Governments, global telcos herald WTO agreement

Global telecommunications companies and world leaders are praising the global telecommunications trade agreement reached during the weekend by the World Trade Organisation in Geneva.

LONDON--Global telecommunications companies and world leaders are praising the global telecommunications trade agreement reached during the weekend by the World Trade Organisation in Geneva.

The agreement, which will open up world telecomm markets to global competition by allowing foreign ownership and operation of telecom companies, was agreed upon by 66 countries representing 90% of the world telecomm market, according to a WTO spokesperson.

Though compromises were reached, such as allowing Canada to limit foreign ownership to a 46.7% interest, and Japan to offer 100% foreign ownership only to new companies, most government officials and telecomm companies seem pleased with the outcome.

The agreement also includes regulatory principals designed to allow newcomer carriers to compete directly with monopolies. These principles include favorable access rates to existing network infrastructures, and will bring services such as satellite systems, cellular phones, data transmission and paging under the control of the WTO, according to WTO officials.

US government officials expect the pact will open up new markets for the US and lower costs to consumers.

Analysts say the main benefit to consumers will be a decrease in the costs of telephone services.

What the basic consumer will see is a drop in prices due to the fact that more companies will be providing international service at competitive rates, says Stephen Young, principal consultant at the UK research firm Ovum. However, it may take up to several years for these price cuts to become apparent, he says.

"No matter what breaks are offered, a new service provider cannot take on the ubiquity of the incumbent overnight," Young says.

Large telecom operators are also praising the outcome of the talks.

"BT very much welcomes this agreement because we have always been a warm supporter of liberalisation," says Robert Dunnett, a spokesman for British Telecommunications. "While we felt that some countries could have gone farther in their effort to open up their markets, BT is nonetheless pleased with the outcome as it opens up an additional number of

Countries which have agreed to the pact have until November 30 to ratify the agreement, which is due to go into effect on January 1, 1998.

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