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Geneva, 16th March 1998

Trade in Telecommunication Services
Trade and Development
Ahmed Laouyane,
Director, ITU Telecommunication Development Bureau

Your Excellencies,
Ladies and Gentlemen,

I am delighted to be able to say a few words, at the start of this second Policy Forum on the subject of Trade in Telecommunication Services, on the link between trade and development. In particular, I would like also to establish a linkage between the discussions this week in Geneva, and the World Telecommunication Development Conference, which starts in one week’s time in Valletta, Malta. I would also like to announce some concrete proposals on how the BDT, and the ITU Development Sector, can participate in the planned follow-up to this Forum once the text of the Draft Opinions is finalised as we did successfully in the case of the GMPCS which was the theme of our first Policy Forum.

It is clear to all of us that 10 years after the publication of the Paul Hansen Report on the changing environment, the international telecommunications environment has changed decisively as a result of the WTO’s basic telecommunications agreement. The implications of that agreement will arguably be just as significant for those that have not made commitments, and did not take part in the negotiations, as for those that did. In particular, the developing countries risk being left behind if they are not able to benefit from the new opportunities created by the liberalisation of global telecommunication markets and the telecommunications development gap, with which we are all too familiar, could evolve into a much wider one.

Universal Access

Next week, in Valletta, we will be revisiting the Missing Link Report (Sir Donald Maitland, the Chairman of the famous Independent Commission will address the Conference on this theme). We will also be revisiting the Development Gap concept as well as the Universal Access Concept, and at this occasion we will be launching the fourth edition of our World Telecommunication Development Report which focuses this year on the topic of Universal Access to telecommunication services. I am sure will be a major topic of discussion at this Forum. On the basis of research carried out for the report, we have concluded that, if telecommunication services were uniformly available and sensibly priced, then a further 300 million households world-wide could afford to have telephone service, in addition to the 500 million that already have it. This finding is significant because it highlights the extent to which the telecommunications development gap is a result of the failings of supply-side strategies rather than any real lack of demand. As identified by the two Regional Development Conferences and the six fora on finance, the policies which developing countries need to adopt, therefore, to reduce the telecommunications development gap are those that seek to increase the number of suppliers and investors that can participate in the market. The report recapitulates five main ways this can be done: by privatising the incumbent operator, by contracting out infrastructure development, by permitting competitive market entry, by targeting certain segments of the market, such as payphone provision, for greater private sector participation, and by establishing a universal service fund.


Without prejudging the outcome of the Valetta meeting, I can foresee that Universal Access will become one of the major themes of the BDT’s (and ITU-D as a whole) work programme over the next four years. The six programmes of the proposed Valletta Action Plan will be devoted in fact to the achievement of Universal Access.

Programme 1 Sector Reform, Regulation and Legislation;

Programme 2 Technologies and GII development and applications;

Programme 3 Rural development and Universal Service;

Programme 4 Finance and Economics including WTO issues, tariffs/accounting rates;

Programme 5 Development of Partnership - Private Sector;

Programme 6 Human Resources Development and Management

Draft Opinion B for consideration by the Policy Forum lays out a future work programme of co-operative actions between ITU Member States and Sector Members to facilitate adaptation to the new telecommunication environment. In particular, it calls upon the ITU "to develop a programme of regional seminars to support Member States in establishing regulatory bodies independent from telecommunication operators in co-operation, where appropriate, with regional bodies". I can confirm, subject to approval next week in Valletta, that the BDT will organize these regional seminars, in conjunction with our regional and international partners.

Country Case Studies

As part of the preparations for this event, and for the Development Conference next week, and in conjunction with our Development Partners at the Commonwealth Telecommunication Organisation and the World Bank, we have commissioned a series of nine country case studies of the changing international telecommunications environment. The case studies, which were presented at yesterday’s information session and which have been made available to all participants, show the difficulties that certain developing countries are likely to face due to the speed of the changes which are occurring in the international accounting rate system. In particular, the studies highlighted the fact that many developing country administrations lack the cost data and methodologies and tools necessary to establish cost-oriented pricing. As a result, they are sometimes forced to rely upon data provided by their calling partners. The case study programme has helped to bridge this data gap and will provide guidance to countries on what strategies they should adopt to benefit from the new opportunities created by the new liberal market environment.

Draft Opinion B calls for the ITU, and its development partners, "to continue the use of case studies such as those carried out in connection with this Forum through detailed studies, including elasticity studies, and to develop possible models for progressively implementing cost-oriented tariffs". Again, I am happy to confirm that, subject to approval from Valletta, that a second stage of the case studies project is foreseen and will be conducted by BDT in close co-ordination with our development partners, in response to requests from particular countries and regions. An important element of this second stage will be a series of regional seminars and training workshops that will broaden the coverage of the initial case studies. We plan also to involve regional training institutions and, of course, when operational, the Centres of Excellence in this important work.

Human resource development

Last, but certainly not least, we recognise that the most important component in development is people. Over the year’s, the ITU has built up a considerable expertise in the field of human resource development. We are now extending that work towards distance learning, using the tool of remote communication via the Internet, to bring training resources to a broader audience, including through the implementation of the Global Telecommunication University/Academy project.

Draft Opinion B calls upon me "to develop partnerships for development and human resource training" and identifies a number of areas, in particular in developing cost analysis methodologies and management information systems, where such training is urgently needed. Once more, I am happy to confirm that that this has been included in the programme that will be reviewed next week at Valletta.

Trade and Development

To conclude, it is evident that for developing countries, the move towards a trade regime holds many uncertainties, but it also holds many new opportunities, particularly for developing new supply-side strategies for enhancing universal access. The BDT will be making every effort to ensure that developing countries, in particular the Least Developed Countries, are able to play their full role in any decisions which are made on the future trade regime and on the reform of the accounting rate system. To this end, we plan to set aside a sum of one million Swiss Francs to implement these actions in 1998 and we will, in Valletta, be discussing a work programme for the coming years which will address this issue in more depth. As developing countries begin to navigate the uncharted waters of the new millennium, what they really is a MAP: Perhaps what we need is a Malta Action Plan! (Should read in fact Valletta Action Plan).