Expert View

September 15, 2003
Growth shifting from developed to developing world

Geetanjali Wadhwa & Pradeep Chakraborty

GENEVA -- According to Dr. Yoshio Utsumi, secretary-general, International Telecommunication Union (ITU), many parts of the world, especially North America and Western Europe, are approaching saturation in fixed-line and mobile users. Growth is now shifting away from developed economies to the developing world, particularly in Asia, and to a lesser extent Africa.
Convergence plus met up with Dr. Utsumi on the eve of the ITU TELECOM WORLD 2003 in Geneva, to find how whether an industry turnaround is beginning to happen, and what would be the focus areas of the ITU event. Excerpts from an interview:

CP: Has the turnaround in the industry happened? If not, when can things start to look up again?

Dr. Yoshio Utsumi: It is important not to forget that the downturn in the telecommunications sector comes after what has been the greatest period of growth in its history. At the peak of the spending boom, in 2000, the telecommunications industry invested more than US $200 billion worldwide, plus a further US $100 billion in acquiring licences to provide future 3G mobile services.

Today, although the reaction of the financial markets suggests an industry in crisis, the actual performance of the sector has really not been so bad. For example, about 200 million new mobile users and 76 million new fixed-line users were added to telecommunication networks around the world in 2002. Although this is lower than that in the peak year of 2000, it is still higher than for any year in the previous century, and growth is continuing in 2003.

Part of the reason for the slowdown since 2000 was the scale of past success. Many parts of the world, especially North America and Western Europe, are approaching saturation in fixed-line users and mobile. The growth is shifting away from developed economies to the developing world, particularly in Asia, and to a lesser extent Africa. In some parts of the world, investment just cannot seem to keep up with demand. There are still around 1.5 million villages worldwide that do not even have a basic telephone connection.

Market growth and potential for growth is now greatest outside of the developed North, and those manufacturers and operators that have not built this new market dynamic into their corporate strategies are the ones that will suffer most from the current downturn. China has now overtaken the United States as the world's largest telecom economy (measured by number of subscribers). At the same time, Africa has emerged as the fastest growing region for mobile communications over the past five years.

CP: What steps have been taken so far by the ITU toward public protection and disaster relief communications?

YU: Internationally agreed standards are critical to facilitate the interconnection of national and international relief schemes - and to enable a swift reaction to global or regional disaster events. For this reason, the ITU Telecommunication Standardisation Sector (ITU-T) recently organised a workshop on Telecommunications for Disaster Relief that brought together, in Geneva, governments, international relief agencies, non-governmental organisations (NGO), manufacturers of telecom systems, telecom service providers and makers of standards.

One of the outputs of the workshop was the creation of a new co-ordination effort and information exchange platform, which will be called the Telecommunication for Disaster Relief and Mitigation Partnership Coordination Panel. Among the panel's aims are to monitor the progress of technical standardisation work and map the requirements of different users. The panel will also enable an invaluable dialogue between ITU sectors, other standards development organizations, and most importantly, the users of the equipment that will enable efficient preparation and reaction to disaster events.

CP: If and when deployed, how will high-altitude platform stations (HAPs) affect neighbouring countries? What is the ITU doing to find solutions to this problem, if any?

YU: The ITU approved several recommendations on the sharing criteria with associated co-ordination distances so as to enable the shared use of frequencies between HAPS on the one hand, and other radiocoms systems in the neighbouring countries on the other hand. These criteria should facilitate the introduction of HAPS on a coordinated basis, with a view to determine the areas where the effect of the HAPS is negligible and the areas where the effect of the HAPS could be substantive.

Other recommendations specify the interference mitigation techniques, which could be implemented on the HAPS with a view to minimising its interference potential. This would provide appropriate protection to radiocommunications systems that are likely to be affected. With the use of these recommendations, suitable operational agreements can be implemented on a mutually agreeable basis.

CP: Is the ITU addressing any compatibility issues between broadcasting and aeronautical services?

YU: The ITU is addressing the compatibility between the broadcasting service and the aeronautical services in various texts. The main results are contained in two ITU recommendations that address the compatibility between the FM sound broadcasting service in the band 87.5-108MHz and the aeronautical services in the band 108-137MHz. The introduction of new aeronautical applications in the band 108-118MHz, by WRC-03, such as communication data links for supporting aeronautical navigation and surveillance functions, in conjunction with the planned introduction of digital sound broadcasting systems in the band 87.5-108MHz, would need a review of the current criteria with a view to their adaptation to the new realities.

CP: How do you see HDFSS going forward, given that broadband itself has not taken off in many countries, especially India?

YU: High-density fixed satellite services (HDFSS) have generated much interest at recent World Radio Conferences (WRC). They seem to offer a way of providing broadband services to large areas, via satellite service. However, there is a concern that such services will end up competing for the same frequencies being targeted for future fixed service applications. In a country like India, where terrestrial mobile as well as fixed-line broadband are not yet well developed, there may be a case for arguing in favour of an ambitious satellite-based platform for delivery of these types of services. However, in other countries where terrestrial solutions are already well developed, a case is hard to make.

Another topic that received a lot of attention at WRC-2003 is the potential for high/low altitude platform stations (HAPS/LAPS) for providing coverage to large areas at low cost. Although the technology is still largely unproven, except for some very specific applications, there seems to be a strong case for arguing that it would be more economic and easier to deploy than satellite-based services in a country like India, and easier to upgrade as the technology moves on.

CP: What are the focus areas of ITU TELECOM 2003? What would be your key message to the global telecom industry?

YU: With a unique mix of high-level audiences converging to the ITU TELECOM WORLD 2003, the event continues to provide an unrivalled platform for strategic debate and business networking. It is the only telecommunications event that is truly global in nature and has the ability to bring together the industry's top CEOs, government ministers and regulators.

TELECOM WORLD 2003 will address recent market challenges and forge a common view on how our industries can rebuild confidence and generate new sources of growth. The event will confront the new realities facing the industry and the critical issues, policies, technologies and standards that are shaping the nature and direction of telecommunications.

TELECOM WORLD 2003 will host a significant number of new companies this year as nearly one in two exhibitors will be at a TELECOM WORLD event for the first time. TELECOM WORLD 2003 has seen a steady increase in the registration of small and medium-sized companies over the past few months, many of whom will be exhibiting in national pavilions. We are very pleased to see such a positive increase of new companies attending a TELECOM WORLD event for the first time. This clearly reflects the market shift to a more diverse range of players in the industry.

We are delighted not only with the quality and global nature of participation at TELECOM WORLD 2003, but also with event attendance as there are many new companies emerging in the marketplace who have chosen to attend because they believe this event is an ideal launch pad for gaining access to international markets and will play a big role in setting the tone for the future of the industry.

Contact:
International Telecommunication Union (ITU)
www.itu.int/WORLD2003