INTERNATIONAL TELECOMMUNICATION UNION		

Foz do Iguaçu, Brazil, 6th November 1995

Local, national, Regional and global integration through telecommunications

Video presentation by Dr Pekka Tarjanne, Secretary-General, International Telecommunication Union (ITU)
“Third International Seminar on New Technologies and Telecommunication Services”, SEMINT 95,
Foz do Iguaçu, Paraná, Brazil, 6-9 November 1995

Your Excellencies,
Ladies and Gentlemen,

I am speaking to you from Geneva, where the 1995 Radiocommunications Conference is currently taking place. Some 1’300 delegates, representing most of the 184 Member countries of the ITU, are taking part in the conference which is hosted and organised by the ITU. I hope you will excuse me for not being present with you today at the opening of your international seminar. Modern telecommunications offers many marvels but, unfortunately, not yet the luxury of being in two places at the same time.

One of the main topics on the agenda of the meeting here in Geneva is how to prepare the way for the next generation of global mobile satellite services which promise to make the dream of “anyone, anywhere, anytime” communications a reality within our lifetime. Such new services present tremendous opportunities, both social and commercial, but they also present a clear challenge to the countries of the world. If it is possible to make a call, from one individual to another anywhere in the world, which would effectively cost the same because the call is being switched by satellite, then customers will legitimately ask why the service will (inevitably) be priced differently in different countries. Indeed, will the concept of being a customer “belonging to” an individual country still be meaningful? If an individual user can agree a contract with a company of their choice, to pay for telecommunication services of their choice in a currency of their choice, then why should that user be considered to “belong” to any particular country. 

At issue here are the very principles of national sovereignty and national regulation which have served as the starting point for the International Telecommunication Union since its inception, 130 years ago. In practice, none of the proposed operators of global mobile satellite services expect to by-pass national regulations. Indeed, they see every advantage for the moment of working within national regulations and working closely with local operators. But will they still say that once they have gained the spectrum and the financing they need to offer global services?

Telecommunications is a technology which “connects” rather than “separates”. As such, telecommunications provides a powerful tool for integration and for communication. But integration takes place at many different levels:

•	The personal integration of an individual or a family into the village or town where they live, the organisation where they work, the school where they study, the society in which they live;
	
•	The process of national integration, or nation building, of different peoples, races and families into a single nation;
	
•	The regional integration of neighbouring nations, such as the MercoSur trading bloc, the European Union, NAFTA, ASEAN and many others;
	
•	Finally there is the global integration of individuals and firms into the world economy and the coming together of nations in a common purpose, such as when they established the United Nations, of which the ITU is a specialised agency.

Telecommunications has a role to play in each of these different levels of integration -- local, national, regional and global -- but there is a clear cascade effect. The first applications of telecommunication networks in the closing years of the last century were restricted to the local level. Gradually, isolated urban networks became connected together into national networks. Progressively links between countries were established, through microwave, through cable and through satellite. Finally, those regional links were united into a single global network. Today, it is possible to call any of the 700 million or so subscribers to fixed link and mobile telephones from your own personal telephone. The time it takes to connect me to you in Brazil is only a little longer than it takes me to call to my next door neighbour in Geneva. At the moment, a local call costs a lot less than an international call, but in the long term, there is no reason why that should continue to be the case. This year, The Economist magazine entitled its annual telecommunications survey “The death of distance”. I am sure the prospective satellite operators gathered here in Geneva would endorse that sentiment.

What is the relationship between regional integration and global integration? Does the global integration we are discussing here in Geneva threaten the regional integration that you are currently discussing among the MercoSur countries? On the contrary. It is likely that the growth of trade within regional blocs will eventually promote the growth of trade between regional blocs. Global trade will only grow as regional trade grows.

Let me illustrate this point with the example of the four MercoSur countries of Argentina, Brazil, Paraguay and Uruguay. In 1992, the level of outgoing international telephone traffic from these four countries was 338 million minutes while by 1994 it had grown to 438 million minutes, a growth rate of 14 per cent per year. In 1992, the level of international traffic between the four MercoSur countries was 85 million minutes while in 1994 it was 135 million, a growth rate of 26 per cent per year. In simple terms, the percentage of traffic between the four members of the trade bloc had increased from 25 per cent of their total traffic to 31 per cent. In other words, traffic between the members of the trade bloc is growing almost twice as fast as their traffic with the rest of the world. Where telephone traffic grows, so too do commercial, economic, social and cultural contacts. When the citizens of a nation spend more time talking to each other, there is less likelihood that they will misunderstand each other, quarrel, or threaten to go to war. As I said earlier, telecommunications is a connecting technology, not a separating technology. 

In the modern world, there are two seemingly irreconcilable forces at work. There is the force that promotes fragmentation which splits nations apart, and there is force of integration that bring nations together. The forces of decentralisation can have positive effects through local empowerment as has occurred, arguably, in the Baltic States. But more often than not, national fragmentation is associated with enmity and poor communications as in Bosnia, Rwanda, Somalia and elsewhere. In the countries if MercoSur, as the example of telephone traffic shows, it is the forces of integration which are dominant. I would urge you to press ahead with this process. The UNISUR fibre optic cable which links together Brazil, Uruguay and Argentina is a prime example of the way in which telecommunications can bring nations closer together and in which telecommunications can promote trade. But I would urge you to remember that regional integration should not be an end in itself. It must be a stepping stone to greater global integration. The process of regional integration should not be one of shutting the gates and becoming a fortress, but rather of opening the gates and becoming a channel. Do not separate, only connect.

Table 1:  Regional traffic flows within and outside the MercoSur countries (millions of minutes)

Traffic	1990	1991	1992	1993	1994	CAGR, 92-94	
Total MercoSur outgoing traffic	276.9 	315.0 	338.1 	372.4 	438.4 	13.9%	
Total, within MercoSur	70.3 	76.9 	85.4 	113.8 	134.8 	25.6%	
							
Percentage traffic within MercoSur	25.4%	24.4%	25.3%	30.6%	30.7%		

Note:	The countries of MercoSur included in this analysis are Argentina, Brazil, Paraguay and Uruguay. CAGR = Compound Annual Growth Rate.
Source:	ITU/TeleGeography Inc. “Direction of Traffic” database.