Digital PolicyThe IcT PolIcy & develoPmenT magazIne

Information TechnologySaudi arabia’s general manager of national Information center discusses the center’s role in providing services and solutions to various government sectors

Enter the New Era of Convergence

The shift in the telecom operator's role to keep up with the changes of user’s orientation

A New Type of CompetitionThe strategies of telecom operators in dealing with over-the-top services

UN e-Government Survey

The achievements of Saudi arabia and the developments prospects

overview on the role of ITU efforts towards the harmonized allocation of the digital dividend spectrum

The Benefits of Digital Dividend

ISSUe 3 | december 2012

Briefing Digital Policy

3 Issue 3

ICT Is DeemeD The maIn pIllar of TheeConomyDr.mahmoud bin abdulkareem alkhateeb,Vice President for Regulatory Affairs

ICT is deemed the main pillar of the knowledge-based economy. Indeed, communications has drastically changed the way of accessing and using knowledge and contributed in developing international trade activities and the flow of investments among countries, because there are today few geographical barriers to the spread and acquisition of valuable knowledge. The low cost, high reliability of highly developed communication networks have played a direct role in facilitating international trade, importing, exporting and the exchange of ideas. Moreover, ICT has been the main engine of economic growth throughout the past fifteen years in many countries that adopted knowledge-based economy on a large scale.

A report prepared by STC shows the socio-economic effect of ICT in the Kingdom. There are remarkable results. Indeed the report indicated that most ICT expenditure in KSA was focused on paving the way to communication services and equipment,it is estimated at about 80% compared to 45 and 55% in the economies that most use ICT, such as the USA. This shows that there is room for improvement and development in IT components. The report also pointed that in 2009 alone, investment in the telecom sector created a total economic benefit of around SR60 billion. Furthermore, on average during the 2006-2009 period, the annual economic benefit from telecom investment has been around SR50 billion. During this same time period, annual average job creation attributable to the direct, indirect and induced impact of telecom investment has been over 60,000 jobs per year. The report mentioned as well that the Gross Value Added (GVA) of the telecom sector is around 2% of GDP and about 4% of non-oil GDP. It should be noted

here that in Saudi Arabia, fluctuations in oil prices often lead to large annual swings in GDP growth, and therefore the contribution of any given type of investment (such as ICT) tends to be overshadowed by these fluctuations. In other words, the absolute contribution of ICT to GDP growth is substantial, but the proportionate contribution of ICT is modest because the influence of oil on the economy is so large. Investment in ICT as a whole contributed around 0.34 percentage points of growth per year, which is a good percentage, though it could be improved. It turned out recently, from what the newspapers have published, that the Kingdom is targeting a 30% direct and indirect contribution of ICT in the GDP by 2018.

On the other hand, the report shows that tertiary enrollment is still too low and that the expenditure on research and development is relatively low in KSA, at around $8 per head of population, compared to $1,000+ in many OECD countries.

Here lies the value of economic diversification, it is worth noting that energy intensity of GDP has been falling in developed countries. For example, in the USA, the number of barrels of oil required to produce USD 1000 of the GDP fell from 1.5 in 1977 to 0.8 in 2000. Then, ICT appear to be an obvious tried and tested area upon which to focus besides the oil sector in order to meet the needs of a fast growing young generation, reinforce the role of knowledge as a source of value and wealth and raise the competitiveness of the local economy and the national products, in addition to increase productivity, improve employment and labor force participation, and minimize youth unemployment. Malaysia is a good example considering the 0.66% annual

economic growth it has achieved thanks to the investments in ICT.Considering the above, it is normal to prioritize ICT in the national development plan and develop the appropriate policies to reinforce the investment in ICT in various economic fields and increase their contribution in the economy in the light of the critical role it plays in the change to a knowledge-based economy. It should be noted that the UN e-Government Survey for 2012 discussed in one of the articles of this issue of Digital Policy magazine shows that KSA has raised its global rankings from 58 to 41, thanks to unrivaled support its leaders, government, the big telecommunications companies and the private sector.

The extent the telecommunications network infrastructure rollout - especially broadband, online services, the adoption of internet by the citizens and the government, the competency of the human factor and the internet literacy of the members of the community throughout the various stages of education are all factors in the assessment of the ranking of each country. KSA has set a goal in the Shura Council to reach ranking 18 internationally by 2018. This will require governmental efforts, strategic planning as well as significant material and procedural contributions to reach that goal, with active partnerships between the public and private sector. STC will offer a lot, in terms of infrastructure availability and human resources, to reach this goal.

4 Issue 3

ContentsDigital Policy

Briefing

Foresight

Talking to

Looking ahead

ICT IS DEEMED THE MAIN PIllAR OF THE ECONOMyDr.mahmoud bin abdulkareem alkhateeb,Vice President for Regulatory Affairs

THE DIGITAl DIVIDEND worldwide and regional developmentsfrançois rancy, Director, Radio Communication Bureau, International Telecommunications Union

NATIONAl INFORMATION CENTER... BECAUSE IT IS All ABOUT OUR NATIONprince Dr. Bander Bin abdullah almushari al saud, General Manager of National Information Center

MACHINE-TO-MACHINE erkan akdemir, Avea CEO

ENTER THE NEw ERA OF CONVERGENCE: THE FANTASTIC FOUR

THE JOURNEy TO IPV6… How, When, and Why!!!said ouissal, Vice President of Strategy & Customer Engagement, Ericsson IP & Broadband

GCC COUNTRIES POlICIES IN THE TRANSFORMATION Towards Digital and Knowledge Economyabdulla Bin Juma al-shibli, Assistant Secretary-General for Economic Affairs Secretariat General of the Cooperation Council

ACHIEVING A wEll-BAlANCED AND FUTUREBy sacha a. Dudler, Adviser to Saudi Telecom Group

3

6

13

16

17

19

22

10

Khaled Al Twergi

Contents Digital Policy

5 Issue 3

Regulatory Matters

Society

Last Word

TElECOM OPERATORS AND THE OTT CHAllENGEmark newman, Informa Chief Research Officerreda haidar, Informa Senior Consultant

A lOOK AT THE UN E-GOVERNMENT SURVEy 2012Dr. essam eldin mitwally, General Advisor Technology & Regulatory Strategic Studies, STCsaeed m. alqahtani, General Manager Regulatory Strategic Studies, STC

GOVERNMENT POlICIES AND REGUlATIONS AND THE IMPORTANCE TO KEEP PACE wITH DEVElOPMENTS IN THE ICT INDUSTRysaeed mohammed, Editor-in-chief of Digital Policy magazine

MOBIlE VIRTUAl NETwORK OPERATORS (MVNO)rayed alKahtani, STC, Regulatory Strategic Planning Director

DIGITAl CERTIFICATIONDr. adel Bin mohamed al-said, PhD in Information Security, Research and Security Management Director, Digital Verification National Center, Ministry of Communications and Information Technology

25

43

50

34

39

6 Issue 3

ForesightDigital Policy

The DIgITal DIvIDenD wORlDwIDE AND REGIONAl DEVElOPMENTSfrançois rancy, Director, Radio Communication Bureau, International Telecommunications Union

This article addresses the Digital Dividend issue, emphasizing the role of the ITU and regional organizations towards the

development of national policies and processes for the allocation of the digital dividend spectrum. It includes specific examples of latest worldwide developments and ITU actions in this regard.

historical contextIn many countries, the delivery of television broadcasting to consumers has been carried out traditionally by means of “terrestrial television”, which technically means that signals are transmitted through an antenna tower located at an elevated point within a region, providing television coverage to the audience around it. Terrestrial broadcasting uses significant parts of the radio frequency spectrum to transmit these signals. For many decades, this spectrum has been used throughout the world to deliver analogue television signals to homes (uncompressed, raw video and audio signals). Given the limited amount of radio spectrum available, this way of distributing television was restricted to a few analogue programs. Since the eighties, terrestrial television has been increasingly challenged by cable and satellite television, and more recently by ADSl and Internet television. All these alternative means deliver a much larger number of programs and, as a consequence, the share of terrestrial television broadcasting has generally decreased, sometimes below 5% of the population.

Digital television developments To face this trend, terrestrial television broadcasting has recently started its transition from analogue to digital form. This transition brings to the viewers a higher number of programs, a better picture quality and new services such as high definition TV (HDTV). It therefore represents a very positive evolution for this type of broadcasting. In addition, it presents the advantage of necessitating a much smaller amount of frequency spectrum. As a basis for comparison, where a single analogue program can be broadcast on one transmission channel, the same transmission channel could carry up to 20 digital equivalent programs with the latest compression and transmission technologies (e.g. MPEG4 compression and TVB-T2 transmission system). This huge step in spectrum efficiency translates into a dramatic reduction in the broadcasting costs per program, which opens a whole new range of opportunities for consumers and content producers in the audio-visual sector.

Digital television broadcasting has been in service in many countries for over a decade and corresponding technologies have now fully matured. Their performance is such that maintaining analogue networks in place will soon become impossible to justify in economic terms. The interest of the providers and the interest of the viewers is therefore to go digital and staying analogue can no longer be considered as an option. As a matter of fact, the transition to digital TV has already started or been finalized in many countries. In the European Union, the

target date of 2012 has been set for the end of analogue transmissions and this date is expected to be met in most cases.Obviously, given the very significant gains in terms of the above mentioned “spectrum efficiency” which results from this transition, there has been growing interest in the last few years on how these spectrum gains might be distributed. Through this, the concept of digital dividend has emerged, which may be defined as the amount of radio spectrum made available by the transition of analogue terrestrial television to digital, which results in the release of large portions of radio spectrum no longer needed to broadcast analogue television. The digital dividend may be used by digital broadcasting services (e.g. provision of more programs, high definition, 3D or mobile television) or by other wireless services, such as the mobile telephony service. Obviously, the digital dividend, and the benefit for both broadcasting and other services, is maximized when using the most spectrally efficient techniques for digital television.

However, reaping the benefits of the digital dividend is not exempt of complexities. It first requires that the transition to digital terrestrial television broadcasting is carried out successfully.

Foresight Digital Policy

7 Issue 3

managing the transition to digital terrestrial television broadcasting The very nature of television broadcasting requires high power – high towers to maximize coverage with a small number of transmitters. This also means that a given transmitter can produce interference over large distances, which requires significant efforts in terms of frequency coordination between countries, on a bilateral and multilateral basis.A well-established practice has been to develop broadcasting agreements that ensure equitable access to spectrum between the countries of the region by registering a-priori transmission rights on specific frequencies in specific locations or areas. This guarantees the absence of interference at international level. In Europe, Africa, Middle East and Iran, the ITU Regional Radio Communication Conference held in Geneva in 2006 has achieved this and adopted a Regional Agreement and associated frequency plan (GE06 Plan) which provides to each country in the region specific rights to use the UHF and VHF bands for digital terrestrial television, and mandates analogue switch off by 17 June 2015.

At national level, radio spectrum is considered a national economic resource and is therefore regulated and managed by the State (government agencies or independent regulators). This centralized approach is taken to ensure that the appropriate balance is struck between political, commercial, cultural, national and local interests.

Before analogue television switch off can occur, it is necessary to deploy a digital broadcasting network which provides an equivalent coverage to that of analogue broadcasting and is using frequencies which need to be compatible with those used by analogue television. Because of this constraint, these frequencies are generally non optimum and will need to be changed at the time of analogue television switch-off, hence the term digital switchover (DSO) frequently used to describe this operation.

DSO is therefore the crucial point of the

transition to digital television. It consists in terminating the transmissions from thousands of analogue sites, and retuning the frequencies of thousands of digital transmitters in an orderly manner. For logistical reasons, this operation can only be carried out by steps, e.g. region by region within a given country.

The political, cultural and social importance of the terrestrial television service and the potentially disruptive effects of DSO on this service make this operation a national issue which needs to involve:

• Government and/or legislative backing,

• Advance national and international planning and coordination of all activities,

• Communication to the public, • Technical assistance to the population

and, • Financial assistance to the population

(which may cover the purchase of digital receivers or, in case of loss of terrestrial service, the purchase of alternative equipment, such as satellite dishes).

It is only after all of these steps have been taken and DSO has been completed that the resulting digital dividend spectrum will be fully available for its utilization. As seen in the following sections, if analogue switchoff enables the digital dividend to materialize, it is certainly not enough to reap the benefits of the digital dividend.

International harmonization of the digital dividend for mobile servicesworldwide, the decision-making process in which countries agree on the regional and global spectrum allocations is done through the International Telecommunications Union (ITU) in the so-called world Radio Conferences (wRCs), which are held every three to four years. In 2007, wRC-07 allocated the 800 MHz band to the mobile service worldwide and identified it for International Mobile Telecommunications (IMT), together with the 700 MHz band in the Americas and a few countries in Asia-Pacific.

This decision left the choice to each country to decide to use these bands for mobile broadband or to continue to use it for broadcasting, but provided a very strong encouragement for national regulators to allocate it to mobile. Using common digital dividend spectrum bands at international level for mobile, together with harmonized band plans within the mobile service, offers several benefits for countries: a) bringing worldwide economies of scale for the manufacturing of equipment (the same spectrum band can be used in the same way in all countries), b) allowing worldwide roaming, c) providing long term assurance to manufacturers and network operators, who invest in making the equipment and the service available, on the intentions of regulators and governments worldwide, d) minimizing capacity and commercial losses resulting from interference in border areas.

Since 2007, the standardization efforts carried out in ITU and regional bodies have paved the way for the possibility of an early implementation of mobile broadband services in that part of the spectrum. As a result of the non-uniform allocations by wRC-07 and the constraints arising from incumbent mobile usage (CDMA at 850 MHz and GSM at 900 MHz), these efforts have produced non-uniform solutions across the world (See Figure 1):

- In 2007, the USA adopted a 700 MHz band plan, which led to two paired arrangements of 2x 18 MHz and 2 x 11 MHz for commercial services and 2 x 17 MHz for Public Safety services (PPDR). Following auction, AT&T and Verizon have already launched mobile broadband service respectively in parts of the paired arrangements, using lTE technology. Steps are being taken to create a public/private partnership for the development of a unified PPDR network. Canada has announced its intention to follow this plan.

- In 2009, European countries (CEPT)

8 Issue 3

ForesightDigital Policy

adopted a harmonized frequency plan for mobile broadband at 800 MHz, with a 2 x 30 MHz paired arrangement. In the European Union, this arrangement is mandatory for the use of the 800 MHz band by the mobile service. Germany, Sweden, Spain, Switzerland, Italy and

UL UL

960925915880

900 MHz

UL UL

894 MHz869849824

850 MHz

UL

UL

UL

UL DL

DL

DL UL

UL

UL

UL

UL

862 MHz832821791

CEPT 800 MHz

APT 700 MHz

Duplexer 2

Duplexer 1

718 748 773 803 MHz

703 733

698 716 728 746 MHz

746 757 776 787 MHz

758 775 788 788 MHzPPDR

Pairing 1

Pairing 2

US 700 MHz

758 788 MHz

Figure 1 – CEPT, APT and US band plans at 800 MHz and 700 MHz and other incumbent mobile plans (CDMA at 850 MHz and GSM at 900 MHz)

France have already auctioned that spectrum and service rollout has started, using lTE technology.

- In 2010, the Asia Pacific Telecommunity (APT) adopted a paired arrangement of 2 x 45 MHz based on a dual duplexer implementation for the 700 MHz band, and a TDD arrangement covering the entire 703-803 MHz band. Several countries in Asia have announced their intention to follow this plan.

In February 2012, at wRC-12, the international community further affirmed its commitment to work towards maximizing harmonization of the digital dividend spectrum for the mobile service, in deciding to allocate the 700 MHz band to the mobile service worldwide and identify it for IMT, in

addition to the 800 MHz band. This has prompted significant activity to take this opportunity to get reconcile the various options taken since 2007 and to address the future of the 700 MHz, 800 MHz and 900 MHz bands jointly, with a view to achieve worldwide harmonization of IMT frequency plans in these bands,

while providing incumbent services with incentives to refarm their activities into this future. Figure 2 provides an example of current scenarios being brought forward as a result of this activity.

regional coordination of the transition to digital terrestrial television broadcasting

Regional decisions to make a common choice on the allocation of the digital dividend to the mobile service in the 700 and/or 800 MHz may affect the plans made by broadcasters to use this band after DSO, which in turn may affect their plans for the transition to digital terrestrial television. It is therefore imperative that countries in the same region coordinate their efforts in order to ensure that the bands allocated to

the mobile service can be freed up by broadcasting services.This will require frequency coordination discussions in order to revisit existing agreements on sharing of spectrum between broadcasting stations. In Europe, Middle East, Africa and Iran, the ITU regional Radio communication

conference held in Geneva in 2006 adopted a regional Agreement which allocates to each country, in an equitable way, the 49 channels of 8 MHz bandwidth ranging from 470 MHz to 862 MHz, as specified by the GE06 Plan. Since the channels received by each country in the 700 and/or 800 MHz band may no longer be usable by broadcasting as a result of regional harmonisation decisions, the GE06 Plan needs to be modified through frequency coordination between countries at regional level, to ensure that the requirements of broadcasters are met in the remaining band (470-698 MHz).

In Europe, the corresponding coordination started in 2008, with multilateral discussions held within two groups: eight countries around Belgium

Foresight Digital Policy

9 Issue 3

UL UL UL DLDL

UL-DL UL DL

DL

703

TDD

824 832 869 877 MHz

CDMA-850

LTE700leverage APT 700 MHz equipment

(3GPP standard-June 12)

LTE800equipment available. Commercial

services started in Europe

HSPAS900>90% smartphones support

UMTS900 today

733 758 788 791 821 832 862 880 915 925 960

Improvements of Asia and Pacific Ocean tools for wired and wireless (APT) for 700MHz frequency (3GPP – June 2012)

Tools are available. The commercial services started in Europe

Support more than 90% of smart phones today which operates by UMTS900

Figure 2 – Example of a possible harmonized frequency plan of 700-800-900 MHz bands and corresponding accommodation of current technologies

(wEDDIP group, for western European Digital Dividend Implementation Platform), created in May 2009, and 9 countries around Germany (NEDDIF group, for North-Eastern Digital Dividend Implementation Forum), created in October 2010.

within the African Telecommunication Union (ATU), following a ministerial summit on the issue in December 2011, and with the assistance of the ITU, two frequency coordination meetings have studied possible rearrangements of frequency assignments in order to make space for a harmonized frequency band for mobile services (694-862 MHz) while ensuring a minimum capacity of four nationwide broadcasting coverages for each African country and concluded on their feasibility.Due to the magnitude of the frequency changes operations required during DSO, their financial impact and potentially disruptive effects on the television service, it is not advisable to repeat

these operations. All above international coordination activities should therefore be completed before starting the transition process, in particular those relating to the allocation of the digital dividend and those relating to the re-arrangements required in the regional and bilateral agreements on broadcasting frequencies.

Conclusion For the purpose of achieving a successful transition to digital terrestrial television and to successfully implement and benefit from the digital dividend, countries need to rely on clear regional planning and coordination processes. A regionally harmonised allocation of the digital dividend spectrum, is a pre-requisite. To benefit from economies of scale and worldwide roaming and interoperability, this process needs to rely on worldwide spectrum harmonisation, which has now been boosted by wRC-12 decisions. It

also needs to be coupled with regional frequency coordination, to ensure that the spectrum requirements of the broadcasting sector are taken into account.In order to facilitate this process in all regions of the world, the ITU is conducting, in cooperation with regional organisations, a program of workshops and coordination meetings on the transition to digital television and the digital dividend. This program can be consulted on the ITU website .

10 Issue 3

ForesightDigital Policy

aChIevIng a well-BalanCeD anD fuTureREADy FIxED AND MOBIlE BROADBAND INFRASTRUCTURE FOR SAUDI ARABIA

1 ICT Development Index of the 2011 edition of the report Measuring the Information Society, prepared by the ICT Data and Statistics Division within the Telecommunication Development Bureau of ITU2 STC plans to link more than half a million homes with FTTH technology by the end of 2012, and more than a million homes by the end of 2014 as per its press release from August 2nd 20123 Saudi Arabia remains the most competitive cellular market in the Arab World for the year 2012 followed by Jordan and Palestine, respectively, a report released by The Arab Advisors Group on Cellular

Competition Intensity Index 2012 said4 The total number of mobile subscriptions grew to around 54.3 million at the end of Q1 2012, with a penetration rate of 188.5% according to CITC, considered having the third highest mobile-cellular penetration

worldwide (186 per cent), after Macao (China) and Hong Kong (China) according to ITU ICT Development Index of 2011.5 The total subscriptions to mobile broadband already reached 11.9 million at the end of Q1 2012, representing a population penetration rate of 41.4% according to CITC6 According to Olivia Ma, a news manager with YouTube, Saudi Arabia has the highest per-capita YouTube use of any country in the world

By sacha a. Dudler, Adviser to Saudi Telecom Group

The Kingdom of Saudi Arabia has undergone major positive changes since the start of its telecom

market liberalization 10 years back. It can proudly claim to have become the most dynamic ICT country globally in absolute terms1 because mainly of availability and uptake in mobile services and created momentum does not stop here. Even the wireline infrastructure readiness that was considered much underdeveloped has recently seen substantial improvement with DSl availability reaching more than 3 Million

households and additionally fiber being rolled out nation-wide with STC being committed to cover 1 Million households by 2014 with fiber2 which means that more than 20% of the population will enjoy high-speed broadband beyond 100 Mbit/s. Intensified competition already has helped boost investments in the mobile sector that is today deemed most competitive across the Arab world3 and will also lead to a further increase of fiber based high-speed broadband availability beyond STC’s aspirations.

with three mobile operators competing for an attractive and continuously growing young and dynamic society with sound purchasing power has led to the availability of three nation-wide mobile high-speed broadband networks based on latest 3G and 4G technologies that are direly needed to meet sky rocketing uptake in mobile services with mobile subscriber base penetration approaching soon 200%4, one of the highest penetrations globally, and mobile broadband uptake seeing even stronger growth5 due to one of the

Foresight Digital Policy

11 Issue 3

7 Based on the Saudi National Communications and Information Technology Plan NCITP - The Vision Towards the Information Society, that is currently being updated to detail the next 5 years plan to achieve

aspired vision 8 Is LTE Another Building Block for Fixed-Mobile Substitution – Pyramid Research’s Telecom Insider Report 2012

lowest rate for mobile broadband and subsequent worldwide highest youtube consumption6 - mainly consumed over mobile broadband technology.

Such success story especially driven by mobile has already manifested substantial change in how the Saudi society interacts. Social media services such as facebook, twitter and chat services such as Black Berry Messenger BBM, skype and whatsapp to name just a few are seeing a very active and ever growing at very high pace Saudi society in the ICT space, creating opportunities for the government to better reach out to its citizens and interact and engage in a dialogue to help identify most suitable ways how to transform the Saudi society into the aspired modern knowledge based information society ensuring high quality jobs and sustainable prosperity as per the government’s vision7.

For telecom operators such as STC that are committed to support the government in every way possible to achieve its aspirations, readying and scaling up most modern broadband infrastructure to serve consumers, businesses and government nation-wide alike is of highest priority and requires substantial investments while accepting considerable risks given the very dynamic ICT sector and also uncertain business environment globally. Fortunately, Saudi Arabia has proven to be rather resilient to ongoing global economic challenges. Still, as a glance at the Saudi Stock Exchange Tadawul confirms that only few investments into ICT players in KSA have proven to be successful for the public so far. Attracting new investments is especially for financially weakened players difficult. Additionally, with key spectrum including the digital dividend not yet made available to mobile operators and unprecedented uptake in mobile broadband services, it remains unclear if operators will be able to continuously meet consumers’ expectations for highest-speed mobile broadband in the near future. To make most efficient

use of scarce spectrum, KSA mobile operators including STC therefore are thinking about technologies allowing to off-loading mobile traffic as much as possible to wireline technologies but face regulatory challenges as well as business challenges given that strong fixed mobile substitution trends in Saudi Arabia are heavily impacting investment cases for fiber rollout.

with the nation-wide availability of latest mobile broadband technology lTE that is capable of delivering beyond what DSl will ever be capable of, it seems likely that more and more Saudi citizens will prefer mobile broadband they can take anywhere and share with their surroundings even abroad given very attractive roaming offers especially during holiday and vacation seasons. Although it seems still obvious that fiber based broadband access for highest usage including high definition IPTV will be the prevailing technology with most optimal cost and quality efficiency, at least in the interim mobile broadband has become a powerful mass substitute to existing DSl wireline access8. Once accustomed to mobile broadband that has only few limitations compared to today’s mass scale available DSl based wireline broadband in KSA of which some are being removed as we speak - online gaming on lTE has fast response times unlike earlier mobile broadband generations and also IPTV and VoIP can be prioritized, enabling high-quality service delivery – and so many benefits given its mobility, only heavy users of multimedia services currently may opt for wireline to mobile broadband in KSA fi they had to choose one over the other. So especially for the young and mobile, it is becoming less and less rationale to pay for both mobile and wireline broadband if one of the two – obviously mobile in this case – clearly alone can do the job. Thus, wireline investors face the risk being left with stranded assets for fiber investments no one is going to use as it has already hit STC previously when massively rolling out copper networks in the previous decades

in areas that did not see expected uptake and that has left STC with a huge access deficit and idle copper lines in the millions. And with strong mobile voice subscriber uptake in the past years, STC was destined losing further subscribers for its wireline business. Only with bundling voice and broadband services and introducing flat rate voice calls to fixed and mobile networks, STC was recently able to turn around the trend of declining fixed subscribers but again faces as other wireline operators an even bigger challenge given massive mobile broadband uptake and associated strong fixed mobile substitution pressure through very attractive mobile services including free on-net calls, very cheap mobile broadband and typically cheaper international rates than wireline and free roaming given the many promotion and overall highly competitive environment in the mobile sector.

The perception of mobile broadband superiority may change if consumers soon enough get accustomed to highest-

12 Issue 3

ForesightDigital Policy

speed reliable fiber – eventually anyone enjoying the comfort of reliable high-speed fiber access will never trade back to DSl or use mobile broadband exclusively anymore - however with mobile broadband uptake according to KSA mobile operators forecasts reaching 100% within the next 2 years, it is expected that a substantial share of subscribers to 4G mobile broadband services will be at least for the time being lost as subscribers for wireline services. winning them back as wireline subscribers will only be possible at substantial discounts and fixed mobile service bundles, eventually eroding much value needed to attract investors in nation-wide fiber rollout projects. The stronger the fixed mobile substitution effect manifests - which depends merely on how attractive wireline broadband can position itself as part of ubiquitous bundles between wireline and wireless as well as quality, capacity and price for mobile broadband services - the more difficult it will become to attract investors to cover areas of Saudi Arabia with fiber that are not considered metro areas, thus leaving it to the government to ready the necessary policies and funds that ensure efficient universal high-speed broadband availability across the country9.

However, timing is key and currently mobile broadband uptake has exceeded already wireline broadband penetration and will outpacing further uptake in wireline, creating soon an irreversible market situation where broadband will be provided mainly over mobile infrastructure in Saudi Arabia – a situation common in many developing countries with the benefit of achieving fast a fully connected society, but not ensuring an underlying reliable broadband infrastructure that fosters an overall ICT ecosystem that can be leveraged as a hub for the broader MENA region, attracting ICT companies, talents, and subsequently growth and jobs as Saudi Arabia is aspiring to as other developed countries do that are considered top tier in the ICT space.

Eventually, the longer it takes to establish a well-balanced investment environment that equally fosters wireless and wireline infrastructure, the more difficult and subsequently expensive it will be to correct the trend and promote wireline fiber based universal access, requiring extensive government intervention. Government intervention always leads to less efficient outcomes than market driven solutions, thus setting now the necessary regulatory environment empowering wireline investments helps the government to choose the least intrusive means to still achieve its objective at efficient costs for the society.

CITC, the Saudi ICT regulator has acknowledged the danger for the country become a mobile mainly country and facing at some point a spectrum squeeze and capacity and quality shortages that erode consumer confidence and overall infrastructure reliability, and it aims at facilitating joint fiber deployment and other means of wireline infrastructure sharing that may reduce investments for participating operators. while for metro and nationwide backbones such sharing definitely will reduce costs and hopefully also limit public disturbance through less road diggings, the overall challenge of fixed mobile substitution won’t be resolved and thus not helping wireline operators to improve their investment cases to ensure high-speed broadband universally in Saudi Arabia. For 1) independently of how many operators will share trenches and ducts; at the end of the day only one operator usually serves the customer leaving all other operators with stranded assets and a loss, and 2) joint deployment requirements leads to orchestrated and managed competition that slows down fiber roll-out, thus actually accelerating the effect of fixed mobile substitution further, worsening the overall outcome.

More promising may be a broader and more comprehensive collaborative approach between wireline operators to empower each other by providing fair access to each other’s’ services

and by taking advantage of the highly competitive mobile sector by negotiating access to mobile network operators’ as well as soon to be licensed MVNOs’ services to substantially improve wireline attractiveness to Saudi consumers and businesses by offering ubiquitous affordable access to high-speed broadband independent of technology - anywhere, anytime over the most efficient technology, taking advantage of traffic offloading and convergence, one bill, one-stop shop and other means to make the experience for Saudi citizens as appealing and simple and affordable as possible. Key success factor for such an approach is that operators investing in wireline may enjoy at least for some time certainty that the infrastructure will be used and a fair compensation is paid by whoever is providing the service over the infrastructure to the consumers and businesses. Eventually, to accelerate fiber rollout that is key to overcome the fixed mobile substitution challenge, the government may consider facilitating investments through tax incentives, easier and faster and cheaper permits for deployments, a revision of universal service obligation and funding and other means that improves the business case for wireline nation-wide investments.

In the past and mainly led by STC, wireline operators have invested substantial amounts into nation-wide wired broadband networks but profitably has remained below expectations of investors - of which many are Saudi citizens that have bought shares in IPO’ed but underperforming companies. Should the investment environment in Saudi Arabia remain biased towards mobile services, wireline operators will continue to struggle and we will see further shifts of investments from wireline to mobile to bet on more lucrative mobile success, including eventually STC. Only time then will tell if such hopes that mobile networks continue to deliver to meet the needs of the Saudi society for its journey towards a modern knowledge based information society.

8 As per CITC, ‘the rate of demand for fixed line service has been relatively stable since 2004. The main reason is the rapid spread of mobile telecom services, their ease of subscription, and the gradual

decrease in prices, which have led to a lower number of requests from consumers for fixed services’ but CITC expects uptake of fiber in metro areas.

Talking to Digital Policy

13 Issue 3

naTIonal InformaTIon CenTer... BeCause IT Is all aBouT our naTIon

prince Dr. Bander Bin abdullah almushari al saud, General Manager of National Information Center

Digital Policy speaks to Saudi Arabia’s General Manager of National Information Center; Prince Dr. Bander Bin Abdullah Almushari Al Saud regarding the significant role of National Information Center as one of the biggest information centers in the Middle East

The national Information Center is considered one of the biggest information centers in the middle east. Could you please tell us about the history of the Center and its main activities?

I would like first of all to thank you. The National information Center may be, as you mentioned in your question, one of the biggest information centers in the Middle East in terms of the vital technical services and information it includes. The truth is this reputation did not come from thin air, from was a result of a well-planned work and effort by H.H. Crown Prince Nayef bin Abdul-Aziz al Saud, May God Rest His Soul in Peace, more than thirty years ago when

H.H approved the establishment of this Center until it became an international center, leading in the field of providing IT services and solutions to the Ministry of Interior and its departments, while reinforcing its role in national security, facilitating and providing services to citizens and residents, and supporting the initiatives of KSA in the field of e-government transactions.Today, the Center offers various technical services to all the departments of the Ministry of Interior and to a great number of government departments based on the best modern and cutting-edge technologies, covering various cities and provinces of KSA through its branches spread in the main cities and linked to over 2500 location across KSA through telecommunication networks serving over 14000 terminals, which make the Center among the biggest technical telecommunication networks in the Middle East. Moreover, the Center plays other technical roles, including providing central and security information for all the departments of the Ministry of Interior and other ministries, developing and automating the Ministry’s information systems, developing the Center’s automated systems and their performance and supporting 4.Supporting the Ministry’s administration and departments to make the best use of the Center’s services.

The Center is currently implementing a great number of technical projects for the ministry of Interior. how does it supervise these technical projects efficiently?

prince Dr. Bander Bin abdullah almushari al saud, General Manager of National Information Center

14 Issue 3

Talking toDigital Policy

The Center is the technical interface of the Ministry of Interior and is directly responsible for the execution of a number of technical projects for the Ministry of Interior. It holds a great responsibility for it contributes with other entities in implementing the vision and aspirations of our leaders, God bless them, in terms of the shift towards providing advanced services to the citizens and residents through the electronic transactions. This made the Center and the various departments of the Ministry endeavor to become the first government entity to provide electronic services through continuous planning to carry out integrated technological projects aiming at facilitating the services provided in a technological integrated manner. Today, over 140 technological projects are implemented by ambitious national cadres that continuously work towards meeting the requirements of their customers, whether departments in ministries or other governmental departments according to advanced services standards.Through the Projects Management Office, the Center handles the continuous planning, follow-up and supervision tasks over these projects, enabling the Center to achieve high quality technological success and enabling the various departments of the Ministry to meet the technological demands of their customers and reach the required level of service. The Office also allows the various departments of the Ministry enough time to participate in the planning and development in collaboration with the Center so as to support the continuous development and modernization process.

The Center focuses on simplifying and developing the work processes in accordance with the technological development, especially that the departments it serves are numerous. how did the Center manage to contribute here?

The Center handles, on a daily basis, a huge number of saving, retrieval and interaction procedures which require a special security protection. The Center follows the best international practices in terms of protecting its information and systems, starting from their structure build in the system and executive procedures to the daily input and output processes and the end user who provides the service to the citizen and resident in the departments of the Ministry and other government departments. Here, the role of the common coordination between the Center and the service departments is highlighted, notably when it comes to transforming all applicable procedures to technological procedures serving the end user and in harmony with the quantum leap the Ministry of Interior is witnessing in the field of technology.

The electronic portal of the ministry of Interior is a pioneering technological project. what are the most prominent efforts the Center is exerting to provide e-services to the beneficiaries through this electronic portal?

we, at the Center, consider the e-portal of the Ministry an important tool to develop and improve the level of service and performance by providing the best in the world of technology. Today, this portal offers over 75 electronic services in cooperation with all security and services ministerial departments. Moreover, the e-portal of the Ministry www.MOI.GOV.SA is considered one of the most important electronic services the Center is carrying out to enable the Ministry and its departments to provide electronic services to their citizens and residents and easily communicate with them. For this reason, we see departments racing every day to turn the concept of routine work in terms of the service offered to the citizen or resident into an advanced electronic form with this leading portal. This shows that soon we

will see ministry departments offering technical services up to the level of our leaders and government’s expectation and in harmony with the requirements of this modern technological era, i.e. the e-government.

The human cadres are the main pillars of the daily services work. how does the Center choose these cadres when hiring?

The Center, like other governmental departments, need to provide the qualified human cadres to carry out all the requirements of the client services in various fields. we had started developing a policy to attract the qualified and talented Saudi youths and motivate them into working in the various administrations of the Center, keep, train and provide the technical, financial and moral support to the existing human cadres, as well as meet all their needs, develop their potentials so as to keep up to date with the latest technological and telecommunications changes in order to rely on them in improving the quality of the services that the Center offers. we strategically strive to adopt the best practices that would provide a work environment that attracts and keeps the job competencies. The most important of these practices are the training and development programs which are a big priority for us, especially considering their direct effect on developing the practical skills.

Information is the basis. how can this information help support the decision makers to take the right decision regarding any special event or case?

The Center took care of the information and contributed to its development in order to provide, at any time, reports regarding any service based on numerical facts so that the decision

Talking to Digital Policy

15 Issue 3

maker can take the right decision. without the numerical statistics and information, no bearer of responsibility can take a right decision. Thus, we always provide the officers, of all levels, with the information and statistics that support their decisions regarding the various services of the departments. Thanks to its accumulated experience, the Center is now exceeding its boundaries to data mining, which extracting the information to plan the future. The person in charge does not take only the information into consideration, but also the indicators of that information.

Today.. Cloud computing technology has become the most used technology on the web, and among the first ten important technologies in 2011 and 2012 aD. In your esteemed opinion, why has this technology gained this much importance?

Cloud computing refers to the computer sources and systems available on demand through the web where many integrated computer services are provided without being restricted by the local resources in order to facilitate the services for the user. These resources include a storage space for data, backup, automated synchronization, software handling, tasks scheduling, email and remote printing. By connecting to the internet, the user can control these resources using a simple software interface that simplifies many details and accurate internal processes. The reason for the big media fuss over this kind of technology might be the strong trend in companies and institutions of the public sector to cut the capital and operational expenses, including IT, so that they became dynamic and transparent. As we all know, with cloud computing came the concept of not investing in the infrastructures and focusing on offering services instead of having assets.

In your esteemed opinion, does this huge momentum of technologies have the same local as international echo?

The truth is that there is increased interest in this technology locally. However, on the practical level, the technology is still in its beginnings. Even in developed countries, cloud computing in both the private and public sectors has not reached the top priority projects until the beginning of the current year 2012. On the local level, there were efforts to spread such technology through academic conferences and other entities particularly interested in such technologies. Moreover, some companies are launching initiatives to enable and commercially introduce this technology; however, they are still mere attempts that need a lot of time to mature as a whole.

what efforts is the national Information Center exerting in adopting and nationalizing cloud computing in Ksa?

The Center is considered one of the first updated government bodies in terms of this technology. It is seeking to adopt its standards in the future work environments. The Center formed a cloud computing team to study the global trends in terms of ways to offer the cloud computing various services; SaaS, Paas, Iaas and seek to implement them on the Private Cloud of the Ministry of Interior and offer services to other governmental institutions online through the Public Cloud. The Research and Development Office at the Center studied cloud computing, its various applications, the ways of adopting the same by governments in various countries of the world. In addition, the Center participated in the International Conference for Computing held recently at Taibah University with paper entitled “Cloud Computing: a Governmental Perspective”

It is known that all departments or entities have future or current challenges. In your esteemed opinion, what are the main challenges the Center is facing or will face?

The challenges are huge, that’s for sure, and the most important challenge facing us is the increasing demand on information by many governmental entities. That requires daily and prompt work on ensuring privacy to users. we thus have to exert many efforts to make sure that access to these information is regulated and it is used for intended purpose. This is why we are keen on auditing these information, interconnection links and methods. we trust that all government entities understand our focus.

any last word, your highness?

I would like to thank you and your Digital Magazine for allowing us to highlight the efforts and technical services of the National Information Center on the front pages of this specialized magazine, and I hope this communication between the magazine and the Center continues to reinforce and publicize the concept of technological government in a manner that achieves all of our ambitions.

16 Issue 3

Looking aheadDigital Policy

maChIne-To-maChIne

erkan akdemirAvea CEO

machine-to-machine (or M2M) communications is one of the most common words we are hearing in association with telecommunications in the past few years. In essence machine to machine communications is the relaying of information between devices/machines through mobile (or sometimes fixed) connectivity with limited or no human intervention. Devices on one end usually include sensors or measurement devices providing measurements to a central server where these are stored, analyzed and where necessary pre-defined actions are executed.

Based on a study and publication by one of the large technology vendors entitled “ “Towards 50 billion connection” there will be 5 billion human and 50 billion objects connected to each other in 2025. Another technology company forecasts that BU 202 there will be 20 billion connected devices with data traffic increasing by 300%. Even though there are differences in various forecasts, one thing is for sure – we are not talking about millions, but rather billions of M2M connections worldwide.

Main benefits and objective of M2M include easing day-to-day life, improve measurement and controlling of events, resulting in increased efficiency and response time in industrial as well as non-industrial applications.

M2M services can be provided across many sectors including construction, industrial automation, utilities/energy, healthcare, transportation and automotive as well as retail.

Today the most common application being in the transportation sector. Solutions in the transportation sector range from vehicle tracking (locating a vehicles speed and position) through to more sophisticated features such as integrated solutions including vehicle tracking, emergency call and on-board entertainment services. large car manufacturers have all started embedding such M2M solutions in their newer models such as BMw’s connected drive, GM’s OnStar. Some car companies such as Ford going even as far as forming alliances to research technology to help people monitor and maintain health and wellness while in the car, seeking to develop “the car that cares”. we as Avea are actively engaged in the transportation sector providing our customers vehicle tracking solutions ranging from car rental companies to the security forces.

Another growing M2M sector is health. Telehealth enabling to remotely monitor patient’s health values such as blood pressure, blood sugar or oxygen saturation. Remotely measured values being transmitted to health institutions, allowing to continuously monitor patients in real-time and take necessary precautions such as calling-up patients or dispatching ambulances in case of unexpected measurements. Telecare supporting care dependent citizens (such as elderly) at home and on the move by monitoring their location or providing alerts in case of emergency. Both Telehealth and Telecare reduce the financial burden on the health system through immediate response in critical cases, enable providing health services in remote locations and reducing required face-to-face consultation and hospital visits. As Avea we are present both in the telehealth and telecare area providing end to-end solutions to large hospital groups and healthcare providers.

“Industrial automation” is the third sector example I would like to provide. Industrial automation includes the supply chain automation across different industries, measurement of critical values such as emission or for example automation of farming and agriculture installations. One sample solution which we offer is

the monitoring of temperatures within airline catering trucks and their location, providing on-time and qualitative high catering for airlines. Another solution being the measurement of soil temperature, humidity, pH as well as glass house methane and CO2. Based on these measurements farmers are able to fully automate their day-to-day activities including irrigation, pesticide control or ventilation of glass houses.

To realize all these sectorial M2M solutions mobile operators are an indispensible partner for corporations and consumers. we as Avea not only provide the data connectivity, but provide turn-key solutions. These turnkey solutions always take into account our customer’s requirements and include the right devices, connectivity and where necessary software integration.

Taking the above into account there are several success factors which include providing tailored solutions which address customer requirements, having flexibility to manage SIMs and for customers to self-service manage their devices, providing the necessary sales and after-sales capabilities, establishing the necessary end-to-end solution ecosystem and operating in the necessary regulatory environment.

All-in-all we will see over the coming few years that M2M will be one of the fastest growth areas in both mature and maturing markets, reaching millions of connected devices across all sectors which touch our lives with mobile operators being indispensable end-to-end solution providers in this space.

Looking ahead Digital Policy

17 Issue 3

enTer The new era of ConvergenCe: The fanTasTIC four

1 http://www.tmcnet.com/channels/triple-play/articles/7760-why-triple-play-quad-play.htm2 2012 Detla Partners, The Future of Telecoms- p.2

long were the days when multiple devices were needed to perform everyday tasks such as making calls, surfing the web, accessing online content, or even watching a movie. with advancements in the field of convergence and increasing market demand for single sign-on, single interface, and unified billing point comes quad-play – broadband, voice, video, and mobile services bundled in one package. with quad-play (otherwise known as quadruple play), economies of scale can be achieved through repurposing content on multiple devices, thus taking content consumption to the next level.

Quad-play creates a cost-effective method for service providers to enter the bundled services market and capture a greater share of subscribers’ total communication and entertainment expenditures and therefore protecting market share. By enabling services to be accessed across multiple devices anytime anywhere1, operators in the Middle East have the opportunity to provide cloud-enabled services now that convergence is evolving, even if at the minimum level required for these services as a result of bandwidth levels. It also provides them with an opportunity to bundle content with direct plans resulting in attractive deals for the end consumer.

Such opportunities for combining data bundles with content services create more reason for broadcasters to collaborate with integrated telecom operators. with interactive TV permeating the content viewing experience, specifically with young and mobile audiences, the internet is increasingly cannibalizing TV prime time. This, however, comes as no surprise to anyone since IPTV provides access to multiple pay channels without being tied to a single network, giving users access

to a broader selection without the large costs previously involved. with a global trend of progression from live TV to time-shift and VOD to user-generated content, a proliferation of content will come to life making consumption virtually limitless and thus threatening linear broadcasters’ model of one-way consumption. As such, major broadcasters have extended their service portfolios to include Over-The-Top content (OTT), sidestepping the engagement and control of ISPs over content distribution. However, with bandwidth constraints on telecom operators and ISPs, capital investments are constantly needed to maintain the quality service required for the provision of quad-play.

Challenges like large capital requirements aren’t always regarded as obstacles, but rather sometimes as opportunities for new alliances and partnerships. Reddhi Mitra, Director of Corporate Development, at Intigral, advocates a “..cooperation model between telecom operators and broadcasters through which last mile access providers participate in the content value chain through advertising and pay-TV revenue share in return for quality service and additional investment in network infrastructure…”. This might just be what is needed at this stage. In addition to this being a feasible solution, Mitra adds that “an opportunity exists for telecom operators to transform as a preferred content distribution and delivery partner for broadcasters and content owners that don’t control captive delivery platforms”. There is substantial risk sharing as telecom operators provide access to their customer base and take ownership of the subscriber acquisition and retention cost.

Trend, risks, and opportunities from the global landscape

rise of non-Traditional services: The shift of the industry towards data has resulted in major declines in importance of current cash cows such as voice and messaging. And while this has greatly affected margins, there is much room for growth in new services like mobile broadband, Cloud and ICT services, M2M, social media and m-advertising2.

Implications of increasing digitization: Customers everywhere are becoming more demanding, expecting TV Everywhere services on the go, compelling

18 Issue 3

Looking aheadDigital Policy

Country rank score

Bahrain 27 4.9

Qatar 28 4.81

UAE 30 4.77

Saudi Arabia 34 4.62

Oman 40 4.35

Jordan 47 4.17

Tunisia 50 4.12

Kuwait 62 3.95

Egypt 79 3.77

Morocco 91 3.56

lebanon 95 3.49

Broadband Connections in emerging regions6

The networked readiness Index (2012)8

3 2012Booz&Co Telecommunications industry perspective 4 2010 Blominvest Telecommunications in the MENA region5 2012 World Economic Forum –INSEAD, The Global Information Technology Report- p.676 2012 Mobile broadband: Wireless Intelligence Database; Fixed broadband: Informa Telecoms & Media Database72012 World Economic Forum –INSEAD, The Global Information Technology Report- p.698 2012 World Economic Forum- INSEAD, The Global Information Technology Report9 2012 World Economic Forum- INSEAD, The Global Information Technology Report- p.74

البلد2011 Connections

(mn)2016 Connections

(mn)

Mobile broadband in emerging regions 415 2,366

Total broadband in emerging regions 676 2,826

Mobile broadband (as % of total) 16% 84%

operators to boost network capacity and access. In addition, commerce is becoming increasingly digitized, demanding a variety of new services like mobile payment platforms and cloud computing. In line with that, the market for mobile applications continues to grow rapidly3.

Increasing convergence: For operators, convergence presents a strong opportunity to boost share of the communications and entertainment spend, and enhance customer loyalty. As a corollary, subscribers will benefit from price reductions and discounts that operators will be able to offer owing to better economies of scale with such service bundling4.

mobile as primary way to access the internet: By the end of 2010, the number of broadband internet subscriptions over mobile technologies surpassed the number of broadband subscriptions over fixed technologies. This indicates that mobile is in the lead, possibly because it is the only way people in emerging regions access the internet. It also implies that the internet is shifting from a desktop experience to an ‘on-the go’ experience for developing and developed nations alike5.

Data traffic surpasses voice over mobile network: Mobile network traffic has been shifting from voice to data. Global mobile data traffic continues to grow at a staggering rate forcing operators to build and acquire a number of tools to help them meet this rapidly growing data demand. These new tools include new bands, migrating subscribers to the most efficient 3G and 4G technologies, employing technologies that reduce interference, as well as deploying smaller cells that can more dynamically supply capacity to users in specific locations7.

mobile advertising, great potential: Advertising follows eye balls. with mobile becoming the connected device with the highest penetration globally, there is a large monetization potential conditional of proper exploitation means.

while the main responsibility of meeting market demands and constantly playing catch up with shifting consumer trends lies with telecom operators, ISPs, and broadcasters, ICT regulatory frameworks and ICT policies must be changed to accommodate these new business models and facilitate the adoption of converged services. Most governments in the region recognize the importance of the sector, particularly those of the GCC.

To ensure the ongoing success of mobile broadband and its economic and societal benefits, governments and other stakeholders around the world have an important role to play in ensuring the availability of the tools and incentives needed to spur innovation, new technologies, and new products9.

Finally, aggregators and solution providers must also respond swiftly to the paradigm shift. Intigral, with its fact-based understanding of consumer segments and content genres, focuses much of its attention on staying ahead of the market. “Intigral aims at creating a platform that enables innovation across the MENA region to reach operators and ultimately end users”, according to Juan Jose De la Torre, VP of Strategy

and Business Development. De la Torre further adds that “Intigral has developed different building blocks that enable it to go to the market to seek and foster innovation” constantly ensuring that with every step Intigral takes, it contributes to the Company’s portfolio and eventually its clients’ portfolio.

Looking ahead Digital Policy

19 Issue 3

The Journey To Ipv6…how, when, and why!!!

abstractThe journey to IPv6 started two decades ago to mitigate the exhaustion of IPv4 address space (2^32 ~4 billion unique address), IETF designed the IPv6 to have four-times the number of bits available in IPv4 address (2^128 ~340x10^36), in other words each human of the 6.8 billion living on earth today will have around 2^95 unique address for his own, seems a lot for a while!! This is not the only benefit of IPv6 but reality is nothing comes for free.

In this article, I’ll try to answer the simple three questions associated with the journey to IPv6, How, when and why!!! we will start by identifying the problem and discussing the concepts and benefits of IPv6 over IPv4, then identify the business & technology impact of the transformation to IPv6 on telecom operators, and then frame a recommendation for policy makers by highlighting the international best practices in IPv6 migration strategies.

said ouissal Vice President of Strategy & Customer Engagement, Ericsson IP & Broadband

why Ipv6?

As we enter into a fully Networked Society, consisting of 50 billion connected devices (2020 estimate, Source: Ericsson), the question of why to move to IPv6 becomes moot, but the process of how to get there is a very real current issue. The Internet has come incredibly far from its humble origins and has expanded to reach nearly a billion connected devices already. Thanks to the rapid growth of mobile broadband, that number has grown extremely fast over the past 5 years. And the number will grow exponentially higher with the expected machine-to-machine wave, which is right now beginning.

This rapid growth is both a challenge given IPv4’s current situation, which will be discussed shortly: and an opportunity in new markets, with a richer service mix etc. to network operators. It comes at a time when operators are having to re-think their business models to get a better share of the content revenues out there e.g. by working with OTT players, and expanding their offerings to facilitate the growth of new industry verticals which will drive the M2M marketplace. However, given the fact that those new business models are not really in place yet, and global macro-economic conditions the modern network operator is faced with capex and opex constraints. Not really the ideal time to deploy a whole new protocol then!

The day-to-day functioning of the internet is not really currently threatened by the recent depletion of the Internet Assigned Numbers Authority’s inventory of unallocated global IP version 4 addresses – which is mainly due to translation work-arounds, and potential resale market opportunities - however, the time has come to say that IPv4 has met its limits. The transition will not however happen fast, there are potentially costly risks attached to the migration phase, and network operators need to take great care. The whole IPV4 to V6 debate has moved from being a purely technology one, to being very much about business drivers.

addresses

The current version of the Internet protocol (iPv4) is based on 32-bit addresses that allow the unique identification of a maximum of 4 billion nodes. The Internet Assigned Numbers Authority (IANA) assigned the last top-level “Class-A” free IPv4 address block (/8) to the five Regional Internet Registries (RIR) in February 2011 (IANA depletion point). Since that announcement, network operators around the world have become increasingly aware of the need to deploy IPv6. Previously, IPv6-related discussions happened primarily in the engineering and standardization communities. Since the depletion of IANA’s global pool, the discussions have since reached the top-level executives of many telecom and Internet companies.

The Asia-Pacific Network Information Center reported full IPv4 address block depletion in the same year (APNIC RIR depletion point), and, based on current users growth rate, other regions are expected to announce full depletion of IPv4 blocks within a window probably ending by the end of 2015. At that point (RIR depletion point), RIR will stop assigning full class-A blocks (/8) and start leasing blocks of 1024 addresses (/22) to local Internet Registry (lIR) and at that stage there will simply be no more blocks to sell (only re-sell).

The impact of address-space depletion could be catastrophic to the current telecom market growth model. The absence of available IPv4 addresses will prevent subscriber growth in an industry, which has been built on attracting new users by reducing price, providing differentiated services and blending features in attractive packages. In other words, not being able to commission new subscribers because of address-space depletion will become a threat to business continuity,A simple question that many telecom operators are asking today is: “Can we continue adding devices to the network for ever?” IPv6 protocol says, “yes, limit is in the order of 10^34, which is practically unreachable”. IPv6 has been designed by the Internet Engineering Task force (IETF) to use a much larger address space (2^128 addresses) than available today; and the limit looks unreachable for a while, even with 50 billion network-attached devices

20 Issue 3

Looking aheadDigital Policy

(which is around 12 times what IPv4 can provide anyway). Thanks to IPv6, the challenge will be shifted completely from “addressability” to “scalability” of the architectural model we are using to design telecom networks.other Benefits

Most network operators consider the deployment of IPv6 to be a necessary evil — a cost that they have to incur simply to continue business as usual. This stance overlooks the fact that IPv6 brings important advantages over IPv4 that can reduce cost as well as providing new revenue opportunities. Amongst the top advantages are scalability and bi-directional reachability. with the gain associated with the latter helping network operators emphasize operational efficiencies and customer experience. Meeting these requirements will become increasingly difficult for network operators that limit their networks to IPv4 plus NAT, and those operators with IPv6-capable networks will gain a clear advantage.

In addition to that: IPv6 has inherent security features to guarantee that packets coming from the same host which is indicated in its source address, authentication, data-integrity and data-confidentiality (IPSEC -optional) are included as part of the protocol -no spoofing attacks anymore. IPv6 has a much simpler header format, and a lot of IPv4 fields have been dropped or made optional. This reduces the processing cost of packet handling within routers in addition to reducing total header overhead (especially for small packets such as signaling). Dynamic assignment of IPv6 addresses is inherited in the protocol with ability to label packets to identify different flows for which the sender requests special handling (such as non-default QoS treatment or identification of real-time multimedia services).

economics

Unfortunately, nothing comes for free, the graph in Figure 1 shows the potential annual investments associated with IPv6 transition per region until the end of 2015 (RIR depletion point), with the transition investment at 2014 expected to exceed 60 billion US$ world-wide, and aggregated

investment needed to pass the turn-point exceeding 0.5 trillion dollars distributed across the time between 2000 till 2015. Some operators have low utilization of address-blocks, so they acquire over-years from lIR - but unfortunately migration to IPv6 is not an-option anymore, beside business-related pressures to move to IPv6, and governmental enforcements are taking place world-wide. Such governmental enforcements push both vendors and operators to support IPv6 moving forward. The first governmental movement toward enforcing IPv6 in telecom networks was in Japan when the Japanese government integrated a policy on deploying IPv6 as part of the e-Japan strategy outlined by Japanese prime minister in 2000. The US Department of Defense (DOD) created a similar act by obligating all vendors providing IP services or hardware for any project starting after October 2003 to support IPv6. US federal government issued a memorandum calling all federal agencies to plan for IPv6 transition by supporting IPv6 on backbone networks by June 2008. A similar act has been also been made by the European Union during 2008. China showcased its Ipv6 infrastructure at the 2008 summer Olympic games in Beijing with network operations conducted using the new protocol. The event was reported at the time to be the largest IPv6 showcase since the development of the protocol.

Deployment

Divide-and-Conquer is the best tactic to follow in the IPv6 transition journey. while investigating the transition to iPv6, the impact of deploying it on the various different parts of an operator’s network have to be studied. IPv6 can be deployed incrementally on particular aspects of the network before others. e.g. O&M and user traffic can be transitioned to iPv6 at different times. The transition plan for one organization may differ significantly from that of another, as it depends heavily on the organization’s goals.

Pure layer-2 access and transport networks are not affected by the IPv6 transition for fixed or cellular radio access (RAN) with the exception of some nodes that handle a specific subset of layer-3 packets (e.g. DSlAMS or network security functions which require IPv6 ACl

in layer-2 devices). Away from the access and transport network: the Mobile Core, IMS and O&M domains are going to be impacted substantially by transition to IPv6, because all layer-3 nodes need to be updated to support IPv6, not to mention that signaling in IMS is going run over IPv6. For O&M, configuration, fault management and charging systems will need to be updated.The transition to IPv6 is expected to be a gradual and phased process that will take long time. Several techniques can aid in the transition and can be classified into three major categories: Dual-Stack, Tunneling and Translation.

Dual stack: the transition mechanism that requires each user device to have a network stack that supports iPv4 and iPv6 and to have assigned addresses for both protocols.

Tunneling: Tunneling mechanisms work by encapsulating one version of imp (the payload version) into another (the transport version) to traverse a network that does not “understand” the payload IP version. Tunneling mechanisms can provide both IPv6 access over IPv4 networks (ex. 6to4, Teredo, ISATAP and 6RD) and IPv4 access over IPv6 networks (ex. DS-lite).

The tunneling of IPv6 over IPv4 networks (i.e. 6RD) is not recommended as it will unnecessarily create an IPv4-dependency that will add extra complexity to the final transition to native IPv6. On the other hand, forcing the access network to migrate to native IPv6 and tunneling IPv4 as an overlay exception (DS-lite) will have an immediate impact on users especially for mobile applications.

Dual-stack has for a long time been and remains the recommended model for deployment, however its need for side-by-side use of IPV4 and IPV6 (and because of the fact that IP is at heart and end-to-end protocol) has meant that local adoption of IPV6 has been considered too expensive by many. The timing of each individual network operator transition is going to be decided on economics rather than technology (including the resale price and price inflation of IPV4 addresses). However, the right technology choices that help to simplify local

Looking ahead Digital Policy

21 Issue 3

 

figure 1 projected global Ipv6 Transition assoicated costs till 2015

mill

ions

$ Asia

Latin AmME/Africa

EuropeCanadaU.S.

Global IPv6 Transition Costs

Sources: US Dept of Commerce, NISTm IPv6 Economic Impact Assessment, TIA’s 2010 ICT Market Review and Forecast

adoption (for example the “divide-and-conquer” techniques) will help to make the economics work, and make IPv6 much more widespread. The benefits of divide-and-conquer are that it allows operators and also application developers to move to IPV6 without costly, widespread upgrades and that it also enables them to gradually remove IPv4 support but still maintain reachability of IPV4-only services.

Translation: Translation mechanisms work by deploying an interworking function at the edge of the network between the iPv4 and iPv6 networks. Translation mechanisms can be implemented in the application layer (proxies) or in the network layer. Translation mechanisms work by intercepting packets sent with one version of IP and converting the packets into the other version of IP. NAT64 is a packet- translation mechanism currently under development that will probably be widely used for iPv6-only network deployments. NAT64 works in conjunction with another closely associated mechanism called DNS64.

recommendations

The Ericsson strategy for IPv6 migration is to minimize the impact on applications and preserve an end-to-end native IPv4 stack during the transition, Keep the network

architecture as simple as possible. Maintaining v4 and v6 co-existence on all devices (Dual Stack) is key. As is avoiding the introduction of new nodes and complex tunneling mechanisms, except when necessary. we expect the transition to extend over a very long period of time, especially for services. NAT44 is an important tactic to rollout fractional-IP services to end-users when depletion hits, NAT64/DNS64 is a medium/long-term tactic to allow legacy IPv4 services to work over a native v6 network.

At Ericsson, we have played a major role making the vaunted divide-and-conquer techniques possible. The all-IP architecture of mobile networks decouples end-user traffic from network control functions, and thus allows operators to roll out IPv6 to end users without major network upgrades.

Conclusion

IPv6 is certainly coming, but migration must be kept simple and be done at the correct point in time depending upon economics. There is no clear winner which best fits all possibilities out of the three migration approaches available today, however Dual Stack and the divide

and-conquer methodology certainly best addressed issues of future-proof scalability, migration and risk. At some stage in the future IPv6 will achieve the growth necessary to ensure that it can live on its own without backwards compatibility to IPV4, but the likelihood is that it will take some time, be based on sound economic decisions and be tied closely to operator changes in business model and market development of new applications. The solution is to be entirely pragmatic, accept the future and respond fast enough not to miss out, but to understand that rushing would be disastrous.

22 Issue 3

Looking aheadDigital Policy

gCC CounTrIes polICIes In The TransformaTIon

Towards digital and Knowledge economy

abdulla Bin Juma al-shibli, Assistant Secretary-General for Economic Affairs Secretariat General of the Cooperation Council

Acknowledging the role of ICT in developing and supporting the economies of the GCC countries in order to reach long-term goals, the economic agreements between the GCC countries have given more attention to this aspect with Articles 19, 24 and 25 stipulating the integration among those countries in the field of ICT, e-transactions and the necessary measures to ensure the integration of ICT policies aiming to improve the level of its related services, economic efficiency, set up an enabling environment and encourage the investment in ICT industry and its applications. Governments provided an attractive environment and an incentive for the development of this industry with laws and regulations encouraging investment and through the provision of the adequate infrastructure. On the other hand, the private sector is basically spreading ICT,

developing and bringing knowledge to the region, adopting a comprehensive view in development the scientific and technological systems by developing a mechanism for ICT regulators and operators, reinforcing the infrastructures and raising the level of effectiveness by enabling teaching and training and setting up the ways to reinforce and develop natoinal capabilities in scientific research and technological development in this field, through financial support, increasing the level of expenditure and utilizing the big projects contracts in supporting technology adaptation and then generation in the GCC countries.

Handling the human factor was a priority for the GCC countries through encouraging, supporting and motivating innovation and initiatives by individuals,

groups and the private sector, and through training, supporting, and honoring intellectual and technical innovation, with a particular consideration for the intellectual property rights in ICT.

Despite the above mentioned positive points, our region still lives an economic gap separating it from the developed economies due to the delay in adopting modern ICT means. By developing ICT, we can bridge a big part of the gap, which in turn will cause the development and growth of the other economic sectors.

The improvement of ICT in our region compared with the developed world has facilitated the transfer of information, pictures, news and opinions, creating thus social, political and economic transparency making the members of the

Looking ahead Digital Policy

23 Issue 3

Gulf society more aware to what is going on around them, to their rights and more eager to improving the reality surrounding them by taking decisions, reinforcing the values of responsibility, liability and accountability on all levels, improving the standards of living by demanding social and economic services similar to the ones in the developed countries. Thus, the official media can no longer monopolize communication means and shape the public opinion.

Through the work of ICT committees and the e-government in the scope of the Secretariat, the GCC countries have thus rushed the process of reaching the Gulf community in a more consistent manner using modern communication means and applications and serious work on the following axis:

a. set up and implement high-level policies to develop ICT society and nationalize its applications in the gCC countries through the following:1. Opening the local markets for in

GCC countries the entrance of local companies .

2. Adopting Arabic domain names and Arabic website address as a policy across the GCC countries.

3. Reducing the telecommunications prices among the GCC countries.

4. Adopting an telecommunications emergency plan.

5. Expanding the local telecommunications networks in the GCC countries so that they can accommodate the terminated and transit traffic.

6. Solving frequency interference problems among the GCC countries.

7. Using fiber optic cables for interconnection links between the GCC countries so as to make them integrated and highly efficient.

B. growing the ICT community through governmental and institutional policies encouraging and framing the intensive use of ICT means in various aspects of life and encouraging local research and development in this field 1. Cooperation between the R&D centers.2. Active participation in the development

of unified standards (specifications, quality and efficiency).

3. Reinforcement and encouragement of local ICT capabilities.

4. Establishment and development of specialized training centers.

C. Corporatize the telecommunications institutions in the gCC countries to work on commercial basis and offering them the opportunities to operate and invest in the gCC without discrimination or obstacles and opening the door to national and foreign companies to compete after setting up the framework and laws regulating the same by:

1. Offering investment opportunities in the websites of telecommunication regulators.

2. Publishing documented statistical data regarding telecommunications sector that assist investors from the private sector to study the investment opportunities.

3. Engaging the private sector in international and regional conferences and seminars to bridge the gaps of communication with the market requirements in the GCC countries.

4. Eliminating the investment obstacles among the GCC countries.

5. Encouraging the merge between ICT companies to cooperate with a view to develop various projects in the GCC countries, taking into consideration the requirements of the competition and antitrust.

6. Encouraging the investments in small and medium projects aiming at developing the ICT services.

7. Facilitating the procedures of setting up small companies.

D. The implementation of e-transactions such as e-government, e-commerce and others in their facilities and authorities with a view to raise productivity, improve the performance, ease the burden of routine work and offer government and commercial services with less cost and effort by:1. Increasing the awareness of the GCC

citizen of the advantages of ICT and its applications which are positively changing some aspects of life such as 1) e-commerce 2) e-Health 3) e-Education and others, and legislating laws that make those applications possible and affordable for the parties dealing with it in a manner that preserves the rights of all.

2 . Building a high-speed telecommunication network among the GCC countries to facilitate the connection among the companies and institutions.

Regulatory Matters Digital Policy

25 Issue 3

TeleCom operaTors anD The oTT ChallengeNEw BUSINESS MODElS AND THE ROlE OF REGUlATORS

Over-the-top (OTT) players have started eating into telecom operators’ revenues through the services and content they provider over the omnipresent Internet. How are operators adapting to this new form of competition? What is the role of regulatory bodies in orchestrating the changing dynamics?

41%

13%

6%

40%

users are moder-ately substituting voice & messag-ing services

users are heavily substituting voice & messaging services

no material impact today, but we expect users to substitute in the future

no material impact

207.3250.3

295.1337.1

379.7422.7

466509.7

648.8

656.8

673.4

676.6

675.5670.6

662.8652.1

0

200

400

600

800

1000

1200

2009 2010 2011 2012 2013 2014 2015 2016

البيانات الصوت

global mobile revenues, voice vs. data, 2009-2016

reve

nues

(us$

bil.

)

mark newman, Informa Chief research officer reda haidar, Informa senior Consultant

evaluating and sizing the threat from oTT Ip communicationsThe magnitude of the OTT phenomenon is potentially massive and the matter is urgent. Today’s OTT players are only having a small impact on operators’ voice and messaging revenues because the user base is still comparatively small, but the size will quickly grow.

It’s big and it’s imminentThere are two types of OTT services – content services, which are offered over a (mobile) broadband connection, and communication services. while the former only represent competition to the

operators to the extent that they would like to provide these services too, the latter are in direct competition with the operators’ core business.OTT-communication services have existed for a long time and have usually focused on providing low-cost calls – usually international calls, less often, national.In the fixed-line world, OTT communication has existed for a decade, soon after the mass proliferation of the Internet and it did arguably contribute both to eroding voice revenues and helping to push further Internet adoption. The mobile world today is facing the same issues: telephone lines are turning into Internet connections,

phones are turning into computers.

Question to operators: which option best reflects your opinion on the impact of smartphone adoption on usage of operator voice & messaging services?

This survey question is trying to draw a correlation between take-up of smartphones and the reduction of usage of operator services. number of respondents to the question = 225.

Data Voice

26 Issue 3

Regulatory MattersDigital Policy

CommunICaTIons wanTs To Be free....90s – ...from places00s – ...from devices 10s – ...from price??s – ...from operators?

73.267.1

15.1

14.8

11.718.1

0

20

40

60

80

100

۳الفصل ۳الفصل

الصوت الرسائل البيانات

Source: Informa Telecoms & Mediawestern europe: Voice, messaging and data revenues as a percentage of total revenues, 3Q10 vs. 3Q11

Shar

e of

tota

l rev

enue

s (%

)

Source: Informa Telecoms & Mediaeastern europe: Voice, messaging and data revenues as a percentage of total revenues, 3Q10 vs. 3Q11

79.7 76.4

7.57.8

12.8 15.8

0

20

40

60

80

100

۳الفصل ۳الفصل

الصوت الرسائل البيانات

Shar

e of

tota

l rev

enue

s (%

)

Voice VoiceMessaging

3Q10 3Q103Q11 3Q11

MessagingData Data

potential revenue lossThe theoretical addressable size of OTT communications services is the operators’ entire messaging and voice traffic; in reality the size is much smaller, but there is clear evidence that voice and messaging revenues are being cannibalized with free

or very low-cost OTT services.Informa estimates that a 10 percentage point increase in smartphone penetration could cost European operators between 0.5% and 0.6% in service revenues from voice and messaging, which translates into

which revenues are being lost?Mobile operators are redistributing revenue allocation in favor of data connectivity to mitigate the effect of OTT on messaging and voice revenues. Nonetheless, Informa believes that real revenue losses are imminent for some revenue segments, for example, consumer outgoing revenues and revenues from

US$1.19 billion for western Europe and US$306 million for Eastern Europe.

incoming communication.Among outgoing revenues, some are more likely to be lost due to specific consumer behaviour. when users approach the limit of their bundled minutes or SMS messages, instead of carrying on using the operator’s services and being billed out of

bundle, they may use OTT apps until the new bundle is available.

Regulatory Matters Digital Policy

27 Issue 3

11%

89%

17%

83%

31%

11% 2% 2%

13%

40%

30%

21%

13%

5%

27%4%

enterprise

other

Consumer contract in-bundle

Consumer contract out-of-bundle

Consumer contract incoming

Consumer prepaid

prepaid

Business

Consumer in contract bundle

BilledBilled

flat/bucketflat/bucket

otherConsumer incoming

Consumer contract out of bundle

18% of Europe mobile revenues are out-of-bundle/incoming - potential revenues substitution by IP-based comms; managing through transition to integrated tariffs

15% potential revenue addressable by Ip services

Source: Vodafonevodafone: Europe mobile service revenue mix 1Q 11/12

Informa argues that an additional 27% of Vodafone’s European revenues – those generated by consumer prepaid – will also be at risk of cannibalization as it seems likely that prepaid consumers will be more inclined to use IP communication than postpaid customers. Prepaid consumers tend to be more price-sensitive. As such, they are more willing to churn to cheaper means of communication as and when they become available.

According Deutsche Telekom, 15% of its service revenues are addressable (i.e., at risk of erosion) by IP servicesservice revenue mix reflects focus on data and bundles

share of billed contract smsshare of billed customer contract minutes

According to Vodafone, 18% of its European mobile revenues are out-of-bundle or from incoming revenues and these are subject to potential revenue substitution by IP-based communication services.

Source: Deutsche TelekomDeutsche Telekom: Growing SMS and traffic volume through bundling safeguards revenue

28 Issue 3

Regulatory MattersDigital Policy

analogies with fixed line won’t workIn many respects, mobile operators are more vulnerable to competition from OTT players than fixed-line players. Besides generating revenues from broadband connection, fixed-line operators can still count on generating revenues from line rental. Also, fixed-line operators gain a high proportion of revenues from enterprise customers whose revenues are more resilient to OTT-led erosion.when mobile operators experience losses in voice and messaging revenues, it is more significant. Mobile operators cannot rely on a fixed element of revenues such as the line rental. Additionally, the differential price between OTT calls and mobile operators’ calls is much higher as the mobility premium still exists.

Dealing with threats and turning them to opportunitiesInforma has identified five main strategies that operators are currently using to deal with the threat from OTT-based IP communication services, sometimes turning them into opportunities. These strategies are not mutually exclusive.

The fIve sTraTegIesstrategy 1: Do nothing – deny and embrace oTTSome operators have a historically opted

for a hands-off approach to any service that can increase the usage of data, including OTT services communications.These operators actually believe that the non-occasional nature of communication services such as IP voice and messaging works as a strong incentive for customers to adopt a recurring data plan.

For example, BlackBerry Messenger has been used to induce a permanent change in users’ behavior by incentivizing them to use paid-for data plans in a non-occasional way.

strategy 2: fight oTT servicesThis is done by combining economic disincentives with technical solutions that prevent the use of some IP services. Many operators are introducing pricing tiers that are combined with service tiers and application controls like restrictions and “throttling”.

Specifically, these operators are blocking or disrupting VoIP services for low-end or prepaid customers while allowing the high spenders to use VoIP services.

strategy 3: neutralize the effect of oTTMany customers use IP voice and messaging services because they want to save money. In response, operators

are introducing very large voice and messaging bundles so that customers do not need to use OTT services in order to save money.

These larger bundles are tied with “integrated price plans” where very large bundles of data, texting and voice are offered to protect the overall customer spend from the usage of OTT – this strategy may even increase customer spend.

strategy 4: partner with oTT players – opportunityThere are cases where operators decide to partner with OTT players with the aim of benefitting from them. while operators are afraid that their core services could be marginalized by OTT players, they also know that these services can be extremely popular amongst customers.

Operators that choose to partner with OTT players tend to benefit from both OTT services and also from the OTT brand.

strategy 5: emulate oTT services – opportunitySome operators are offering services that mirror the ones offered by traditional OTT players. There have been many examples of operators deploying IM clients for example. yet, these attempts never fared and have often been abandoned following poor results.

However, there is now a second wave of attempts to emulate OTT services, not only try by replicating OTT services but also by trying and adopting OTT business models.

Regulatory Matters Digital Policy

29 Issue 3

hi voice & sms hi web hi messaging

• Voice and SMS within bundle; no data• Data tariff € 1/MB• Speed: Max 2.0/0.1 Mbps

• Voice, SMS and data within a bundle

• Speed: max 2.0/0.1 Mbps

• Voice, unlimited SMS and high-quantity and high-speed

data

• Speed: max 7.2/2.0 Mbps

Min. of SMS (x2)Contract (€)

7517.50

11020.00

16025.00

21030.00

27535.00

37545.00

50060.00

MBMin. of SMS (x2)Contract (€)

1009027.50

20012030.00

25017535.00

35025040.00

50032545.00

60040052.50

70055067.50

MBSMSMin.Contract (€)

---

40012037.50

50017542.50

70025047.50

100032552.50

120040060.00

160055075.00

2000900107.50

20001500157.50

UNlIMITED

• Outside bundle tariff per min: €30ct

• Outside bundle SMS: €15ct• Outside bundle Data: €10ct/MB

Extra serviceVoice bundle, SMS bundles, data bundles and extra services

• The mobile brand for youth • Maximum message: unlimited messages - also SMS• Hi society community and services

BlackBerry €5Evening bundle: €9.95

Unlimited SMS: (x1,000) €9.95 +250MB €5

Source: KPN

Kpn netherlands: re-pricing data and introducing integrated tariff plans

After being badly hit by OTT replacement and announcing a profit warning in May 2011, the operator increased its pricing for

mobile data, introduced data as integrated element in the tariff plan and introduced speed-based differentiation where higher

speeds are combined with higher data allowances and priced at a higher fee.

30 Issue 3

Regulatory MattersDigital Policy

Source: Informa Telecoms & Media

“Internet calling is not available on pay as you go. If you want to use internet calling you will need to get a pay monthly price plan which includes internet calling”.

“Generally price plans with a base cost over £40 a month include internet calling in the package”

Source: Vodafone

Is it future-proof?

safetylongevityConsumer friendliness

effectiveness

regulatory environment

Competitive environment

Do nothing

Fight

Neutralize

Partner

Emulate

high medium low

vodafone uK: Blocking voIp at the low endVodafone’s strategy is the one of blocking VoIP access for low-end users while allowing access to high spenders. In the UK, for instance, all users of tariff plans below the £40 mark are not allowed to use VoIP.

Those users that have a contract commitment below £40 and intend to use VoIP need to subscribe to an add-on VoIP package at the cost of £15 per month. This pricing approach works effectively as a deterrent to VoIP.Besides introducing an economic impediment to VoIP, Vodafone aims to neutralize potential revenue erosion from VoIP by introducing so-called “integrated tariff plans” where data is an integral part of the overall service package.

KDDI: partnerships with skype – opportunityAccording to KDDI, it needed to change the perception of its brand inferiority as quickly as possible by driving home the message that KDDI has changed by offering new services.

Starting with Skype au, launched as a “forbidden app”, KDDI swiftly provided new services by collaborating with companies that had access to competitive content. Skype users “use 14% more conventional voice minutes, 10% more SMS than average and show lower churn rates.”

An alternative solution for mobile operators is to monetize OTT services by providing billing systems and facilitating the OTT players to access their customer bases by retailing or bundling services for them. However, many of the OTT/operator partnerships in communication will not be based on carrier billing but will concentrate on their mutual benefits from a commercial perspective.

mapping alternative strategieswhen analyzing different strategic options, the alternative actions have been mapped against six critical criteria which had led to the conclusion that three out of the five strategies are not future-proof.

Regulatory Matters Digital Policy

31 Issue 3

Assessing if any of the strategies – either carried out in isolation or in combination – are potentially customer-friendly and which ones are future-proof is the most important part of this analysis. without a doubt, any action that prevents either all of some of the customers from using OTT services is fundamentally not a long-term strategy.Neutralizing the effect of OTT services by increasing service-bundle sizes and introducing price tiers is an effective strategy, especially when carried out in combination with network polices, but in the long run, this strategy does not protect operators from overall price pressure.Informa believes that operators will need to be able to offer services that give the same rich user experience as OTT communications. The RCS step taken in the last GSMA world Congress in March 2012 might be a good start.

In parallel, some operators will offer their own apps that mimic the OTT solutions. For example, Telefonica has launched an application in mid May 2012 dubbed TU Me. The app provides free voice and instant messaging, multimedia sharing in addition to some location information.

Such efforts do not stop the voice/SMS revenue decline but rather help operators keep price-sensitive subscribers on their networks. Consequently, those subscribers

can still generate some revenue (ads, paid content) in contrast of completely turning away from the operator’s services.

Two-sided business models will not work for oTT communicationsMany mobile operators have been thinking about attempting to charge the OTT players for using the network in order that the OTT players can offer a better user experience to the operators’ customers. This is a two-sided business model where an operator charges both the OTT players as well as their own customers.Operators are now actively engaged in discussing potential areas of collaboration with OTT operators. These mainly involve offering OTT players benefits in terms of how their traffic is handled on their network. For example, an operator may be able to offer an OTT service provider a local caching capability or guaranteed QoS – maybe for specific services for which the OTT player can charge a premium to the end user. Operators can also offer OTT players branding, marketing and distribution capabilities, particularly in those markets where the OTT players do not have a strong presence.

However, Informa does not believe that this is will fundamentally affect the dynamics between operators and OTT players. The economics of mobile application and the economics of developers will severely limited their ability to pay for network access simply because the amount of money generated by their services will not allow them to have enough profit to distribute a portion of it to mobile operators.

Carrier billing and retailing capabilities will help operatorsMobile operators and OTT players are warming to the idea that they can monetize OTT services by using carrier billing. In fact, carrier billing, combined with an operator’s distribution capabilities and customer reach can be a compelling way for OTT players to introduce a

“freemium” business model and charge for some of the services that are traditionally freeMobile operators in turn will be able to monetize some OTT services by billing for them and gaining a share of the revenues in recognition of the fact that they provide a billing mechanism and a distribution channel.

global regulatory framework changesOTT players and their applications have indeed triggered a lot of regulatory discussions within telecom regulators internationally. These discussions do not specifically address the issue of the relationship between operators and OTT players. Nevertheless, the discussions have a direct effect on the reach and effectiveness of OTT applications – i.e. Net Neutrality.

Definition of net neutralityNet Neutrality means that the Internet should remain neutral/open to all content that flows on it regardless of the source or the destination and without any throttling, blocking or tiering. Internet (OTT) players and telecom operators have two opposing views on Net Neutrality.

Developed markets have had their share of discussions for the last 3-4 years around the topic which lead to some decisions. Discussions in the USA and the EU have led to the enforcement of Net Neutrality on fixed operators and ISP only. There have been no decisions yet within the EU specifically with regards net neutrality and mobile operators.

In a first among EU nations, the Netherlands became the first to pass a Net Neutrality law for mobile operators in early May 2012. The law does not allow operators, like KPN, to block or throttle access to certain services, like Skype whatsApp and Viber. However, it does allow slowing down connections due to congestion or security reasons.Moreover, the new Dutch Net Neutrality

32 Issue 3

Regulatory MattersDigital Policy

law views Deep Packet Inspection (DPI) as wiretapping and as such outlaws its use.

opposing viewsUnsurprisingly, Internet (OTT) players support the concept of net neutrality. Their business models are built on this principle and on the traditional flat-rate, “all-you-can-eat” telco pricing model.From the perspective of Internet/OTT players, anything that stops them from serving the maximum number of customers limits their potential to cater for ad-clicks, which is the core of most of their business models. Moreover, they are simply not in the position to pay each and every telco around the world to deliver content over their networks as they are simply not profitable enough to pay for such taxes.

And fundamentally, why would OTT players share their revenues with operators who have played no role in the success of their businesses.would it not be like asking a car manufacturer to give its electricity supplier a share of its profits from selling cars? what is the difference between supplying connectivity and electricity?Telecom operators, especially mobile operators, on the other hand have become concerned about the growth in Internet traffic, particularly as a result of the growing popularity of video, and the need to invest heavily in new network technologies to carry this traffic. They believe that someone else needs to help pay for this investment – either end users and /or the companies that deliver services over their networks.

making a distinction between “communications” and other OTT serviceslooking at these arguments there may be a case for making a distinction - in regulatory terms – between different types of OTT services. 1. “Value added” services. This category

includes video, music, social networking and games. These services have not

traditionally been part of an operator’s business although operators have had ambitions to expand into these areas.

2. IP voice and messaging services. These are services such as Skype and Viber (voice) and what’s App (messaging). They are communications services rather than value-added services.

The rationale for taking such an approach would be that the first category of services does not represent operators’ core business and they can monetize these services through data access. Many operators are uncomfortable with their role as providers of data connectivity because of their data pricing approaches. They have chosen to offer “all you can eat” access, or high capacity bundles (10 GB and above). If they change their approach towards pricing – initially by offering price tiers based on data usage but eventually introducing a whole range of new pricing approaches – the problem of carrying high bandwidth applications such as video will cease to be such a major issue.

Moving on to the second category, operators are able to present a sounder argument. Voice and messaging have traditionally been the core services that operators provide on top of the networks they invest huge sums of money to roll-out, operate and maintain. If OTT players want to take this away from operators without anything in return, the operators will lose their core source of income and become incapable of operating their own networks. They would also lose their appetite to roll-out more networks in the future. As such, it could be argued, regulators cannot sit and allow this to happen.

what about convergence?In practice, however, such a regulatory approach would both be unworkable and undesirable.It would simply not be possible to put in place regulation that either prevents OTT

players from offering voice or messaging services or one that enshrines the concept of allowing operators to somehow charge them for delivering such services over their networks. The constant evolution of the Internet means that services do not fall into the category of being communications services on the one hand and value-added services on the other.For example, a service such as Facebook allows for the provision and delivery of a whole range of different services. Social networking itself involves communications between people but contained within Facebook are different “value-added” services provided in a social context.Furthermore, regulators should be cautious of introducing any approaches that hinder the convergence of telecoms and media. These convergence forces are shaping our future economies and societies.

net neutrality in europewithin Europe there is now a healthy debate on a national level. There, and elsewhere in the world, regulators are struggling to determine the best model for OTT players’ interaction with the telecoms ecosystem.Questions that regulators in Europe are trying to address to arrive at a fair and constructive Net Neutrality model: • To what extent do telecom operators

have a right to take a share in businesses or to tax them for using their networks?

• What should we do when OTT players start offering core operator service (voice and messaging)?

• Should operators be given the freedom in terms of the way they segment data access and price it? Based on: quality of services, location (dynamic pricing), type of application or group of applications as an extension of tiered pricing, etc...?

• Is Google being neutral when it prioritizes some results in its search function in return for it being paid extra money? why that should be

Regulatory Matters Digital Policy

33 Issue 3

allowed while prioritizing type of data (voice, video, P2P....) to get a return on investment on huge networks is banned?

Current oTT situation is Ksa & Informa recommendationsThe dynamics in the Saudi telecom market are somewhat a blend of characteristics of developing and developed markets. In Saudi, a subscriber can find state of the art technology, VoIP is not blocked and “all you can eat” packages still exist.

Furthermore, operators in Saudi Arabia are taking a leading global role when it comes to developing strategies for partnering with OTT players.Take the STC “Action I” mobile broadband plan for example.STC has included free content browsing in this offer. All Google (search engine only), Kooora.com (sports news website) and Twitter usages do not count towards the 5GB cap of the bundle.

This adds to the mixed dynamics in the Saudi market which in turn adds to the complexity of any model the regulator might attempt to work on for OTT content and applications.

Unlike neighbouring UAE, KSA has not blocked VoIP yet. This means that operators have not, until now, felt the bite of cannibalized revenues by OTT apps, or else, they would have blocked VoIP access as well. On the contrary, Saudi operators are experiencing double digit revenue growths quarter and quarter as the local market still expands. On the other hand, the opportunity loss in IDD, especially to the Indian subcontinent, should not be undermined.

Questions for the saudi regulator to address with regards to oTT in the Kingdom • When is the time to consider whether

policies need to be put into place either to protect or to regulate OTT players and their activities?

o In Europe and the west it is clear that now is the time to consider appropriate regulation because operators have already started to see a decline in SMS revenues, and as such, are considering blocking or charging a premium for access to certain OTT apps. This is not clear yet in the Saudi market.

• Once it interferes, should the regulator

try to make distinctions between certain types of applications – communications services on the one hand and value-added services on the other?

• The lack of Arabic & localized content is an important issue that the Kingdom needs to consider.

o what is the best regulatory approach to encourage the growth of local content?

o what should the role of the operators be in this?

o Should they merely be enablers, as is the case in western markets or do they have the opportunity to play a role higher up the value chain?

final commentIt is still early for regulatory intervention in Saudi with regards to OTT due to the stage of development of the telecom sector and a set of dynamics particular to this market. Thus, it is worth kicking off the discussion about OTT by addressing the template questions above to keep an eye on how the market develops and be prepared for suggestions when the time to interfere comes.

34 Issue 3

Regulatory MattersDigital Policy

mobile virtual network operators (mvno)The mobile telecommunication industry is characterized by the lack of licenses due to the limited availability of mobile spectrum. However, this industry is growing rapidly and is searching for new business models for expansion.

rayed alKahtani, STC, Regulatory Strategic Planning Director

The mobile telecommunication industry is characterized by the lack of licenses due to the limited availability of mobile spectrum. However, this industry is growing rapidly and is searching for new business models for expansion.

Telecom regulatory authorities want to enhance competition in the mobile industry for the benefit of the end users and ensure that all customer segments are provided with access to mobile services at affordable rates. As there is limited mobile spectrum availability and several players aim to capture the available business opportunity by becoming mobile operators, only a few of them are able to get a license. Because of mobile network building vast cost and the need to serve all consumer segments appropriately, Mobile Virtual Network Operators (MVNO) have been introduced. This article intends to describe the key concepts of MVNO.

what is mvno?Telecom regulatory authorities define MVNOs based on how they will use the facilities of the Mobile Network Operator (MNO). Currently, there is no specific and agreed definition for MVNO. In general, MVNOs can be defined as companies that do not own licensed spectrum and buy network capacity from a mobile network operator in order to offer their own

branded mobile subscriptions and value added services.

mvnos Business modelsThere are many different business models for MVNO, some of which have demonstrated greater success than others. MVNO can have its own control and ownership over its business depending on its relationship with its ‘host MNO’. The choice of the appropriate business models is a key factor for success.

Because MVNOs do not have spectrum licenses, they are required to have access network agreements with host MNOs. Usually, they can have one or more agreements with MNOs. MVNOs can supply all of its other operational components. The less elements of the MNO’s facilities the MVNO use, the greater the opportunity to provide different services and add value.

The MVNO operational model depends on a multiple of factors such as the total investment MVNOs undertake and its control of network elements from other telecommunications businesses that could also be used in the provision of mobile services. Therefore, MVNOs operational models can be classified as follows: • full mvnos: They operate a core

network and have control over costs,

traffic, and subscriber services. However, this model has relatively large amounts of investment and hence it is the most risky model.

• enhanced mvnos: They are different from full MVNOs as they do not operate all the network elements. They resell the MNOs’ services with value added services.

• Basic mvnos: They offer customer care and provide marketing and sales activities. However, they do not own network elements.

• pure resellers: Simply they resale the MNO services for a commission.

Figure 1 describe these business models.

On the other hand, MVNO business models can also grouped into four different categories. These categories are as follow: • Facilities based group: Depending on

the network facilities used, MVNOs can be ranged from full MVNO (partial facilities-based) models to pure resellers (no network facilities) models.

• Target market group: MVNOs in this group will target specific market segments. For example, discount MVNOs that provide cut-prices call rates to the market segment, lifestyle MVNOs that focus on serving niche-market segments and Ethnic MVNOs that target ethnic communities and

Regulatory Matters Digital Policy

35 Issue 3

mvno Business models

RetailMktng &

SalesCare & Billing

Apps & Services

Core Network

AccessNetwork

Mobile Network Operator (MNO)

Full MVNO

Enhanced MVNO

Basic MVNO

Pure Reseller

figure 1: mvno Business models

mvno moDel DesCrIpTIon examples

Discount Simple and cheap mobile service tageting price sensitive customers

Ethnic Targets international communities providing cheap calls to home countries

Business Targets corporate customers with tailored voice and data solutions

youth Value added music and video content targeting young people

figure 2: examples of mvno Business models

1 MVNOs and MVNEs: Analyzing the Viability of Virtual Mobile Players, Ozgur and Zibi, Pyramid Research, 2006

provide them with inexpensive calls to their home country. Also, there are other example as shown in Figure 2. • Plan based group: In this group MVNOs

can be either a prepaid MVNO or a postpaid MVNO.

Also, there is an enabler for MVNO business models that is Mobile Virtual Network Enabler (MVNE). An MVNE is a company that provides services to mobile virtual network operators (MVNOs), such as billing, network element provisioning, administration, operations, support of business support systems and operations support systems, and provision of back end network elements, to enable provision of mobile network services like mobile phone connectivity. A MVNE does not have a relationship with end-user customers. Instead, an MVNE provides infrastructure and services to enable Mobile Virtual Network Operators (MVNOs) to offer services and have a relationship with end-user customers1.

where is the mvno today An explosion of the MVNO activity is taking place in the mobile marketplace. Many players from multiple industries are exploiting the MVNO model, to get revenues from the mobile market. while many MVNOs have entered the mobile market on a “pure voice play”, their offerings are not very different than traditional mobile operators. However, as the voice ARPU declines, MVNOs are under great stress to need to differentiate their services.

An MVNO usually offers not only voice services but also value added services or sometimes referred to as mobile value added services, which are a combination of voice, data, graphics and video information. Examples include mobile music, mobile TV, games, ring tones, multimedia messaging, mobile commerce and location-based services. while the initial business model of

creating new revenue streams without actually having to be an expert in the mobile industry still stands, today’s MVNOs are far from achieving a license to print money. Two essential factors have emerged: • MVNOs must differentiate themselves

with new value added services orientated around customer choice and a personalized customer experience

• MVNOs present operators with a way to realize revenue from spare capacity and target niche markets that are peripheral to their core business

However, supporting MVNOs brings with it burdens and risks for the operators. Qualifying the business cases of potential MVNOs to a network provider can therefore be time-consuming and distracting.

mvno advantages & Benefits There are advantages and benefits for

having MVNO in mobile market. These advantages and benefits are as follow: • MVNOs offer the possibility that traffic

on their hosted MNOs network will be increased as they offer capacity on a wholesale basis, thereby generating a new revenue stream for host MNOs

• MVNOs can recoup MNOs high investments by offering a way of addressing areas of the market which would not be reached by MNOs as well as providing innovative services, branding and marketing expertise.

• MVNOs can exploit factors such as a superior brand or content to attract new customers who would not necessarily be attracted to the existing MNOs.

• MVNOs can be used by their MNOs to expand their geographic reach as well as by brands which are sufficiently strong to leverage consumer loyalty across markets.

36 Issue 3

Regulatory MattersDigital Policy

aDvanTages DIsaDvanTages

Increase MNO network traffic Compete directly with host MNO

Recoup MNO high investment by addressing and serving new areas

Equipment's high cost makes MVNO projects Uneconomical

Attract new customers Security issues for MNO Core network Access

figure: mvno advantages & Disadvantages

mvnos Disadvantages & Drawbacks

Despite MVNOs advantages and benefits outlined above, there are a number of recurring issues which have led many to conclude that MVNO has significant flaws. These are as follow: • MNOs will open their network

to MVNOs and hence risk the creation of a competitor that will cannibalize its own subscriber base

• MNOs security concerns in giving MVNOs an access to their important and expensive asset, their core network

• MVNOs will face significant problems in constructing a coherent business case, given historically low profit margins in the MVNO business

• Costs of equipment are high and may make the MVNO project uneconomical given that volume discounts may not be available to new entrants.

• MVNOs must also develop intelligent billing systems which can accurately charge subscribers and also split complex financial transactions between the MVNO itself, MNO and any third-party content provider

• The greater degree to which the MVNO relies on host MNO for its services the lesser the possibility for service differentiation as the MVNO increasingly resembles the operator whose network it uses.

• MVNOs, as a largely unregulated area of the market, will have all the benefits of being an operator without any balancing licensing obligations.

mvnos entrance

Telecom regulatory authorities should consider the timing and extent of regulation aspects for MVNO entrance.

For timing aspect, they should assess their markets using the following points:

• Is market network infrastructure built out extensively and in a strong state?

• Is penetration relatively high and market growth is stagnating or slowing down?

• Is there Significant Market Power by operator(s) resulting in high prices?

• Is there enough value potential left in market to have MVNO?

• Are there clear and demonstrable segments of society whose demands are not adequately met by the existing MNOs?

For regulation aspect, they should create favorable conditions for MVNO entrance while taking care not to undermine the incentive of MNOs to continue building networks through encouraging them to open their networks and freely negotiate wholesale agreements with potential MVNOs.

Considering these aspects, telecom regulatory authorities can decide when and how they can introduce MVNO. It is necessary to check whether mobile markets with MVNOs actually develop better than those without. If this is proved to be the

case then the question becomes that of determining the specific method to be used to achieve this, and the degree to which regulatory obligations have a positive influence on the market’s development. In addition, the extent to which the regulatory authorities are allowed to intervene.

Once telecom regulatory authorities decided to introduce MVNO, MVNO should consider successful strategies for its entrance to capture market share.

Performance of MVNOS GloballyMany countries have introduced MVNO license arrangements aiming to solve the perceived limitations in their markets. Some of these limitations include:

• Limited Spectrum. • Lack of innovative service offerings • High investments with decreasing

payback.

Studying existing MVNOs performance in many countries resulted in a number of interesting findings. These findings are as follow:

• Countries introduced MVNOs had at least one MVNO.

Regulatory Matters Digital Policy

37 Issue 3

• Top three MVNOs tend to dominate the overall MVNO pie in each country observed

• The combined MVNO market share per country is less than 10 percent.

• Telecom regulatory authorities didn’t intervene in MNO-MVNO relationships. However, in all cases, they based their decision to intervene or not on a competitive review of the relevant market.

• MVNOs tend not to compete directly with their host MNO or with MNOs.

• MVNOs tend to offer innovative services rather than lower prices services

mobile market in saudi arabia

Mobile services in Saudi Arabia’s market have grown in recent years. Mobile penetration reached 188.5% by Q1-2012. This represents one of the highest penetration rates in the world. The Saudi Arabia mobile market is competitive, with no dominant operator.

The mobile market is maturing, with the rate of mobile subscriber growth slowing following a period of rapid growth. The total number of mobile subscriptions grew to around 54.3 million by the end of Q1 2012.

Mobile broadband has grown rapidly in recent years from under 500,000 subscribers at the end of 2008 to 11.9 million by Q1-2012 representing a population penetration rate of 41.4%. Competition is particularly intense on mobile broadband services, where price level is quite competitive when compared to most advanced mobile broadband markets across the world.

mvno market in saudi arabia

Telecom regulatory authority in Saudi Arabia (CITC) believes that it is time to expand the wholesale and retail structure of the mobile services market by issuing new licenses to MVNOs. CITC intends to introduce three MVNO operators in the near future. CITC has issued on 18.01.2012 a public consultation document on licensing of Mobile Virtual Network Operators. This Public Consultation concerns the way in which CITC will define the regulatory context and principles to be incorporated into the MVNO scheme in Saudi Arabia; develop and offer a new form of license for Mobile Virtual Network Operators (“MVNOs”); select the applicants that shall initially be granted MVNO licenses; and Issue Guidelines in respect of the development of partnering agreements between MVNOs and mobile Facilities Based Host Providers (“Host FBPs”). The consultation period has been closed on 02.04.2012 and CITC received all interested parties responses. Up to date, there is no update from CITC.

Conclusion

The MVNO concept will continue to receive heightened level of interest over the next few years and is expected to provide more competition and innovation to the telecommunications market. It is noted that many of the incumbent operators have now accepted the existence of MVNOs which to some extent do provide opportunities to the MNOs themselves especially when they stand to benefit from tapping niche markets which they previously could not serve, as well as realizing

an incremental wholesale revenues streamHowever, challenges still remain for new entrants to penetrate the telecommunication market as long as there are continuous changes in the telecommunication landscape. But by capitalizing on market differentiation and segmenting the industry instead of competing on price, some MVNOs have proved to be resilient.Telecom regulatory authorities need to check when and how they can introduce MVNO. It is necessary to know whether their mobile markets with MVNOs actually develop better than those without.

Regulatory Matters Digital Policy

39 Issue 3

DIgITal CerTIfICaTIonDr. adel Bin mohamed al-said, PhD in Information Security, Research and Security Management Director, Digital Verification National Center, Ministry of Communications and Information Technology

IntroductionMost countries and governments seek to provide easily-accessed public services to their citizens by using technology and modern telecommunication means and, at the same time preserving the security, confidentiality and privacy of data. Using the Public Key Infrastructure is deemed one of the solutions to preserve the security and privacy of data and provide services based on digital signature and identity verification. The Kingdom of Saudi Arabia is considered one of the pioneering countries in this field for the establishment of the National Center for Digital Certification in 1422 Hijri, which delegated the task of creating and operating the Public Key Infrastructure to King Abdul Aziz City for Science and Technology. The tasks of the National Center for Digital Certification were moved from King Abdul Aziz City for Science and Technology to the Ministry of Communications and Information Technology in the beginning of 1426 Hijri, as stipulated in Article Sixteen of Chapter Six of the Electronic Transaction Act.

The role of the National Center for Digital Certification lies in providing an integrated system to manage the Public Key Infrastructure in the Kingdom, an infrastructure designed to be the basis of all e-transactions, such as e-commerce, e-government and others, for which th the secrecy, reliability and total safety of information it provides . The main tasks of the Center include the following: • Issue digital certificates for the digital

certification centers in the Kingdom. • Manage , operate and maintain the

devices and software of the Public Key Infrastructure.

• Cancel the digital certifications when needed and publish the list of cancelled certificates on the internet.

• Qualify the applicants for granting

licenses to provide commercial digital certification services for digital certificated.

• Set up the Public Key Infrastructure regulations and bylaws and coordinate in this regards with the concerned parties.

• Technical and administrative coordination among the certification centers at the Kingdom. The National Center for Digital Certification includes the main certification center (called the Root Certification Authority) and other subordinate centers including Government Certification Authority which work together in order to issue digital certifications to the beneficiaries of whatever category and sector. The Authority has completed the development of public policies and regulatory standards for the Public Key Infrastructure, study of the regulatory

aspects to the issuance of certificates, the usage controls, the issuance of the Digital Certification Policy, the development of national policies and procedures which organize the provision of the service, such as the conditions for licensing of service providers, and the mechanism of monitoring the work of the Certification centers and the registration centers, as well as the methods of auditing and testing in addition to the mechanism of managing the Certification Center. The technical specifications for the overall structure of infrastructure, such as managing the cryptography keys, the certificates issuance and saving procedures were set, in addition to the specifications and requirements for the center’s environment, hardware and software required to issue the certifications and saving private keys were developed and an integrated infrastructure system was designed.

40 Issue 3

Regulatory MattersDigital Policy

pKI is a secure technology that provides a solution to all five work requirements

Digital CertificationThe Public Key Infrastructure (PKI) is an integrated security system providing an environment with a high level of security and reliability to electronic transactions by managing the (public and private) cryptography keys using the Digital Certificates, which contain the public key as well as information about its holder and certified by the Certificate Authority. The private key is stored in a secure saving media that can only be accessed by the owner of the digital certificate. The cryptography certificate, the digital signature certificate are examples of digital certificate types. Authentication, Confidentiality, Integrity and digital signature in addition to the No-repudiation feature are examples of the services provided by the PKI.

For example, to add a digital signature on a document, the sender calculates a value called Document Hash and then uses his own key to encode this value and send it with the document. To validate the authenticity of the digital signature, the recipient calculates the same value and compares it with the sent value after decoding with the public key of the digital signature owner (see the attached figure).

Digital Certification structure in saudi arabiaThe strategy of the National Center for Digital Certification in terms of managing the PKI in the Kingdom is based on a structural model that includes the Saudi National Root Certification Authority and the certification centers enlisted under its name, such as the Government Certification Authority and the Commercial Certification Authority, where the National Center for Digital Certification handles the hosting and administration of the certification authorities in a unified secured data center called the Shared Services Center which manages the issuance of digital certificates and the complete management of the certification service providers certificates. All certification authorities work together in order to issue various digital certificates for the beneficiaries (cryptography certificate, identity certificate, digital signature certificate), in order to enable the government or

commercial e-transaction users to perform their electronic operations in total secrecy, reliability and safety.

Brief about laws and regulation governing Digital Ceritification in Ksa and its main highligtes The National Center for Digital Certification follows the Ministry

of Communication and Information Technology. It was established pursuant to Article Sixteen of the Electronic Transactions Act which stipulates as follows: • The National Center for Digital

Certification shall be established in the Ministry upon this Act and shall supervise the tasks relating to

pKI functions work requirements

Digital Signature

Data integrity

Non-Repudiation

Confidentiality

Access Control

Decodingencoding

Text

Public key Algorithm

Electronic Signatures Creation Process

Electronic Signature Authentication Process

message/Datamessage/Data

hash functionhash function

message Briefmessage Brief

electronic signature authentication

electronic signatureelectronic signatures Creation public Keyprivet Key

valid/Invalid

Encoded text Digital Signature

Public Private

Identity authentication

Digital signature

Data encryption

• keys are used : a private key to for the decoding process and electronic signature and a public key for encoding and verifying the electronic signature

• Slow like RSA• No need to distribute and share the passkey (you have a unique key). There is only one

copy thereof • The public key is distributed openly (for example published on an internet website)

Hash Function:A function for the transformation of a text sequence from unspecified-length bits to a specified-length bit sequence

Regulatory Matters Digital Policy

41 Issue 3

management of digital certificates • The Bylaw specifies the rules

concerning the headquarters of the Center, its organization, specializations, tasks and how it carries out its business.

The Council of Ministers approved in its session on Monday 7 Rabia 1, 1428 Hijri the Electronic Transaction Act. The objective of this regulation is to control and regulate electronic transactions and provide a legal framework that fulfills the following goals: drawing up rules for using technology in the electronic transactions and signatures to reinforce confidence in these transactions and signatures and to facilitate their use in both public and private sector, by reliable electronic records; confirmation of electronic transaction usage on both local and international levels to utilize in all fields such as trade, medicine, education, e-government and e-payment; elimination of any obstacles facing the electronic transactions and signatures; and curtailing cases of misuse and fraudulent opportunities, such as forgery of electronic transactions and signatures.

The Center is currently working on launching certification services and commercially issuing digital certificates by qualifying many companies to offer the service to the remaining society fragments and the private sector in a safe

and effective manner within the scope of the national legislations and regulations represented in the Electronic Transaction Act and its executive bylaw.It should be noted that the National Center for Digital Certification finished in April 2012 updating the Root digital certificate and government certification centers. This update comes along with international technical updates and recommendation of manufacturers, researchers and producers to develop the current cryptography and hash algorithms SHA-1 from an cryptography key of 160 bit of length to latest SHA-2 cryptography key of 256 bit of length, and develop a cryptography system from RSA-1024 to RSA-2048, giving the National Center for Digital Certification an edge over other digital certification centers around the world and raising the confidence level in the certificates of the Center.

The role of Digital Certification in the economy and everyday lifeThe PKI is an e-security infrastructure; and as is with any infrastructure, the return on investment is measured by the applied processes and procedures which use this infrastructure and the applications enabled to use this technology. Economically and in everyday life, digital certification has many applications, services and benefits for both service providers (public sector or business sector) and beneficiaries from

the service provided, such as: • A common service and trust center (the

Digital Certification Center) provides free services to the government entities

• Decreasing the administrative costs by saving time and financial waste

• Increasing the efficiency of processes, reducing the paperwork using the digital signature

• Providing easy and secure ways to access the services

• Developing new services and products based on digital certification and Public Key Infrastructure

application and services Based on Digital Certification in KsaThe PKI infrastructure can be used in most applications that require identity Authentication, Confidentiality, Integrity as well as digital signature using the digital certificate. The examples of such applications include: 1. The e-government by facilitating the

procedures in a secure and confidential way

2. The email certificate, which used in digital signature, identity verification and cryptography

3. Name certificate, which used in digital signature, identity verification and cryptography

4. The Secure Socket layer (SSl) certificate, whichused in digital signature, identity verification and cryptography

national Center for Digital Certification

subscribers

government Certification authority

government Csp (x) Commercial Csp (x)

pa pa pa para ra ra ra

government Csp (y) Commercial Csp (y)

Commercial Certification authority

42 Issue 3

Regulatory MattersDigital Policy

NCDCCertificate Issuance Certificate Usage

PKI EnablementStorage

Smart Cards

USB Tokens

CryptographicProviders

Registration&

Verification

Enrollment

Administration

Policy & Audit

Browsers

Administration

Desktop

Clients CSPsCertificate - Enabled

Applications

Out of the BoxPKI Support

Regulation andPolicies

Best Practices

Compliance

Advisory & Consulting

Research &Development

Training

NCDC PKIInfrastructure

andassociatedServices

PKI

MS Crypto APIJAVA APIsOpenSSLPKCS#11

Entrust PKI ToolkitsSmrt Card APIs

CommercialIntegrationSolutions

NCDC providedAPIs or Sample

Code

CustomDevelopment

NCDCprovidedclients

OpenSSL

Others

WWW

Website Auth

Document Signatures

Web FormSignature

G2G DataExchange

DocumentEncryption

SecureEmail

Secure File

CustomApplication

VNP Auth

VNP Auth

5. Digital certifications in the unified sign-in to the government electronic portals (unified access) through the electronic government transactions portal (yesser).

Among the services the National Center for Digital Certification seeks to activate in cooperation with the government entities and the private sector to ensure the reliability and confidentiality of the electronic transactions is the activation of the use of digital certification issued by the Center in the following: 1. Bank transactions 2. Secure payment over the internet 3. Bonds and stock markets 4. VPN 5. Government procurement systems and

resources planning systems 6. Health sector services 7. Smart devices and mobile systems

The strategic plan for adoption and use of Digital Certification in KsaThe National Center for Digital Certification has developed strategic plans to activate and spread the PKI services in Saudi Arabia, by setting up a common services center to issue and manage digital certificates to verify the identities, digital signature, cryptography, spread the government and commercial registration centers in the entities, manage the registration processes in a decentralized manner, supervise the national public key infrastructure, in addition to enabling the e-government services which is considered one of the success factors for the implementation of the PKI, and using the safe storage units, smart cards and roaming feature.The National Center for Digital Certification had completed the execution and implementation of these strategic plans. In fact, he had completed setting up, preparing the software and hardware required for the shared services center, issuing and managing the digital certifications as per international standards. Moreover, the Government Certification Authority was inaugurated and the registration centers within the government bodies were linked to the unified center to issue certificates. Government entities implemented some of the applications that are based on PKI and digital certification, including government

payment orders. It should be noted that the inauguration of the Commercial Certification will provide the private sector with the opportunity to benefit from the services of the Center and will enable the applications and products based on digital certification and PKI.The Most Important Digital Certification Applications in the worldThere are many applications and uses for the PKI and digital certification, including: • Identity verification. • Encoding files on personal computers. • Digital signature on various electronic

documents and files. • Authenticating the safe access through

virtual private networks. • Cryptography and digital signature on

emails. • Secure electronic transactions online

as in e-commerce, bank systems, such as transfers, stock exchange, bills settlement systems and safe access to medical records.

• Ensure the security of (SSL) certificates for secure access to websites .

Among the international experiences, we look into the Indian experience and use of PKI and digital signature in public purchases, tenders evaluations with a view to save time and costs, increase the operational efficiency and preserve the required transparency. Maintaining the confidentiality of tenders and ensuring equity is an important requirement just like in the public tenders and purchases

systems. Thus, the Indian government considered, in 2000 to change the public purchases system to a system based on PKI. Each party wishing to submit an offer to a tender for the Indian government was provided with a single-use digital certificate to be used when making offers online. No tender shall be considered unless digitally signed, which led to saving time and effort and increasing the productivity and effectiveness.There were other experiences, such as in South Korea which used applications based on PKI in areas including: • Bank operations. • Electronic security. • Electronic transfers. • The medical field. • The educational field, especially in

terms of electronic education. • Securing access to private networks. • Stock exchange. • Electronic bills. • Electronic bookings • Online purchases • Settlement of payables

Society Digital Policy

43 Issue 3

Dr. essam eldin mitwally, General Advisor Technology & Regulatory Strategic Studies, STCsaeed m. alqahtani, General Manager Regulatory Strategic Studies, STC

a look at the un e-government survey 2012[1]:

e-government Indexes and Indicators of the un survey 2012Countries are ranked according to e-Government Development Index “EGDI” as shown in figure 1. EGDI is a weighted average of three normalized scores on the most important dimensions of e-Gov.

figure 1: Components of the e-government Development Index “egDI”

A KSA PERSPECTIVE

[1] “United Nations e-Government Survey 2012”, UN Department of Economic and Social Affairs (UNDESA), March 2012. [2] “Measuring DAC for formulating strategies and increasing developmental impact”, Farah Mansour , Regional Workshop on “ICT indicators from Strategy to Impact” Sharm ElSheikh, Egypt, 8-9 June 2012. [3] “ON The Road to Change”: Ali Bin Saleh Al Soma, director general of the Yesser e-government transaction program, STC Digital Policy Issue-1, January 2011.[4] “ON the Rugs to Success”: The Yesser e-government program for provision of government services to Saudi citizens. By Raymond Khoury, STC Digital Policy Issue-1, January 2011.

1/31/31/3

For the past 2 decades, the ICT capabilities were considerably empowered by the use of the Internet and its applications in almost all sectors. e-Government (electronic Government) refers to such use of ICT and Internet technologies by governments to enhance the efficiency and effectiveness of supporting Citizen-Centric service delivery to ensure sustainable development of the nation. The underlying principle of e-Government, supported by effective e-governance institutional framework, is to improve the internal workings of the public sector by reducing financial costs and transaction times so as to better integrate work flows and processes and enable effective resource utilization across the various public sectors. ICT capabilities and e-services have been significantly magnified through the growth of mobile and broadband Internet access services. There are several international and regional organizations working on different forms of ICT indicators, including Eurostat, world Bank, ESCwA, ITU, OECD, UNCTAD, and UNESCO[2]. Such ICT indicators also include the use of ICT by governments. However, The United Nation e-Government Surveys, developed by the UN Department for Economic and Social Affairs (UNDESA), present closer assessment of how governments use ICT to provide access and engagement for all. The indicators adopted in those surveys combine measures of the complete ICT ecosystem covering telecom infrastructure, on-line services and human capital. Such Surveys identify the countries taking leadership role in promoting e-Government, and those where the potential of ICT for development has not yet been sufficiently exploited.

Countries, therefore, can determine shortcomings that deserve improvements, and can also learn from the best practices derived from other countries.

In this article we examine the indicators used by the UN e-Government Survey 2012. It shows the ranking of special countries and countries with special merits, including the Gulf and some other Arab and Muslim countries. The progress made by some of the world’s 193 countries is illustrated, specially KSA, which improved its ranking from position #58 in year 2010 to rank at #41 in year 2012. A brief overview of KSA e-Government activities was given in a previous article of our Digital Policy magazine[3][4]. The main e-Government trends are highlighted, and we pointed to areas that may assist in achieving the target of KSA to rank at 18 in the year 2018.

egDI

Online servicesIndex

1. Emerging information services2. Enhanced information services3. Transactional Presence4. Connected Presence

1. Internet user/100 inhabitants2. Fixed phone lines/100 inhabitants3. Mobile subscribers per 100 inhabitants4. Fixed Internet subscriptions/100 inhabitants5. Fixed Broadband Internet/100 inhabitants

1. Adult literacy level2. The rate of admission to the educational process

TelecommunicationsInfrastructure Index Human capital Index

44 Issue 3

SocietyDigital Policy

online services IndexThe “Online Services Index” is assessed thro questionnaire consisting of 4 sections corresponding to the 4 stages of e-Government development as depicted in figure 2 below.

This represents the most sophisticated level in the online e-Government initiatives. It can be characterized by an integration of G2G, G2C and C2G interactions. E-services cut across

ministries in seamless manner. Gov have moved from a Gov-centric to a citizen-centric approach, where services are targeted to citizens thro segmented groups to provide tailor-made services.

government websites engage in two-way communication with their citizens. Electronic authentication of the citizen’s identity is required. Governement websites process non-

financial transactions, e.g. e-voting, downloading and uploading forms, filing taxes online or applying for certificates, licenses and permits. They also handle financial transactions.

Government websites deliver enhanced one-way or somple two-way e-communication between Gov. and citizens, such as downloadable forms for Gov

services and applications. The sites have audio and video capabilities and can be multi-lingual.

Government websites provide information that is limited and basic (e.g. infor on public policy, government laws, regulations, relevant docs and

types of Gov services). Citizends are able to obtain info on what is new and can follow links to archived info.

figure 3: e-participation

figure 3: e-participation

The telecommunication infrastructure indexThe telecommunication infrastructure index is an average composite of the 5 indicators shown in figure 1, normalized for comparison with all 193 countries

stage 4:Connected Presence

stage 3:Transactional

Presence

stage 2:Enhanced Information

Services

stage 1:Emerging Information

Services

As an important Part of Stage-4 (Connected Presence) of the “On-line Services” Index is e-Participation, reflecting the governance dimension of e-Gov, as depicted in figure -3.

e-participation

Use of thr internet to facilitate provision of info by Government to citizens

Interaction with Stakeholders thro the Internet

Engagment in Decision-Making Processes

e-consultatione-information sharing

e-decision making

 

Society Digital Policy

45 Issue 3

The human Capital Index The Human Capital Index is derived from the weighted average composite of adult literacy rate Indicator and the combined primary/secondary/tertiary gross enrolment ratio Indicator, where the UNESCO is the main source of data for both “Literacy” and “Enrolment” indicators

Human Capital (HC) composite value = 2/3 adult literacy Z-score + 1/3 gross enrolment Z-score

Country e-Government EGDI 2012

Rank2012

Rank2010

Rank Change

Online Service

Telecomm.Infrastructure

Human Capital

Republic of Korea 0.9283 1 1 --- 1.0000 0.8356 0.9494

Netherlands 0.9125 2 5 3+ 0.9608 0.8342 0.9425

United Kingdom 0.8960 3 4 1+ 0.9739 0.8135 0.9007

Denmark 0.8889 4 7 3+ 0.8562 0.8615 0.9489

USA 0.8687 5 2 3- 1.0000 0.6860 0.9202

France 0.8635 6 10 4+ 0.8758 0.7902 0.9244

Sweden 0.8599 7 12 5+ 0.8431 0.8225 0.9141

Norway 0.8593 8 6 2- 0.8562 0.7870 0.9347

Finland 0.8505 9 19 10+ 0.8824 0.7225 0.9467

Singapore 0.8474 10 11 1+ 1.0000 0.6923 0.8500

Saudi Arabia 0.6658 41 58 17+ 0.7974 0.4323 0.7677

Table 1: Top 10 countries in e-government

 

ranking of Countries according to Indexes of the un survey 2012

The UN Survey 2012 includes comprehensive statistics and tables of the different e-Gov indicators for all of the 193 countries. The tables below were built with the data most relevant to KSA.

Best e-gov Countries Table 1 depicts the change of e-Gov ranking for the top 10 countries, along with those of KSA. The table shows how the Republic of Korea maintained its 1st position over the 4 years from 2008 to 2012, while some countries such Netherlands and Denmark achieved improvements and others such as USA and Norway were degraded. The KSA achieved a jump of 17 positions in the world ranking. It is also worthwhile mentioning that potential improvement in the KSA e-Gov ranking can be attained in the Telecom Infrastructure Index of (0.4323) which is far below the top countries.

ranking of some arab and Islamic countries

Table 2 provides the e-Gov Index and ranking for some of the Arab and Islamic countries. The Gulf countries are at the top of the Arab countries. KSA falls in the middle of the Gulf countries. It is also to be noted that KSA is one position below Malaysia but far above Turkey, Egypt and Iran.

46 Issue 3

SocietyDigital Policy

Country e-Government EGDI 2012

Rank2012

Rank2010 Rank Change

United Arab Emirates 0.7344 28 49 21+

Bahrain 0.6946 36 13 23-

Malaysia 0.6703 40 32 8+

Saudi Arabia 0.6658 41 58 17+

Qatar 0.6405 48 62 14+

Kuwait 0.5960 63 50 13-

Oman 0.5944 64 82 18+

Turkey 0.5281 80 69 11-

lebanon 0.5139 87 93 6+

Jordan 0.4884 98 51 47-

Iran 0.4876 100 102 2+

Tunisia 0.4833 103 66 37-

Egypt 0.4611 107 86 21-

Country Stage 1 Emerging Stage 2 Interactive Stage 3 Transactional Stage 4 Connected Total Index

Republic of Korea 100 79 92 87 87 1.0000

Singapore 100 79 94 86 87 1.0000

United States 100 90 88 83 87 1.0000

United Kingdom 100 95 79 81 85 0.9739

Canada 100 83 81 68 78 0.8889

Finland 100 90 75 67 77 0.8824

France 100 79 85 65 77 0.8758

Bahrain 100 76 81 67 75 0.8627

United Arab Emirates 100 74 83 67 75 0.8627

Colombia 100 76 65 74 74 0.8431

Sweden 92 90 71 62 74 0.8431

Estonia 100 69 65 74 72 0.8235

Saudi Arabia 92 60 77 67 70 0.7974

Malaysia 100 64 79 59 69 0.7908

New Zealand 100 79 69 57 69 0.7843

Kazakhstan 92 64 52 80 69 0.7843

Table 2: ranking of selected arab and Islamic Countries

Table 3: online service index and its components in selected top performing countries

ranking with respect to online services

Table 3 provides the top 16 countries in Online Service delivery, where KSA ranks at the 13th position. It is also worth noting that KSA is one of top 22 countries offering more than 67% of the online services assessed in the survey. The online service index is a measure of ‘how much’ the governments are putting online, regarding achievements over the 4 stages of Online Service evolution with more weight given to the higher stages.

ranking with respect to Telecommunication Infrastructure Index Table 4 depicts the Telecommunications Infrastructure Index together with its 5 sub-index components for the countries surrounding KSA of the global table. It can be noticed that the Mobile Subscribers/ 100 inhabitants indicator in KSA is one of the highest in the world. However, there are 3 other very low components. Those other components namely: Fixed Broadband, Fixed Internet Subscribers

Society Digital Policy

47 Issue 3

Country Index value Internet Users Fixed phone lines Mobile Subs. Fixed Internet subs. Fixed Broadb.

Qatar 0.4513 69.00 16.95 132.43 9.13 9.17

Malaysia 0.4510 55.30 16.10 121.32 20.01 7.32

Uruguay 0.4442 43.35 28.56 131.71 8.96 11.37

Panama 0.4408 42.75 15.73 184.72 6.16 7.84

Argentina 0.4352 36.00 24.75 141.79 11.72 9.56

Saudi Arabia 0.4323 41.00 15.18 187.86 7.02 5.45

Romania 0.4232 39.93 20.94 114.68 13.00 13.96

Bahrain 0.4183 55.00 18.07 124.18 6.79 12.21

Kuwait 0.4179 38.25 20.69 160.78 12.51 1.68

The former yougoslav Rep. of Macedonia 0.4135 51.90 20.05 104.51 10.78 12.47

Seychelles 0.4037 41.00 25.48 135.91 6.60 7.26

Grenada 0.4014 33.46 27.15 116.71 10.48 10.12

Chile 0.4001 45.00 20.20 116.00 9.76 10.45

Viet Nam 0.3969 27.56 18.67 175.30 7.80 4.13

Oman 0.3942 62.60 10.20 165.54 2.88 1.89

Table 4: Telecommunication infrastructure index and its components in selected countries

references[5] “ICT in KSA: A Socio-economic Impact Review”, STC Regulatory Affairs Report, February 2012.[6] “Report of the Partnership on Measuring Information and Communication Technology for Development”, UN Economic and Social Council, March 2012.

and Fixed phone lines need attention. One way to achieve a big jump is to work on revising those indicators such as to make the count on per 100 household basis rather on per 100 inhabitants basis. This was proposed in a recent ICT report by STC[5], as well as another UN report[6]. Further, an indicator for Mobile Broadband may also be proposed.

ranking with respect to human

Capital Index KSA has achieved great progress in Schools Enrolment to become the highest of almost all Arab and Islamic countries as shown in table-6. However, the Adult literacy factor in KSA needs special attention.

e-government Trends and special focus of the un survey 2012

Taking a whole-of-government approachCountries began to move from a decentralized single-purpose organization model of e-Government to an integrated unified whole-of-government model. This model aims at centralizing the entry point of service delivery to a single portal where citizens can access all government-supplied services, regardless of which government authority provides that service.

48 Issue 3

SocietyDigital Policy

CountryHuman Capital index

(HCI) Adult literacy (%) Schools Enrollment (%)

Bahrain 0.8028 91.63 80.15

Jordan 0.8013 92.20 78.27

lebanon 0.7917 89.61 80.76

Kuwait 0.7885 93.91 72.16

United Arab Emirates 0.7837 90.03 78.12

Turkey 0.7726 90.82 74.10

Malaysia 0.7691 92.46 70.29

Saudi Arabia 0.7677 86.13 81.55

Qatar 0.7316 94.72 57.41

Oman 0.7224 86.62 70.11

Iran 0.7089 85.02 69.89

Tunisia 0.6841 77.56 77.79

Egypt 0.5588 66.37 69.11

Table 6: human Capital Index and its components of some arab and Islamic Countries

Supporting multichannel service deliveryMultichannel service delivery is the provision of public services by various means in an integrated and coordinated way. Citizens make selections as they need and receive consistent information and services across their preferred channels.

Bridging the digital divideThe e-government for vulnerable populations is about facilitating digital access for the illiterate/low-educated, persons with disabilities, the poor, women, children, the elderly, and communities in rural and remote areas. An appropriate focus on extending e-government to vulnerable groups is critical to ensuring that e-government supports inclusion and development for all.

expanding usage

Policymakers need to identify factors affecting usage and make efforts to increase citizen take-up of e-gov services. Such factors include: Convenience , Cost saving, Privacy & Security concerns, Trust in using e-Gov services, Transparency, Usability of e-services, Broadband availability. Policies and strategies need to overcome usage differences, increase awareness, focus on user needs, exploit the potentials of social media and open data, and provide incentives for e-service.

examples of Countries with special merits

KSASaudi Arabia raised its global rankings from 58 to 41. The principle goals of the Saudi Arabian e-Government offerings are to raise the productivity and efficiency of the public sector, increase the return on investment in ICT and provide easy-to-use, timely accurate services. The Saudi eDashboard portal verifies the identity of the citizen (Digital Verification) and serves as a single sign-on portal where citizens can access all services provided. The Saudi Government also offers an Open Data initiative, which provides citizens with documents and reports from ministries and government agencies, all publicly

available. KSA recently declared its goal to achieve the 18th position in e-Gov ranking by the year 2018.

UAEUAE stands at the top of all Arab and Islamic countries. The progress of the UAE is especially notable as it advanced 21 positions to the ranking this year to become 28th globally and 5th in Asia.

BahrainBahrain world ranking fell from 13 to 36. The government provides delivery of services through the following channels: e-Government portal, mobile portal, national contact centre and e-services centers and kiosks. Bahrain has introduced the “listen” feature, which enables people with visual disabilities to hear any text available on the website with the click of a button.

QatarQatar’s “Hukoomi”, the National Portal of Qatar, integrates government services and programs to facilitate access to over 100 topics with detailed info about Qatari law and society, accessible to all through the Internet

as well as mobile. “Hukoomi” includes payment for utilities, renewal of health cards, settlement of traffic violations, visa applications, and licenses. The portal provides direct links to sub-portals, such as on the employment and recruitment service and e-tendering; and links to application forms from a wide range of government ministries and public services.

KoreaRepublic of Korea is the world’s leader in Broadband. The main website has developed into an integrated portal where citizens can find almost every service they want. The main government portal is a gateway to services through multiple channels, by theme and subjects. Citizens can have a customized channel by inputting their own age, gender and services of interest. A key reason for continued leadership in world e-Government progress is significant development and provision of downloadable mobile applications that are available from its national portal.

Society Digital Policy

49 Issue 3

Conclusions

• The UN e-Gov Survey 2012 shows how governments are employing e-gov policies to support efficiency, effectiveness, and inclusiveness for sustainable development.

• The underlying principle of e-Gov, supported by effective e-governance institutional framework, is to improve the internal workings of the public sector by reducing financial costs and transaction times so as to better integrate work flows and processes

and enable effective resource utilization across the various public sectors.

• The Survey provided a special focus on the rising importance of a whole-of-government approach and integrated online service delivery; the value of multichannel service delivery; the emphasis on service usage; and the role of e-infrastructure in bridging the digital divide.

• Governments should continue to strengthen their attitude to take whole-of government and multichannel service delivery approaches, as well as paying special attention to digital divide and promotion of usage by individuals and businesses.

• Governments must address both

access to infrastructure as well as barriers to using online services, and must bring technology to people instead of making the people come to technology hubs.

• Ranking of special countries and countries with special merits, including the Gulf and some other Arab and Muslim countries were highlighted to determine shortcomings that deserve further improvements, and to learn from the best practices derived from those countries.

• Although KSA compares well among

the Arab and Islamic countries, this article has highlighted several areas that need enhancements in order to attain the target of being ranked at 18th position by year 2018.

• Coordination of KSA e-Gov programs along with the 2nd ICT Strategic plan by MICT, and the KSA National Strategic Plan by MoEP should take advantage of the recommendations and the special focus of this UN e-Gov Survey report.

• While KSA has been very successful to move from position 58 in the

UN 2010 e-Gov Survey to 41 in the 2012 Survey, there is much to be done for improving the KSA EGDI, mainly in the telecom Infrastructure and literacy dimensions.

• The KSA government should make

incentives for continued investments in Broadband, and should contribute subsidies to provide broadband to non-profitable areas. This will help raising the low Telecom Infrastructure Index currently at

(0.4323).

• KSA Telecom Infrastructure Index may considerably improve if Fixed phone, fixed broadband and Fixed Internet would be counted on per 100 households instead of on a per 100 inhabitants basis . The Saudi big family size is a contributing factor to such a low Index. KSA Infrastructure Index may further improve if Mobile Broadband is also included in the calculation of EGDI. STC and other KSA organization should lobby to make such update of e-Gov indicators.

• The STC Broadband expansion plans

to have 0.5 million fiber connections by end of 2012 and 1.0 million fiber connections by 2014 will have major

contribution to improve KSA ranking in the coming years.

50 Issue 3

Last WordDigital Policy

governmenT polICIes anD regulaTIons anD The ImporTanCe To Keep paCe wITh DevelopmenTs In The ICT InDusTry

saeed mohammed, Editor-in-chief of Digital Policy magazine

Digital Policy magazine has established its place as a magazine specialized in ICT and the first of its kind in the region. STC is proud that Digital Policy has provided the platform for discussion of ICT related policies for many decision makers, experts and specialists inside and outside KSA a aiming to support the directions of this sector in terms of strategies, studies and specialized articles to highlight its role as an enabler for socio-economic activities and contributor in achieving the aspirations of the Kingdom of Saudi Arabia.

while the previous issue focused on the results of the ICT socio-economic Impact Report published by STC, this issue highlights the recent ICT trends and focuses on the importance of having in place government policies and regulations that are in sync with those trends in order to maximize the profits for all stakeholders, whether investors, consumers or governments.

Among the new trends that should promptly discussed are Telecom-Media convergence and Fixed-Mobile convergence in addition to emergence of the Over-the-Top players, which threatens telecommunications operators of losing their revenues and investments in their networks. It thus seems quite necessary to initiate a discussion about enabling telecom operators to adjust to this new form of competition, changes in business models and the expected role of the telecom regulators in orchestrating and regulating these changes.

Providing a secure and reliable environment for all e-transactions, such

as e-commerce and e-government is deemed a critical factor in encouraging the adoption of those services and must thus be prioritized in the government agenda. Even though KSA is considered a pioneering country in this field with the establishment of the National Center for Digital Certification which provide an integrated system for the management of the PKI infrastructure in KSA. It is important to speed up the commercial launching of the certification services and issuance of digital certificates to open the doors for the private sector to benefit from these services and to activate PKI and digital certification dependent applications and products.

It is equally important to offer the right incentives for operators to invest and continue to build and expand their telecommunications networks infrastructure,. Policy makers shall promptly make the frequency spectrum necessary for the 4G networks and the digital dividend available so as to encourage the adoption and increased use of broadband services, in addition to facilitating the required approvals for the excavation and rolling out of the fibre optic networks.

On the other hand, governments, telecom operators and vendors shall cooperate together in the development of plans and programs to facilitate a smooth transition towards the sixth version of internet protocol that’s because of the high cost of transition at the moment from the fourth edition, and to maximize the benefits associated with the sixth version.

Moreover, service-based competition,

including the services of the MVNOs, shall form an incentive for innovation and creativity in the provision of telecommunications services. yet, care must be exerted in order to keep motivating the MNOs who own the infrastructures, so that they continue on building and expanding their networks, especially in the light of the competitive markets, in order to avoid distorting the open market mechanisms.

We are pleased to serve167 million customersaround the world