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17 February 1997
Data on Telecommunications Markets covered by the WTO Negotiations on Basic Telecommunications

The following is an informal background document for information purposes only. It should be cited or quoted as an official document of the WTO.


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Overview

This note summarizes some basic telecom data relating to the market size and growth in the sector both globally and for individual WTO Members who annexed Schedules of Commitments on basic telecommunications services to the Fourth Protocol of the GATS by 15 February 1997. The source of the data used is the International Telecommunication Union database on World Telecommunication Indicators.

Global telecom services revenue in 1995 stood at US$601.9 billion, a figure which represented 2.1% of global GDP. Revenue from mobile services was estimated at about $82 billion in 1995, accounting for nearly 14% of total revenue. Revenue from international service was estimated at nearly $63 billion in 1995; accounting for 10% of total revenue.

Telecom revenue grew by 7% in 1995; this is higher than the annual average growth rate of 5.2% recorded since 1980. Also, the world's number of telephone main lines increased about 7% in 1995 following similar performance in 1994. Other measures confirm even more dramatically that telecommunications is a fast growing sector. Outgoing international telecommunications traffic, measured in minutes, grew by 13% in 1995 and over the past five years has achieved average growth of over 12% a year. In newer services such as mobile cellular telephones, the number of subscribers grew by about 60% in 1995, and average annual growth since 1990 has been more than 50%. In telecom equipment, a sector which responds to telecom services growth, exports achieved a global value of $58 billion in 1995, up 20% over the previous year.

By almost any measure, the WTO Members contributing to the negotiations on basic telecommunications account for a vast majority of telecommunications markets worldwide. The 130 WTO Member governments together accounted for US$570 billion, or 95% of 1995 global telecom revenueSee footnote 1; the 69 WTO Members that tabled commitments in the basic telecom negotiationsSee footnote 2 accounted for more than US$550 billion or 96% of the 1995 revenue of WTO Members. In relation to global totals, the WTO Members that have made offers represent telecom markets that in 1995 accounted for over 91% of telecom revenues and 82% of the world's telephone main lines.

Industrialized countries

Five of the participants in the negotiations, the QuadSee footnote 3 plus Australia, held the leading shares of world telecom revenue in 1995, together accounting for 77% of the market. The EC, US and Japan ranked as the world's largest telecom markets in terms of global shares by all main telecom indicators except outgoing international traffic (where Japan ranked sixth behind Canada, Switzerland and Hong Kong).See footnote 4 But for all of the main indicators, the combined shares of the EC, US and Japan in 1995 represented well over half of world totals.

Share of world totals - 1995

  European Union United States Japan Total
- Revenue 28.3% 29.7% 15.6% 73.6%
- Main lines 26.1% 23.8% 8.8% 58.7%
- Investment 27.1% 15.6% 22.0% 64.6%
- International traffic 35.2% 25.3% 2.7% 63.2%

Developing countries

Although most developing country participants in the negotiations individually accounted for lower shares of global telecom activity in 1995 than did the US, EU or Japan, they were nevertheless significant players. Korea, Brazil, Mexico and Argentina ranked in the top ten in shares of global telecom revenue. Hong Kong ranked fifth as a source of international telephone traffic, while Mexico and Singapore ranked among the top ten. Korea ranked fourth in terms of telecoms investment, while Argentina, Korea and India were among the top ten. In number of telephone main lines, Korea was in the top 5 and Turkey, Brazil, India and Mexico were among the top ten.4

Often, developing countries that do not necessarily rank high in the telecom indicators are experiencing much higher growth in telecommunications sector than more advanced countries. Among the reasons for this are higher overall economic growth rates in some developing countries as well as efforts to expand the sector rapidly from infrastructure and service levels which are generally much lower than those already in place in developed countries. For example:

- In main telephone lines, industrialized countries experienced an average annual growth rate of only 3.5% from 1990-95. Yet, over the same period, developing countries averaged over 13.8% average annual growth.

- In telecom revenue, industrialized countries recorded average annual growth of 4.2% from 1990-95, whereas the telecom revenue growth of developing countries was more than double at 9.7% over the same period.

Footnote: 1In these negotiations on basic telecommunications, only governments that are currently WTO Members are eligible to participate. However, a number of governments are seeking to accede to the WTO; for these, commitments on services sectors, including telecommunications, would be negotiated in the context of their talks with trading partners on accession.

Footnote: 2The commitments are contained in 55 offers -- counting as one the offer of the 15 EC Member States.

Footnote: 3 Canada, Japan, the European Communities and its Member States, and the United States.

Footnote: 4The ranks are determined by excluding governments that are not WTO Members and by applying a single ranking for the EC Member States based on their combined totals.

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1995 Telecoms revenue for WTO Members with offers submitted as of 15 Feb.

   in M US$ % share of world total % share of world total
UNITED STATES 178,758.0 29.70   
EUROPEAN COMMUNITIES** 170,166.0 28.27   
JAPAN 93,855.0   15.59
AUSTRALIA 11,403.0 1.89 Top Five
CANADA 10,689.0 1.78 77
SWITZERLAND 8,889.0 1.48   
KOREA 8,728.0 1.45  
BRAZIL 8,622.0 1.43   
MEXICO 6,509.0 1.08 Top 10
ARGENTINA 6,009.1 1.00 84
HONG KONG 5,113.0 0.85   
INDIA 3,818.0 0.63   
SOUTH AFRICA 3,675.0 0.61   
NORWAY 3,234.0 0.54 Top 15
INDONESIA 2,735.0 0.45 87
SINGAPORE 2,540.0 0.42   
ISRAEL 2,249.0 0.37   
POLAND 2,162.0 0.36   
MALAYSIA 2,097.5 0.35 Top 20
NEW ZEALAND 2,091.0 0.35 89
THAILAND 2,040.0 0.34   
TURKEY 1,674.0 0.28   
VENEZUELA 1,594.0 0.26   
CHILE 1,321.0 0.22   
COLOMBIA 1,213.0 0.20   
PERU 1,139.7 0.19   
PAKISTAN 1,045.0 0.17   
PHILIPPINES 982.0 0.16   
CZECH REPUBLIC 890.0 0.15   
HUNGARY 770.0 0.13   
MOROCCO 659.4 0.11   
ROMANIA 423.1 0.07   
ECUADOR 332.4 0.06   
SLOVAK REPUBLIC 320.5 0.05   
JAMAICA 313.6 0.05   
TUNISIA 263.2 0.04   
BULGARIA 232.5 0.04   
SRI LANKA 218.6 0.04   
GUATEMALA 197.2 0.03   
BANGLADESH 194.9 0.03   
TRINIDAD & TOBAGO 162.6 0.03   
EL SALVADOR 153.3 0.03   
PAPUA NEW GUINEA 141.4 0.02   
CÔTE D'IVOIRE 138.2 0.02   
ICELAND 132.5 0.02   
SENEGAL 107.5 0.02   
BOLIVIA (1993) 104.6 0.02   
MAURITIUS 104.3 0.02   
GHANA 65.0 0.01   
BRUNEI DARUSSALAM 61.4 0.01   
BELIZE 37.8 0.01   
ANTIGUA & BARBUDA n.a. n.a.   
DOMINICAN REPUBLIC n.a. n.a.   
DOMINICA n.a. n.a.   
GRENADA n.a. n.a.   
Total 550,375.3 91.44   
           
World Total 601,900.0 100.00   
  
**EC Member States in M US $ % share of world total
GERMANY 48,036.0 7.98
UNITED KINGDOM 27,647.0 4.59
FRANCE 27,162.0 4.51
ITAL Y 20,004.0 3.32
SPAIN 11,008.0 1.83
NETHERLANDS 8,488.0 1.41
SWEDEN 5,756.0 0.96
BELGIUM 4,339.0 0.72
AUSTRIA 4,014.0 0.67
DENMARK 3,728.0 0.62
GREECE 2,798.0 0.46
PORTUGAL 2,775.0 0.46
FINLAND 2,534.0 0.42
IRELAND 1,580.0 0.26
LUXEMBOURG 300.0 0.05