|Issue:||Latin America IV 1997|
|Topic:||Stakeholders in Restructuring: The Shared Vision|
|Author:||Dr. Pekka Tarjanne|
|Organisation:||International Telecommunication Union at the Trade and Finance Colloquium for Europe, Geneva (Switzerland), 15-17 Dec 97|
Dr. Pekka Johannes Tarjanne is Secretary General of the International Telecommunication Union (ITU) since 1989. He is currently implementing new working methods and structures to equip the ITU to confront the upheavals currently taking place in the world of telecommunications more effectively. Previously; he was the Director General of Posts and Telecommunications of Finland in 1977 where he presided over the restructuring of the sector.
It is my great pleasure this morning to welcome you to the International Telecommunication Union, the Telecommunication Trade and Finance Colloquium for Europe, and to the City of Geneva. We are here as fellow ‘Stakeholders in Restructuring’ to work together in preparing partnerships, for studying private investment, privatisation, the development of the telecommunications infrastructure and designing the “tools and rules” to do our job. That is one reason we are here today. We are, very lucky with the timing of our Colloquium. When planning we did not know that only towards the end of last week two major breakthroughs would happen: Financial Services negotiations in WTO and international telecommunications tariffs (accounting rates) in the ITU. I’ll come back to these later. Over the last few years there has been a direct alignment between the activities of the ITU with the major efforts of the other leaders of the global economy, such as the World Trade Organization, the World Bank and many other institutions. As the Secretary General of UNCTAD, Mr. Rubens Ricupero, stated in the opening this month of the Second Session of the Commission on Enterprise, Business Facilitation and Development, ‘The dialogue of policy should cover both formulation and implementation, be structured, relevant, transparent and inclusive of all constituents’ sectors’. This today is such a policy dialogue. Since seizing the initiative at the Plenipotentiary Conference at Kyoto, the ITU has played a catalytic and crucial role in gaining the majority of the world to participate in the dialogue to promote new mechanisms to tap into the private sector, for example, joint ventures with national and international enterprises. The key principles have been converted into programmes of action with timetables, milestones and targets, reached, and even surpassed, in the last two years by the ITU along with its partners in development. This Colloquium is the fifth in a series of six colloquia designed to reinforce these channels for dialogue between all stakeholders in the new era of restructuring of global telecommunications development. With all its diversity and the immensity of need on our planet, bringing together the private sector in cooperation with government, lawmakers and policy makers, the Telecommunication Trade and Finance Colloquia have been hailed as a new direction and valuable fora for the ITU Membership. The Colloquia are a keystone in the preparatory process for the Second World Telecommunication Development Conference, to be held in Valletta, Malta, this March 1998. In defining the now commonly used term ‘rapidly changing telecommunication environment’, key issues have been identified by countries who most recently identified financing as the primary concern, limiting their telecommunications development. Here, we are addressing the issues of Europe. It is noteworthy to state that most of the countries of Central and Eastern Europe have established, or are in the process of establishing, the legal framework necessary to attract foreign investment, including the transfer of profits and ownership rights. Additional achievements have been the separation of sovereign/regulatory tasks from operational/entrepreneurial ones. It is still necessary to underscore the importance of bringing the regulatory aspects in line with customer demand, changed market conditions and to reorganise the existing structures to provide for more flexibility, streamlining of application, and closeness with market realities. Telecommunications infrastructure is, of course, one of the most important prerequisites for the development of an economy and for applications in health and medicine, education, agriculture, transportation, information, trade and not the least, disaster relief. Telecommunication is no longer a discrete sector but rather the infrastructure of all the sectors. Privatisation of infrastructures in Central and Eastern Europe has taken hold to such an extent that a transition to market economies is now well underway. In Western Europe, restructuring, privatisation and competition are now systematic and dynamic, with the independent regulatory agencies providing a tool for governments to shape national legislation and policy. The key EU directives are focused on establishing a single market for telecommunications in the subregion. On 1 January 1998, as we all know and as we knew when planning this colloquium, all telecommunication services will be open to competition in most of the EU markets, plus between traditional operators and a great number of new entrants including many mobile operators. Today and into Wednesday we hope to move forward our negotiations. In this Colloquium you will also hear from our eminent speakers about the expansion of the region, country cases from the Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania; the regional initiatives, the operators’ stories, the banks and financing institutions, the responsiveness of regulators, the cases of the GATS, WTO, Tariff Policy (ITU-T Study Group 3 results of the recent meeting and the WTPF), as well as GMPCS, universal access and rural telecommunications initiatives. You will hear figures and statistics recently gathered by the BDT and not even yet published, including those for revenues, mainlines, demand, multilateral lending privatisation and internet hosts. The Seventh ITU Regulatory Colloquium, entitled ‘Transforming Economic Relationships in International Telecommunications’ concluded earlier this month that now is the time for telecommunications operators, regulators and national governments to comprehensively reinvent the international economic relationships in telecommunications. The fundamental issues involved concern investment, especially the investment required for rapid progress towards universal service in the developing countries, as well as related goals, improved industry structure and effective regulation. In its conclusions, the Colloquium cited that it was necessary to facilitate access to investment resources for funding network development, by reinforcing local expertise in the new emerging issues of the national and entrant private sectors. Needless to say, I have supported in many fora for the promotion of global development, with an emphasis on the developing world. Through traditional and innovative means the ITU will continue in 1998 and beyond, to meet this commitment in coordination with all sectors and-organisations concerned. The Second World Telecommunication Policy Forum in mid-March will address issues on Trade in Telecommunications, as a result of the WTO’s Basic Telecommunication Agreement, the importance of which is emphasised by its wide coverage (signatory countries account for more than 90% of global telecommunication traffic) and its binding nature. The most visible and rapid impact of the Agreement will be a shrinking of the ratio between the price of the international and long distance telephone calls – in a few years’ time we’ll see an even more radical death of distance. Within the European Union, many of the major carriers have seen decrease in their US Dollar revenues from international services over the last year at the same time as their traffic volumes have continued to grow, demonstrating the impact of price cutting. An equally important outcome of the agreement would be the co-existence of multiple different regimes. At the World Telecommunication Policy Forum, stakeholders of the restructuring process will focus on services, the reform of international accounting system and the impacts on the financial strategies to support the development programme. This Forum represents a good chance to reposition ITU in the new era of liberalised global telecommunication. The ITU/BDT has commissioned a number of developing country case studies for use at the World Telecommunication Policy Forum and World Telecommunication Development Conference, but also to provide the baseline information needed to construct new methods of cost-oriented tariff rates. Only last week, ITU-T Study Group 3 recommended a transitional arrangement to cost-oriented mechanisms (regimes) which will reduce total accounting rates to less than 1 SDR per minute before the end of 1998. The results of the Forum will be conveyed to the WTDC the following week along with the results of all the Regional Colloquia and Regional Development Conferences to serve as the basis for the action plan of the Development Sector for the next 4-year period. In this Colloquium, you will want to discuss these future actions, for the sake of restructuring for social and economic development, in a dialogue about financing strategies and policies, WTO matters, tariff policies, international accounting and settlement rates, and private sector partnerships. Before concluding, I should like to salute the very recent agreement – from last Friday – reached by the WTO concerning financial services. I have no doubt that this will greatly contribute to solving the problems of financing telecommunication development infrastructures. I do warmly welcome friends from the EBRD, the EU, the World Bank, WorldTel, and from the countries of the region, their operators, financiers and regulators to join in this future-focused debate on the era of restructuring, the era of cooperation for our global socio-economy: and a better life for the world’s people. Conclusion In closing I would just say a word about why these colloquia were organised: to encourage partnerships between stakeholders from around the world. The Colloquia have generated an immense body of information, available to all Members of the Union. In short, an approach consistent with listening before giving advice, with hearing the interests behind the positions, with negotiating together the best solutions, and in recognising that we are all, in fact, stakeholders with a shared vision.