marketplace and the effect these have on strategies and revenues.




Edited by Brooke Neuman
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