Regulator is the key for transition: ITU chief

By : |February 14, 2000 0

Cyber News Service

NEW DELHI: The role of a regulator is very important once you introduce competition in telecom. This is the message International Telcommunication Union Secretary General Yoshio Utsumi has for India. “For,” he said, “if the market is unpredictable, it fails to attracts foreign investment, something most required by a country like India, unfortunately, one of the least developed countries in the world for telecom.” A regulator is also essential to play a role in resolving the issues of interconnectivity between the incumbent player and the new operators, which he says is the lifeline of providing healthy competition.

In an exclusive interview to Cyber News Service, Mr Utsumi shared his thought on various telecom developments around the world. He said that ITU has fair amount of expertise on the issues related to regulation that any country can benefit from. But ITU itself can not impose any country to adopt any of them.

As for the pace of telecom liberalisation in India, he said that just liberalising a market was not enough. What is more important is to set up right framework to sustain such developments. Citing example of Japan, where he was expert in policy and regulatory affair, he said, “it took 10 years to liberalise telecom in Japan and another 10 years to set up the right framework. So, India will likewise have many years to go before these teething troubles are over.” He said ever since liberalisation was initiated, government in Japan had been reducing its equity in NTT (Incumbent operator). Liberalisation has brought down the tariffs to one-fifth of what it was.

On asking whether a country like India can afford to keep investing in all the newer technologies keeping in mind the rate of obsolence of the same, he suggested that it was sensible to have new technologies as the same has lower cost of operation. “Many countries in Africa have deployed new digital networks enabling them to have multimedia services from data, voice and video at far more less cost. On the contrary, US still has many networks using analogue technologies.”

Talking of the e-commerce, a major initiative with the ITU at present, Mr Utsumi said that no doubt it is the new paradigm for the survival in global market. But, still lack of digital authentication and high cost of PCs are the two major hindrances. However, we have this consensus in the expert committee that there should not be any extra taxes imposed on the e-commerce and it should largely be non-governmental initiative.

He also talked about the initiative that ITU has taken on building a framewrk for the accounting rate. He said, “We are building a framework for a cost-based accounting rates. It is the most efficient way of settling the accounts between two countries. But, we can not implement in just one go as it would turn many countries bankrupt.” He said for many countries revenue from accounting rates contributed as much as 5 per cent of the GNP. So, changing it to cost-based structure would simply cut this revenue. “Therfore,” he said, ” we have developed a transitional scheme. But, while others have agreed, US is still not happy about the idea as it will drastically increase the tariff of the services there.”

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