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On the 12th July 2006. The business reports indicated that the European Commission has backed the European telecoms regulators’ plan to reduce the high cost of the roaming charges to mobile uses in Europe. Through the enactment of a bill that will limit the service provides in the mobile phone industry to cut down their international roaming charges to the Cost level of home cross-network calls within the 25 European member countries. This is because currently, mobile consumers pay high roaming costs to the extent that it ends up to give service constitutes companies 20% profit from roaming charges, on the total profit. The commission telecoms intend to cut off customer’s mobile phones costs for about 70% of their spending. Therefore, using this case this essay is examining by analyzing and looking into various forces, principles, reactions, procedures, and effects of the outcome of such intervention in the ICT industry including the analysis of specific issues of the regulatory agencies.
The regulatory activities in any intervention that involves the business world there are usually varied reactions from the key market players. These market players include the consumers, the governments of the regions u8nderwhich regulation is bound to be done, and the operators. Consumers always call for the reduction in the prices, operators normally oppose the move to reduce their tariffs as they cut down their profit margin and stability in operations. while the regional governments take a neutral position to protect the interests that are favorable to both citizens, operators, and investors. In these case of the EU mobile phone roaming price regulation, the EU telecoms regulators take the stand that aims at protecting the citizens and gives a conducive atmosphere to business operations in the sense that they propose the reduction of roaming call plan of 34 pence for calling home from abroad, 23pence for local calls made abroad from home and 11pence for receiving a call which is consumer’s pocket friendly.
Also, telecom recommends reduced tariffs with a consideration of the network providers who will harness an estimated 30% profit margin. Therefore consumer organizations had a reason to smile since for a long they have been crying for the high prices charged by the mobile operators and this is redemption to them. the operators oppose the move strongly of EU telecoms through their representative body of GSM Association, by saying their companies have made and are making efforts to cut off prices by 40%, the commission move would result into dampening the competition, stifle the innovation, and in the long run harm the consumer society. Therefore there is a need to regulate the mobile phone industry to protect consumers or citizens, balance the operations for equal opportunities for all operators so that it can enhance sustainable inventions, innovation, and development, and better services. These reactions that came as a result of the call for the intervention from the consumers who were paying high roaming calls a broad it must be carefully approached so that it balances both key players interests to foster a good trading environment.
In policies relating to ICT one should acknowledge the fact that there’s an aspect of technology and market convergence, therefore, regulatory policies must take into account these developments which are key factors. The factors of technology and market convergence development are basic factors for consideration when marking a regulatory policy on the organizational changes but in addition, the organizational issues must be factored in (Johan 2002). The entities of industry and convergence regulatory body it has to consider the relevant issues of economies of regulation in terms of scope and scale within the Ice sector access the region. In this regard the ICT issues especially phone call charges offer the same communication service, therefore, necessitating the fact that rules of access should be the same in Europe and other geopolitical regions.
With a unifying formula for arriving at access and universal services retail prices for tariffs charged by service providers. Such can be calculated by the use of the RPI-X formula, which indicates that the retail price index subtracted from the politically reduced price. The only outstanding issue in the scope and scale of economies is the lack of specifics of the regulations. In this case for instance the UK and EU regulation activities must cohere. In the UK the main body of regulating communications industry which is the OFFICE OF COMMUNICATION (OFCOM); was established to combine the five regulatory bodies to have one unified regulatory body within the UK, that included the Oflet (office of telecommunication) for telecommunication regulation, RA(radio communications agency) for radio communication especially radio frequency spectrum of non-military regulation, ICT(independent television commission) for regulating independent private television, BSC(broadcasting standards commission)for standards in the broadcasting regulations, Radio Authority for radio regulating especially the private ones. Under which the OFCOM matches the telecommunication standards of the EU telecoms regulation structure including price determination (Soumitra Arnold Amita Gerald 2006).
Capture is an issue worth looking at in regulating pressure and procedure as far as the ICT industry is concerned. Because regulatory organizations can be captured by the policy-making bodies, dominant players within the ICT market, or by both. This is why the need for independence in the regulatory body is required which will ensure and assure all stakeholders of the utmost transparency and accountability. However, the challenge remains that the models need to regulate prices and operation within the ICT industry whether single, convergent, or any model cannot ensure independence due to variation of circumstances under which models are designed because the business environment is dynamic.
These pros and cons exist between the competitions between the regulatory bodies as for the market players it may have the beneficial effects limiting the regulators covers distinct regions which they regulate. But this results in a possible yard-stick competition which initiates indirect competition. The only challenge remains the criteria used in establishing whether this competition will generate a constructive or destructive force which one will be more of the other.
Diversification of the risk in relation to better coordination in regulating organizations within the ICT sectors. This comes about in the sense that in the case of different entities of regulatory organization will lead to some experimentation in the regulating undertakings and this will result in a wide diversity of risks (Bert-Jaap 2006). While specific regulatory bodies can be in touch with the market realities in different segments. In addition, a joint regulatory entity will have better coordination and high certainty in decisions access the various market segments but appears to be more opaque to market stakeholders due to the diversity of issues they handle. The just regulators also give the market players an opportunity to have a collective base for settling their various needs without moving from one regulator to the next (Soumitra Arnold Amita Gerald 2006).
Then the possible transfer of regulatory practices in an event when two regulators merging with the area with little regulations, then it follows that the regulation outcome will have two merged areas regulated stringently reduction of regulation notwithstanding. A good example can be the transfer of telecoms which exist to areas with Internet regulatory processes should be done on the basis of achieving economic efficiency, competition, and structured desirable outcomes rather than primary rental purposes from the industries. The market should be regulated in that it allocates the scarce resumes in a sense that the regulator should allow for the additional opportunities in trade arrangements internationally after consultation within the mobile industry and evaluating the merits and demerits of spectrum trading.
The regulatory body usually follows the guiding principles in their activities (Bert-Jaap 2006). Such principles as seeking the balance between the benefits and the cost of interaction and the regulatory forbearance. This is the approach that regulators take to see that the measures are not for short-term benefits, stifle the market dynamism with unhealthy competition, and have adverse economic and social consequences in the long term (Johan 2002). Instead should focus on the use of initiative of competition to better economic efficiency rather than mainly regulating and to have a long-term sustainable competition. For instance, the EU intends to make 147 million EU citizens which constitute 80% to benefit and profit margins of the companies are 30% in this regard the citizens benefit socially through increasing their contacts with their clients, economically through reduction and pocket-friendly tariffs such that it will be 11 pence per minute (Soumitra Arnold Amita Gerald 2006).
Regulation must be based upon the clearly stated objection and kept to the minimum necessary to meet the stipulated objectives. This is achieved through the enhancement of law to safeguard the effective competition set by the regulatory body. EU telecoms regulators proposed a law that comes to force in April 2007 to safeguard the initiated competition and economic operations within the phone service companies (Bert-Jaap 2006).
Regulations must take into consideration normal competitive market usually reflects the range of return (Johan 2002). Therefore when putting in place the measures to regulate the market, it should have the essence of not regulating away excess profit but initiate healthy and effective economic prevalence operations which will boost the returns of the company and mid-long-term unhealthy competition development.
There should be a balance between the micro and macro views reflecting the market situation in which regulations should be noted such that the roaming charges should not be judged high because the lead of economic performance raises. For instance, EU telecoms analysis shows that calling the UK from Spain £2.38 – £4.01 then receiving a call from the UK in Spain ranges between £1.15 to £3.04. While calling the UK from Slovenia cost £2.38 – £5.68, when receiving a call in Slovenia from the UK costs a consumer £1.15 – £5.27. This range of tariffs as per the month of March 2006 varies according to the UK networks and list network. Therefore in EU telecoms regulation, it cannot come up with the uniform tariffs to be adopted (Bert-Jaap 2006). But rather consider the performance so that small companies that get low do not hint. This variation ranges from 34 pence to 23 pence in receiving in relation to the UK and other European Union countries as Spain, France, or Italy.
The regulation exercise by the regulatory body must be publicly accountable and done in a transparent manner. These enable the essentials of participatory of the stakeholders through public consultations processes. Should also allow assessment of the market and defined solution which would see the putting in place the measures basing on the law and procedures that will be used against checks the balances to the modalities of operation between the regulators and operators. EU telecoms regulators published a draft law in April 2007 and also updated the special website launched in October 2006 that would allow people in 25 member countries of the EU to compare the roaming charges across various networks in Europe. The transparency lend also is advanced through the scrutiny of the bill by the European Parliament and the council of ministers, before being implemented (Johan 2002).
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The governments within a regulatory agency should adopt licensing practices that enable investments in the telecommunication infrastructure sector and facilitates healthy competition that aims at sustaining the long-term benefits and development (Bert-Jaap 2006). In this regard within a region, we should have a harmonized license issuing procedures that will facilitate the applicable market entry. This should be done judiciously and proper explanation by the government fees and charges to fees, terms, and conditions and aim at efficient resource allocation rather than rising of the surplus revenue for the government.
The convenience of sharing the market’s infrastructure and facilities is an issue that should be based specifically on the operator and market. In some circumstances its beneficial to the level of driving the efficiencies in accelerated network out and elimination of cost duplication together with some environmental impacts (Bert-Jaap 2006). The regulatory should allow for the measures enabling negotiations to share facilities amongst mobile phone operators but the sharing be restricted to certain regulations and conditions for successful and conflict-free sharing.
Since the ICT industry is based on scientific approaches then it will be necessary for the regulations affecting the deployment of the mobile phone networks to be built upon the fundamental and substantiated studies. It should be separate from the public concerns that have no appropriate scientific authority banking on for their claims (Johan 2002). Then lastly the consumer should be adequately safeguarded against the inappropriate access and use of the data. This should be in terms of balancing the consumers’ data privacy with the easy timely access to information which can become through regulator allowing self-regulatory measures within the industry to allow for the of stated and common objectives (Johan 2002).
In summary in the ICT industry, the issue of regulation is vital especially for economic growth and the market balance for investors, operators, and consumers. The approach to the regulation should be systematic to enhance sustainable regulation. However, two major issues relating to the functional assignment of the regulatory body, attention must be paid to new ICT technologies and the perspective of information technology in relation to society policies of the country. In addition pertaining the technologies and the convergence developments there are issues such as the network security, safeguarding and protection of the privacy and protection of the property right of intellectual are raising concerns in the regulation process.
These are some of the issues raised in relation to ICT technology precisely as to whether be included when assigning the ICT convergence regulators and be part of the regulator roles. In this regard no satisfactory concrete solution has been arrived at because different agencies deal with different content coverage and infrastructural issues in the information technology sector. The issues regarding the independence, it should be noted that the broader perspective should be taken into account in relation with information technology and society policies of the country. Therefore, in one hand it can be necessary to develop this between policy making agencies and the regulatory agencies. For instance the administration dimension should be factored in because the regions need to monitor the communication network for the purpose of safety and security of the citizens and entire region or state. But these regulatory activities usually fall short to address all challenges that arise in the ICT industry because of scientific inventions that advances daily, therefore it may not in any way guarantee the overall goal of situating the ICT regulatory in a broader policy context to meet fully the ICT challenges.
Soumitra D., Arnold de M., Amita J., Gerald R., 2006, The Information Society in an Enlarged Europe, Birkhauser, Boston.
Gert-Jaap K., 2006, Starting point for ICT Regulation, Cambridge university press, London.
Johan l., 2002, competing for Technology Leadership; EU policy for high technology, EdwardElgarpublishing,Capetown.