This report, the eleventh in a biennial series, was prepared in the context of the OECD’s work on the analysis of communication policy in member countries.

In 2011 the OECD celebrates its 50th anniversary, and to mark the occasion this chapter looks briefly at how the communications sector has evolved over these years, how the OECD contributed to this evolution, and the issues emerging in the 21st century.

The eleventh biennial OECD Communications Outlook examines recent developments in the communications sector, which has emerged from the global financial crisis (GFC) with a resilience and underlying strength reflecting its critical role in today’s economies. This latest edition covers developments such as the emergence of next generation access (NGA) networks and the imminent exhaustion of unallocated IPv4 addresses, and aims to provide an overview of efforts on the part of countries to promote competition and foster innovation in communication markets through regulation. It also examines the issues surrounding broadcasting markets, Internet infrastructure, communications expenditure and use by households and businesses, and trends in trade in telecommunications services.

The communication services industry has fared relatively well during the global financial crisis. In part, as has been discussed in previous editions, the industry’s experience in, and emergence from, the “dotcom bubble” has placed it in a much stronger position to meet recent challenges. Certainly, parts of the industry have characteristics – similar to other utilities – that make it more resistant to financial downturns. That being said, the industry’s resilience must also be attributable, at least in part, to its need to deal with extremely rapid commercial and technological changes.

Next generation access networks (NGA) are in a critical phase of development. Present policy decisions are likely to have an impact over the next decades in terms of market structure, service provision, investment and innovation. Furthermore, the rise of smartphones and other devices is driving the boost in mobile broadband traffic and usage. This involves new challenges for spectrum policy, which policy makers have to balance carefully as spectrum is a key competitive asset. This transition is being facilitated by the release of spectrum resources coming from the switch-over from analogue to digital terrestrial television.

In 2009, the telecommunication market was valued at USD 1.16 trillion in the OECD area. Telecommunication markets have expanded at a fairly constant annual growth rate of 3.9% since 2000, and have withstood two severe economic downturns. Voice remained the largest revenue source for operators despite declines in calling prices for both fixed and mobile. Mobile revenues accounted for 45% of all telecommunication revenues in the OECD in 2009, up from 24% just a decade earlier. In 2009, 13 countries had mobile sectors larger than their fixed sectors in revenue terms.

The total number of fixed, mobile and broadband subscriptions, in the OECD area, grew to 2 billion in 2009, with mobile accounting for 63% – some 1.3 billion subscriptions. The number of fixed broadband subscriptions reached 292 million in June 2010. The share of fibre has developed significantly, accounting for 12% of fixed broadband subscriptions. It grew at 25% over the two years leading to the end of 2009. Significant developments included a rapid increase in higher speed wireless broadband and the range of new access devices, as well as new business models including the growing popularity of “application stores”.

This chapter examines developments in the core structure of the Internet. Measurement of the Internet is challenging mainly due to the fact that, unlike most communication technologies, it relies on different actors and participants, and thus lacks a central control point. Nevertheless, data are available for some indicators from surveys and databases, which provide country-level information on Internet infrastructure issues such as Internet hosts, domain name registrations, address space, security and network traffic, among others.

Broadcasting is changing rapidly with audiovisual content now delivered over an ever-increasing range of networks and devices. This chapter traces recent developments in audiovisual platforms and devices, explores emerging trends and issues, and then looks at some of the regulatory challenges arising.

Prices for broadband and mobile communications have declined over the past two years, while services have expanded. Broadband speeds have increased between 15 and 20% whereas the downward trend in prices has been more marked for mobile services. Triple-play offers are now being commonly offered in most OECD countries and quadruple play (triple-play plus mobile voice) is starting to gain presence. While recognising some of the positive implications of bundles, this trend makes it increasingly difficult to map offers to prices and to compare them across providers.

This chapter explores the evolution of household expenditure with regard to ICT goods and services. Specifically, it looks at one of the most striking phenomena of the last decade: the rise of mobile communications in telecommunication services expenditure. This dimension of expenditure mirrors the massive diffusion and uptake of mobile wireless services – and the variety of services on offer is increasing. SMS was an early addition to mobile telephony and its growth is now being replicated by the use of data services. Undoubtedly, the development of new technologies, services and lower prices, all driven by competition, has played a part in the increased use of communication services by households.

This chapter focuses on major trends in communication equipment, ICT goods and communication services trade among OECD countries and the rest of the world. During 2009, the global financial crisis (GFC) significantly disturbed trade worldwide, and while ICT has not escaped its influence, ongoing demand has to some extent softened the blow. Part of this chapter covers recent changes in ICT product definitions, examining the classifications used to measure trade and the techniques used to bridge the different classifications (Box 9.1).