"More than half of humanity has never made a telephone call. There are more telephone lines in Manhattan than in all of Sub-Saharan Africa."14
10.The telecommunications infrastructure is the backbone for the application of a wide range of communications and multimedia services. Telephone access and connectivity will be key for participation in the global information society and markets and, thus, for future development and wealth creation. Indeed, the levels of economic development and telecommunications development are closely correlated. The quality of telecommunications infrastructure and connectivity has already become a major competitive factor for attracting foreign direct investment in sectors other than telecommunications. "The losers will be those who stood still and watched" (The Economist).
11.But most developing countries, especially the least developed countries (LDC), are not sharing in the communications revolution, lacking as they do
12.In effect, we witness a deepening mal-distribution of access, resources and opportunities. The technology gap and related inequities between industrialised and developing nations - the information rich and the information poor - are widening: a new type of poverty - the information poverty - looms, further complicated by the emergence of a new information elitism both among and within countries. Developing countries are threatened by domination, marginalisation and even exclusion. Eliminating the distinction between information rich and information poor countries is also critical to eliminating other inequalities between North and South and to improving the quality of life of all humanity."15 The capacity to communicate will soon come to be viewed as a key human right.
13.The 1995 ITU publication "Telecommunications Indicators for the Least Developed Countries" paints a somber picture of the present situation:
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14.The major bottleneck and obstacle to universal connectivity of and within developing countries is the local telecommunications loop/network and its quality as well as the availability of adequate and reliable bandwidth on international links.18 The expansion of domestic telecommunications infrastructure and the provision of connectivity to reliable international networks must therefore become a top priority. In particular, strengthening rural telecommunications must be treated as a central parameter for any SHD strategy aimed at poverty alleviation and reduction. Today, more than half of the world's population lives more than two hours from a telephone; nearly 58,000 villages in Indonesia, 535,000 villages in India and 151,000 villages in Africa have no telephones. This will require considerable physical and capital investment. Development cooperation can and must play a critically important role in this process. The Copenhagen Social Summit called at the national level for the promotion of greater access to technology and technical assistance as well as corresponding know-how, especially for micro-enterprises and small and medium-sized enterprises in all, but especially developing countries. (Programme of Action.para. 12 (d))
15.Substantial new funds will be required to help developing countries build and upgrade telecommunications networks and related communications technologies. These needs are bound to compete with other enormous global resource requirements and one may wonder whether a global savings shortage will occur in the process. To catch up, developing countries will have to aim at a network growth rate between two and three times the global average of five per cent per year. To attract the needed substantial new investment for modernising existing telecoms infrastructure, most countries must as a first step implement policy and structural reforms and changes in their telecommunications sector, which is invariably dominated by state-owned and -run monopolies. In turn, these monopolies are often the beneficiary of development assistance, however inadequate. The non-existence of free markets and preservation of protectionist structures impedes the evolution of the telecommunications services as much as does the prevailing distorted pricing and tariff system. While telecommunications are in essence a fixed cost system, the customer pays on the basis of variable "voice minutes" which bear no relation to where the costs are incurred.19 Under present arrangements, high long-distance tariffs thus cross-subsidise local service.
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16.The liberalisation of global markets for telecommunication services is the main theme of negotiations among 51 member countries of the World Trade Organisation (WTO) which are to be concluded by 30 April 1996 - and extended at the last moment by another ten months. These talks aim at a commitment from as many countries as possible to a framework for the orderly development of the telecoms industries, e.g. binding force principles (rules based) requiring transparent regulations, ensuring competing companies access to public telecoms, proscribing unfair discrimination by dominant carriers - thereby allowing foreign ownership of networks and infrastructure. The negotiations aim at the breakup and abolition of national telecoms monopolies. It is estimated that by 2005, developing countries will make up 30% of the projected US$ 900 billion worldwide telecoms market, up from 16% of around US$ 520 billion in revenues today.20 But as yet, few developing countries have telecoms companies which are active internationally and would stand to gain from global liberalisation (although in India, the Centre for the Development of Telematics has developed and installed rural telephone switching and exchange systems using low-cost, local technology and materials21). A successful completion of the round may well attract foreign investment in developing countries' infrastructure which is estimated to amount to US$ 60 billion over the next five years22 (while in 1993, LDCs invested only a total of US$ 289 million). For their part, developing countries are concerned about the possible impact of market power by one or a few large providers23 jeopardizing local services which may be unable to compete with powerful international operators. Development cooperation can assist in the formulation of sensible negotiating positions by developing countries involved in such negotiations.
17.To be effective and equitable, solutions must be responsive both to
18.Many developing countries have already formulated ambitious strategies to upgrade their domestic telecommunications infrastructure. For instance, the Philippines and China aim at providing universal telephone access for their people (see boxes). For the Philippines access can be as basic as providing a single telephone line for every one of its 40,000 villages.24 China for its part plans to add the equivalent of a Bell (telecoms company) each year ( click here to view box ) and hopes to have 140 million lines by the year 2000 (the United States today has 160 million lines).25
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19.Rural connectivity can be established through a variety of ways: land/terrestrial lines, satellite links or radio connections. A domestic network must then be joined with an international network. For land lines, various options for fiberoptic cable service exist and are actively being pursued, such as AT&T;'s Africa Optical Network (Africa One) - which proposes to connect 41 cities to the international circuit (see box) -, the FLAG project (see box), Siemens' Afrilink or NTT's Afrinetwork. All are planned to be operational between 1997 and 1999 if the immense investments and capital requirements can be secured.
20.Equally daunting are the funding requirements for several competing schemes offering a link via digital satellite systems, which would in principle allow an enhancement of rural communications directly.26 Several international satellite projects are at present in the pipeline and if realised, they might well push transmission capacity to a satiation point (see chart):
This overview does not take into account yet the plans by several media consortia to provide a global satellite infrastructure for digital television and broadcast services.
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21. 22. 23. 24.
21.WorldTel - conceived and sponsored by the International Telecommunications Union (ITU) - offers a strategic access and innovative approach for the development of rural communications. Recently launched pursuant to a feasibility study by McKinsey &Co.;,29 WorldTel is a commercially structured consortium, acting both as a venture capitalist and a developmental operator/solution provider. It aims to increase the tele-density and connectivity of the telecommunications systems in developing countries, focussing on countries with a teledensity below 1% and a waiting time of more than 5 years for the installation of telephone lines. Its projects seek to complement and reinforce already existing telecommunications services, especially to rural areas.Click to View Box
22.WorldTel projects would be implemented on the basis of build-own-operate (BOO) or build-operate-transfer (BOT) schemes and will have the imprimatur of ITU. An initial subscription of US$ 50 million has just been completed and will allow the design and preparation of projects by national and international multi-disciplinary teams of consultants. Capital markets will then be tapped for the implementation of each project and, in cooperation with WorldTel, countries will invite application for tenders to carry out the projects. The responsibility to select the business partners for the execution of a project within the circumscribed technical parameters thus rests with each country or group of countries. Increasingly, the financing, operation and ownership of telecoms infrastructure seems to become attractive to the private sector and investors, which will reduce the financial burden carried in the past by the public sector.
23.One possible option to foster rural telecoms penetration, dubbed telecom lite, would involve a configuration consisting of a mixture technologies: low-cost options for local connections, competing global (terrestrial or satellite) operators for long-distance services, digital transmission and low-cost, reliable simple network access with increasingly sophisticated terminals. This would allow countries to leapfrog the industrialised world's enormous investment in expensive wired local loops and to provide better service at lower cost per subscriber.30 Public-private partnerships and other innovative types of modalities and arrangements might be effective means to generate investment and direct it to the poorest countries.
24.One of the most promising approaches might be the provision of rural telecommunications services on a community basis organised in the form of a public utility.31 It is designed to help establish basic communication links, support education and health programmes through distance education and telemedicine, attract small-scale industries such as handicraft and animal product processing; and allow commercial marketing of rural products. Pre-paid (smart/cash or entitlement) cards could be adapted for use by such rural projects to allow access to telephone and other services. All envisaged applications could raise the level of living standards and increase the welfare and quality of life of rural populations. They could help create new employment and thus reduce abject poverty. Ultimately, the availability of these services might also help stem the flow of rural migrants to urban areas.32
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25.The lack of generally available and reliable electricity supply, especially in most villages, is one major constraint in establishing connectivity and utilising any type of communications technology. Rural electrification would take years to electrify rural dwellings and would necessitate immense investments to expand national electricity grids. The massive application of solar energy technologies (panels or batteries) can therefore offer an alternative, readily available solution to fill the rural energy gap and to extend the reach of all types of communications technologies. Communications projects should therefore envisage and make full use of solar power. Equally, the private sector should be prodded to innovate more solar energy applications in this area.
26.Another alternative might be the old-fashioned crank-up technology. South Africa's BayGen Power has developed and manufactures a 6-pound portable crank-up radio "Freeplay", independent from electrification or batteries which are largely unavailable or unaffordable for rural dwellers. The crank of a handle for 20 seconds will hold forth 40 minutes of listening reception (AM, FM and shortwave). The benefits are remarkable: a radio played 5 to 10 hours a day will save US$ 500-1,000 in battery costs over a three-year life-span.35 Yet, the radio's price of some US$ 30-40 is still too hefty for most rural areas and will require subsidisation. It might also be useful to explore whether this spring-turned-generator technology could be extended and used for other normally electricity-dependent communications hardware.