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The evolution of the international telecommunication environment, particularly the accounting and settlement system

The second World Telecommunication Policy Forum (Geneva, 1998),


that ITU-T Recommendation D.140 calls for the establishment of rates for the settlement of accounts which are cost-oriented and applied in a non-discriminatory manner,


  • that, following the implementation of the WTO basic telecommunication agreement, three-quarters of global outgoing international traffic is now provided under competitive market conditions;

  • that, given the uneven pace of market liberalization, the number of asymmetric relations between competitive, partially competitive and non-competitive markets is likely to increase in the shortterm;

  • that an increasing range of options are now available for the origination and termination of telecommunication traffic and that, with increased competition in the global telecommunications market, several methods for settling international traffic will coexist;

  • that these circumstances create additional urgency to the work of ITU-T Study Group 3 in reforming the international accounting and settlements system,


  • that ITU-T Study Group 3 has proposed transitional arrangements as an initial step to cost-oriented rates (in the form of a proposed new Annex to Recommendation D.140) and is also considering expanding the menu of remuneration options included in Recommendation D. 150;

  • that within the European Union, and between the United States and certain other countries, best-practice rates for the termination of international traffic on competitive routes are already below 0.05 SDR per minute;

  • that the case studies carried out for this Forum have indicated that the cost of terminating international calls, in the low and middle income countries studied, ranges between 0.09 and 0.33 SDR per minute,


  • that some developing countries fear that a sudden reduction in settlement rates would also lead to a reduction in settlement payments and, as a result, would endanger or reduce their ability to meet network development targets and fulfil universal service obligations, and they would therefore like to see a longer transition period;

  • that a cost-oriented accounting system may be asymmetric, i.e., with higher costs for terminating calls in some countries than others,

invites all ITU Member States and Sector Members

  • to endorse the work of ITU-T Study Group 3 in developing transitional arrangements (a target accounting rate of less than 1 SDR, i.e. a remuneration rate of below 0.5 SDR where the 50/50 arrangements are applied, for those administrations whose rates are currently above 1 SDR) as an initial step towards cost-oriented rates;

  • to continue to work towards reducing remuneration rates towards cost-oriented levels, as called for in ITU-T Recommendation D.140, without prejudice to the specific needs of developing countries, and in particular the Least Developed Countries;

  • to introduce cost-accounting mechanisms in their network operations to allow them to establish the real costs of terminating international traffic;

  • to acknowledge that an increasing number of countries will be evolving to a multi-operator environment and, not withstanding each ITU Member State’s domestic liberalization policies, to ensure that agreements to exchange international traffic with major suppliers can be extended to new entrants of these countries in accordance with principles of cost-orientation and non-discrimination as defined in ITU-T Recommendation D.140,

invites the ITU Secretary-General, in liaison with the Directors of TSB and BDT

  • to respond positively to requests from developing countries for assistance in developing cost accounting systems for international telecommunications,

invites the Director of TSB

  • to establish an intersessional group—drawn from the membership of ITU-T Study Group 3, regional tariff groups and other interested members of the Sector—to provide the necessary data and ideas for the consideration, in Study Group 3, of interim solutions to be applied, based on existing analytical and statistical studies, and market trends, and pending the development of methodologies, for determining cost-orientation;

  • to instruct this group to report back by 6 November 1998 to the Director of TSB and ITU-T Study Group 3 with proposed solutions and recommendations for implementing transitional arrangements beyond 1998,

invites the ITU Council

  • recognizing the urgency of the matter, to provide the necessary resources for the Group to meet regularly and to produce its report to the Director of TSB and ITU-T Study Group 3 in time.