Rich telephone, poor telephone

Luís Ángel Fernández Hermana - @luisangelfh
28 February, 2017
Editorial: 76
Fecha de publicación original: 17 junio, 1997

Date of publication 17/06/1997. Editorial 76.

To sleep is to forget the world

Jorge Luís Borges

The relationship between telecommunications and economic development is an obvious one, and should there have been any doubt on this score, various studies on the subject –despite their different approaches– have come to the same conclusion, namely, that without telecommunications there can be no economic development and without economic development, telecommunications are a stagnant pond. Thus, this sector is becoming one of the most reliable yardsticks for judging the position that everyone, both individuals and countries, occupy in the world. The problem begins when it comes to deciding how to bring them together (telecommunications and economic development) in order to get in working mode, especially as far as the Third World is concerned. I will be devoting the next few editorials to this fundamental question, as powerful financial and technological consortiums have started to draw up their battle lines for a singular fight: a new distribution of the globe, especially within the developing world as it becomes more and more part of a global telecommunications model. Logically enough, both the resulting skirmishes and battles are bound to affect us directly. In fact, we will be obliged to take sides (either by omission or action) in this new version of the distribution of wealth between the rich and poor of the planet, in the North/South divide within cyberspace.

In February this year, 69 countries (42 of them in the developing world) agreed to fling their doors wide open to foreign telephone operators as from the 1st of January 1998. This decision was taken in Geneva under the auspices of the World Trade Organisation. It was the culmination of a long process of negotiations, pressurising and bullying of the Third World on the part of the industrialised countries. The principle that the sacrosanct market should regulate the telecommunications sector on every level, from the global to the local, took top priority in the agreement. The starter gun was fired at the World Conference on the Development of Communications held in Buenos Aires in March 1994 and organised by the Union Internacional de Telecommunicaciones (UIT). It was there that governments of the Third World got the message loud and clear from the World Bank and the US, which sent its main spokesman, Vice-President Al Gore, to the Argentine capital: either they opened their doors to the process of liberalisation of their telecommunications or they would feel the full weight of the powers pulling the strings of world commerce. For ten days there was an attempt to create some kind of “resistance front” which would favour a hybrid solution more in tune with the economic realities of our planet i.e. a combination of market laws to modernise the telecommunications sector combined with criteria of a more social nature, which if they were excluded would be postponed indefinitely, flattened by the overwhelming wheels of “progress”. In fact, much of the discussion centred on whether telecommunications would really mean economic development for these countries weighed down as they are by enormous external debts or, instead, for the operators and nations where these companies have their headquarters.

The meeting in Buenos Aires hinted at events that have since come fully into affect. It was thought that the Internet, which it was obvious even then would become a crucial tool in telecommunications, might lead to an intensive use of electronic resources thus widening the existing chasm between rich and poor even more. The explosion of the WWW (then just embryonic) and, more recently “push” technology, have only confirmed the Third World’s worst fears. The problem now not only lies in increasing the number of telephones, (a parameter very dear to the U.N.’s heart), but also telematic services at competitive speeds and cost.

Let us not forget that 75% of the telephones in the whole world are to be found in 8 industrialised countries, that 600 million people have never made a telephone call in their lives and that half the people on the planet don’t know what a fax is. The Internet lies in some kind of misty twilight zone, just as the concept of economic development itself does for almost 2/3 of the world’s population. In Tanzania, for example, there are 3 telephones per every thousand members of the population, half of which are in the capital itself. The average wait for telephone installation is 39 years. So, it is obvious that the need to attract investment in these antiquated telephone systems is a matter of great urgency. When we say that there is no development without telecommunications and that there are no telecommunications without certain development areas, we are talking about a concept that is much more vast and which globally affects natural, human, agricultural, industrial, and social resources in all the countries of the world. The poorer countries are afraid of the way things might go, since the history of capitalism has confirmed time after time that economic investment, if it is allowed to take its natural course and operate via its own dynamic, always goes for short term profitability. This principle applied to the field of telecommunications means that foreign operators will always gravitate towards the more “juicy” sectors in each country, leading, in turn, within a few years, to a widening gap between the rich with access to resources and the poor who aspire to them. If the needs of these people don’t form part of the strategic plans determined by the market, this abyss will become even more difficult to bridge as a result of the multiplying effect that telecommunications will have on the economy.

One of the most widely accepted projections of the relationship between these two factors, known as the Jipp curve, predicts that for every 1000 dollar increase in the Gross National Product (GNP), there will be 2,24 extra lines for each 100 inhabitants. The problem is that developing countries need to invest 5,000,000 million dollars over the next decade in modernising their equipment in order to be able to attract significant future investment. And this massive spending would only just raise the average number of telephone lines to 14 per 1,000 inhabitants, a figure which only too clearly indicates the serious dimension of the problem. On the other hand, the assault which operators are making on the world market seems to be determined by factors other than those of merely altruistically “favouring” the economic development of countries in the Third World. Up until recently, the worldwide increase of lines in the main telephone companies, registered a steady increase of 4,5% in 1983 to 5,2% in 1991. In 1992, the growth rate fell slightly which according to experts was probably the consequence of economic recession and the fact that many developed countries were starting to reach saturation point in universal access to their networks.

Nevertheless, this decrease could also be put down to the rhythm of substitution of traditional services by others such as cellular telephones and data transmission networks. During 1992, while world telecommunication lines increased by 27 million, the number of users of cell phones increased by 6 million. Both figures contributed to a continuous acceleration in the total growth rate in the sector, in a scenario where the number of big operators decreased as a result of the liberalisation measures introduced in their respective countries. Consequently, the competition amongst them began to push them into a life or death struggle abroad. Within this framework, developing countries appear to be propitiatory victims. These new tendencies undoubtedly represent a phenomenal impetus for their aspiration to share resources of which they have been deprived up until now due to weak infrastructures, and subjected as they are to the ups and downs of international markets which they have never been able to control. At the same time, the risks for them are enormous: the multiplication of regions clearly identified with the most outstanding features of the North/South divide within their respective countries and of these in relation to all the other nations in the world.

​Translation: ​Bridget King