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Webster University, Geneva 20 September 1996
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1
TRADE IN TRADE IN TELECOMMUNICATIONSTELECOMMUNICATIONS
Michael MingesTelecommunication Development Bureau
Telecommunications and Economic Growth
Webster UniversityGeneva
20 September 1996
2
TopicsTopics
Trade in telecommunication equipment Trade in telecommunication services Rules and regulations Global electronic commerce
3
TELECOMMUNICATION TELECOMMUNICATION EQUIPMENT TRADEEQUIPMENT TRADE
1990 1991 1992 1993 1994
5661
76
96
68
Telecommunication equipment exportsUS$ billions
4
Top telecom equipment vendorsTop telecom equipment vendorsTELECOM EQUIPMENT REVENUE, 1995
ForeignCompany (US$ b) sales %
1 Alcatel (Fra.) 20'054 77%2 Motorola (USA) 16'660 63%3 AT&T (USA) 15'564 26%4 Siemens (Ger.) 13'669 57%5 Ericsson (Swe.) 13'423 91%6 NEC (Jap.) 13'045 28%7 Nortel (Can.) 10'143 89%8 Nokia (Fin.) 8'525 91%9 Fujitsu (Jap.) 4'899 30%10 Bosch (Ger.) 3'777 56%
Top 10 119'759 49%
5
Trade-dependentTrade-dependentHow can developing countries How can developing countries
pay?pay? Generate enough service
revenues Have strong currency
Multi-lateral loans (World Bank, EIB)
Declining Bi-lateral loans
Tied Make own equipment
China, Korea Foreign Investment
Telecom equipmentexports, 1994
Asian27%
Developed70%
Developing 3%
6
TRADE IN TRADE IN TELECOM SERVICESTELECOM SERVICES
Cross-border supply Consumption abroad Commercial presence Presence of natural persons
7
Cross-border supplyCross-border supply
Traf
fic (b
illio
ns o
f min
utes
)
0
10
20
30
40
50
60
70
75 77 79 81 83 85 87 89 91 93 950%
5%
10%
15%
20%
25%
Annual grow
th rate
Twenty years of talkingInternational telephone trafficBillions of minutes
Developing countries
Traffic growth
GDP growth
8
ImbalanceImbalance
Growing imbalances creating pressure for reform of “Accounting rate” system
Growing call-back exacerbates problem
Net telephone trafficMinutes, 1994
Mexico
Canada
Philippines
Turkey
Colombia
Singapore
SwitzerlandJapan
Germany
USA
1'134
700
369
230
-240
-279
-400
-1'044-7'800
326
9
Consumption abroadConsumption abroad
Home billing Global System
for Mobile Communications (GSM)
Global Mobile Personal Satellite Systems
Cellular subscribersWestern Europe, millions
1992 1993 1994 1995
GSMAnalog
69
15
23
10
Presence of “natural” personsPresence of “natural” personsCAN WE HELP?: SCANDINAVIAN TELECOM CONSULTANTS1995 Revenue
Company (US$ m)
Staff
ProjectsTeleDenmark Consult 11
44
Management training in Bulgaria. Network planning in Ukraine. Payphone network in Mozambique.
Telnor Consult 3
11
Corporate Plan for Mongolia. Feasibility study for cellular in Bangladesh. Subscriber network plan for Eritrea. Training for Lesotho and Poland. Billing system for Tanzania. Network planning in Russia.
Swedtel 33
225
More than 50 countries including development of services in Philippines, cooperation with new network operators in Poland, building transmission systems in Bosnia and Hungary.
TOTAL 46
280
11
Commercial presenceCommercial presence
Liaison office “Watching” function Foreign Direct Investment
Privatization Joint ventures International partnerships
12
Foreign Direct InvestmentForeign Direct Investment
“Only foreign investors can save Mongolia. We must do everything to attract them.”
“Little countries like ours [Zaire] are in desperate need of help in developing infrastructure in things like telecoms, and we’re grateful for whatever can be done. But we mustn’t lose sight of what the world ‘help’ means. We’re not negotiating the carve-up of the world for the benefit of only half-a-dozen countries.”
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PrivatizationPrivatization“La Reconquista”Spain’s Telefónica in South America
Telefónica del Perú (35%)1994: US$ 2 billion
CANTV (6%)(Venezuela)1991: US$ 300 million
Telefónica deArgentina (21%)1990: US$ 160 million
CTC (44%)(Chile)1990: US$ 400 million
14
Joint venturesJoint ventures
TELECEL: AirTouch (USA) 23%AIRTEL:AirTouch (USA) 16%OMNITEL:AirTouch (USA) 12%BellAtlantic (USA)12%Telia (Sweden) 10%
BELGACOM MOBILE:AirTouch (USA) 25%Ameritech (USA)13%TeleDanmark 12%Singapore Telecom10%
NORDICTEL: AirTouch (USA) 51%
MANNESMAN: AirTouch (USA) 35%C&W (UK) 5%
ONE 2 ONE: US West 50%
Foreign investment inWestern Europe
Cellular Operators
Ö CALL:Deutsche Telekom25%
SONOFON:BellSouth (USA)29%Vodafone (UK) 25%
E-PLUS:BellSouth (USA) 21%Vodafone (UK) 17%
SFR:BellSouth (USA) 4%Vodafone (UK) 10%
NETCOM:Singapore Telecom17%
STET HELLAS: STET (Italy) 75%PANAFON:Vodafone (UK) 45%France Telecom 35%
EUROPOLITAN:Vodafone (UK) 19%
LIBERTEL: Vodafone (UK) 35%
ORANGE:Hutchison (HK) 65%
ESAT: TelNor(way) 38%
15
INTERNATIONALINTERNATIONALREGULATIONSREGULATIONS
ITU Equipment
standards Numbering Traffic settlement
principles Frequency
conflicts Policy discussions
GATT / WTO Equipment trade
barriers General
Agreement on Trade in Services (GATS)
Annex on Telecoms
Negotiating Group on telecoms
16
General Agreement on Trade General Agreement on Trade in Services (GATS)in Services (GATS)
Most-Favored Nation Transparency Domestic regulation Monopolies and exclusive service supply Business practices Market access National treatment Annex on Telecommunications
17
WTO timetableWTO timetable
1986-1993: Uruguay Round 15 April 1994: Marrakech Treaty 1994 - 1996: Negotiating Group on Basic
Telecommunications (NGBT) April 30 1996: “Standstill” on NGBT December 9-13, 1996: WTO Ministerial
Conference, Singapore Jan 15 - Feb 15 1997: Reopening of Group
on Basic Telecommunications Implementation of agreement on basic
telecommunications on January 1 1998?
18
APPLICATIONS: APPLICATIONS: Global electronic commerceGlobal electronic commerce
Telecommunications for other services Banking, travel, etc. Off shore software development
Telecommunications as commerce Voice services Information services
Telecommunications as trade facilitator Trade points EDI
19
Communications for other Communications for other servicesservices
Internal networks Banking, airline
industry Customer interaction
Call centres International
freephone Delocalization
Off-shore software development
0
100
200
300
400
500
600
1990 1992 199405001'0001'5002'0002'5003'0003'5004'0004'5005'000
SWIFT MessagesMillions
Banks connected(right scale)
20
Communications as commerceCommunications as commerce
Audiotex Videotex On-line services Internet Interactive TV-
based services0
2'000
4'000
6'000
8'000
10'000
12'000
14'000
1.91 1.93 1.95 7.960
5'00010'000
15'00020'00025'000
30'00035'000
40'000Hosts(leftscale)Users
Internet host computersWorld, 000s
21
Communications as trade Communications as trade facilitatorfacilitator
Trade points EDI Pacific
8%
Asia30%
Other1%
Europe23%
Americas38%
1995 total: 130'000
EDI usersEstimated distribution