Policy challenges are undermining operators' willingness to invest.
As new market structures emerge, the regulatory approach to these evolving sector ecosystems remains unclear.
Consequently, policy challenges are undermining operators' willingness to invest. This means that 2010's third-placed risk of "rising regulatory pressure" has now narrowed into this year's more specific risk factor — and that it is increasingly crucial for governments and regulators to adopt pro-investment policies to sustain the sector's momentum.
The challenges and uncertainties around the policy approaches to new market structures include shifting regulatory standpoints on wholesale broadband access pricing, and the trend toward imposing network separation as a pro-competition tool in super-fast broadband.
Going forward, new spectrum releases will shape 4G market structures — and the rules vary from market to market in areas such as spectrum caps and trading. In new and emerging areas such as mobile money, regulatory jurisdictions and policies continue to lag behind the technology — a challenge compounded by the "broadband as a human right" lobby.
On top of these uncertainties, there is continued regulatory pressure on legacy parts of the business, such as MTRs and roaming. In combination, these issues have pushed regulatory frameworks to the top of the list of challenges facing ISPs.
Survey: challenges facing ISPs6
And in tough fiscal conditions, operators know that telecoms can be a rich source of government taxation as well as a focus for government investment.
These factors are creating an urgent need for greater regulatory certainty — and, alongside greater clarity and consistency from regulators, achieving this will require operators to engage with a wider set of stakeholders.
Consolidation in markets worldwide will continue to impact pricing and investment, and the need to fund next generation access and spectrum releases will require broad market consensus on the regulatory position.
And overarching questions remain about the impact of the net neutrality agenda across the whole of the technology, media and telecoms ecosystem.
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6Ernst & Young/ITU Telecom World poll, November 2011 (85 online respondents).