With the growth of information and communication technologies (ICTs), and their enormous contribution to economic and social progress of countries, there is an increasing demand for accurate measurement of the performance of the ICT sector and regulatory success. For this purpose LIRNEasia developed a perception survey known as the Telecommunication Regulatory Environment (TRE). Actual sector performance is also tracked by LIRNEasia in the region and more on ICT Indicators can be found here.
The TRE has many uses. It is a diagnostic instrument for assessing the performance of the laws affecting the telecom sector and the various government entities responsible for implementation. The TRE can also be used as a tool for investors to assess regulatory risk in a country. Particularly for investors facing investment opportunities in the telecom sectors of more than one country, the TRE can provide a ranking of the countries in terms of telecom-specific regulatory risk.
The respondents are asked to rate the quality of the regulatory environment for each dimension on a Likert scale ranging from 1 (highly ineffective) to 5 (highly effective). So the respondent has to select a score (1, 2, 3, 4 or 5) and simply circle it (or click, in the case of a web-based survey). Posing questions in this format ensures that responses can be easily analyzed without losing any qualitative information as often occurs when using open ended questions.
The first survey was conducted in July 2006 in five Asian countries, India, Sri Lanka, Pakistan, Thailand, and the Philippines on six dimensions: i) market entry; ii) access to scarce resources; iii) interconnection; iv) tariff regulation; v) anti-competitive practices; and vi) universal services, for the fixed and mobile sectors. In the survey carried out in 2008, a seventh dimension dealing with the “quality of service” was added, and the survey was conducted for the broadband sector in addition to fixed and mobile sectors.
The TRE instrument is administered at the same time in all countries measured by a team of researchers. This web page summarises the TRE findings for 2010-2011 in the Broadband Sector. More details can be found here.
TRE Broadband sector results of 2011 evaluating results for 2010
Overall it appears that Pakistan has achieved higher TRE results in the Broadband sector compared to India, Sri Lanka, Bangladesh and Thailand.
In Market Entry it is seen that Pakistan is the best performer, with an expensive (USD 291 million based on auction value) but transparent process. There are no limitations to foreign ownership in Pakistan, in 2009 – 2010 there was Foreign Direct Investment (FDI) of USD 374 million (17% of Pakistan’s FDI).
Pakistan has the highest score and Sri Lanka has the lowest score for management of Scarce Resources. According to the findings of the TRE, Pakistan is given higher scores due to the launch of I-ME-WE (India-Middle East-Western Europe) cable in 2010 and Sri Lanka is given a low score due to the major bottleneck in the International landing station and the incumbent fiber not being shared on a regulated (cost-based) basis.
Pakistan was also the best performer in the Universal Services Obligations category as they only collect around 1.75% from operators, and USF decisions are made by private sector and government and are based on real market needs. They have also disbursed the fund effectively, with a clear definition of technologies that are included and where funds can go.
With regards to actions taken against Anti-competitive Practices Pakistan is ahead, due to actively regulating the market with the view of promoting competition. They also approved cross border mergers such as the acquisition of Wind Telecom by Vimplecom Ltd, and took action against Wateen Telecom and Defense Housing Authority entering into agreement that would have limited competition in the relevant market.
India was scored least in Broadband Interconnection due to ineffective use of Internet exchanges despite their neutral Internet exchange (NIXI).
India has scored highest in the Price regulation category due to having some of the lowest tariffs in the world. Regulator does not regulate (most) prices.
Overall countries have not performed well in QoS, partly also due to the Budget telecom network model in mobile which is generally of poor quality. International Bandwidth is a major bottleneck in Broadband quality, specially with most access content lying overseas. For more details of the individual TREs conducted click the relevant links below.