Ovum’s Regulatory Scorecard

In the second iteration of its annual Regulatory Scorecard, Ovum finds that competition and investment in the global telecoms industry is being held back by inconsistent regulatory frameworks.

Having assessed and ranked the regulatory performance of 11 countries across three geographic areas, the global analyst firm noted that countries getting the worst ranks across the board were those with generally less competitive markets, and the lack of competition is often due to the uncertainty around the frameworks that are in place.

“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.

Although Ovum’s Scorecard highlights similarities between countries within the same geographic region, significant differences occur across regions in most areas of regulatory activity. For instance, the regulation of the wholesale fixed sector differs from country to country, and from region to region, mainly due to the varying uptake of copper- and fiber-based fixed broadband. Countries within the same region are often ranked very differently; for example, Mexico appears significantly below its counterparts in South and Central America for almost every respect of the regulatory environment.

“While Colombia and Brazil are making progress in setting out a stable framework which reflects the industry’s developments, the regulatory process in Mexico appears confusing and slow. This inevitably leads to inefficiency in most areas of regulation,” said analyst Luca Schiavoni, the other co-author of the Scorecard.

By contrast, spectrum policy is one area in which current best practice can be observed across most countries. As the volume of mobile data traffic has grown considerably over the past few years, many regulators have acted to liberalize certain spectrum bands from previous technological restrictions. Ovum’s Scorecard also notes 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.

Consumer protection is also now more important to regulators all over the world. As Ovum’s research shows, NRAs across Asia-Pacific, Europe, and South and Central America are aiming to guarantee a certain quality of service for users’ Internet connections, and to ensure that those users can easily switch between providers. Nevertheless, some countries must still work to improve transparency, in particular concerning the advertising of broadband speeds and traffic management policies.

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