As a result of these trends and developments, demand for the products and services provided by ITU has risen in the 1995-1999 period and is expected to continue to rise in the 1999-2003 time-frame. This is the case for the services provided to the ITU membership (e.g. meetings, recommendations, assistance in applying regulations, frequency and number registrations, technical and development assistance) as well as those provided to the international telecommunication community as a whole (e.g. exhibitions, forums, development indicators, trend reports, information services).

One of the most important strategic issues facing ITU in the 1999-2003 period is how to respond to these rising demands:

	The Union functions within the framework of the United Nations common system. Since the ITU budget has been based on "zero growth" for a number of years, it has only been possible to respond to increased demand for products and services through productivity improvements. Further improvements can and will continue to be made.
	The 1995-1999 strategic plan noted that assessed contributions from Member States had "reached a plateau; income from these sources appears unlikely to grow dramatically and may begin to decline". Four years later, it is clear that this was an accurate assessment. This is the financial reality the membership faces in preparing a strategic and financial plan for 1999-2003.
	While unquestioned, the intergovernmental nature of ITU is acknowledged by Member States and Sector Members alike as placing certain limits on enhancing Sector Members' rights and obligations. It does limit the role of Sector Members in decision-making, and although Sector Member rights have been somewhat enhanced, the intergovernmental nature of ITU might limit Sector Members' willingness to make increased financial contributions which they cannot control. Implementation of recommendations deriving from Resolution 15 (Kyoto, 1994) and Resolution 39 (Kyoto, 1994) can lessen these constraints and facilitate cooperation between Member States and Sector Members.
	The solution to strengthening the Union lies in treating the Sector Members more as partners in appropriate work of the Union. The Union will have to see itself as seeking to satisfy the needs of its customers by providing products and services of superior value in a competitive environment. Many Sector Members have had to transform their organizational cultures in this fashion, and it is natural that they will expect to see similar changes in the Union.
	Another factor affecting the future effectiveness of the Union is the process of decision-making. Even as ITU has supported some improvements during 1995 ‑ 1999, including the use of web technology, advanced electronic communication and document exchange facilities, the number of ITU meetings, meeting days, participants and pages of documents produced per meeting has continued to grow. That the membership has turned to ITU to satisfy their diverse needs should be seen as an indication of the value that can be provided by the Union. Therefore, appropriate changes in the working methods are required, along with financial responsibility based on a transparent budget process and generally accepted accounting principles.

There are clearly major challenges facing the Union as it seeks to respond to rising demand for its products and services. However, each of these challenges has a positive side which provides an opportunity to build on ITU's "core competencies":

	The Union is an acknowledged leader in the movement to reform international organizations by enhancing the participation of non-government players, increasing efficiency, and adopting innovative approaches to achieving its purposes.
	The Union has a comprehensive membership and "high approval rating" among the members of the international telecommunication community. The vast majority of the Union's Member States freely choose to contribute more than they would if they were assessed under some measure such as GDP or teledensity. And during the 1995–1999 period, Sector membership almost doubled as new players on the international telecommunication scene and companies from convergent industries were added to the ranks of established players.
	Member States, Sector Members and the international community have shown a continuing willingness to pay for many ITU products and services. Demand has remained strong for established publications and TELECOM events. In addition, customers have responded well to the innovative range of ITU information products and services which have been introduced in the past four years.
	In every major test of its decision-making ability in the 1995-1999 period, the Union has been able to respond with activities that have led to beneficial results for all concerned.

The strategic challenge facing the Union in the 1999-2003 time-frame is to remain a pre-eminent international forum where Member States and Sector Members work together to enable the development of telecommunication networks and to facilitate universal access to communication and information services, so that people everywhere can participate in and benefit from the global information economy and society.