About author

Not available

Article abstract

The dynamic liberalisation process globally and in the Caribbean presents opportunities for the indigenous private sector to hold States in the provision of telecommunications and telecommunications-related services. However, it still has to be clarified whether the opportunities for investment promotion will cover the entire telecommunications industry. Here, Roderick Sanatan reveals some interesting facts and figures, and highlights the opportunities as well as the challenges.

Full Article

The dynamic liberalisation process globally and in the Caribbean, presents opportunities for the indigenous private sector to hold States in the provision of telecommunications and telecommunications-related services. The Caribbean environment already provides a sufficient infrastructure for its communications industry. In the latest UNDP Human Development Report of indicators of access to information and communications, most Caribbean countries are examples of high human development. Access to Information and Communications Today, telecommunications is less of a transmission issue and more of an international trade issue, which can be defined as sales of telecommunications equipment or services that cross the national border. This also includes foreign investment. Services are traded by cross-border supply, commercial presence, consumption abroad and by movement of staff. Already, in many countries, there is cross-border supply of international telephone services and commercial presence of foreign carriers. We need to give life and purpose to benefit from consumption abroad, e.g. mobile roaming of Global Mobile Personal Communications by Satellite (GMPCS) services; and from progressive policies for movement of staff, i.e. development of consulting activities. Implications of Global Trade The telecommunications global show that services deriving both from software and hardware and telecommunications equipment account for 62% of the market. The rising telecommunications services industry point to the implications for the Caribbean: · business opportunities abound in the telecommunications services trade, e.g. IT applications; · the telecommunications industry has to be constructed as wider than the telecommunications sector, so that business investments can address the applications of infrastructure for education, health, etc., and the strong economic possibilities of finance, export trade services. Caribbean Data on Investments The ownership structure of telecommunications reveals high monopoly foreign investment in the Caribbean (see Figure 2). This is parallel with high levels of incompatibility between the intention of Caribbean Governments to align themselves with the multilateral trade regime of the WTO and the existing monopoly licences. Private Sector Needs There is a large gap between existing monopoly structure and the needs of the indigenous private sector. A recent CTU survey sought to gain a picture of the Caribbean private sector. The excerpt below describes the results that emerged: "... This survey aims to capture the views of the various companies regarding the role of the private sector in telecommunications development...The types of companies interviewed include Cable companies, television companies, Internet providers, IT software firms, telephone companies and Cable and Wireless... ". The questions asked range from the role of the private sector to the notion of financial support and participation in the development programs. Responses to the questions identified several critical issues that will undoubtedly become the subject of further discussion. The issues raised can be categorised into the following: Dialog and Decision Making Nearly all of the participants believe that there is a need for more dialog between the public and private sectors. It is felt that at the level of the decision making, too much is just handed down to the private sector who, undoubtedly, will be expected to conform without resistance. Regulation There is a general cry for an updating of the existing regulation regarding telecommunications. It is felt that as countries move towards global activities, there must be an update of the existing regulation to be more reflective of the industry's current status. Competition In many of the countries interviewed, the telecommunications market is dominated by one large telecommunications operator. In most cases, this is either the public or private sector magnate, Cable and Wireless (C&W). Although C& W represents a private sector firm, other firms in this sector feel that the presence of C&W serves as a hindrance to their growth. The result of this being that the smaller firms have to settle for servicing the niche markets. Incentives Private sector firms also expressed their dissatisfaction with the whole issue of incentives. In particular, they are requesting equal opportunities regarding incentives. This is seen as critical if they are to keep up with, and even outshine, the larger firms that dominate the market. Infrastructure and Costs The cost of telecommunications activity is quite high. Given the size and state of the economy in these developing countries, there is a need for some sort of financial aid. Also, assistance is requested in the area of infrastructure provision in these countries. Education The final major issue to be raised is along the lines of Education. There is a general cry for knowledge about the industry to be publicised. One interesting contributor even suggested that the telecommunications awareness be incorporated into the education system at the tertiary level. WTO Commitments The Caribbean countries, in making commitments to the WTO, adopted the following strategy for the Basic Telecommunications Agreement: · recognition of a major exclusive operator; · licence controls; · gradualist approach; · negotiating dates for liberalisation, new satellite services; · current revision exercise; and, · anticipated changes by modified legislation, re-negotiated licences and telecommunications policy insertion. The common elements of Caribbean offers include: · basic services for non-public use; · value-added services; · mobile services (terrestrial and/or satellite based); · VSAT services for non-public use; · telecoms equipment-related services. The Caribbean private sector can enable the two readily opened areas for capital investment and business expansion; value-added services and mobile satellite services (the cellular market and GMPCS linkages). Hemispheric Challenge Within the Americas, with its own drive to create a free trade area by 2005, the Caribbean needs to move quickly in the following areas: · development of statistics on services in the Caribbean economy; · advantage of advocating the special needs for the smaller economies of the Americas both in the Services Negotiating Group and the Competition Policy Group; · careful analysis of the special provision of 'sectoral coverage' under the WTO (in respect of regional agreements); and, · adoption and implementation of the Caricom single market protocol two (on services). Most significantly, the private sector can lead the alliance of Central America, Andean and Caribbean countries in the Smaller Economies discussions of the FTAA. Already, conceptually, the Caribbean through Jamaica's Ambassador Bernal, has stated the claim for the Smaller Economies of the Americas. By extension, at the wider global level, the Lome negotiations can derive a boost from private section inputs into future investment arrangements for Information Technology applications. Europe is struck by the wider issues of sustaining the Information Society through job creation. This offers a handle to Caribbean negotiation for the next round of Lome. National Level Strategies Institutional capacity building is still requisite for the national private sector to stimulate and facilitate. A recent example of providing access to foreign and local investment and transparency of operations comes from the Trinidad and Tobago investment Promotion Bill 1999: "...the establishment of a framework for the promotion and encouragement of private investment from domestic and foreign sources, the fostering of a hospitable climate for investment, and the abolition of the impediments to the free flow of investments as far as possible". It still has to be clarified whether the opportunities for investment promotion will cover the entire telecommunications industry as distinct from the telecommunications sector and whether the entire industry would fall under the power of the Regulated Industries Commission. Conclusions The opportunities for the Caribbean private sector participation in competitive telecommunications services already have some urgent priorities: · seek value-added services for competitive investment opportunities; · create regimes of training and education for areas of entrepreneurship; · advocate the issues and create alliances of smaller economies of the hemisphere; · work for the rapid dismantling of monopoly telecommunications services; · utilise and stimulate appropriate national instruments to promote investment; and, · focus on IT applications.