The telecommunications industry has been one of the most successful industries in the world in recent years. Until the 1980s, the governance and regulation of international telecommunications regulation was relatively simple, with public telecommunications companies providing services within discrete national borders. International traffic was carried at mutually agreed rates by governments and their respective national carriers. A brief discussion on the industry’s transition to a multilateral trade framework.
International telecommunications were based on bilateral relations between countries. The monopoly operators of these countries have collaborated in the joint provision of international services. This model is collapsing and a new model based on global competition is emerging. Now, it is not nations that trade with other nations, but businesses and individuals that trade with each other.
Until the 1980s, the governance and regulation of international telecommunications regulation was relatively straightforward. Telephone companies were state monopolies that provided services within separate national borders. International traffic was carried at mutually agreed rates by governments and their respective national carriers.
Many observers regard 1998 as a pivotal year in the evolution of the global telecommunications industry. This view is based on the fact that two major shifts in the international political landscape have begun to remove many long-standing barriers to competition in global networks and services.
The first of these changes is the expansion and consolidation of the international telecommunications trade regime in order to liberalize basic telecommunications services sectors in accordance with international trade disciplines in participating countries. It also marks the beginning of full liberalization within the European Union (EU). As part of a wider program to create a “single market” for goods and services, under which the 15 EU member countries are required to remove barriers to competition between them in infrastructure and telecommunications services under the direction of the European Commission (EC).
The second major change concerns the international accounting and settlement system, the restructuring of global traffic precipitated by the disappearance of the accounting rate system and the governance of global electronic commerce.
Multilateral trade framework:
Trade in telecommunications equipment and services now takes place in a multilateral environment in which the majority of commercial relationships involve multiple intermediaries between buyer and seller. We are moving from a world of one-to-one relationships to a world of many-to-many.
For many telecommunications users, the transition to a multilateral trading system will bring benefits in terms of greater choice and lower prices. For the majority of carriers, there will be significant benefits in terms of creating new market opportunities and leveling the playing field.
The goal is to expand the multilateral solution, in which all countries move forward together and in which everyone benefits, not just the carriers with strong market power. Only then will the benefits of global competition be extended to everyone on the planet.
The nature of international telecommunications trade is changing from a bilateral nation-to-nation framework to a multinational and multilateral business-to-business paradigm. Large international telecommunications alliances have taken many forms and have the potential to dominate parts of international telecommunications as they hope to realize significant market and cost advantages. Growth, demand will continue to increase for small businesses that can provide local presence and technology expertise.