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“The impressive results we have seen in 10 years of
opening telecommunications markets shows how crucial liberalising services trade
can be for economies. It is a good reminder to all of the importance of
accelerating the services negotiations that are so vital to the success of the
Doha Development round,” said Mr. Lamy.
“Since the results came into force ten years ago this month, global access to
telecommunications has increased from below 15 percent in 1996 to above 60
percent in 2006, and revenues have risen from US$620 billion to US$1.4 trillion
during the same period. Telecommunications are an essential prerequisite for a
wide range of economic activities in any national economy, developing or
developed, from agriculture, travel and tourism to mining and manufacturing.
Opening telecommunications has been a win-win game,” said Mr. Lamy.
Some of the significant developments over the last
decade or so in global telecommunications services sector include:
Reforms often galvanized and locked into place by
WTO commitments have led to substantial reductions in prices for international
calls. For example, the cost of a three-minute call from Mauritius to London
declined by over 60% between 2000 and 2006.
Reforms have also increased global teledensity from
below 15% in 1996 to above 60% in 2006. Mobile services, in particular,
connected many more people. By the end of 2006, mobile phone subscribers had
increased 20 fold, representing 70% of all telephone subscribers. In Africa,
for example, mobile growth rates are now over 50% annually, among the highest
in the world. For example, average mobile subscriptions increased 200%
annually in Liberia and 250% in Niger between 2001-2006.
Also, between 1996 and 2006, world telecom services
revenues increased from US$620 billion to over US$1.4 trillion and internet
use increased by 1500%. By 2006, Internet user penetration had risen well
above the world average of about 8%, reaching 24% in Peru, 20% in Morocco and
17% in Vietnam, compared with their single digit rates only a few years ago
(approx 7% for Peru and 1% for Morocco and Vietnam in 2001).
Information and communication technologies (ICT)
development generated by telecom reform accounts for a growing share of
investment and trade. In Egypt, for example, mobile subscriptions increased by
45% per year and Internet users grew from 600 thousand to over six million
from 2001- 2006 and the Egyptian ICT sector’s success in attracting foreign
investment and outsourcing contracts resulted in US$548 million in exports of
communications, computer and information services in 2006.
Small and medium-sized enterprises also benefit.
Today, for example, a barber in South Africa can now deposit his customer
receipts over a mobile phone by means of “M-banking”, rather than spend
several hours of his time walking to the nearest bank.
Background notes on the WTO negotiations on basic
The WTO Symposium marks the 10th anniversary of the
entry into force of the results of the WTO negotiations on basic
telecommunications (1994-1998). The results, consolidated in the Fourth
Protocol of the General Agreement on Trade in Services (GATS) entered into
force in February 1998.
The Fourth Protocol, sometimes referred to as the
“basic telecommunications agreement”, is not actually an “agreement” in its
own right. Rather, it was a legal instrument used to amend the Members’
national Schedules of Commitments from the Uruguay Round (1986-1994) to
include their commitments on telecommunication services.
When the GATS came into existence in 1995, only 22
governments had commitments on telecommunications. Most of these covered
services often referred to as value-added or enhanced telecommunications, such
as e-mail or on-line data-base access.
At the end of the WTO negotiations on basic
telecommunications, 69 governments agreed to open their telecom markets to
competition in basic services like fixed and mobile voice telephony. They
committed to do so immediately or, in the case of some developing countries,
on a phased-in basis. Most of commitments to phase in reforms (ranging between
1999 and the mid 2000s) have now been implemented.
The results of the negotiations also included
commitments by 57 governments to provisions containing telecom regulatory
obligations, known as the Reference Paper. It set out basic legal principles
for a regulatory framework that would underpin the market access commitments
Today, 107 WTO Member governments have GATS
commitments to open some or all segments of their telecommunications markets
to foreign suppliers and 80 WTO members have committed themselves to the
Reference Paper. Most of the additional commitments resulted from the
accession of new Members to the WTO.
The Members’ commitments on the Reference Paper
include competition and interconnection safeguards and rules to promote
transparent and fair mechanisms for licensing, universal service and
allocation of scarce resources such as radio spectrum. It also requires having
a regulator that is independent of the entities that operate telecom networks
or otherwise supply the services.
The GATS commitments extend not only to foreign
investment in telecom companies in one another’s markets, but also to
cross-border trade by means such as international simple resale, capacity
wholesaling, and global data networks. In many cases, Members made what are
known as “technology neutral” commitments that apply even as new technologies
become available to supply the committed services.
Two recently released reports will be showcased at
the Symposium: UNCTAD’s 2007-2008 Information Economy Report and a study
contracted by Telenor on the economic impact of mobile communications in
countries where they do business. Summaries of both will be available in hard
copy at the symposium.
debate: What has been the impact of telecoms liberalization?
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