Thursday 28th April 2005

 

Deregulation of telecom sector

Devil in liberalising details

 
 
 
 
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With T&T on the verge of full telecommunications competition (cellular and international), the Business Guardian started a forum last week on this sector which is so important for this country’s development.
This is a forum—it is meant to be an exchange of ideas—and it is hoped that companies and individuals who are interested in participating in T&T’s telecom future would contribute to it as they see fit.
We also expect participation of the representative trade union, the Telecommunications Authority, regional telecom bodies, academics and, most importantly, the customers. —Business Editor

By Keith Maynard

Advanced Technology Consulting

Internet Cafes and low-cost International Calling Centres are springing up everywhere. Even TSTT is proclaiming lower prices for international calls and for broadband Internet access. Telecom deregulation must be in the air.

T&T is experiencing the same pre-deregulation benefits as just about every other country that has trodden this path including USA, UK, India, Ghana to name a few. As consumers, we’re already gaining major quantifiable benefits from the government’s decision to deregulate.

History would appear to be repeating itself. But should we assume that all the other benefits that accrued to those countries after deregulation will automatically apply here as well? And just what are those benefits?

The answer to the first question is a resounding NO! All deregulations are not made equal and as the saying goes “the devil is in the detail.”

There are any number of issues that could harm our ability to gain maximum benefit. Of particular concern are two—the mechanism for allocating scarce spectrum and the pricing of interconnection with TSTT’s network to the newcomers. Related to the latter is the extent to which wireless operators will be permitted to bypass TSTT altogether.

We have not been privy to the documents detailing the Government’s position on these and many other issues. Indeed, it isn’t clear that these issues have yet been decided. On these decisions rest the promise of major benefits to be derived from our telecoms deregulation process.

Let’s assume for now that our decisions closely followed those of other successful deregulators. Assume for a moment that history repeats itself not just in the pre-deregulation period but in its aftermath as well. What should we then expect?

Taking the UK as an example, what we’ve seen is a rapid growth in the range of services on offer and a dramatic decrease in cost. It is now the case that new technology is brought to market much more rapidly than in the past.

Every month, there is an announcement about the roll-out of picture messaging, higher speed Internet access, wi-fi and all kinds of novel technologies. Not all of these will impact on our daily lives but a significant number will.

The most dramatic impact, though, has been on cost. Dial-up Internet access (very slow) used to cost about $400 per month. The most recent broadband offers, at ten times the speed of dial-up are now under $200 per month. Bundled packages are also on offer. Here’s a quote from a recent article in The Independent: “Telewest offers a package comprising a 1MB broadband connection, a phone line and free local and national calls at weekends, and 35 TV channels for £35 a month.”

You can find the article at http://money.independent.co.uk/personal_finance/invest_save/story.jsp?story=630123

The evidence is clear. For any country that deregulates successfully, the benefits to the public are staggering. We just have to make the right decisions and deregulate in a way that leverages the lessons of prior telecom deregulations.

The benefits don’t end there though. Efficient, low-cost telecom and Internet access will be a boon to a large number of businesses and the national economy.

I’ll give one small example: I know of a woman from Sweden who works as a translator for various international bodies. She loves Trinidad and would happily ply her trade from here. Right now, she doesn’t simply because Internet access is unreliable and the cost of calling her clients is prohibitive except from the call centres.

Resolve these two problems and we have the beginnings of an industry that can generate significant foreign income.

Her story is not unique and indicative of the fact that deregulation enables businesses to trade and work internationally much more easily than at present.

Even fledgling exporters and hoteliers can more effectively sell their wares when international calls are more reasonably priced.

And let us not forget the Government. Much is made of the loss of profit from its share of TSTT. Yet we should balance that against the obvious benefits. I don’t know what their collective telecom bill for the year are like, but if we see the expected 50 per cent or more decrease in charges, then the saving to the Government and its various agencies would be enormous.

Having said all of the above, perhaps the most exciting outcome of deregulation is glorious uncertainty.

While we can reasonably predict most of the general outcomes (and they’re overwhelmingly positive), we must remember that our deregulation, if done properly, will leverage the technology that is coming to market now and not that which existed when the UK and others deregulated.

The upshot is that we should expect to see a host of technologies, benefits and yes, challenges that didn’t exist then.

I can’t wait.

Advanced Technology Consulting is a newly formed, Trinidad-based IT consultancy whose consultants are all internationally recognised as leaders in IT. They’ve worked for G E Capital, National Westminster Bank, Primus Telecommunications, Esprit Telecom, CellNet, Vodaphone, AT&T, Royal Bank of Scotland, Citigroup and other major corporations, mostly in the telecom and financial services sectors.

 

 

 

 

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