ASIAN IT BRIEFING SEPTEMBER 2017

TRPC ASIAN IT BRIEFING | SEP 2017 | Page 1

Australia ...................................................... 2

Bangladesh .................................................. 2

China ........................................................... 2

India ............................................................ 3

New Zealand ............................................... 5

Singapore .................................................... 6

South Korea ................................................. 6

Sri Lanka ...................................................... 7

Thailand ....................................................... 7

Vietnam ....................................................... 7

CONTENTS

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AUSTRALIA The ACMA Consulting on mmWave Spectrum for 5G The ACMA is looking at how spectrum in the 26GHz Millimetre Wave (mmWave) band should be considered for 5G broadband purposes. Comments are welcomed until 13 Oct. The ACMA has renewed 148 community broadcasting licences for another five-year

run. Multiband residual spectrum lots in the 1800MHz, 2GHz, 2.3GHz and 3.4GHz bands will

sold off in a single auction later in 2017. Impact Analysis: The mmWave spectrum is a “new frontier” for 5G because it has

limited incumbency issues.

BANGLADESH PM Approves Guidelines to Conduct 4G Auction by Dec The BTRC’s spectrum auction will be open to the country’s four existing mobile players along with a new participant. The BTRC is working to finalise a date for the auction. According to the approved guideline: 1) the floor price for each MHz of spectrum

would be USD27m in the 2100 MHz band and USD30m in the 900MHz and 1800MHz bands; 2) the spectrum conversion fee for technology neutrality in the existing 900MHz and 1800MHz bands will be reduced to USD7.5m per MHz from USD10m; 3) the 4G licence fee will be reduced to BDT100m (USD1.21m) from the BTRC's earlier proposal of BDT150m (USD1.82m); and 4) operators will have to pay BDT1.5bn (USD18.2m) to participate in each category of spectrum auction, and will also have to pay BDT1.5bn (USD 18.2m) as bank performance guarantee for rollout obligation.

BTRC Releases Guidelines for TVAS Registration for Public Consultation BTRC released its “Regulatory Guidelines for Issuance of Registration Certificate for Providing Telecommunication Value Added Services (TVAS) In Bangladesh” – which covers music, news and sports content delivered via SMS, Unstructured Supplementary Service Data (USSD), Interactive Voice Response (IVR) and smartphone apps. Registration will be open, valid for five years with eligibility limitations based on foreign equity and source of investment. Fees and charges include an application fee, a registration fee, gross revenue sharing

and payment to the Social Obligation Fund – 5.5% and 0.1% of annual audited gross revenue respectively.

Draft Guideline for Mobile Assembly Introduced The govt has drafted a guideline to encourage manufacturing and assembling of handsets in Bangladesh, following its earlier move to slash customs duty for mobile parts by 24% to 1%. The move is part of the govt's efforts to encourage local assembly and position

Bangladesh as a handset exporter. While the BTRC notes that it will not impose import restrictions on the devices, the

govt has doubled the customs duty on imported handsets to 10% for FY2017-18.

CHINA MIIT Publishes Updated Frequency Allocation Document (Revised draft)

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The MIIT is seeking opinions on its most updated Radio Frequency Allocation document, which incorporates the results of its earlier consultation on assigning the 3300-3600MHz and 4800-5000MHz bands for 5G. It contains the following updates related to International Mobile Telecommunication

(IMT) services: 1) The CHN34 3300-3400MHz band has been allocated for IMT services, principally for indoor use; 2) The CHN35 4400-4500MHz band will be for IMT services. However, IMT services which should not cause interference to aviation radio navigation systems, and can only be use once a coexistence conditions are determined; and 3) The CHN37 4800-5000MHz band will be used for IMT services and its specific frequency allocation will take into consideration the needs of relevant departments.

Circular on Promoting and Upgrading Information Consumption Issued The State Council circular is aimed at stimulating domestic information consumption online, which is expected to grow at an average rate of 11% annually, to reach CNY6tn (USD901bn) by 2020. This growth is expected to lead to CNY1.5tn (USD227bn) in output from related industries. The circular lists intelligent digital products for families; innovative digital content and

services; online education and medical care; and rural e-commerce platforms as applications that should be developed to drive this information consumption growth,

The IoT, big data, cloud computing and AI are highlighted as technologies that should be leveraged to upgrade digital products and their applications.

Central Bank Bans ICOs The People’s Bank of China has issued a notice on initial coin offerings (ICOs), deeming such fundraising illegal and ordering that they be halted on the basis that they threaten the stability of China’s financial market. The central bank has ordered completed ICOs to liquidate and refund investors. Impact Analysis: By bypassing venture capital (VC) funds and investment banks, and

existing outside a regulatory framework, ICOs operate outside of central banks’ remit and this allows risks including fraud to be passed on to ordinary investors.

Govt May Ban Virtual Currency Exchanges Following news on the ICO ban, local media have reported that the govt is also planning to stop the trading of virtual currencies on domestic exchanges. The authorities have not provided clarification on the issue. Despite this, a number of prominent bitcoin exchanges have already made

announcements that they will shut down.

INDIA TRAI Releases Consultation Paper on Planned 4G, 5G Spectrum Auction The TRAI has released a public consultation paper on spectrum auction for the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300-3400MHz and 3400-360MHz bands. Among other things, the paper lists recommendations on: 1) auction timing; 2) auction approach; 3) block sizes; 4) minimum quantity for bidding; 5) quantum of spectrum; 6) network rollout obligations; 7) spectrum cap; 8) valuation of spectrum; and 9) reserve price estimation. Comments are due by 25 Sep and counter-comments by 3 Oct. The spectrum sale may provision 60% of unsold airwaves from last auctions and some

275 units of new spectrum in bands identified for 5G services in the 3300-3400MHz and 3400-3600MHz bands.

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Telecom Panel Looks at Higher Cap for Spectrum The Telecom Commission is looking at revising upwards the spectrum cap for mobile companies, to further enable consolidation in the highly-stressed industry. The commission has sent the matter to TRAI. If it is approved, the measure will be a gain for a merger like Idea Cellular and

Vodafone where currently spectrum needs to be shed in certain circles as it breaches the ceiling.

The IMG is expected to revert with details on the clarifications sought, and the Telecom Commission will meet again within two weeks on the inter-ministerial group's proposals to diffuse the financial stress in the sector.

TRAI Releases its Recommendations on M2M Communications The TRAI has released its recommendations on "Spectrum, Roaming and QoS related requirements in Machine-to-Machine (M2M) Communications". The recommendations cover: Licensing and spectrum related aspects – whereby all access service providers using

licensed access spectrum shall be allowed to provide M2M connectivity within their authorized areas, MSPs will be required to register with the DoT as an M2M service provider, and this registration will not be a part of existing OSP registration, and a National Trust Center will be created for MSP certification.

SIM and roaming related aspects – which covers details on devices with pre-fitted embedded Universal Integrated Circuit Card, International roaming in M2M, and extra-terrestrial usage of IMSI ranges.

QoS, security and privacy related aspects – which aims to put comprehensive regulations on QoS parameters in M2M communication. TRAI will issue recommendations through consultation paper “Privacy, Security and ownership of Data in telecom sector”.

Impact Analysis: M2M communications often run on unlicensed spectrum and with the help of spectrum sharing.

TRAI may Phase out the Controversial IUC The TRAI is considering to completely phase out the controversial interconnect usage charge (IUC) beginning with a sharp 50% cut from the existing IUC. The consumers are likely to benefit from the move, with reduced mobile phone bills. Telcos such as Airtel, Idea and Vodafone stand to lose, if IUC is lowered or scrapped, as

they are the biggest operators by subscribers and garner a major share of the termination charge. The three operators together incorporate 60% share of the country’s more than 1 billion wireless subscribers.

However, If the IUC is increased, Reliance Jio Infocomm would need to pay more to the three telcos.

COAI Launches 5G India Forum COAI announced, establishment of 5G India Forum, which aims to support use and deployment of technology in India. The 5G India Forum will contribute to the national policy on 5G, and will closely work with Department of Telecommunication (DoT) to build consensus among all the stakeholders, including private sector players and govt. MeitY Asks Ministries to Boost Cybersecurity Spending The MeitY has called on ministries spend 10% of their IT budgets on cybersecurity. It has also proposed the chief information security officers (CISOs) in each of them to safeguard and spur up govt's IT infrastructure. MeitY also plans to set up 10 Standardization Testing

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and Quality Certification (STQC) labs to provide quality assurance services in IT, adding to 15 existing STQC labs. Data Protection Bill to be in Place by Dec To complement the Supreme Court’s judgement on right to privacy, the Data Protection Bill is expected to be in place by Dec 2017. Rules will capture data protection and privacy principles, including issues on data sharing, storage, access etc. The MeitY has put together a Committee of Experts to identify data protection issues

and suggest solutions, including a data protection draft bill by Sep. As part of its ongoing discourse on privacy in the context of Aadhaar, in late Jul the

Supreme Court conceded for the first time that privacy was a fundamental right under the Constitution with the caveat that the right could not be extended to “every aspect” of privacy.

Govt to Issue Security Standards for Phone Makers to Control Data Theft The govt will be mandating strict security and privacy guidelines and standards for device makers. The cybersecurity standards aim to protect the data and information of mobile users. These standards will look at controlling the hidden movement of personal information of users to servers abroad. The standards will be based on the recommendations of two high-level committees -

one led by the RBI and the other by the Department of Telecom (DoT). These will be in addition to the provisions in the IT Act that guard against any theft of data.

The IT ministry will also take reference from ISO standards. With rising internet access in India led by mobile devices, govt is concerned over theft

of personal and financial data at the hands of mobile companies, especially the large number of Chinese firms.

NEW ZEALAND New Zealand Commencing 3.5GHz Review 3.5GHz management rights will expire in Oct 2022. The Radio Spectrum Management (RSM) will kick off an industry consultation on 3.5GHz future uses in Oct. Impact Analysis: 3.5GHz has currently limited use but it is expected to be one of the

main 5G bands.

Govt to Up Spending on UFB The UFB2 deployment is to be finished by 2022 and UFB will get NZD130m to reach 190 more small towns, NZD140m to reach an additional 74,000 rural households under the Rural Broadband Initiative (RBI). Chorus will be responsible for most of the additional UFB rollout. The Mobile Black Spot Fund (MBSF) will improve mobile coverage along 1000 km of

rural highways and at tourist areas. By 2022, 87% of New Zealanders will have UFB access and 99% access to high-speed

Internet. Impact Analysis: Agriculture and tourism sectors operate in many rural parts of New

Zealand and people working in those sectors will benefit from improved rural connectivity.

Govt Joins International Open Data Charter New Zealand joins 17 other countries in signing the charter to drive innovation, accountability and transparency.

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Govt Commits to Big Service Digitalisation Effort As part of the Result Action Plan, govt wants 80% of transactions for the 20 most common public services 100% digital by 2021. Impact Analysis: Govt wants to accelerate the digitsing process of public services and make

them easier to use. This is part of a wider Better Public Services campaign.

S INGAPORE Govt Developing Common QR Code for Cashless Payments An industry taskforce led by the Monetary Authority of Singapore and IMDA is looking into developing a common QR code for Singapore (SGQR), which will come with standardised specifications to accept both domestic and international payment schemes. The taskforce also involves the Housing Development Board (HDB), National Environment

Agency (NEA), Spring Singapore, payment providers Alipay, NETS and EZ-Link, as well as non-govt partners Singtel, UnionPay DBS Bank, OCBC Bank, United Overseas Bank, Mastercard and Visa.

SOUTH KOREA Telcos Accept Govt Discount Rate Hike The three major telcos KT, LG Uplus and SK Telecom have decide to accept the govt directive to expand discount benefits for telecom fees to 25%, and will not file administrative litigation against the govt. Govt Crackdown on Digital Currencies The govt has designated Sep to Dec as an intensive illegal financial pyramid scam crackdown period in an effort to protect consumers from damages as neither the govt nor financial institutions can guarantee the value of the digital currencies created. The govt cites it is illegal to create new digital currencies and such currencies may be

used of illegal transactions, such as money laundering and tax evasion. Govt Plans National Semiconductor Project The envisioned 10 year national semiconductor R&D project will cost an estimated KRW2.5tn (USD2.2bn), and will be overseen by the Ministry of Science and ICT (MSIT) and Ministry of Trade, Industry and Energy (MOTIE). Semiconductor experts from research institutes such as Electronics and

Telecommunications Research Institute (ETRI), Korea Institute of Science and Technology (KIST), Korea Electronics Technology Institute (KETI), and Korea Research Institute of Standards and Science (KRISS) and about 50 university professors are also involved in the planning.

The national project is expected to commence in H2 2018 after preliminary feasibility tests pass this year.

The project is largely divided into AI, IoT, and equipment and materials related to production of next-generation semiconductors and will cover development of fundamental technologies such as ‘super low-power’ devices and commercialized technologies.

Govt Mulls World First Robot Tax South Korea is mulling changing its tax laws to limit tax incentives on investments in automation. The move comes amidst growing recognition that automation will displace low and middle-skilled workers and the reduction will help offset the lost income tax.

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SRI LANKA TRC Asks Operators to Better Regulate SIMs The TRC has issued a Presidential Directive requesting that MNOs introduce better SIM registration schemes to reduce the problem of SIM-based fraud and crime in the country. The TRC has called on domestic MNOs to register SIM cards with “a duly filled application form and a photocopy of the National Identity Card of the owner” by order of the minister, under the Telecommunications Act. No 25 of 1991. No mention has been made of any punitive steps that could be taken if any MNOs fail

to comply with the request. Central Bank, ICTA Develop NPP under Existing Laws The Central Bank is now involved in the development of a new National Payment Platform (NPP) for digital financial transactions under existing legislation. ICTA is in the process of submitting a proposal to the Central Bank, which will then go by the Payment and Settlement Systems Act to develop the desired framework. The original NPP development process started in mid-2015, and over the course of the

past two years three IT service providers had been chosen as facilitation partners to develop the consumer end of the platform.

However, concerns related to risk in creating a NPP outside the purview of the Central Bank, may further undermine the independence and authority of the monetary policy regulator.

THAILAND Digital Economy and Society Index Planned for Thailand The Office of the National Digital Economy and Society Commission plans to have a Digital Economy and Society Index as a significant indicator of digital performance. The index will be announced to the public every year and is expected to show what

percentage the digital economy contribute to GDP. The ONDE is tasked with five projects including: developing the 2,280 digital

community centres nationwide; developing a fully-integrated electronic health record (EHR) system; promoting an online commerce system; developing an e-village centre project; and encouraging traditional merchants to go online.

V IETNAM Government Considering Recognising Cryptocurrency The Prime Minister has approved a plan to research an examine possibly streamlining the legal framework to include the management of cryptocurrencies, such as Bitcoin, in Vietnam. The project will be headed by the Ministry of Justice, who will co-ordinate with the

State Bank of Vietnam, MIC and other relevant agencies to scrutinise the current legal framework.

Expect Draft Cyber Information Security Law at end-Sept The draft will be submitted to the National Assembly Standing Committee in Sep 2017. Impact Analysis: The law is expected to help Vietnam strengthen its cybersecurity

network, but previous drafts have done this to the detriment of the free flow of data in and out of Vietnam, which may slow Vietnam's digital economy expansion drastically if not done right.

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