Future of Digital Communications

Regulatory Heat Map


Introduction

The regulatory landscape affecting the ICT sector has grown increasingly complex and complicated to navigate. The time where a key focus rested on regulating competitive dynamics among telecommunication players has passed. Today, regulation needs to deal with telecommunication incumbents as well as various digital players with numerous new forms of interaction and interdependency.

Scorecards from different organizations attempt to evaluate and compare the effectiveness of regulation or of the regulatory authority between different countries. Less work has been done to take a step back and provide an organized, accessible overview of the regulatory landscape and identify the key elements of conflict it may hold.

The World Economic Forum Future of Digital Communications project set out to help governments and regulators in different regions navigate regulatory topics and prioritize the regulatory agenda. In order to do so, the involved stakeholders developed a tool to provide a framework of the main priority areas – or key challenges – to focus on in the coming years, and to uncover inconsistencies or discrepancies among different viewpoints of different stakeholders.

What distinguishes this project from others is the acknowledgement that before entering into a debate on policy guidance, it is important to agree on the list of topics in order to then focus efforts and attention on what really matters.

The work displayed here is based on an expert survey, which has been designed to compile inputs from people interested in regulatory policy around the world, including service and application providers, government, the media, academia and, of course, regulators. The aims was to see how different topics are being prioritized in comparison to one another and whether the metrics used to measure progress in those areas are sufficient to understand the opportunity cost of that prioritization.


Using the tool: The tool illustrates in columns the most impactful regulatory topics and the most relevant KPIs to address the priority areas listed at the top. You can generate different views by selecting another sector and/or region in the dropdown buttons below. Each view can be toggled between "Regulatory topics" and "KPIs" by using the respective buttons inside the tool.

Regulatory Heat Map for All Sectors in All income regions

Executive Summary

Respondents from all regions, backgrounds and priority areas were frequently rated as highly important. The results, however, indicated a tendency that priority focus should be set on infrastructure-related areas:

Within the different priority areas, views between the private and public sector notably differed at times on identifying the most impactful regulatory topics or the most relevant KPIs to measure success. This indicates a need for additional dialogue and research to identify how to solve for these pressing issues and address potential misalignments. Within the priority areas, some highlights identified from the survey responses include:


Encouraging continued investment and innovation in fixed and mobile infrastructure

Most notable differences in opinion were visible among respondents from low- to middle- income countries. Here, the public sector respondents did not consider taxation a pressing topic to address, although the private sector considered it among the key barriers. On the other hand, the public sector showed concern about fixed broadband coverage levels (as a very relevant KPI) which was not ranked very high by the private sector, who in turn was more concerned about mobile indicators.

Traditional topics surrounding spectrum and competition ranked as highest priority to address, followed by a more modern topic of “appropriate regulatory symmetry” for all players of the digital value chain.

  • Traditional topics – an effective approach to spectrum policy and the regulation of competitive dynamics (competition model) – still received highest support to prioritize across stakeholders. Additionally, however, “appropriate regulatory symmetry” is perceived as highly relevant to most respondents, consistently rated within the top three priorities.
  • The dominant opinion towards spectrum policy is shared across respondents from all regions; rarely not being ranked among top three priority topics. A respondent summarized the underlying reasoning by stating: “It's the equivalent of the physical infrastructure in a wired network, and thus must be ubiquitously available. “It should not be subject to wealth-based acquisition, but should be made available according to national and international requirements for infrastructure availability, and innovative applications that would benefit in terms of development form the availability of spectrum.”
  • Comparing regional responses, it is notable that issues surrounding taxation are considered highly impactful by some respondents in low- to middle-income countries. A closer look at sector opinion within regions reveals that this opinion is driven largely by private sector views on taxation – which are not at all shared by public sector and academia from the same region (low- to middle-income). A respondent's comment from Brazil exemplified this disconnect: “In Brazil, government seems to have low concern on reducing tax on telecom, which creates a huge imbalance on investments profitability and prices and quality of the services."
  • The issue of taxation – as flagged by private sector respondents from low- to middle-income countries – is one that merits closer attention. In the Global Agenda Council's related work on trade-offs, the simultaneous performance in (mobile) taxation levels and mobile adoption (mobile subscriptions per capita) is illustrated in a sample “spirit level” – focusing on low-income countries in particular.
  • Among the high-income countries' respondents, overall prioritization of topics across the private and public sector were largely aligned, leaving only open the next level questions of how to best address them.

The majority of respondents identified “return on investment in networks by the communications sector” as most relevant measure of success for investment and innovation.

  • The most relevant measures of success identified by all respondents focus on measures to guarantee the underlying incentives to invest – the “return on investment in networks by the communications sector”.
  • In high-income countries next generation mobile coverage – “4G/5G mobile broadband coverage” – was ranked as similarly relevant.
  • Measuring actual download speeds, fixed or mobile, or selecting a method to measure and track the level of competition seems less relevant to respondents from high-income background, but played a larger role in low- to middle-income countries.
  • A key discrepancy to note in all regions was the perception of “fixed broadband coverage”. Here, the public sector and academia showed stronger concern – a KPI not considered very relevant by the private sector. A comment to this extent noted that “without a fixed broadband coverage mainly using optical fibre, mobile quality will continue to be a problem. The tremendous amount of mobile data traffic should be automatically off loaded to the fixed optical fibre networks.” It seems conceivable from this discrepancy in prioritization, that fixed broadband coverage levels should be a topic to address in future dialogue.

Ensuring access – providing ubiquitous broadband coverage

While spectrum policy and competition ranked high on the agenda in respondents' opinion to address access issues, sector views in detail differed in which one of the two is the more impactful topic. Additionally, respondents diverged strongly in views whether subsidization is an effective solution to access. More alignment could be seen in the idea that "network sharing" should be a topic on the agenda. Regarding KPIs, respondents tended to prioritize "take-up of mobile broadband" as well as an investment level measure in the industry. It was recognized, however, that really measuring success both in access and adoption requires a holistic approach, with all KPIs receiving recognition for their relevance.

When focusing on ensuring access, it was also traditional topics surrounding spectrum and competition that were mentioned most frequently as most impactful. However, a closer look reveals that respondents from different sectors diverged in opinion on where exactly priorities should lie.

  • Notably, the public sector and academia across all regions shared aligned views, prioritizing “competition model” as most impactful, but also noting the role of “subsidization and support”. “Spectrum policy”, while not discarded completely, entered their prioritization less frequently in the top three.
  • The private sector, on the other hand, unanimously agreed that “spectrum policy” is also the most impactful topic to address access – similar to its prominence in their view to solve for investment and innovation. In contrast to the public sector view, they did not consider subsidization to be part of the solution. This may be a surprising result to those that disagreed, some of which clearly stated it is necessary for “supporting network deployment in areas not immediately profitable”.
  • One respondent summarized the rationale behind the dominant selections as follows, drawing from thoughts beyond simply the provision of communications network access: “Coverage is mainly depending on the availability of the spectrum and incentives to invest. [...]. Competition has to be seen covering all the sectors of life, not just the competition within the telecommunication sector, in a balanced way. The value created in other sectors can be used to finance also the good coverage of the network services where the total value is more than the sum of the parts.”
  • Additionally, “network sharing” was considered to play an important role in this priority area by several respondents across all sectors and regions. One respondent summarized the rationale behind this concisely as “network sharing can prevent costly duplication of facilities and help make competition possible in rural/remote areas.”
  • Drawing from the related investigations of trade-offs in more detail, “network sharing” and “competition model” in this context should be particularly noted, as they may constitute a direct trade-off: “A decision to allow mobile infrastructure sharing might reduce competition and investment, but conversely may improve coverage and reduce prices.”.

In line with views expressed in the priority area on “investment and innovation”, respondents partly focused on mobile adoption (“take-up of mobile broadband”) and industry investment (“Total investment in networks by the communications sector”) as KPIs, but also noted more direct usage/adoption KPIs around internet users and households.

  • When measuring access, consensus emerged that measuring mobile broadband is a more relevant KPI than “take-up of fixed broadband”, which rarely ranked high among all respondents, with the exception of some responses from public sector and academia in high-income countries. A common sentiment driving this relative ranking may have been expressed by some respondents from low- to middle-income countries: “Mobile broadband is an easier way for developing areas” or similarly by another respondent as: “The mobile internet access has proven to be the most important mean of access to the largest part of population in developing countries, which usually cannot afford the costs of fixed internet access.”
  • Overall, however, clearly identifying the most relevant measure for access proved more difficult to respondents than several other questions in the survey, with responses more balanced across all options.

Maximizing consumer and business benefits

Key themes to maximize consumer and business benefits in the upcoming years surround security and data protection, and regulatory symmetry. Measuring benefits to businesses and consumers in terms of KPIs strongly focused on price-indicators as best proxy as well as elements surrounding security, mirroring the strong sentiment that this should be a regulatory priority.

Key themes to maximize consumer and business benefits in the upcoming years surround security and data protection, as well as addressing regulatory symmetry.

  • Relating to benefits for consumers and businesses, topics surrounding protection and security most frequently entered respondents’ sense of priority (“cybersecurity measures”, “data protection”), as well as elements around symmetry (“appropriate regulatory symmetry”). This sentiment was most concisely summarized by a respondent arguing that “cybersecurity measures and data protection ensure confidence of users [and businesses] in services and interactions made possible by broadband. That is why they get the highest priority. Regulation should be non-discriminatory, but appropriate and yet relevant, to be effective.”
  • Looking at the trade-offs involved in decisions around these topics, direct effects are more difficult to identify. One reason may be that some effects are external. As the related publication by the Global Agenda Council notes, “data privacy laws” may constitute an example of an external trade-off: “The benefits [though real] are intangible. However, such laws potentially diminish the range of over-the-top (OTT) services available.
  • One respondents' comments help to further draw towards the complexity in trade-offs that this particular set of regulatory topics hold, noting especially the potential clash between privacy and interoperability: “There is so much new value which can be extracted from the consumers' data but currently this is not possible when the people are focusing merely [on] how to protect the data. Both are important. [...] Interoperability helps both in making the data become available but also help in creating value on it and through competition also will return some of that value back.” Since “interoperability” was frequently mentioned as impactful to address “adoption”, a decisive stance on this trade-off may be necessary. Furthermore, as a proponent of “interoperability” as a key priority remarked: “Currently the lack of interoperability in app economy between different mobile platforms is centralizing value flow to a few companies only and does not allow consumers to fully benefit of the opportunities of the mobile economy.”
  • In low- to middle-income countries’ private sector, as well as the public/academia sector of high-income countries, “internet openness” was an area for concern as well, frequently being prioritized with a respondent noting that: “An open internet [net neutrality, etc.] provides more benefits for users.”
  • For the remaining topics, varied opinions existed both across and within stakeholder groups with proponents arguing for the impactfulness of all of the topics. Regarding “ICT skills” for instance, one respondent from a low- to middle-income country remarked they “are mandatory to achieve any consumer benefits”.

Measuring benefits to businesses and consumers strongly focused on price-indicators as best proxy, as well as in high-income countries elements surrounding security, mirroring the strong sentiment that this should be a regulatory priority.

  • While price indicators were prioritized as relevant measures of success to monitor and track, one respondent noted an important differentiation, selecting the KPIs “with the caveat that ‘the lower the better’ in terms of monthly prices will not be the case. What is needed is the right balance between consumer prices and healthy business cases for market players that allow them to invest."
  • The private sector in all regions ranked the importance of security measures (such as “secure internet servers”) notably more than the public sector and academia in the different regions – indicating another divergence in opinion that need addressing.
  • Other than the public sector and academia in high-income countries, most respondents iterated the focus on mobile indicators (in this context related to price) as opposed to fixed-line access.
  • KPIs aiming at skills or use (especially at work) were generally ranked as less relevant measures of maximizing benefits in high-income countries, but received some recognition in low- to middle-income countries.

Ensuring adoption – stimulating digital demand and digital content development

To ensure adoption, respondents prioritized the important impact of available content (e.g. “eGovernment services”), ensuring "internet openness" and the ability of individuals to engage with content or create it themselves ("building ICT skills"). The most relevant KPIs to measure success of adoption directly reflect this choice in topics – on the one hand a measure of available online public services as well as measures of individuals' skills.

To ensure adoption, respondents prioritize the importance of available content (e.g. “eGovernment services”) as well as notions surrounding “interoperability” and “internet openness".

  • Prioritizing “eGovernment services” as most impactful was especially pronounced by the public sector and academia from all regions, with frequent mention among the top three from the private sector too.
  • At the same time, regulation to ensure compatibility of all offers (“interoperability”) was highly recognized in light of the online content required for widespread adoption. The reason interoperability ranked so prominently in respondents’ opinion on adoption may have been most concisely summarized by a high-income country resident: “By focusing on the interoperability, portability and mobility of the consumer data. The consumer data is the valuable, raw material which can be used to facilitate many new services. But the rules how to use the data, how to make it interoperable etc. are weak at the moment.”
  • In contrast to all other respondents, the private sector from low- to middle-income countries again highlighted “taxation” as an impactful area to focus on, noting that in developing countries the price of internet access (including devices) is the most relevant barrier to large part of the population.
  • Interestingly, the recognition of “building ICT skills” was more pronounced in high-income countries than among respondents from low- to middle-income backgrounds.
  • “Spectrum policy” was rarely perceived as a priority topic regarding the aim of ensuring adoption.

The most relevant KPIs to measure success of adoption reflected the choice of regulatory topics prioritized – a measure of available online public services (“basic public services for citizens and enterprises, which are fully available online”) and measures of individuals' skills (“individuals with medium or high internet skills”, “Individuals ordering goods or services online”).

  • The prioritization of the top three KPI group was almost unanimous among all respondent groups.
  • Notably, these KPIs were prioritized over more enterprise-focused measures to assess availability of available content, such as “enterprises having a web site or homepage” or “total electronic sales by enterprises”.
  • While most respondents recognized that many suggested measures work, an interesting remark from a high-income country respondent called for new measures to be created in the digital age, arguing that: “We should create a measure of success which is kind of a digital complement to GDP based on the digital value created and consumed. Today, significant part of the new value created based on the data is not taken into account in our statistics, or is taken into account in a limited fashion.”

Fostering competitiveness internationally and a competitive in-country product and services market

Most impactful in addressing competitiveness issues was seen to be first and foremost the regulatory dealings with competitive dynamics among the players, but most respondents additionally identified "appropriate regulatory symmetry" as a key topic to address. To measure competitiveness successfully, respondents focused on supporting a “classic” measure of revenue growth and measures of competition levels, while displaying some divergence in opinion of whether other KPIs could be equally useful.

Most impactful in addressing competitiveness issues is first and foremost the regulatory dealings with competitive dynamics among the players. But, most respondents additionally identified “appropriate regulatory symmetry” as a key topic to address with high priority.

  • Prioritization of “competition model” was to be expected, linked to a commonly shared sentiment best summarized by a respondent who noted: “Wholesale competition is critical to participation by smaller and innovative players.”
  • Most poignantly balancing the need for competitive regulation and appropriate regulatory symmetry, a regulator summarized his opinion (having ranked “appropriate regulatory symmetry” as top priority) as follows: “In order to foster healthy competition and the availability of choice for the consumers, the regulator must ensure that everyone along the digital value chain is given an opportunity to participate in the sector and compete. As best possible, the approach should also try to adopt technology neutrality as one of the key tenets to minimize any artificial barriers which technology may cause.”
  • For remaining topics, respondents were divided as to identifying most impactful prioritization; “market consolidation” was less frequently ranked as a key topic than may have been expected. This may seem surprising for some high-income respondents sharing an opinion expressed by a European respondent, noting that there is too much fragmentation in and across Europe, and that market players are typically sub-scale compared to their global peers.

To measure competitiveness successfully, respondents focused on supporting a classic measure of revenue growth and measures of competition levels, while displaying some divergence of whether other KPIs could be equally useful.

  • Next to overall revenue growth of the communications sector, “measures of broadband competition levels” (such as market shares or Herfindahl-Hirschman Index (HHI)) also frequently among top choices by all respondent groups.
  • Trade-balance elements – both imports and exports of ICT goods and services – usually ranked among the least relevant indicators of competitiveness, except by respondents from public sector and academia in high-income countries who valued exports as a very relevant indicator.
  • Respondents from low- to middle-income countries – both from private and public sector backgrounds – also identified ICT patents applications among the top three relevant indicators for competitiveness. In contrast, this KPI seemed less relevant to respondents from high-income countries.

Disclaimer: The survey was designed as an expert survey, targeting selected individuals across the world who are familiar with the regulatory landscape. This work does not intend to make a claim of offering balanced representation of all countries' views. The results presented above are based on the responses received up to the time of publication.


Decision-making requires trade-offs

Requiring respondents to prioritize between the priority areas or policy objectives provided them with a difficult task – as these objectives may all seem equally important. To encourage a more decisive picture, a final question required respondents to allocate a fixed amount of funds to the priority areas. This helped to crystallize results, as almost half of the virtual funds were allocated to the infrastructure topics, whereas the usually lower ranked area of "fostering competitiveness" received only a seventh on average.

This helped to illustrate that addressing the objectives requires certain trade-offs to be made. Furthermore, the decisions on selected policies and regulation setting within the priority areas – say how to regulate the competition model or at what rate(s) to set taxation levels – will also result in trade-offs. A given decision may support one objective and improve its KPI measuring success, but possibly impede another.

A connected publication supported by the Global Agenda Council on the Future of Digital Communications and prepared in collaboration with Communications Chambers investigates the role and effects of trade-offs in communications policy and regulation in more detail.


Approach

In a first step, a framework around five priority areas – or key challenges – for regulators and governments related to the digital economy was set up. Subsequently, a pre-selection of impactful regulatory topics and relevant KPIs were prioritized via an expert survey.

This survey was distributed to respondents in different regions as well as from both public and private sector backgrounds. The framework of priority areas included:

Encouraging continued investment and innovation in fixed and mobile infrastructure

  • Ensure future demands on network capacity and quality for traffic are met
  • Ensure adequate incentives for investors to ensure the network is adequately maintained and enhanced to meet future needs

Ensuring access – providing ubiquitous broadband coverage

  • Support broadband access to all consumers, businesses and public institutions to drive full realization of the digital potential, ensuring transparency and equal access

Ensuring adoption – stimulating digital demand and digital content development

  • Foster vibrant digital engagement and support business to promote the creation of locally relevant content and apps
  • Mitigate lack of digital literacy among the population, ensuring the inclusion of all population groups (e.g. women, individuals with disabilities)

Maximizing consumer and business benefits

  • Ensure privacy and safety of any consumer or business digital assets; ensuring transparency and accountability
  • Ensure value for money; quality and choice of products and services

Fostering competitiveness internationally and a competitive in-country product and service market

  • Drive innovation across the product and service offering for communication and digital services for the global, competitive environment
  • Ensure balanced market structure and rules to enable competitiveness for products and services along the digital value chain

Summaries by stakeholder groups

Taking a step back from how the views differed by priority area, the responses can be interpreted to provide direction on the regulatory agenda as seen by different stakeholders.

High-income countries' private sector: Regulatory priority lies on infrastructure investment and furthering access. As such, traditional topics related to spectrum policy and the regulation of competition should be iteratively revisited and remain the key focus of regulation. Following these, addressing data protection and cybersecurity should be on the agenda in the context of maximizing consumer and business benefits. Looking after appropriate regulatory symmetry would also be among the more impactful topics to address. Everything related to ensuring adoption, especially focus on ICT skills or eGovernment services, could consequently not receive the same urgent attention.

Public sector and academia from the same regions: The overall focus prioritizes ubiquitous access just before investment and innovation - closely followed by adoption issues. To address these areas, the highest priority needs to rest on regulating competitive dynamics, but appropriate subsidization strategies also plays a role. Furthermore, topics around interoperability, regulatory symmetry and eGovernment services need to be addressed to solve for the objectives. As a consequence, dealing with overall international competitiveness and for this purpose reviewing market consolidation or taxation levels would need to be deprioritized.

Private sector in low- to middle-income countries: Overall priorities are a combination of the high-income country views mentioned above. Investment and innovation is the top priority area followed by ubiquitous access, yet adoption is also a high concern. To address these areas, the first topic on the agenda needs to be a well-designed spectrum policy. However, revising taxation should be almost as high on the list of immediate focus. Furthermore, addressing internet openness and e-government services will be important to solve for the adoption objective. Hence, topics around internet openness or cybersecurity to address benefits cannot simultaneously rank as high in priority as well.

Public sector and academia from low- to middle-income countries: Surprisingly, adoption lies further down in overall priorities. The agenda should start with the areas of investment and innovation, ensuring access and then consumer and business benefits. Like their high-income public sector colleagues, competition model is the highest ranking topic to address these, but spectrum policy and regulations on network sharing should also be addressed for their high impact. Following these, topics around regulatory symmetry, and cybersecurity and data protection, are important topics. Building ICT skills to foster adoption or addressing taxation in the context of competitiveness will have to be moved lower down on the agenda as a consequence.


Closing remarks

Where there was consensus – such as an overall focus on infrastructure and access as well as looking into spectrum and competition to approach these – respondents showed a clear direction for regulatory focus in the coming years. However, the analysis of priorities also demonstrated that respondents' views did not always align. Where there was conflict or divergence in opinion – especially within the same region by respondents from different backgrounds – a clear need for additional dialogue and research is needed to identify how to solve for the priority areas. Lastly, keeping the survey open to allow additional responses can eventually lead to improved views and evolution of opinion over time. Ideally, this survey could gather enough responses to provide analyses even at a country level – to encourage the direct exchange and dialogue between governments, regulators and the private sector affected locally.


Glossary


Acknowledgments

Project Team

World Economic Forum

Isabelle Mauro
Head, Telecommunications, Information & Communication Technology Industries

Rodrigo Arias
Content Lead, Telecommunications Industry, Global Leadership Fellow

Michael Garabet
Project Manager, Future of Digital Communications

The Boston Consulting Group
(Adviser and Knowledge Partner)

Wolfgang Bock
Senior Partner and Managing Director

Hans Kuipers
Partner and Managing Director

Maikel Wilms
Associate Director


Global Agenda Council on the Future of Digital Communications

Chair

Nokia
Risto Siilasmaa, Chairman of the Board of Directors

Co-Chair

International Telecommunication Union (ITU)
Houlin Zhao, Secretary General

Council Members

Cisco
Robert Pepper, Vice-President, Global Technology Policy

Georgia Tech Research Institute
Jeff Evans, Director

GSMA
Tom Phillips, Special Advisor to Director General

Huawei Technologies
Ken Hu, Deputy Chairman and Rotating Chief Executive Officer

Independent
David Dean, Independent Consultant

Independent
Hamadoun I. Touré

Keio University
Jun Murai, Dean and Professor, Faculty of Environment and Information Studies

Marshall School of Business
Jerry Power, Executive Director, Institute for Communications Technology Management

New Development Bank
Leslie Maasdorp, Vice-President & CFO

Qualcomm
Sean Murphy, Vice-President and Legal Counsel, International Government Affairs

Telecommunications Regulatory Authority (TRA), United Arab Emirates
Mohamed N. Al Ghanim, Adviser to the Board

Tim Brazil
Rodrigo Abreu, Chief Executive Officer

Tsinghua University
Niu Zhisheng, Deputy Dean, School of Information Science and Technology

VimpelCom
Romano Righetti, Deputy Chief Operating Officer Wind Telecomunicazioni

Vodafone
Matthew Kirk, Group Director, External Affairs and Member of the Executive Committee

YooMee Africa
Anat Bar-Gera, Chairperson

Community Contributors

AT&T
Eric Loeb, Senior Vice President - International External and Regulatory Affairs

GSMA
Matthew Bloxham, Head of Connected Society

Huawei Technologies
Ivan Huang, Director, Marketing

International Telecommunication Union (ITU)
Preetam Maloor, General Secretariat and Expert on International Internet-Related Public Policy Matters
Tomas Lamanauskas, Head, Corporate Strategy Division
Sofie Maddens, Head, Regulatory and Market Environment

Nokia
Leo Baumann, Head of EU Representative Office

Telefonica
Jerónimo González, Director, Regulatory Strategy
Inmaculada De La Cruz, Director, Corporate Regulatory Strategy

VimpelCom
Vincenzo Ferraiuolo, Antitrust and Regulatory Affairs Director

Vodafone
Bailey Ingram, Senior Manager Global Public Policy