Between 1993 and 1998, a minimum of US$ 40 billion has been directed towards developing countries via the mechanism of the accounting rate system (Figure 3). If this money had been used in its entirety to fund network development at best practice procurement rates then it would have been sufficient to fund around 45 million new main lines which would be equivalent to a rise of one extra telephone main line per 100 inhabitants among developing countries. No other net flow of telecommunications assistance towards developing countries, comes near to matching this level of funding.

Understandably, developing countries have been reluctant to move towards lower rates for fear of losing these net settlements. However, pressure exerted on them, particularly by US operators, has been intense.

Figure 3: Net financial transfers between developed and developing countries
Total payments, receipts and net settlements made under the international accounting rates and settlements system, between developed and developing countries, 1993-97

Notes: For the purpose of the analysis here, the developed countries are broadly defined as the 15 EU Member States plus Iceland, Norway, Switzerland, Canada, United States, Australia, Japan and New Zealand.

Source: ITU estimates.