4 - Telecommunications: can trade agreements keep up with technology?

Summary

Since 1997, when the WTO negotiations on basic telecommunications concluded, the market for telecommunications has witnessed an enormous transformation. The sector has evolved from one in which government monopolies supplied the services, usually over landlines, to one in which the vast majority of governments have sold some or all of their ownership interests and introduced competition. During this same period mobile phones, which now comprise close to 70 percent of all telephones in use globally, have overtaken fixed-line services in nearly all countries. Over the past decade the internet has evolved from a largely experimental technology to a full-fledged commercial service that is an integral part of the business world, of consumers' lives, and of the global economy. Internet technology might well form the backbone for the communications industry in the near future – the so-called next-generation networks (NGNs).

Governments have now generally embraced competition in telecommunications as a means of achieving national policy objectives in both the sector itself and the economy as a whole. The willingness of governments to submit their telecoms reforms to trade obligations has been impressive. In the mid-1990s only a handful of governments had introduced competition. Today over 100 WTO members have WTO commitments that allow new entrants to compete in some or all segments of the industry. This reveals an appreciation of trade undertakings in the sector as a two-way, win-win situation. On the one hand, service providers are able to count on legal guarantees and predictability.