World Telecommunication Day 1999 |
In emerging markets around the globe, the participation of both the public and private sectors is a key element in the process of improving telecommunications infrastructure and ''wiring'' millions more people into the on-line world.
In Malaysia, for example, the government recently granted Internet licenses to all companies that had originally received telephone service concessions, increasing the number of Internet service providers from two to five.
In Bangladesh, the government has granted local telecommunications provider Grameen Telecom permission to provide cellular service in rural villages. Grameen, in conjunction with the government, also plans to install ''cyberkiosks'' where rural residents can access the Internet.
Morrison Knudsen Corp. announced in September that it had been awarded a $55 million contract from Telecom Egypt to design and install new telecommunications lines in Cairo, Port Said and Alexandra. With this project, the Boise, Idaho-based engineering company will install 287,000 new lines and rehabilitate 64,000 existing lines as part of a project funded jointly by Telecom Egypt and the U.S. Agency for International Development.
But not all joint ventures between the private and public sector run smoothly, as recent developments in China and Vietnam have shown. China Unicom, the country's second-largest telecommunications company, is trying to dissolve more than $1.4 billion worth of contracts with foreign investors before the company's impending overseas stock listing. Among the partners are 25 foreign companies (including France Telecom, NEXTEL and Sprint) that skirted Beijing's ban on foreign ownership of domestic telecommunications operators by forming joint ventures with Chinese companies that, in turn, set up ventures with Unicom.
Unicom has frozen or delayed revenue sharing with these joint-venture partners and has even offered to buy one of them for the cost of its initial investment plus interest. Most of the foreign companies have so far resisted the move, saying they deserve equity in Unicom or buyout packages worth two or three times their initial investments.
Regardless of such problems, telecommunications companies are still scrambling to participate in China's potentially enormous market. The country currently has some 22 million cellular phone subscribers, a number that is expected to increase to 35 million by the end of this year and grow by at least one million a month over the next few years.
Most current subscribers use Europe's GSM standard. Chinese Premier Zhu Rongji declared in March, however, that China Unicom can also develop Code Division Multiple Access (CDMA) networks. The U.S.-backed CDMA standard was developed by Qualcomm of California before Sweden's Ericsson bought its CDMA infrastructure division earlier this year.
NTT DoCoMo of Japan will be presenting various applications for W-CDMA and other next-generation mobile communications technologies, including Internet-capable cellular phone service, at the P.T./Wireless Comm Beijing '99 show Nov. 9-13.
Confident that there is room for yet another player in the market, the Universal Wireless Communications (UWC) consortium recently visited China to promote the adoption of a third standard: Time Division Multiple Access (TDMA). UWC is a nonprofit association of more than 100 carriers and vendors supporting TDMA, including AT&T Wireless Services and BellSouth Cellular.
According to the UWC, TDMA is the dominant technology in the Americas (18.5 million subscribers at the end of 1998), an open standard that will soon be compatible with GSM networks.
Foreign telecommunications companies have also encountered obstacles in Vietnam. Cable & Wireless recently came to an agreement with state-run Vietnam Posts and Telecommunication to abandon a 15-year business cooperation contract to install 250,000 telephone lines in Hanoi.
In severing the contract, Cable & Wireless announced that it was changing business direction in Asia and was no longer willing to invest in fixed-line telephone networks. Other sources say, however, that the British telecommunications giant was disappointed by slower-than-expected growth of telephone networks in Hanoi because of the current economic slowdown. Industry experts say that this decision has probably been affected by the increasing global telecommunications investment opportunities following deregulation.
Other foreign companies (France Telecom, Japan's Nippon Telegraph and Telephone, Korea Telecom and Australia's Telstra) that have signed business cooperation contracts with Vietnam have seen little action on their projects. This has not stopped other companies, however, from forging ahead with their own telecommunications projects.
A mere two months after the Cable & Wireless deal unraveled, ePHONE Telecom of Fremont, California announced that it had secured an initial agreement with Saigon Tel Corp. for ''the first phase in a substantial project for the development of a fixed wireless local loop telephony network in Vietnam.''
ePHONE says that the goal of the partnership is to build and operate local telephony as a lead-in to other projects like Internet telephony and other network services.
Julia Clerk