Houlin Zhao Deputy Secretary-General, ITU

1. International Telecommunication Union Digital Convergence: Challenges and Opportunities Houlin Zhao Deputy Secretary-General, ITU IT Ministerial Conference, Seoul 19 April 2007

2. Static market environments “Divergence” “Circuit-switched Local Low-speed Switch-on Fixed Single medium Distinct Dynamic, fast-paced innovation “Convergence” Packet-switched Global High-speed Always-on Mobile + Fixed Multi-media Bundled Opportunities: Paradigm Shifts TO

3. Challenges: Digital Convergence • Institutional challenges: convergence of ministries, regulators etc. in telecom spectrum, IT/ICT, broadcasting, which is often a political issue. • Regulatory & legislative challenges: difficulties to catch up technological innovation and convergence in the converged laws/regulations. • Industrial challenges: balance between creating new employment and redundancy as well as convert from legacy networks/technologies to the converged ones with huge costs especially for the developing countries.

4. Challenges: Convergence (e.g., NGN) • Pricing: Will offer prices that are significantly lower than those available today? • Bundling and billing: How to distinguish real price of bundled services? • Interconnection: Will current interconnection models (based on per-minute settlement) work ? • Security: If much greater capacity is available at the edges of the network, how to guarantee security? • Investment: Will unbundling discourage new infrastructural investment? • Traffic prioritization: Is the Net really “neutral”? • Emergency services: What level of universal service obligation to impose? • Competition policy: Significant market power will not go away in the converged (e.g., NGN) environment ? • Consultation: compensation for stranded assets?

5. Opportunities • NGNs provides an excellent opportunity to agree improved interfaces in ITU-T to better enable service providers to interconnect and cooperate • Such interfaces, based on ITU-T defined global standards, opens the door to the provision of an unlimited range of applications and services • NGN has the potential to accelerate the deployment of telecommunications networks and services in developing countries • It offers the opportunity for developing countries to jump several generations of technology • The capital costs of deploying NGN technology are significantly lower than circuit switched technologies • Enables a more rapid expansion of network capabilities • NGN will enable a range of multimedia services to be provided easier with less cost, and so increase potential revenues.

6. R.O.Korea’s Leadershipin Digital Convergence USA Germany 2001 Austria 2006 Canada Digital Opportunity Index • 2001: Korea’s DOI = - Overall: 0.60 (rank #2) • 2006: Korea’s DOI = - Overall: 0.80 (rank #1) - Mobile: 0.65 (rank #2) - Fixed: 0.88 (rank #1) Switzerland Macao, China Israel Luxembourg Norway Finland UK Sweden HK, China Taiwan, China Netherlands Singapore Source: ITU Digital Opportunity Platform. Provisional data for 2006 Iceland Denmark Japan Korea (Rep.) 0 0.2 0.4 0.6 0.8 1

7. R.O.Korea’s ICT Sector: The mainspring of its economic growth • Telecoms revenue as a percentage of GDP • R.O.Korea • 1990 = 2.0% • 2005 = 4.8% • World Average • 1990 = 1.8% • 2005 = 3.0% Source: ITU World Telecom Indicators Database.

8. ITU’s mandates and leadership in digital information society • ITU-R: allocation for the appropriate frequency/spectrum for the converged technologies, networks and services, and develop technical standards for radio access and other radiocommunication services. • ITU-T: set international standards (i.e., Recommendations) to ensure interoperability, security etc. in the converged telecoms/ICts, bridge the standardization gap. • ITU-D: assist members in developing and moving towards the converged telecom/ICT environment through providing expert support, trainings to equipments/facilities. • Closer collaboration between the three ITU Sectors. More

9. ITU - WSIS Action Line C2ICT infrastructure facilitation: ITU “Information and Communication Infrastructure” • Main orientation for actions in C2: • Facilitation of large scale initiatives • Development of thematic activities. • Strategy to link national, regional and international initiatives to facilitate large scale infrastructure projects. • C2 Group, endorsed five (5) large scale ITU projects: • Harmonization of ICT Policies for 43 African States • Harmonization of ICT Policies for 17 Caribbean States • Capacity Building on ICT Policies for 14 Pacific States • International fibre optics: Infinity project West Africa, • ICT Applications and Connectivity : Pacific Island States, studied by ITU, funding to be secured

10. ITU - WSIS Action Line C2 Plan of Action aims at the facilitation of the following core Activities: • Development of National e-Strategies; • Harmonization of the ICT Policies in the different regions; • Development of regional and large-scale national initiatives; • Launch of global thematic ICT Infrastructure initiatives for: • “Public Access”; • “ICT-Applications for Development”; • “Broadband Wireless Access”; • “Large-scale ICT backbones” • Development of a virtual financing platform; • Deployment of an online tool for ICT Development Assessment.

11. October-November 2007: - Radiocommunication Assembly, and - World Radiocommunication Conference • October 2008: - World Telecommunication Standardization Assembly, and - Worldwide Standardization Roundtable and Coordination Meeting

12. World Telecom Policy Forum ’09 • Topic: “Convergence and emerging policy issues” • Timetable: • 30 June 2007: Deadline for first contributions • 1 September 2007: First draft of SG’s report • Spring / Autumn 2008: Two meetings of informal expert group • 15 December 2008: Deadline for final draft • 24 March 2009: Information Session for WTPF • 25-27 March 2009: 4th WTPF

13. Thank you Houlin ZhaoITU Deputy Secretary-General DSG@itu.int Tel.: +41 22 730 5595Fax: +41 22 730 5137