Telecom Sector & GATSTelecom Sector & GATS

Today’s purpose: How to use the WTO forum to

expand business opportunities of HK telecom service providers.

Part I: Telecom negotiations in GATSPart II: Private sector’s wish list

Part I: Telecom Negotiation Part I: Telecom Negotiation in GATSin GATS

Define telecom services in GATS

Basic Telecommunications Agreement (BTA)

Define Telecom Services in Define Telecom Services in GATSGATS

15 subsectors divided into:

Basic telecom services - simple relay of info in real time from end to end

Value-added services - telecom provider adds value to customers’ info by enhancing its form or content

Others

Basic Telecom AgreementBasic Telecom Agreement

Signed in Feb 1997Came into effect in Feb 199869 signatory WTO countriesrepresent over 90% of the basic

telecom market worldwide

Coverage of BTACoverage of BTA

encompasses local, long distance, & international services

for public and non-public usestransmitted over facilities-based or through

resale (private leased circuit)provided through any means of technology (e.g. cable, wireless, satellites, stationary

or non-stationary means)

Components of BTAComponents of BTA

Specific commitments from individual countries

Annex on telecommunications

Reference Paper

Specific Commitments Specific Commitments (Basic & Value-added)(Basic & Value-added)

83 and 70 WTO members have made commitments in telecom and value-added services respectively.

Breath of coverage:

- 65% at least 10 subsectors

- 25% between 14-15 subsectors

Annex on Annex on TelecommunicationsTelecommunications

Motivation:

Telecom services are important input into the supply of other services. Adequate access to and use of public telecom transport network & services (PTTNS) are essential conditions to guarantee market access to all service sectors.

Annex on Annex on TelecommunicationsTelecommunications (cont.) (cont.)

Each WTO member is required to allow foreign firms access to and use of PTTNS on a reasonable and “non-discriminatory” basis when they take advantage of ANY GATS commitments made by this member.

MFN and national treatment

Reference PaperReference Paper

Set up pro-competitive principle– competitive safeguard– interconnection– transparent licensing criteria– independent regulator– allocation of scarce resources– universal safeguard

Summary of Telecom Summary of Telecom CommitmentsCommitments

Value-added services more openCommon limitations on market access

(mostly on commercial presence)– number of suppliers– types of legal entity or joint venture– foreign equity ownership

Part II: Private Sector’s Part II: Private Sector’s Wish ListWish List

Information technology (IT)–telecom services –information services

Economies %

China 48%

Taiwan 23%

Korea 13%

Hong Kong 11%

India 5%

Others 10%

Total 100%

Telecom Services:Telecom Services:Countries of InterestCountries of Interest

Information Services:Information Services:Countries of InterestCountries of InterestEconomies %

China 37%

Taiwan 20%

Singapore 14%

Korea 10%

Hong Kong 9%

Others 10%

Total 100%

Telecom Services:Telecom Services:Businesses of InterestBusinesses of Interest

Subsectors %

Fixed Telecom Network Services 33%

Private Leased Circuit Services 22%

International Telecom Services 17%

Mobile Telecom Services 5%

General Telecom Services 23%

Total 100%

TelecomTelecom Services:Services:Major WishesMajor Wishes

Commercial presence requirements– relax restrictions on foreign ownership, operating licence

and scope of business (top 3) Immigration and visa

– streamline application, relax quota and duration of foreign visa

Market infrastructure– simplify domestic regulations, enforce intellectual

property law Improve transparency

– court rulings, set up inquiry point

Information Services:Information Services:Businesses of InterestBusinesses of InterestSubsectors %

Software Development & Implementation 39%

Internet Services 22%

Hardware Installation & Maintenance 7%

Data Processing Services 5%

Electronic Data Interchange Services 4%

Online Information & Data Retrieval 4%

General Information Services 19%

Total 100%

Information Information SServices:ervices:Major Major WWishesishes

Improve transparency– Set up EDI (1), court rulings, set up inquiry point

Market infrastructure– E-commerce regulations (3), relax restrictions on

marketing channels, simplify domestic regulations

Commercial presence requirements– Relax restrictions on foreign ownership and scope of

business (2)

The EndThe End