Conclusions from a review of Oftel's regular industry data collection

23 July 2002

Contents

Summary

Chapter 1 – Introduction

Chapter 2 – Defining the scope of Oftel’s regular industry data collection

Chapter 3 – Practical issues

Chapter 4 – Publication of industry data

Annex A – Summary of changes

Annex B – List of respondents to the consultation

Summary

S.1 This statement sets out the findings of Oftel’s recent review of its regular industry data collection programme following a consultation process which began in January this year.

S.2 Stakeholders gave broad support for the continuation of regular data collection from the telecoms industry to ensure that Oftel maintains a comprehensive evidence base and a complete statistical overview of UK telecoms markets. Oftel will thus continue to collect information from the telecoms industry on a quarterly basis but will make a number of changes to reflect concerns raised during the consultation.

S.3 The changes to Oftel’s data collection requirements reflect recent developments, particularly in the Internet and broadband markets. Changes have also been made to provide a greater level of detail about fixed wholesale markets and interconnection. Overall, however, there will be a reduction in the amount of data collected reflecting the removal of irrelevant or redundant information requirements.

S.4 Oftel will also seek to capture a wider range of operators and service providers within its regular data collection process, particularly Internet service providers. But Oftel will look to minimise the costs to smaller suppliers and consider how a sample based approach may be used to present a more complete overview of telecoms markets.

S.5 Oftel will also continue to publish market share information in its quarterly Market Information Updates. Following the request of the majority of data providers that Oftel clarifies its criteria for the publication of information from 2002-03, Oftel intends to publish the market share of all operators or service providers with a market share of five per cent or more.

S.6 Oftel will aim to improve the timeliness of its market information updates to publish within three months of the end of the reference period for mobile and four months for fixed.

S.7 Oftel will continue to work with the Office for National Statistics and stakeholders to reconcile alternative estimates of the size of the UK telecoms industry and to improve the comparability of international telecoms data.

EU review progamme

S.8 The revised regular questionnaires will consider data requirements for the current programme of market reviews being undertaken to inform the implementation of the new EU directives.

S.9 It is likely, however that there will be extra data requirements specifically to inform the review process. Oftel will ensure that, where possible, any such requests are made with reference to existing data sources to avoid duplication and ensure that the costs to industry of data supply are minimised.

S.10 Oftel will also consider any further changes in its industry data collection programme which may be required to ensure compliance with Article 5 of the Framework Directive.

Outline of statement

S.11 Chapter 1 of this statement summarises the background to the review and the consultation process. Chapter 2 discusses in broad terms responses to the consultation regarding the scope of the data collection and Oftel’s proposed changes. Chapters 3 and 4 deal similarly with process and publication issues respectively. A more detailed summary of the changes to the regular data requests is contained in Annex B.

Chapter 1 – Introduction

1.1 Oftel’s aim is to obtain the best possible deal for consumers in terms of quality, choice and value for money. Oftel believes that effective competition is most likely to provide consumers with the best deal.

1.2 To ensure that Oftel delivers on this aim it is important that a comprehensive and robust evidence base is maintained, to monitor progress towards effective competition and to properly inform policy decision making.

1.3 A full description of why Oftel’s regular industry data is a key component of Oftel’s evidence base is contained in the consultation document, Developing a strategic approach to market information, January 2002. The consultation document also sets out how the regular publication of these data contributed to stakeholders understanding of telecoms markets and to transparency in Oftel’s decision making process.

Implications of new EU Directives

1.4 The UK legislative background was also set out in the January consultation document. Since then agreement has been reached between the Council of Ministers and the European Parliament on a new package of Directives that will establish a framework for the regulation of electronic communications networks, services and associated facilities throughout the EU. The Directives entered into force when they were published in the Official Journal of the European Community on 24 April 2002.

1.5 Article 5 of the Framework Directive sets out the requirements relating to the provision of information. These requirements are broadly consistent with those under existing legislation and are unlikely to affect Oftel’s approach to the regular collection of data from the telecoms industry. Nevertheless, Oftel will be considering any changes which may need to be made to ensure full compliance with the Directive over the next year.

1.6 Data gathered from the telecoms industry will figure prominently in Oftel’s programme of market reviews being carried out to implement the new Directives. Unfortunately, the full list of markets to be reviewed was not finalised until after the end of the consultation period. While Oftel has attempted to tailor its revised data requirements to meet those for the reviews, it is likely that Oftel will require additional information from the telecoms industry during the review process.

1.7 The timetable for the review programme is tight and is likely to place significant resource demands on Oftel over the coming year. It is therefore in Oftel’s interest to ensure that the process for collecting information for the reviews is as efficient as possible. Oftel will thus seek to ensure that the information gathering process for the reviews is run in close conjunction with its regular market information programme. This should minimise duplication and ensure consistency in both operator response and resulting analysis.

1.8 Oftel will keep all stakeholders informed about all aspects of the EU review process, including the process of information gathering.

Chapter 2 – Defining the scope of Oftel’s regular industry data collection

2.1 Oftel set out its views on how the scope of its existing data collection programme may be improved in the January consultation document.

2.2 These views remain broadly unchanged although the consultation process has provided Oftel with a fuller understanding of the issues of concern to suppliers and users of the data. This has allowed Oftel to focus and refine its future plans.

2.3 This section discusses the changes Oftel will make to the type of information collected from the telecoms industry on a regular basis. The conclusions reflect both responses to the original consultation and comments received from participating operators on draft revisions to the market information questionnaires. These revisions have been available on the Oftel website since the beginning of June.

Responses on broad framework issues

2.4 All operators involved in Oftel’s current data collection processes accepted the importance of data to inform Oftel regulatory decision making and monitor the competitiveness of telecoms markets. BT, for example, felt that the costs involved were acceptable as the majority of data was already collected within the company and One 2 One (now T Mobile) said that data collection and publication provided valuable information for stakeholders.

2.5 Some operators thought that Oftel did not fully understand the resource costs to operators of providing the data. Cable & Wireless Communications (C&W) described the data collection process as "onerous" and said that it was important to ensure that it was clear to operators why specific pieces of data were collected. Thus stated that it was important for Oftel to be mindful of the limited resources available within telecoms operators and Powergen said that it was more difficult for smaller companies to provide the level of data requested, and suggested that the provision of data be phased in for smaller operators.

2.6 But other stakeholders, primarily users of the data were generally all supportive of Oftel’s collection and publication of market data. The Consumer Communications for England committee (CCE) said that, assuming operator’s data collection processes were efficient, the benefits of providing data significantly outweigh the costs. The other Advisory Committees felt that market transparency was important and that it was important for the public to have access to such information.

2.7 The majority of respondents believed that it was still necessary to collect data on effectively competitive markets for monitoring purposes although BT said that Oftel should only continue to collect data on an effectively competitive market if it is required to do so under the new EU Directives. Thus said that Oftel could collect less data on effectively competitive markets and Telewest said that any data collected should be proportionate.

Conclusions on broad framework issues

2.8 Oftel believes that the responses to the consultation give it a clear mandate to continue with its market information programme. Oftel accepts, however, that there is a need to ensure that its regular data request remain relevant and proportionate.

2.9 The EU market review programme provides a useful framework for Oftel’s data requirements but Oftel also wishes to ensure that the data present as complete a picture of the UK telecoms market as possible and wishes to retain the flexibility to capture information about all significant new technologies and services which are offered to UK consumers.

2.10 Oftel thus intends to continue to collect information on a regular basis following the end of the current review programme although this milestone may represent a suitable opportunity to re-evaluate the amount of data collected on the market and reduce the burden placed on operators.

2.11 Oftel believes that the regulatory costs of not collecting information and the associated risks of erroneous or less timely decision making would be severe. However, Oftel is concerned that some operators believe that the costs of the current process represent a burden. Consequently Oftel will work closely with operators when suggesting new areas of data collection to strike the appropriate balance between minimising the burden on operators of data collection and ensuring effective decision making.

2.12 The consultation process has been useful in giving Oftel a clearer insight into the practical issues associated with regular and timely data supply and Oftel hopes to use this information to improve the efficiency of the current process. The following sections deal with more specific issues raised during the review.

Responses on specific scope issues

2.13 In the consultation document Oftel asked a number of specific questions relating to the scope of the data collection process. These centred on the following four areas:

• new services;
• service providers;
• intra-industry transactions; and
• new types of information (eg tariffs, investment).

Responses relating to new services

2.14 A number of respondents to the consultation suggested that a threshold rule should be established to determine whether Oftel should begin to collect data on a new service, although it was agreed that this maybe difficult to implement in practice.

2.15 CCE and Telewest both suggested that subscriber numbers could be used as a suitable benchmark. Telewest also said that data collection costs and the associated benefits should be considered. Vodafone suggested that total revenues would be a better measure, and suggested five per cent of revenues or volumes. Thus said that it was unlikely that operators would wish to invest in reporting systems for services with low revenues or customer numbers. One2One had no objections to reasonable thresholds being applied as long as Oftel discussed these thresholds in advance with contributing operators and service providers. Energis felt that markets should be considered on a case by case basis.

2.16 BT felt that a threshold should not be used to decide when Oftel starts to collect data on a new service. Instead, BT believed that any extension to the scope of Oftel’s data collection should be when the service in question is sufficiently important in a market which Oftel is obliged to analyse under the EU Directives and data collection should be agreed by means of an annual consultation exercise.

2.17 Centrica and SACOT felt that data should be collected on a service as soon as it becomes available. Centrica believed that this was important to promote competition and identify any anti-competitive behaviour in the fledgling market. SACOT thought that early monitoring could provide valuable policy lessons should the service prove unsuccessful.

Conclusion on new services

2.18 Oftel believes that it is important for stakeholders that it retains a complete picture of all telecommunications markets to ensure that all of its decisions are put properly in context. Ideally, therefore, Oftel would collect data on a particular telecoms service immediately from introduction, however given the cost of implementing systems to capture data, it may not always be realistic for operators to do so.

2.19 Because of the differing characteristics of services it is difficult to apply one threshold to all new services. New markets and services can emerge either as a direct consequence of regulation (eg carrier pre-selection) or through technological or marketing innovation (eg mobile text messaging).

2.20 Where new services are created as a direct consequence of regulation they are generally likely to be mechanisms for promoting competition. Consequently it is important that Oftel has detailed information about these services to monitor the effectiveness of its policy intervention. Indeed such processes are already in place.

2.21 Where services evolve independently of regulation, Oftel will seek to consult with data providers as to the most appropriate way to collect information balancing the need to minimise the burden on suppliers with the need to ensure that Oftel retains a complete overview of the market.

Responses relating to service provider issues

2.22 All network operators responding agreed that it was necessary to collect data from all service providers. Telewest felt that it was important to gather data from as many operators as possible, and BT said that it was essential in order to avoid erroneous significant market power (SMP) designations and the imposition of inappropriate regulatory obligations. Energis singled out the Internet market as being a particularly important area for Oftel to collect data on and went on to say that Oftel should clarify the method used to collect data from resellers.

2.23 SACOT said that for consumers there is little distinction between service providers and traditional operators, and therefore they should not be treated any differently for the purposes of data collection. Vodafone pointed out that where data was collected from service providers it might be possible to reduce the data collection burden placed on network operators.

2.24 Most of the operators responding to the question agreed that it would be acceptable to make a measured trade-off between collecting data from all service providers and the accuracy of data. Telewest said that rough data on service provider trends might be more practical and that if this were the case confidence limits or the percentage of the SP sector covered should be stated. CCE said that it would be important that any service provider data be accompanied by a list of those operators who had not provided information.

2.25 BT disagreed with any trade-off and said that under the new EU Directives Oftel should be able to collect data from all service providers, so there should be no need to sacrifice the quality of the data. C&W felt that growth in the service provider market meant that it would be unacceptable to not collect data from all service providers as this would lead to regulatory decisions being made on statistically flawed data.

2.26 Although most operators had no objections, in principle, to Oftel collecting data from service providers facilitated by a self-regulatory body, a large number of concerns were voiced about the practicalities of such an arrangement.

2.27 BT feared that the data might not be comprehensive enough to make efficient regulatory decisions and Telewest, Centrica, CCE and SACOT all felt that the quality of the data could suffer in one way or another. Centrica thought that there might be data sensitivity concerns on the part of those providing data, and the number of operators involved could reduce the timeliness of the data. CCE was concerned that the body compiling information for Oftel may add its own interpretation of the data and that it was important that any such body was independent rather than an industry association.

Conclusions on service provider issues

2.28 As noted previously Oftel believes that it is essential to have as complete a view of the market as possible. Consequently greater consideration must be given to the collection of accurate and timely information from service providers. This is of particular concern given that the distinction between traditional operators and service providers is becoming increasingly blurred.

2.29 The collection of data from service providers is especially important given the recent growth in Internet markets, and the developments in indirect access such as the introduction of carrier pre-selection and recent Oftel proposals on wholesale line rental. These are areas where Oftel has previously encountered difficulties in collecting data due to the large number of small players in these markets.

2.30 There are likely to be disproportionate costs attached to extending Oftel’s market information process to include all service providers and, to some extent, diminishing returns. Oftel has a number of alternative methods of monitoring growth in the market, primarily its complementary market research and market analysis functions and plans to use these more effectively to target its data requests. Oftel has also made changes to its information requirements in respect of wholesale data and it is likely that this will help improve estimates about retail markets.

2.31 In addition, Oftel has recently been working closely with the Office for National Statistics to reconcile estimates of the size of the telecommunications industry. Results from this work will feed into future Oftel estimates and may also allow the development of a process which enables Oftel to request information from smaller service providers on a sample basis.

2.32 Where there are practical difficulties for operators to provide information Oftel believes that a measured trade off on precision is a rational way to approach data compilation. Given that the usefulness of data to Oftel and other stakeholders is affected by its timeliness, especially for newer, fast growing services, the timescales involved in ensuring that all companies submit data would be prohibitive.

2.33 Oftel remains concerned about the low level of participation among larger independent Internet Service Providers and sees this as the largest gap in its current data collection process. Oftel will be seeking to address this in the course of its forthcoming review of Internet markets. It is essential that the largest players in any market contribute to the evidence base.

2.34 Full implementation of the new EU Directives will extend Oftel’s powers, including those in relation to data collection, to cover all providers of electronic communications networks and services. However, Oftel would like to see all major service providers contributing to the regular process in advance of implementation.

Responses on intra-industry transaction data issues

2.35 In general there was support for the idea that Oftel should collect more information on intra-industry transactions. Telewest felt that Oftel needed to collect more data on intra-industry transactions as they were becoming an increasingly important component of the overall market. BT felt that Oftel should collect more data specifically relating to intra-industry activity on indirect access. C&W saw no reason why not to collect additional data on such activity, but in doing so recognised that it was a difficult area in which to do so.

2.36 Thus and Centrica felt that it was important to collect more intra-industry transaction data as the wholesale market was crucial in sustaining retail competition, and Centrica added that it was important to ensure that no anti-competitive behaviour was taking place in the wholesale market. CCE and SACOT agreed that it would be beneficial to collect additional data, with CCE saying that it would help provide a fuller picture of the market and be useful to understand the costs involved in providing retail services.

2.37 A number of respondents also stated that improved information in this area could eliminate current concerns about double counting data in retail markets.

Conclusions on intra-industry transaction data issues

2.38 Oftel agrees that as the telecoms market has become more competitive intra-industry transactions have become increasingly important. Interconnection volumes and revenues have grown significantly as the number of operators offering telecoms services has increased.

2.39 Recent determinations on partial private circuits and other broadband access issues mean that the need for good quality wholesale information is further emphasised. There is also an increased focus on wholesale markets in the EU market definitions.

2.40 Following the end of the formal consultation period, Oftel has discussed some of the specific points raised with operators and has re-designed the market information proforma to help collect better quality information on interconnection and leased lines. The changes should help reduce double counting and enable Oftel to make improved estimates about related downstream retail markets.

Responses relating to new types of information

2.41 In general, there was acceptance that the data collection process should be extended to allow Oftel and stakeholders a better understanding of Internet and broadband markets. Some respondents suggested that areas such as broadband termination and web-hosting should also be considered.

2.42 BT also felt that extension of the data collection process could be justified in areas where the new EU Directives deem that Oftel should analyse a market or service, and that this should be done in agreement with those providing the data.

2.43 Energis believed that some widening of the scope of the data collection would be beneficial, but it would be important to ensure that the balance between costs and benefits was maintained. Telewest and Centrica were not sure whether the benefits of extending the data collection process would outweigh the costs of providing it.

2.44 All operators thought that the suggestion that Oftel widen the scope of its data collection to include financial information such as investment and cost information and tariff data was inappropriate. BT stated that they already furnished Oftel with this data and therefore it was not necessary for them to do so whereas other operators thought that requesting this information on a regular basis would be disproportionate.

2.45 NIACT and the East Midlands Development Agency (EMDA) said that data on a regional basis would be of use.

Conclusions on new types of information

2.46 The majority of the suggestions of areas in which Oftel could collect additional data were newer services such as broadband, Internet and CPS. Although Oftel already collects some statistics on these services, it is recognised that they are becoming increasingly important and Oftel has used the re-design of the current market information pro-formas to ensure that the amount of data collected on each market reflects this.

2.47 Unfortunately the NIACT and EMDA’s suggestion of collecting data on a regional basis is not practical. In general, operators own financial systems from where the majority of market information is derived are not capable of generating regional data.

  Chapter 3 – Practical issues

3.1 Oftel also sought practical suggestions as to how the efficiency of its regular data collection may be improved. This section discusses a number of these suggestions.

Responses on data collection process issues

3.2 A major concern of operators was the advance warning given by Oftel for the collection of new data. BT, C&W, Telewest and Centrica were all quick to point out that the time needed to collect new data on a specific service depends on the service itself and how easily systems can be adapted to compile data on it.

3.3 But there was no real consensus in the minimum required lead time with estimates ranging from one to six months. C&W and Vodafone both said that Oftel should give operators as much notice as possible to any proposed additions to the data collection process.

3.4 Greater consensus was reached in relation to the lag between the reference period and data supply with suggestions again broadly within the range of current requirements of one to two months. Once again, a number of operators noted that the timeliness of data supply will depends on the nature of the data itself.

3.5 BT and One2One both suggested that it would be useful for Oftel to publish a timetable of when data would be required from operators in order that they are aware of forthcoming data requests. Telewest felt that it would be useful for Oftel to look at the scope of data requested, suggesting that it be streamlined and saying that it would be useful to simplify the current pro-formas and tailor them for different types of operator. C&W said that a workshop with operators would be useful for Oftel to get feedback on the data collection process in order to streamline it.

3.6 Centrica said that clearer definitions in the explanatory notes which accompany the forms and an upfront guide to which sections were relevant to which types of operator would be helpful. Thus and SACOT suggested that web-based submission of data would be a useful development.

Conclusions on data collection process issues

3.7 Oftel understands that there can be difficulties in producing data on new services or areas and wherever possible seeks to give operators the maximum time possible to introduce the necessary reporting systems. Oftel is not always able to give operators as much time as it would ideally like. In future, Oftel will seek to give those providing data three months advance warning of any additions to the data collection process.

3.8 Oftel accepts that where there are changes to its regular questionnaire it may take some time to fully revise procedures for interrogating management information or billing systems but Oftel believes that these revisions should be relatively straightforward and can thus be implemented quickly.

3.9 Oftel intends to circulate a firm timetable to data suppliers of when market information data for particular periods is due to be submitted. In addition, the new pro-forma will have a contents page in order to clarify which data different types of operator are required to provide and will have clearer, more accessible guidance notes.

3.10 It is not yet possible to implement a web-based data submission system. There is a large amount of quality checking would be difficult to replicate on an automated system. Nevertheless, Oftel intends that, where possible, all returns will be submitted electronically, leading to some data processing time savings.

3.11 Oftel believes that its current expectations regarding data supply are broadly realistic and should ensure a reasonable level of timeliness in published information. Currently operators are requested to submit data by the end of the second month following the reference period. Oftel then aims to use the third month to quality assure the data with reference to trend information, a comparison of operator returns for the period in question and data from other sources both inside and outside Oftel. The more complex nature of the fixed data questionnaire and the greater number of operators means that this quality assurance process can take an additional month relative to the mobile questionnaire.

3.12 Oftel also plans to set up more regular formal reviews of its regular data collection programme and hopes to hold at least annual forum to discuss possible changes to the requirements with both suppliers and users of the data.

Other Oftel data requirements

3.13 The programme of EU market reviews will place significant resource demands on Oftel in terms of collecting information to properly conduct market analysis. The consultation document outlined the reasons why Oftel believes that a regular data collection process can help to manage the costs to industry in supplying information for these reviews and other Oftel investigations as well as improving the quality and timeliness of its decisions.

3.14 There may be scope for further amendments to the regular data collection process if it emerges that additional information required to inform the review programme is likely to prove useful in the future.

3.15 By their nature it is difficult to properly foresee what sort of information is likely to be required for competition cases. Nevertheless, Oftel will continue to monitor additional data requirements arising from such cases and where there is a persistent need for data on a particular issue Oftel will aim to incorporate the relevant information into the regular collection process.

3.16 Oftel will also ensure that it does not already hold information on the subject matter through its regular data collection process before sending out ad hoc data requests. This improved co-ordination should minimise the risk of duplication, unnecessary additional burden on industry and possible inconsistency in Oftel’s decision process.

3.17 Oftel accepts that, where possible, it should limit its regular requests for information only to those areas where operators themselves generate regular reports for management information purposes. The review process has proved useful in identifying real problem areas but Oftel believes that its revised requirements should be relatively easily met by all operators and service providers. Oftel remains sympathetic to any genuine difficulties suppliers have in producing the information and will continue to work with those suppliers to develop reliable estimation processes if necessary.

3.18 From time to time Oftel is also required to submit data to a range of international bodies such as the OECD or as part of the annual EU Implementation Report exercise. Generally these demands are met by the outputs of Oftel’s regular data collection process. However, Oftel will continue to work with other regulators to improve the comparability of these comparisons.

Chapter 4 – Publication of industry data

Responses on market share issues

4.1 Most respondents agreed that the publication of individual company information was important; many suppliers noting that they were also users of the data.

4.2 But there was less agreement about how thresholds for publication could be established. BT said that publication of individual company data was important and should continue for operators whose market share is above a certain threshold. BT added that data should continue to be published for companies with a market share above a certain threshold and if necessary ‘company x’ type pseudonyms could be used to avoid damaging operators’ interests. Thus agreed that individual company data should be published for operators with a market share above a certain threshold and Vodafone said that publication of company data allowed stakeholders a more useful understanding of the market.

4.3 Energis said that either data for all operators should be published in order to maintain uniformity among participating operators. Otherwise publication should be limited to market totals. Centrica felt that data should only be published for operators with networks or SMP. C&W believed that it was not necessary to publish data on individual companies as market intelligence channels could be used to obtain company data, and it would be more useful to publish data on market segments (eg calling cards).

4.4 Respondents generally agreed that clearer guidelines as to when data on an individual company would be published would be useful. C&W suggested that data should only be published for SMP designated operators and BT said that market share thresholds for publication should be reviewed as part of an annual data collection consultation. Telewest said that clarification of the information to be published would be welcomed by the industry generally and may increase the likelihood of operators participating in the data collection project. Energis felt that there was no need for publication rules.

4.5 There were differing views about how the competitiveness of a market should determine publication of operator specific information. CCE and SACOT felt that it would be inappropriate to publish less individual company data for competitive markets, CCE to promote choice, and SACOT to ensure regulatory effectiveness and accountability. C&W had no objections to the continual publication of company data, but said that operators should be able to opt out of publication. EMDA accepted that as markets became more competitive less company specific information would be published.

Conclusions on market share issues

4.6 Oftel accepts that establishing clear rules on publication thresholds is difficult. As markets become more competitive, disaggregated information becomes more sensitive. Oftel has always been sympathetic to commercial concerns and is still obliged to seek the agreement of individual operators before publishing any company-specific information.

4.7 But there is obviously some concern amongst operators about apparent ambiguity in Oftel’s rules for publishing information. Therefore, to maintain transparency in its decision making Oftel wants to publish regular market share information based on clearly defined criteria.

4.8 Restricting operator specific information only to those operators deemed to have significant market power in particular markets would reduce the amount of information currently published in the regular publications. Publishing data on all operators irrespective of size is simply not practical.

4.9 Oftel therefore proposes to introduce a five per cent threshold above which information on individual operators will be published. Should operators object to individual publication data will be anonomised and published on a ‘company x’ basis.

4.10 However Oftel believes that the ‘company x’ approach is difficult to justify in established markets where it can be relatively simple to deduce companies identities from their size. In such cases major players should be relatively relaxed about the publication of company information. The ‘company x’ approach would therefore seem more likely to be adopted in newer markets where data are more sensitive and company market shares less well known.

4.11 Oftel can see no reason why individual company data should be withdrawn for effectively competitive markets, although there may have to be some sort of value judgement made based on the nature of market itself. Any decision to discontinue the publication of individual company data would be made in consultation with stakeholders.

Responses on timing issues

4.12 In terms of the timeliness of the publication most respondents agreed that information should be made available as soon as possible, although C&W felt that it was important that the quality did not deteriorate as a result of any improvements to the timeliness of the reports. Vodafone also noted that it was important that publication did not take place prior to corresponding stock exchange or stockholder reports.

4.13 Consumer groups generally felt that the current publication lags were too long. One operator stated that a lag of six months was acceptable, but noted that this may not be appropriate where the information was informing a competition policy decision. In general the current targets of three months for mobile and four months for the fixed update were agreed to strike the appropriate balance between timeliness, quality assurance and completeness.

4.14 BT also said that it would be useful if embargoed copies of the reports should be circulated to named operators prior to publication.

Conclusions on timing issues

4.15 Oftel believes that data quality should not be sacrificed to improve the timeliness of publication. Currently, Oftel publishes data as soon as it is satisfied with the reliability of the figures which it has received from operators. In general, any publication delays are due to late operator returns or operators supplying incorrect or missing data. When this occurs additional time is required to obtain updated figures in order that the published data are as reliable as possible.

4.16 Oftel believes that practical targets for the quarterly publications are four months for the fixed reports and three months for the mobile reports. The mobile report takes less time than the fixed as Oftel collects a smaller data set from fewer operators. Consequently it does not take as long to check the data, meaning that there are less opportunities for delays to occur.

4.17 Oftel is aware that the current market information publications are subject to a considerable level of revision. This can make it difficult for users to construct consistent time series. From September, Oftel will make available a full time series version of its market information updates on its website which will be regularly updated with revisions to previously published data. Oftel also intends to benchmark all data at the end of every financial year and that no revisions to prior year data will take place without an accompanying full explanation to users.

4.18 Oftel plans that the first Market Information Updates to be published on the new basis will be those for the April-June 2002 data to be published in September/ October. Consequently suppliers and users will be allowed further opportunity to comment on its proposals before then.

4.19 Oftel will continue with current arrangements for checking that operators are content for their own data to be published and also intends to circulate embargoed copies of future reports to named operators one day prior to publication.

Annex A – Summary of changes to pro-formas

A.1 This annex provides a summary of the changes to the pro-formas used to collect Oftel’s quarterly market information from operators and service providers. The annex provides a brief explanation for the changes together with details of the changes made to each of the individual sections of the forms. The revised forms themselves together with revised notes for completion are available at www.oftel.gov.uk/publications/market_info/2002/forms.htm.

Changes to fixed pro-forma

A.2 The diverse nature of fixed operators’ business means that not all of the data requested on the associated pro-forma are relevant to all data suppliers. To reduce confusion among operators a clearer sign-posting has been introduced on the cover of the pro-forma to point operators to the sections which are relevant.

A.3 The cover of the pro-forma also requests operators to supply a headline turnover figure. This figure should be straightforward for operators to provide and give Oftel a clearer idea of where to target requests for the more detailed information. In addition it should aid the reconciliation of Oftel estimates of telecommunications industry turnover with those compiled by the Office for National Statistics (ONS) and allow a better understanding of the underlying data.

A.4 Oftel has asked operators to differentiate volumes of direct and indirect traffic as part of the market information process for some time. To further assist in monitoring the impact of carrier pre-selection (CPS) Oftel is now seeking to measure the revenues from these separate services separately as well. This should assist in monitoring price trend effects of any growth in indirect access traffic.

A.5 To off-set the increase in the requested revenue information the level of detail has been reduced and operators will no longer be required to specify volume and revenue information for a number of less important call types. However, Oftel is now seeking to measure the specific element of operator revenues derived from offering un-metered calls.

A.6 As noted in chapter 2 of the main document, Oftel has experienced problems in differentiating between retail and wholesale indirect access sales. To combat these problems Oftel is now asking operators to clearly specify whether reported indirect access sales are on a retail or wholesale basis. This should reduce double counting and improve the precision of the published estimates.

A.7 Leased lines have consistently proved to be a difficult area in which to collect accurate information, particularly on revenues. However, the consultation process has given Oftel a much clearer understanding of the issues facing operators in supplying this information and has reduced the level of detail required on a regular basis.

A.8 Finally, many respondents agreed with Oftel’s view expressed in the consultation document that there was a need to collect a larger amount of information on dial-up and broadband Internet services. Extra sections have thus been added to the pro-formas to collect data on a range of related variables. Oftel currently collects some regular information on DSL and cable modem services outside of the market information process to assist the monitoring of broadband roll-out in this earlier phase. However, the expectation is that ongoing monitoring will pass to the regular market information process in due course.

A.9 A summary of all the changes made to the fixed operator pro-forma are listed below:

Cover page

• cover page added to collect operator turnover during the period and checklist showing which parts of the form are relevant to which types of operator.

Page 1 – Call revenues by type of call and customer

• extra page added to allow separate collection of revenue data for directly connected and indirectly connected customers;
  
• the following call categories removed: other calls through the operator, calls to paging operators, calls to the speaking clock, chargecard calls, VPN Off-net (breakout) calls, phonebase calls;
• flat rate calls category added;
• connection and rental revenues for directly and indirectly connected customers moved from page six to the relevant revenue page;
• Centrex and VPN categories merged on directly connected revenues page;
• called party revenues from freephone, special local rate and special national rate calls split out and moved onto new NTS services page;
• payments to service providers for premium rate services moved onto new NTS services page; and
• Internet traffic over the PSTN data spilt between that for operator’s own ISP and other ISPs and moved onto new Dial-up Internet page.

• the following call categories removed from both tables: unmetered Internet calls, other calls through the operator, calls to paging operators, calls to the speaking clock, chargecard calls, VPN Off-net (breakout) calls, phonebase calls;
  
• flat rate calls category added to both tables;
  
• calls volumes from public payphones category added to directly connected table; and
  
• call volumes supplied to other service providers category added to indirect volumes table in addition to retail volumes.

• moved to previous page, changes as outlined above; and
• extra page added containing tables to collect data on directly connected and indirectly connected subscriber numbers, connections and disconnections by service (previously on page seven of the return).

• page merged with old page five; and
• indirect access call origination volumes and revenues/payments category added.

Page 5 – Transaction with other operators: international call conveyance services

• page removed – see above.

• page removed – majority of data now collected on new directly connected and indirectly connected customer revenues pages, NTS services page and broadband Internet page; and
• data on interim carrier pre-selection, call minder, call waiting and caller display no longer collected.

• page removed – majority of data now collected on new directly connected and indirectly connected customer revenues pages, NTS services page and broadband Internet page;
• data on interim carrier pre-selection, call minder, call waiting, caller display and disconnections for non-payment no longer collected; and
• Centrex & VPN customers no longer collected, Centrex & VPN channels now collected together.

Page 8 – Inland Private Leased Circuits supplied to customers

• page merged with old page nine (data on International Private Leased Circuits);
• connection and rental revenues combined; and
• changes to the bandwidth categories.

Page 9 – International Private Leased Circuits supplied to customers

• page removed – see above.

Page 10 – Inland Private Leased Circuits supplied to customers: detail

• page removed.

Additional Internet data requested on new forms:

Dial-up Internet

• fully unmetered, partially unmetered and pay-as-you-go ISP subscriber numbers;
• fixed and call charges for fully unmetered, partially unmetered and pay-as-you-go ISP subscribers; and
• unmetered dial-up ports and web-hosting revenues.

Broadband Internet

• cable modem connection and rental revenues, subscribers, connections and disconnections; and
• DSL and cable modem data traffic volumes.

Changes to mobile pro-forma

A.10 Oftel made a large number of changes to the mobile pro-forma during the course of the mobile market review carried out during 2000-01. The type of information collected during that review is likely to be broadly similar to that required for monitoring the mobile market in the short term.

A.11 The main changes reflect additional data requirements for newer services such as MMS, text chat and instant messaging, and GPRS. As with the fixed form a number of obsolete data requirements were removed data and the number of individual variables requested is broadly similar to that on the existing form.

A.12 A summary of all the changes made to the mobile operator pro-forma are listed below:

Page 1 – Retail revenues from tied service providers

• contract and pre-pay call revenues and volumes split by call type;
• calls made and received while roaming abroad merged into one category;
• on and off-net MMS added in addition to SMS; and
• text information, chat and instant messaging services revenues and volumes added.

Page 2 – Wholesale revenues from tied and untied service providers

• calls made and received while roaming abroad merged into one category; and
• on and off-net MMS added in addition to SMS.

Page 3 – Subscriber numbers

• number of subscribers with WAP handsets removed;
• volumes of numbers ported onto and from network moved from page four; and
• GPRS revenues and data volumes added.

Page 4 – Transactions with other operators

• incoming SMS revenues & messages from third parties removed.

Annex B – List of respondents to the consultation

B.1 The consultation document on developing a strategic approach to market information was published 11 January 2002 and responses requested by 5 April 2002. Responses were received from:

• British Telecom;
• Centrica;
• Consumer Communications for England (CCE);
• Cable & Wireless;
• Disabled and Elderly People Advisory Committee (DIEL);
• East Midlands Development Agency (EMDA);
• Energis;
• Northern Ireland Advisory Committee (NIACT);
• Office for National Statistics;
• One2One (now T Mobile);
• Powergen;
• Scottish Advisory Committee on Telecommunications (SACOT);
• Telewest;
• Thus;
• Vartec Telecom; and
• Vodafone.

Oftel also held meetings regarding the consultation with the following data providers:

• British Telecom;
• BT Cellnet (now O2);
• Centrica;
• Energis;
• Kingston;
• Norweb;
• One2One (now T Mobile);
• Orange;
• Telewest;
• Thus; and
• Vodafone.