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Presentations by Jerker Torngren at the Regional Ministerial Conference in preparation of the World Summit on the Information Society

 

1.Outline of the presentation by Jerker Torngren, Internews Networks, at WSIS 8th November 

  • Brief presentation of RITI-Policy dot-Gov project. 
  • The Romanian electronic communication policy
  • The role of RITI-Policy dot-Gov in implementing the policy

The regulation is in place. The regulator is in place.
Will the policy also materialize in an open competitive market?

There will not be a competitive market without competitors. New entrants can not be forced into the market. They have to be attracted. The policy, the regulation and the regulator are themselves attractions but only if rightly implemented.

Furthermore operators have to have trust in the entire society. Corruption, regardless in which sector of society, will deter companies from investing.

Business opportunities must be at hand. The telecom market has a reputation of being a dying market. Is it a dying market?

It is a market with some dying operators.
That is not the same thing as a dying market.

Traffic minutes are still increasing. Electronic communication is even more important today than before the financial collapse of a number of operators. We adapt our lives to the global environment which generates a need for electronic communications.

In many countries internet usage and e-commerce still have to take off and will result in significantly increased data traffic. Some services are developed as a service but not fully implemented. Distant learning and healthcare are already today possibilities that would save money for the states if used and would improve the living standard for people in rural areas. When introduced, the services will generate traffic and revenue for operators. 

The launch or rather lack of the launch of the 3G mobile service is a disappointment. I do not intend to go into any speculation about the possible reasons for the delay as such. The manufacturers are suffering severely from the delay. Let me just express my personal assumption that the manufacturers are not only concentrating on saving money to survive but are also focusing on creating new applications, applications that the operators can turn into commercial services over the 3G networks, yet again increasing traffic in the entire telecoms network.

The expected growth of traffic minutes, does that have to be taken care of entirely by the existing players on the market?

The rather depressed situation could actually be regarded as strength for some operators. As one example there is a lot of surplus equipment around for new entrants. Probably operators have never had such golden opportunities before to acquire first class equipment to low prices.

A personal advice to operators considering the possibility to enter the electronic communication market. Assess the reliability of the regulator. Make yourself heard if you are not satisfied. Use the promise of transparency. Transparency is a two way dialogue, not a monolog from the authorities. Concentrate on your business plan. With a realistic business plan and a close eye on the cash flow there is no need to fear the present market.

2. Introduction
What supportive actions are needed from government to nurture and allow local enterprises to flourish? This is a question put forward in the program that I would like to spend a few minutes on. 

But first let me introduce the RITI dot-Gov program I have the honour of working with here in this very interesting country, Romania. RITI dot-Gov is a support program financed entirely by USAID and operated by Internews Network, with headquarters in Arcata, USA.

What is RITI? RITI stands for Romanian Information Technology Initiative.

It is a program designed to assist the establishment of a well functioning policy and regulatory framework for electronic communication in Romania. 

RITI shall encourage the creation of an efficient market-oriented policy and legal environment where the internet and electronic commerce can flourish.

And forgive me for focusing to some extent on Romania. But I think Romania can serve as a good model for other countries as well. However, please note that my final brief recommendations of course are entirely general.

The policy and the regulation for an open competitive electronic communications market are well in place in Romania. The Government has taken very impressive steps to reform the market in order to increase the competitiveness of the country. 

The RITI project is focusing very much on providing experience from previous transition from monopoly to an open competitive market. Hopefully we can thus contribute to a speedy transition, fully in line with the intentions of the Romanian Government.

The policy and the regulation are in place in Romania. The regulator is also in place. Will there be a competitive market as well, which is the purpose behind the policy?

Well, there will not be a competitive market without competitors. Regardless which country we are talking about, the official policy is not enough. Competitors must find business opportunities and must be able to trust the entire society.

Commercial opportunities
The telecom market has a reputation of being a dying market. Is it a dying market?

It is a market with some dying operators.
That is not the same thing as a dying market.

Traffic minutes are increasing. Competition will in itself create a significant amount of new traffic.

In many countries internet usage and e-commerce still have to take off and will result in increased data traffic. Some services are developed as a service but not fully implemented. Distant learning and healthcare are already today possibilities that would save money for the states if used and would improve the living standard for people in rural areas. When introduced, also these services will generate traffic. 

The present rather depressed situation could actually also be regarded as strength for some operators. As one example there is a lot of surplus equipment around for new entrants. Probably operators have never had such golden opportunities before to acquire first class equipment to low prices.

Regulatory environment in broader terms.
New entrants can never be forced into the market. They have to be attracted by a secure environment. In that respect it would be a serious mistake to focus only on the telecom regulation as such. 

A constructive telecom policy is not enough if the bureaucracy to register a company, to employ staff members or to get all kinds of permissions by local authorities to install equipment becomes insurmountable hurdles.

Corruption, regardless in which sector of society, will deter companies from investing.

There must be predictable tax rules. Any commercial entity must be able to carry a normal tax burden. However, a Government that plans to introduce all kinds of additional fees or levies on specific companies must be aware of the obvious fact that what the companies have to pay to the State, directly reduces the funds for investments or increases the tariffs the subscriber, the citizens of the country, have to pay. 

I personally do not believe that we will see a number of big new entrants entering the Romanian telecom market when it opens up to competition next year. I rather think that some SMEs might be more likely new competitors. 

SMEs need to be nourished a bit extra. They often lack internal resources to investigate new legislation. Consequently RITI, the support project I am working with, invited SMEs to a workshop earlier this autumn to introduce them to the new regulatory environment and business possibilities in Romania.


Recommendation
Please allow me to make some personal recommendations.

Make sure that the entire society is well catered to harbour a commercial sector. It means that corruption must be fought every where. The entire legal system must be trustworthy and functional. Bureaucracy must be reduced on all levels. 

A good policy and a clear regulation are necessary. But pay attention to how these two instruments are implemented as well. It is actually the implementation rather than the text in documents that determines the success of the policy.

Make sure that the nice word “transparency” becomes an effective dialogue were all parties concerned are actively invited to participate. 


Finally, companies have to be credible not only to their owners but also to the tax authorities.

Regulators should be accountable not only to their Governments or Parliaments, what ever might be the case, but also to the private sector. The regulator should report publicly and annually not only what its money has been spent on, but above all what was the result of its activities. It is not a question of checking how the money has been spend as such. It is a question of creating credibility and trust.

With a good, constructive Government that take care of the proper functioning of the entire society, an entrepreneurial operator should be able to concentrate on the business plan. With a realistic business plan and a close eye on the cash flow there is no need to fear the present market. The market is not dying.

RITI dot-Gov is part of the dot-Com alliance financed by USAID 

Dot-Com Alliance

 

© 2003 Internews