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168 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA South Africa; Singapore; Sri Lanka; Suriname; Switzerland; Thailand; Trinidad and Tobago; Tunisia; Turkey; United Arab Emirates; United States; Uruguay. Several initial offers have been derestricted by the member concerned and are publicly available on the WTO website. 7 In addition, some members have made their initial offers, or summaries thereof, publicly available on their internet sites. Since 19 May 2005, the following members have submitted 30 revised offers: Australia; Bahrain; Brazil; Canada; Chile; the People’s Republic of China; Taipei,China; Colombia; Egypt; European Communities and its member states; Honduras; Hong Kong, China; Iceland; India; Japan; Korea; Liechtenstein; Macao, China; Malaysia; Mexico; New Zealand; Norway; Peru; Singapore; Suriname; Switzerland; Thailand; Turkey; United States; Uruguay. Several revised offers have been derestricted by the Member concerned and are publicly available on the WTO website. LIBERALISATION IN TELECOMMUNICATION SERVICES UNDER THE URUGUAY ROUND This Section is based on a combination of recent information and the WTO Document of December, 1998. The overall picture is the same with each of these two information sources. Classification of Telecommunications Service Sectors and the Commitments made by Various SAFTA Members Section 1 described the classification of telecom services into seventeen categories (mentioned in the first column of Table 15.1 above); fourteen of which are ordered from ‘a’ to ‘n’, and three ‘other’ categories under ‘o’. Though these services are classified separately in the list, the ongoing convergence arising due to technological and market development is blurring the distinction among some of these categories. Given convergence, provision of packaged or bundled services by the same operator will increasingly become a norm in the future. Members therefore have adapted the WTO classification in their commitment and offer schedules, due not only to convergence but also on account of their own requirement. For example, in its schedule, Bangladesh distinguishes between telecom services for public and private use and has introduced a category called Gateway Earth Station services. Nonetheless, given the nature of information available, 7 www.wto.org this section will provide the relevant details based on the seventeen sectoral classifications. As of January 2000, 93 WTO members had included telecommunications services in their Schedules of Commitments. Basic telecommunications is included in the schedule of commitments of 83 WTO members and value-added services have been committed on by 72 member governments. In addition, 72 members have committed on some or all aspects of the reference paper. Of these, 66 have accepted the reference paper in its entirety or with minor modifications. All industrialised countries have taken commitments on basic telecommunications, most value-added sectors, and the reference paper. Industrialised countries operate an extremely liberal telecom regime and have largely bound the applicable regime in their schedules. On the other hand SAFTA countries (excluding Bhutan, who is not a member), have made limited commitments in telecom. Only Sri Lanka has fully committed to the principles enshrined in the reference paper, while Maldives has made no commitments at all. Even the commitments made by SAFTA countries in telecom are meaningless when compared to the prevalent regime in the respective countries. This is further discussed later. The Nature of Commitments made in the Schedules Including the Types of Limitations on National Treatment and Market Access by SAFTA members As stated, SAFTA countries have made partial commitments. Further, such partial commitments were made much more for the mode of supply ‘commercial presence’, than for other modes of supply. Another noteworthy feature is that the ‘incumbent government monopoly’ has been accorded preferential treatment, viz., an automatic license or mandated use of facilities owned by it. For ‘national treatment’, most limitations relate to ‘nationality requirement’, followed by limitations relating to residency requirement, authorisations requirements, and ownership of property land. The number of limitations for ‘market access’ are much more than those for national treatment. These relate mainly to limitations on number of suppliers, types of legal entities, and participation of foreign capital. With regard to accounting rates, there was general appreciation among WTO members that the accounting rate regime in place would not be able to withstand the pressures brought about by competitive markets. It was, therefore decided to secure a shared understand-
P ROSPECTS FOR THE TELECOMMUNICATION SECTOR UNDER SAFTA 169 ing that Members would not challenge each other’s accounting rates under the WTO’s dispute settlement regime. Further, it was agreed that the understanding would be reviewed no later than the commencement of the new services negotiations, from 1st January 2000. However, certain countries included exemptions to the MFN rules with respect to their accounting rate systems. 4 of 6 SAFTA members included exemptions in their schedules. Country by Country Commitments and Offers and a Comparison with the Applicable Regime Bangladesh Bangladesh is one of the poorest, most densely populated, and LDCs in the world. Its fixed line teledensity (about 1%) remains the lowest in South Asia. The overall situation in the country’s telecom sector has been improved to some extent in recent times by a rapidly expanding mobile market. After a number of years of strong growth, mobile penetration reached about 22% at end of July 2007, at par with most of its regional neighbours. However, with almost 99% of homes lacking a telephone and with a four year waiting list for fixed-line services, the country is still struggling with some of the most underdeveloped telecommunications infrastructure in the world. About 80% of the telephone lines are in Bangladesh’s four main cities, while 80% of the population lives in some 86,000 rural villages. Fixed lines services are mostly provided by the stateowned Bangladesh telegraph and telephone board (BTTB), while mobile services are provided by six private operators. It is expected that the government will continue to vigorously pursue the de-regulation process. Expanding the national telecom infrastructure remains a priority. A critical factor is that Bangladesh has some of the most underdeveloped telecommunications infrastructure in the world. The national telecommunications policy, issued in March 1998, offers broad intentions for market liberalisation. The Bangladesh telecommunications regulatory commission (BRTC), established in January 2002, is pushing new initiatives to open up competition in local loop services, rationalise the spectrum policy and establish formal controls over interconnection to stimulate penetration and improve quality of service. Several significant initiatives have been taken by BTRC as of early 2004. Absence of an effective interconnection regime had been one of the major weaknesses of the sector. Service providers were prone to predatory pricing and to refusing access to competitive operators. An estimated 85% of calls originating on mobile networks failed to complete on the public switched telephone network. This forced subscribers to maintain accounts from multiple providers due to the challenges of connecting calls between networks. Over time, GrameenPhone has emerged as the largest mobile provide and dwarfs both fixed line and mobile competitors in number of subscribers. After years of delay, an interconnection regime has finally been put in place with performance, service quality, network availability or pricing obligations imposed by the Government. Following resolution of the interconnection issue, the fixed line network was thrown open to competition. Four Licenses have been issued in September 2007, but BTTB expectedly remains the dominant operator. The benefits of introducing competition in PSTN will appear in the near future. Other topics that have been high on the government’s list of priorities include VOIP. The gray market for Internet telephony has exploded in recent years. BTRC has announced an international long distance policy (ILDP) 2007 which invited bids for licenses to operate international gateways and VOIP services. The ILD market is finally gearing up for ‘legitimate’ competition, which until now was being provided by grey market VOIP providers. Other important initiatives include the restructuring and corporatisation of BTTB, and comprehensive technical assistance for BTTB, BRTC and the Ministry of Post and Telecommunications. Comparison of the applicable regime described above and the commitments made by Bangladesh in 1997 reveals a significant disparity (see Appendix, Table 15.3). Bangladesh has committed to license only two operators, in addition to the Government operator, to supply domestic long distance and local voice services as well as transmission facilities (leased circuit services). Crucially however, no bypass of government owned operator is permitted. The commitment however, included full competition in voice and data transmission over closed used groups and for internet access services. Table 15.3 Key Telecom Indicators for Bangladesh Population 144 Fixed lines 1.44 Fixed teledensity 1% Mobile phones 32.37 Mobile density 22% http://www.btrc.gov.bd/circular.htm
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QUANTIFICATION OF BENEFITS FROM ECO
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Preface Our consultations with seni
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viii CONTENTS 7. Revenue and Welfar
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Executive Summary OBJECTIVE This st
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EXECUTIVE SUMMARY xiii Table 1 EAMA
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EXECUTIVE SUMMARY xv India A full S
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EXECUTIVE SUMMARY xvii indicates th
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EXECUTIVE SUMMARY xix ments on basi
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Part I BENEFITS FROM TRADE, INVESTM
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4 QUANTIFICATION OF BENEFITS FROM E
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2 Literature Review and Rationale f
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4 Effective Additional Market Acces
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6 Impact of SAFTA on Member Countri
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7 Revenue and Welfare Implications
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8 Impact of SAFTA on Inward and Out
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9 Quantification of Benefits from T
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Part II BENEFITS FROM DEEPENING INT
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11 Construction and Related Enginee
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Appendix 12 Original Commitments/In
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Appendix 14 Table A14.1 Telecommuni
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Appendix 15 REFERENCE PAPER Scope T
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Bibliography Abelson, P. (1996),
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BIBLIOGRAPHY 241 Cuba (2002), Negot
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BIBLIOGRAPHY 243 (2004), Impacts of
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BIBLIOGRAPHY 245 Silva, Patricia an
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BIBLIOGRAPHY 247 (1998), Tourism Se
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