Telecom trade: Achieving telecom and development policy objectives

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Telecom trade Achieving telecom and
development policy objectives

• APT-infoDev
• Sub-regional Seminar
• Trade in Telecom
• Trade in Services Division
• WTO, Geneva
• http//www.wto.org

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Meeting the Challenge of Network Expansion

• Investment in telecom infrastructure - to
  increase penetration levels - is crucial for
  developing country participation in the global
  information economy
• Credibility - to attract investors - depends on
• Rules and regulations that ensure investors a
  reasonable chance of returns
• Mechanisms that ensure against arbitrary
  governmental discretion
• Anupama Dokeniya, Re-forming the state Telecom
  liberalization in India, Telecommunications
  Policy 23 (1999) 105-128

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National Goals

• Quality, reliable networks
• Affordable tariffs
• Efficient use of limited resources (frequencies,
  land, numbers)
• Nation-wide interoperability
• Timely extension of networks services
• Universal access
• K.E. Skouby A. Hention, The Political Economy
  of Competition in Telecommunications
  Communications Strategies, No. 30, 2nd Quarter
  98, p. 199

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GATS Fundamentals
Non- discrimination
Transparency
Reasonable regulation
Competition safeguards
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Best Practice?
Non- discrimination
Transparency
Reasonable regulation
Competition safeguards
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Key Ingredients for Reform

• Clearly set out policies in laws, regulations,
  licenses, contracts
• Make all processes open to participation review
  by all interested parties
• Ensure the award of licenses/contracts adheres
  strictly to criteria clearly announced at outset
  
• Limit discretionary intervention by government
• Restructure prices - based on costs
• Guarantee reasonable interconnection to dominant
  operator(s)
• Björn Wellenius, Telecommunications Reform- How
  to Succeed Viewpoint Note No. 130, Oct. 1997,
  The World Bank

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Implementing WTO rulesRegulators in the
forefront
1994 GATS Round ended 1998 BT negotiations
ended 2001 Latest data
Source Regulatory Trends Report, ITU, 2001
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and taking on new roles

• Manage transition from monopoly to market
• Reduce uncertainty
• Compensate for market failure
• Regulator Objectives
• Promote efficiency and competition
• Satisfy demand protect consumer interests
• Attract and protect investors
• Ensure inter-operability, inter-connectivity and
  network integrity

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Why Emerging Economies Commit in WTO on
Telecom Reform

• Extend networks, join the the information
  society, reduce the digital divide
• Stimulate growth exports, deploy ICT for
  development, enhance competitiveness
• Galvanize reform, consolidate a timetable
• Send clear signals to new entrants incumbent on
  what to expect
• Assure investors of a stable, rule-based market
• Strengthen regulatory capacity to implement
  desired reforms obtain maximum benefits

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Taking Advantage of Telecom Commitments

• The Telecom Industry
• Emerging country operators take advantage of GATS
  commitments - investing in PTO privatizations
  new mobile licenses, particularly in their
  region, but elsewhere as well
• Cross-border supply, e.g. using simple resale,
  calling cards, internet and VOIP, are low cost
  ways to enter foreign markets
• Niche markets for business or residential
  services offer new opportunities in telecom for
  small and medium enterprises
• Alliances of large and small telecom operators is
  facilitating entry into liberalized foreign
  markets
• New growing opportunities in mobile/radio
  services, capacity wholesale, hubbing, and
  interconnection services

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Taking Advantage of Telecom Commitments

• Other Industries
• The liberalized tourism, banking and business and
  professional services, including computer and IT
  services, are highly intensive users of telecoms
• They are also well equipped to tap E-commerce for
  cross-border access to global markets which
  can be low cost in competitive telecom regimes
• Competition in e.g. in data transmission, private
  networks and leased lines are especially crucial
  to user industries
• As telecom competition yields lower prices, small
  medium enterprises can better compete
  internationally

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Telecom the new economy

• By whatever name...
• Internet
• Info Highway Info Society
• E-commerce ... E-business
• ICT for development

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Negotiating Proposals . Internet, ICT and
Convergence

• Consider commitments in light of technological
  innovation media convergence. Telecoms impact
  is well beyond services so consider relation
  with intellectual property, trade-related
  investment measures e-commerce (Chile)
• Negotiate on a range of integrated services
  (voice, data, and video) by all technologies
  other on-line services (e.g. financial
  computer) essential to e-commerce (US)
• Commitments should be technology neutral
  interpreted in an extensive manner, to include
  internet-based developments (Switzerland)
• Dont neglect satellite, mobile Internet
  services (Australia Norway)

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ICT Convergence TrendsImplications for
commitments

• Evolving technologies.. IP...Broadband.. wireless
• More integrated diverse commercial offerings
• Convergent regulatory models
• The Chairmans Note on telecom scheduling
  anticipated can address many such trends
• Can address regulatory and technological
  distinctions where they exist and when necessary
  in schedules
• Clarifies when commitments do extend to all
  forms of technology, market segments, or
  users

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E-commerce Business as usual
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E-business Website applications
Customer
service
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Cost
saving
35
Other
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Revenue
Generation
Marketing
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Source Computerworld cited in ITU Challenges to
the Network 1999 Internet for Development
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The ICT Trade Implications Why telecom remains a
priority
Agriculture/commodities
Other Services
Industrial goods
Transport
Insurance
Software
Banking
Telecommunications
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E-commerce Why GATS?

• Customer uses a computer or other access device
  computer services
• Logs onto internet communication services
• Goes to a web site with product information
  advertising services
• Orders a product distribution services
• Pays for it financial services
• Downloads it or has it mailed delivery services

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E-commerce ITA?

• Under WTOs Information Technology Agreement,
  participants eliminate tariffs ( other duties
  or charges) on IT products such as computers,
  telecom equipment and other ICT inputs.
• As of 2000, ITA made much of world trade in IT
  imports free of tariffs
• 60 WTO Members currently take part

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Asia-Pacific in the ITA

• Australia
• China
• Hong Kong, China
• India
• Indonesia
• Japan
• Korea

Macao, China Malaysia New Zealand Philippines Sing
apore Chinese Taipei Thailand
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E-tradeA pilot study
SourceE-Commerce - beyond 2000 , Australian
National Office for the Information Economy, 1999

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E-Commerce Work Program

• In the Services Council
• Concept discussed that GATS is technology
  neutral, so e-delivery of services would fall
  within the scope of the Agreement.
• This would mean on-line services can already
  benefit from existing and future GATS rules
  scheduled commitments
• As a result, cross-border supply is taking on
  added importance in the Doha negotiations

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But overall Cross Border Access Today
(By number of governments)
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E-delivery WTO Opportunities...

• Already, 70-90 of industrialized countries
  commit to barrier-free access for cross border
  supply of
• Computer-related services
• Travel agency services
• Advertising, architecture engineering
• Management consulting market research

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Computer ServicesNegotiating proposals offers

• Canada
• Costa Rica
• European Communities (in business services)
• India
• Japan (in business services)
• Mercosur (Bolivia)
• United States (in telecom proposal)
• So far new computer Offers by 5 Members,
  improvements by 11

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WTO Implications of the negotiations for ICT?
More commitments in e-critical sectors
Improve cross border access
Further liberalize telecom Expand ITA
Developing country ICT interests