Advisory to Regulator on On-net/Off-net Price Discrimination and Regulating Mobile and Fixed Termination Rates
Region: Asia-Pacific Year: 2023-2024 The national regulatory authority for telecommunications needed advice on two ongoing regulatory proceedings. The first proceeding aimed at eliminating the unjustified difference between the price of off-net and on-net mobile calls by an SMP operator which discouraged potential customers to subscribe to the smaller networks. This practice crippled the growth of the smaller mobile operators and cemented the quasi-monopoly position of a large mobile operator. We advised the regulator to allow a maximum price difference between off-net and on-net calls equal to the mobile termination rate. As part of our advisory we drafted two reports; one with the responses to the comments received from the operators, and a second report for the Minister of ICT explaining in detail the justification for such regulation. We also drafted the regulatory determination. The second regulatory proceeding aimed at designating mobile and fixed call termination services as susceptible to ex-ante regulation. In this first phase, we advised on the determination that each operator has SMP on call termination on their own network. We produced two reports; one addressing the comments received from the operators on the proposed determination, and another for the Minister justifying such regulatory decision. We also drafted the regulatory determination. Both determinations were adopted by the regulator. Additional advisory was provided to prepare the regulator for the second phase of the regulatory proceeding to set calculate cost-based prices for mobile and fixed call termination using a long-run incremental cost (LRIC+) approach.
Transaction Advisory to Restructure and Divest Government Telecommunications Assets
Region: West Africa Year: 2021-2022 The government of a West African country wanted to restructure and divest its telecommunications assets in two government-controlled entities. The government hired a Consortium led by Alpha Economics as advisors for this task. Alpha Economics and its Consortium partners performed the due diligence (technical, operational, financial, legal, regulatory) of the two government-controlled companies. This involved, characterizing the access networks of each company (fixed and wireless); the core network; and the transmission network including a fiber optic backbone. Next, Alpha Economics performed the valuation of two entities that would be formed with the restructured assets from these entities: A new fiber optic backbone provider (FiberCo) and a new mobile operator (NewCo). Our Team then undertook a market outreach to potential investors to assess their willingness to bid for these new entities. This resulted in three well-qualified telecom providers expressing interest in purchasing the new entities. Next, we developed a sales and communications strategy that included an open and transparent tender for the sale of these entities. However, unexpectedly the government decided not to proceed with the proposed transactions.
Region: Asia-Pacific Year: 2021-2022 This was a follow-on work advising the Australia DFAT and the Department of Information and Communications Technologies in an Asia-Pacific country. Our services involved various short assignments including but not limited to: (a) Performing an impact assessment of the start of operation of a new fiber optic submarine cable. The assessment included scenario analysis projecting the following for the period 2021-2025: (i) changes on leased international capacity and the price of wholesale international capacity; (ii) changes on retail internet prices and the number of subscribers of mobile broadband; and (iii) the change on the annual growth of GDP. (b) Developed the methodology for a National ICT Roadmap and performed an assessment of the current situation of ICT usage in the country. (c) Assessment of the impact of a reduction on the price of international wholesale capacity on wholesale operator’s revenue. (d) Assessment of changes on the price of mobile data plans as a result of the launch of service of the submarine cable. (e) Economic impact analysis of the Government Digital Transformation Plan 2023-2027, including its impact on GDP and fiscal impact on government tax revenue and total government revenue.
Restructuring of Government Telecommunications Wholesale Assets
Region: Asia-Pacific Year: 2021 The Department of Information and Communications Technology wanted to assess the options for restructuring the government’s telecommunications wholesale assets. Alpha Economics performed a diagnosis of the deficiencies in the supply of wholesale fiber optic international and domestic capacity. Three options were analyzed to address these deficiencies. The options involved a Public-Private Partnership in the form of a special purpose vehicle (SPV) to include the retail operators, the government, and financial investors (non-operators). Each option included a detailed description of the governance within the SPV; in particular, the rules for joining the SPV, the allocation of capacity amongst shareholders, exiting and divestiture by shareholders, Board composition and voting mechanisms. For each option, the advantages and disadvantages were presented, along with a recommendation of a preferred option and steps to move the proposal towards implementation.
National Digital Transformation Plan
Region: Central America Year: 2020 Performed diagnosis of the current state of adoption of information and communications technologies (ICT). To that end, we performed an in-depth analysis of the legal and regulatory framework to identify the main gaps with international best practices. We then analyzed the adoption of various ICT services for personal use, business and government. Next, the telecommunications infrastructure was characterized, including the mobile and fixed access networks and the transport (backbone) fiber optic networks. We then performed an assessment of e-government services including a characterization of the client-server architecture, and the analysis of the functionality of nearly 50 government websites, including performance and security indicators. A set of recommendations were offered to overcome the obstacles to widespread adoption of ICT services. Finally, a National Plan for Digital Transformation was developed, including key strategic objectives with measurable indicators of success and baseline indicators; lines of action and associated programs; implementation strategy, governance and a budget.
Advisory to Regulatory Authority on Telecommunications Guidelines
Region: East Africa Year: 2020 Advised the national telecommunications regulator on best practices for network interconnection, colocation, infrastructure sharing, wholesale access pricing, interconnection principles, and wholesale national roaming service. Drafted five guidelines for: (a) interconnection; (b) colocation and infrastructure sharing; (c) competition assessment; (d) pricing regulation (wholesale and retail), and (e) wholesale national roaming.
Region: Asia Pacific Year: 2019-2020 In a multi-year contract, advised the Department of Communication and Information, on a variety of market competition, policy and regulatory issues pertaining to the ICT sector, including but not limited to, (a) recommendations on options to bring private participation to the retail and wholesale state-owned enterprises; (b) assessment of likely scenarios of capacity utilization in a new fiber optic submarine cable to Australia; (c) recommendations for a new ICT government policy; (d) assessment of current regulatory proceedings before the national telecommunications regulator, namely, the establishment of pricing principles for international capacity, domestic transport capacity, and access services in fiber optic submarine cables, and setting interconnection rates; (e) review of the Telecom Act and proposed recommendations to align it with international best practices; and (f) a rapid assessment of e-government services, including their client-server architecture, level of maturity and security.
Internet Pricing Study and Advice on Restructuring Wholesale Market
Region: Asia-Pacific Year: 2019 For a prominent private sector association, Alpha Economics LLC performed an international benchmark analysis of retail Internet prices. Prices were compared across peer countries for various mobile data plans. Prices in the home country were found to be significantly higher than in other jurisdictions. Performed an analysis of the supply chain of telecommunications services to find the main causes of the high prices. A set of recommendations were proposed to address the main issues causing the high Internet prices. Furthermore, an options analysis was performed to present alternatives for restructuring the operations of the wholesale provider of fiber optic international and domestic connectivity.
Expert Witness in International Arbitration Case
Region: Latin America Year: 2017-2018 Dr. Viani served as lead damages expert for the respondent side. He produced two expert reports for the claim and counterclaim and testified before the tribunal of the International Commission for Commercial Arbitration. He analyzed financial statements, accounting data, and contracts for the provision of wholesale transport service and IP transit. He also calculated market prices for IP transit and calculated four types of damages for the counterclaim.
Regulatory Support to the National Telecom Regulator
Region: Pacific Year: 2018 Provided regulatory advice to a national telecom regulator on the transition to digital terrestrial television (DTT), quality of service (QoS) regulations, and on the annual license fees including radio spectrum fees. Alpha Economics' consultants drafted roadmap plans for the implementation of the DTT service, guidelines for the regulation of QoS, and regulations for setting annual license fees. We also advised during the public consultation process.
Advice on Taxation & Regulatory Fees for Telecom Operators
Region: West Africa Year: 2017 Analyzed taxation and regulatory fees imposed on licensed telecommunications operators. Identified main factors preventing the sector to grow as expected. Benchmarked regulatory fees against other countries in the region. Proposed changes on regulatory fees, taxation, and legal and regulatory framework to enable the telecommunications sector to grow.
Advice on Backbone Interconnection
Region: Eastern and Southern Africa Year: 2016-2017 Advised two regional organizations, encompassing 19 countries in total, on regulation of backbone interconnection. Characterized cross-border IP interconnection regulations and practices. In particular, services involving: (a) IP transit, (b) dark fiber leasing, and (c) colocation services. Characterized terrestrial fiber infrastructure across these 19 countries. Assessed price differentials between IP access in landlocked countries and at landing stations. Assessed trends on IP transit prices in major routes between Eastern/Southern Africa and Europe. Drafted guidelines and model regulations for backbone interconnection.
Regulatory Support to the National Telecom Regulator
Region: West Africa Year: 2015-2016 Alpha Economics' consultants advised the telecom regulator on the definition of relevant retail and wholesale markets, the determination of operators with significant market power (SMP), and recommending remedies for operators with SMP. The team also drafted the competition guidelines for telecommunications.
