Working Group: Implications of Future Developments in International Telecommunication Revenues for Connectivity
- The group argued that to maintain present levels of teledensity, sub-Saharan countries would need to put US$6 billion into the industry, while to increase the levels would require much more.
- Discussion focused on revenues, and how they would be affected by new technological developments such as the introduction of cellular. It was emphasised that new technologies were on the rise, with non-traditional traffic to the USA growing at a rate of 35%, compared to traditional traffic which stood at 10% per annum.
- Note was made of the fact that the sector was very profitable and while there was no scarcity of resources, countries would still have to compete fiercely with each other for them. Investments in basic telecommunication (in developing countries including the former USSR) in the 1980s to early 1990s stood at:
65% - Internal sources (e.g. profits from carriers themselves)
15% - Official sources including the World Bank
20% - Private sector (credit, investment, etc.)
It was stressed that despite making a profit, there should be no illusion that the carriers were providing efficient service and serving the welfare of the economy. In most cases, the reason was simply that they had a monopoly on the sector.
In the second half of the 1990s, though, the trend reversed, with the private sector leading the pack at 55%, internal sources following at 40% and official sources at 5%. New technologies were giving smaller companies an edge, with the private sector leading the way in most countries, it was reported.
New technologies were also forcing countries to face the challenge of providing an enabling environment conducive to Foreign Direct Investment (FDI), but at the same time trying to balance their national interest.
The group disclosed that information on "who owes what to whom" and other data, including tariffs, is hard to come by. Ways and means of promoting transparencies within the sector were discussed, with InfoDev expressing willingness to finance comprehensive studies on the topic. Suggestions were made to the effect that liberalization, with its focus on "commercialism", was the key to making the sector more transparent.