7th in a series of articles on the impact of telecommunications on developing countries

Night is the mother of counsel

At the end of July a group of countries signed their first memorandum of understanding (MoU) on global mobile personal communication by satellite.(GMPCS). These systems represent the new wave in personal telephone systems and promise to carry voice, mobile faxes, messages, broad band data and multi-media connectivity world-wide via manual telephone terminals and portable computers. It’s a telephone infrastructure constructed the reverse way round. Instead of being based on terrestrial networks, they are founded on constellations of low-orbit satellites (LEO).According to the Union of International Communications, (UIT), at whose headquarters the agreement was signed, the majority of these new systems will be operational in the next five years with world-wide coverage.

This is the first step towards what experts call the “leapfrog” in telecommunications: countries with inadequate, antiquated or non-existent telephone infrastructures will now be able to leap in to the Information Society without following the classic pattern of laying terrestrial lines, a process which would clearly be beyond their budgets for many years to come and which would, in the process, leave them out of the race completely. A global telephone system via satellite means they will be able to enjoy global network connection and take advantage of telecommunications for their development plans. It all sounds perfect on paper. Nevertheless, the real scenario, for the moment, is more thorns than roses although at least they are there and could even flower one day.

The first two obstacles are the price of these new systems and the relationships with operators. Iridium, one of the satellite constellations (the total number of which descends as the transmission capacity of each new generation of satellites increases), will end up costing 3.4 billion dollars. Calls will not be cheap: about 3 dollars a minute. And, although operation costs are going down all the time, and thus, possibly rates, as well, they will still be beyond the acquisitive capacity of the vast majority of the population in developing countries. For the moment, only the big cities –above all in countries with a well-developed industrial base, such as South Africa and Brazil– will be able to fill the gaps of their terrestrial networks via mobile wide-band telephones.

The “leapfrog” necessary to regain lost ground will make Bubka’s pole vaulting antics look like child’s play, even if one compares him to other mortals. At present, 3/4 of the world’s telephones are to be found in 8 industrialised nations, while 80% of the planet’s population do not have access to the services which broad-band telephony promise. Even then, those in less developed countries that do have the means to procure these services are on waiting lists of between 3 and 21 years. This minority will welcome the GMPCS as manna from heaven, almost literally speaking. And, according to the experts, they – in general business and professional people, as well as centres for higher education – will be the ones to leapfrog into the future. According to a survey conducted by The Economist (18 May 1996), there will be more than 300 million subscribers to cellular phones in developing countries within the next three years. What it does not say is whether these users are second or third generation or new ones.

In order that the latter make up a significant part of that figure, credit and productive networks need to be set up for the less wealthy sectors, something which, for the moment, big PTT don’t seem decided to include on their agendas in the next few years. This is the case not only in developing countries, but also in industrialised ones (Spain is an example of what will happen now that service access to information is liberated, leaving parts of the country to foot big bills for long-distance rates while those in the big cities are in a much more favourable position. Then those in government shed crocodile tears about the environmental imbalance that migration to the cities causes). This is the bottleneck which galvanised Bangladesh, Pakistan, India and China into action against the MoU allowing GMPCS operators to work in their countries. Their rejection was based on the intricate system of tariffs that they had drawn up as well as the difficulty of controlling telephone calls in the new system which would be directly payable to the corporations by means of complex “roaming” systems.

Curiously enough, the resistance of developing countries to being in the hands of these companies has seemingly stimulated their innovative impulses. In order to reduce the cost of calls, one of the satellite systems which will go into operation before the end of the century will use telephone boxes powered by solar energy, which could be installed above all in rural areas. These networks, together with the cellular ones, could possibly form the backbone of the Information Society in developing countries as long as their “design” depends, to a large extent, on the local organisations involved in projects working towards sustainable development themselves. One of the best examples of this is the Grameen Bank which loans “soft” credits to farmers in Bangladesh. This organisation has obtained a licence to operate GSM-900 cell phones and plans to serve 100 million people in rural areas in the next four years, so that they can keep in touch with agricultural markets, innovation developed by their own research centres or in the exterior and, in general, to pave the way to diversification of business. The bank maintains a credit network that serves more than half of the 68.000 rural villages in the country. All its neighbouring countries are watching closely to see what kind of alliances will emerge between organisations of this type and big international telecommunications operators. Many experts feel that it is this that will give the measure as to exactly what this “leapfrog” in telecommunications really entails.

Translation: Bridget King.