MGT-133 Dealing with Disruption: Competition, Choice & the Search for a 'Level Playing Field'

*This course is also available as a live distance learning course*

Over-the top (OTT) convergence through Information Communications and Technology (ICT), is disrupting not just communications (What's App, Netflix) but all sectors of national economies (Uber, AirBnB, Bitcoin). It may also be impacting the ability of local authorities to tax and regulate business in order to pursue national public interest objectives such as national broadband strategies. The unprecedented rise of economic activity via OTTs has increasingly led to calls to regulate the Internet and/or reform regulation in traditional markets to allow local operators more flexibility to innovate and compete.

With exceptions, OTT has been largely unregulated, while legacy operators continue to be regulated despite increased competition and choice from OTTs. A challenge for operators and policy-makers is that in a world where end-users are increasingly served by applications and cloud-based services that are transnational, unregulated and often seem outside the jurisdiction of national governments, regulatory and competition policy models based on pre-digital concepts around the control of networks and vertical markets (telecom, broadcasting) may prove inefficient and ineffective. Such ineffective policy may impede innovation and even undermine domestic growth and investment. Accordingly, there has been increasing pressure from local operators for regulatory reform that treats all competitors in a similar manner. While the opportunities for operators which invest in convergence seem significant; from mobile wallets for fulfilment to the Internet of Things (IoT), and from voice search and ad related revenue to streaming content, new and often unregulated competition, combined with inefficient regulation of incumbents, may hamper grow new sources of revenues and increased investment.

Technological advances in the telecom industry impact mobile and fixed operators in a variety of ways. Disruption and convergence has unleashed a new cycle of competition, choice and innovation to the benefit of consumers but challenges for operators and economies are complex. Solutions such as network neutrality and unbundling infrastructure that may seem reasonable in mature markets with advanced infrastructure may not always serve the needs of developing economies trying to incent investment in ICT as a way to create economic and social growth.

Moreover, whether in developing or mature markets, pressure to regulate OTT or Internet-based services is not limited to issues of competition, taxation and revenue erosion but is expanding due to legitimate concerns about the impacts of unregulated activities when it comes to issues of security, privacy, hate speech, fake news and consumer protection,

During this 5-day course, participants will learn about the emergence and impact of disruptive OTT competition, as well as countervailing opportunities for operator revenue growth that flow from convergence in both the consumer and business markets (social media, mobile money and fintech, Internet of Things (IoT), 5G and streaming opportunities). They will also conduct an in-depth analysis of the shifting dynamics of competition between operators and applications providers (the disruptors) and examine the ways in which regulatory bodies and competition authorities might intervene to reform regulation in a way that promotes more competition and choice for users, and a “level playing field” in regulation of both operators and new internet-based competitors.

Learning Outcomes

At the end of the course, participants will be able to:

• Identify key global players that are redefining the communications marketplace by substantially increasing innovation and choice in services
• Describe the primary drivers for consumers and business to bypass operators and choose OTT services
• Discuss the impact of digital disruption on local tax bases, operator revenues and the impact of regulatory intervention/reform on ability of national policy-makers to attract and/or stimulate investment
• Note the differences in how regulatory policies (net neutrality, unbundling, spectrum auctions) impact local jurisdictions depending on factors such as the level of broadband deployment, penetration, education, income and financial/digital inclusion
• Explain the role of broadband internet in re-shaping the dynamics of competition between mobile and fixed network operators, broadcasters and application providers like Facebook and Amazon.
• Understand the challenges and barriers for operators of leveraging the network advantage and the potential opportunities in network upgrade/investment strategies
• Identify the current regulatory challenges associated with market disruption and assess some of the approaches being taken by regulators around the world in dealing with that disruption both by intervening in the OTT market and/or forbearing from traditional regulatory activities
• Evaluate operator strategies to remain competitive and offer value added services and examine how disruptor strategies and dominance in key sectors (advertising, search, cloud) may limit carrier opportunities in emerging markets

Topics

*Note: the course structure may be subject to change as trainings are updated on a regular basis.

Disruption in telecom

• Increases in dynamic competition associated with OTT
• The growing power of consumers and business users in driving demand
• New oligopolies? Apple, Google, Facebook, Microsoft, Amazon and Netflix
• Evolution of Over-The-Top (OTT) disruption from legacy voice and messaging to enterprise and streaming video services
• Impact of OTT on carrier revenues and investment
• How dominance by OTTs in social, search, advertising, cloud and content online may already limit operator opportunities
• Increasing issues around regulation of transnationals: privacy, blockchain, mobile money and taxation
  
• Case study: Dealing with growing consumer power - VoIP regulation

• Data revenues
• Path to LTE/5G in developing vs mature markets
• Growth of data revenues in 3G/LTE markets
• The challenge to offset voice revenue losses in markets still at 2G/3G or where revenue growth is limited by low penetration/income
• Key regulatory issues: Ability to licence, tax or obligate all service providers to contribute to universal broadband service
• Case study: The cost revenue data dilemma
• Internet of Things (IoT)
• Business verticals: financial, health, automotive, etc.
• Smart Home
• Smart cities
• Network readiness
• Key regulatory issues: standards,privacy, security, spectrum
• Case study: It's a multi-cloud world
• Cloud-based services
• Extension of enterprise market into the cloud
• Storage for consumer data/video/photos
• Key regulatory issues: Preferences for customers vs net neutrality, security, privacy, content liability
• Mobile money
• Digital and financial inclusion
• Mobile payments
• Remittances and money transfers
• Key regulatory issues: Defining roles and responsibilities of sector regulators (banking, telecom)
• Streaming video
• IPTV vs Streaming video-on-demand (SVOD)
• Bundling opportunities
• Competition from social networks
• Network readiness: fiber, LTE and 5G
• Key regulatory issues: Regulatory overlap (telecom vs broadcast regulator), licensing, obligations to contribute to cultural/local production/exhibition requirements, copyright)
• Case study: Comcast NBC Universal & ATT Time Warner - US giants pursuing content-based growth strategies
• Digital advertising
• The opportunity for operators
• Access to customer information
• Mobile, display and video advertising
• How voice search may be creating new opportunities in the search and ad space
• Understanding how OTT is shifting from messaging to multi-play
• Case study: Verizon's digital ad strategy
• Regulatory reform for operators
• Increased forbearance in retail markets
• Redefining net neutrality rules
• Rethinking infrastructure sharing
• Case study: Google and Project Link

• Reasons for regulating in a digital marketplace characterized by abundant choice for consumers
• Pursuing national broadband strategies (universal access to broadband)
• Licensing/taxing OTT services
• Regulatory forbearance of operator services in retail markets
• Rethinking dominant carrier definitions (market share) based on the increased levels of choice in downstream markets
• Moves to revisit the principle of net neutrality
• Approaches to curb anti-competitive behavior
• Spectrum allocation to support the evolution to 5G
• Vertical integration safeguards
• Unbundling infrastructure
• Application of privacy rules on a functional basis to OTTs and operators
• Emerging regulatory issues around copyright, cybersecurity, and privacy
• Case study: Internet giants face tough new EU privacy rules
• Case sudy: OTT regulation - how much is too much?

Target Audience

• Telecom regulators and government policy makers
• Telecom operators (fixed and mobile)
• Cable providers
• Broadcasters
• Internet Service Providers
• Telecom regulators
• Telecom policy-makers, consultants and other interested parties