This is something to watch from the WTO (World Trade Organization), as it could open more doors than one might want.

Director-General Pascal Lamy hailed liberalisation of trade in telecoms services as a vital tool in economic growth and development on the occasion of the WTO Symposium on Telecommunications organized in Geneva to commemorate the 10th anniversary of agreement among WTO members to open basic telecommunications services.

“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 telecommunications (1994-1998)

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 they made.

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.

WTO Press release
20 February 2008

News Looks

Be Sociable, Share!