2006 Miami Conference

Reports

TELECOMMUNICATIONS/IT: CAPITALIZING ON INCREASED COMPETITION
TUESDAY, DECEMBER 5, 2006
2:00 PM-4:30 PM

Moderators: Cavan Fabris, Womble, Carlyle, Sandridge and Rice

Discussants: Cesar Buia, Lucent Technologies; Camille Facey, Cable and Wireless Jamaica; Francisco Gomez-Alamillo, AHCIET; Khalid Hassanali, Evolving Technologies and Development Company; Linda M. Wellstein, Wellstein Steel and Associates International LLC; David Zumwalt, University of the Virgin Islands

The Context:
Though regulatory and technical barriers still exist, the regional telecommunications/IT market has opened considerably to competitive forces in the last decade. This presents unique opportunities for the region to take advantage of for sustainable development. At the same time, as new telecommunications goods and service providers jostle for market space the region must remain cognizant of the fact that new technologies and products must ultimately be harnessed to improve the regional standard of living.

The Challenges:

Is new technology being effectively used by governments and the private sector, resulting in new economic gains and increased competitiveness?
Is industry, notably manufacturing, tourism and banking truly aware of how they can maximize telecom/IT capabilities?
What of government policies that embrace technology to increase opportunities for their citizens in education and health services?
Are telecommunication providers effectively marketing these new technologies beyond cellular services so that they enhance regional productivity?
Are there any regional best practices?

Points and comments brought up in the session:

The telecommunications industry needs to work together on regulatory harmonization, high cost of interconnection, asymmetry between telecommunications and broadcasting, lack of flexibility in spectrum management, off network roaming issues and regulation of VoIP.
Regulatory barriers include the need to harmonize regulations to allow new companies to enter the market. Many times there appears to be institutional distrust and lack of information about new entrants and lack of understanding of regional markets by potential entrants.
New competitors can be allowed to enter the market to offer new and upgraded services. The right regulatory environment will assist in enhancing their competitiveness and the overall competitiveness of the sector. Additionally, the right regulatory mix will force incumbents to comply and reduce opposition and political leverage that they may have in keeping new entrants out.
The technology park strategy to attract investment is being implemented in Bahamas and Trinidad. They can be used to attract foreign investment and ensure that they go further than just offer services in the CCA region. For example negotiations can include building of production facilities, investing in infrastructure, training of local human resources, technology transfer and
innovation and research and development.
There have been gains in areas such as infrastructure and new technology offerings but full benefits have not yet been realized.

Questions and Answers:

Both new entrants to the market and incumbent companies and service providers face the same challenges in nearly all CCA countries. That is how to expand service into rural areas while maintaining revenue. Politicians sometimes pressure companies and attempt to squeeze new entrants to agree to such terms, making investment for them less attract and without acknowledging the revenue side of the equation.
Not all countries have the resources or political will or technological and developmental capabilities to use the technology park mechanism to attract new entrants. Many smaller markets will be better served by increasing competition among service providers and lower costs of access to technology. Perhaps regional technology parks can encourage the latter.

Recommendations made:

There continues to be the need for debate on policy specifics of harmonization, regulatory inefficiencies and increasing foreign and local investment and open competition.
Telecommunications companies need to address socio economic circumstances such as high poverty levels, political instability, and low computer literacy in order to grow markets. Cable and Wireless has success in providing internet access to libraries, partnering with schools etc. Such strategies can be replicated elsewhere. Making services affordable to consumers is key.
The region needs to explore possibilities of co-investment and sharing development costs. Convergence is key to competitiveness as this would stimulate investment and innovation, open markets and promote e-business exchanges.
The development of technology parks is an innovative way of attracting foreign and national investment. Panama and Costa Rica already operate such parks which are presumably successful. There is a need to assess if such models can be replicated, what are best practices in attracting such telecommunications investments; detailed analysis of the cost-benefit of employing such a development policy.