ITU HEAD SEES TELECOM SECTOR RECOVERY TIED TO DEVELOPING MARKETS

However, several participants pointed to the disconnect between technology touted by exhibitors at the show geared to developed countries vs. more affordable devices tailored for developing markets. The logic of gearing new technology, such as mobile devices, to developing countries with proven market demand is “flawless,” Jose Maria Figueres, senior managing dir. of the World Economic Forum and former President of Costa Rica, said in a panel discussion here over the weekend. “Does it have to be the latest version all the time for all markets?” he asked. “Or can we adequately connect the poor in all parts of the world and add profitability without the latest version of everything?”

“In the developing world, the number of mobile subscribers has rocketed to 1.2 billion from 23 million in 1999,” Utsumi said in an opening news conference. “This has important implications for service providers for how and where people will access the Internet, with the likely focus being on the handset.” Voice-over-IP technology also is poised to exert that kind of “revolutionary change,” he said.

The ITU released a broadband report that said international subscribers grew 72% in 2002, with Korea having the highest penetration rate -- 21%. Hong Kong was 2nd with nearly 15 broadband subscribers per 100 inhabitants, and Canada was 3rd with 11 per 100. The report said home users were driving “the vast majority of broadband demand” in all markets. One in 10 Internet subscribers worldwide (5% of the installed base of fixed lines internationally) had a dedicated broadband connection, it said, and by the end of 2002 broadband services were available commercially in 82 of 100 economies.

Experts repeatedly touted the promise of wireless technologies such as Wi-Fi for “leap-frogging” technology in countries lacking a wireline infrastructure. Hamadoun Toure, dir., ITU Telecom Development Bureau, likened the promise of new wireless LAN and other technologies to the explosive growth of cellphones. “We believe the ‘mobile miracle’ can be repeated in other ICT [information & communications technology] sectors,” he said at a news conference. “The myth in the information society is that people in developing countries either can’t afford or are unwilling to pay for ICT services,” Toure said: “The trend in 2003 is who debunks this myth.” He said his bureau was funding a series of new Wi-Fi projects in developing countries, including Bulgaria, Uganda and Yemen.

Panelists stressed the business case posed by the lack of wireless technology, or even wireline phone penetration, in many developing countries. Jinsheng Su, dir.-gen., telecom administration in China’s Ministry of Information Industry, said his country had 490 million telephone subscribers -- 245 million fixed line and 244 million mobile. By year-end, that figure is expected to reach 500 million, he said. The country has 68 million Internet users, the 2nd largest number in the world, he said.

While the Internet has exerted a growing influence in China, Jinsheng said challenges were continuing, including: (1) Lagging “far behind” developed nations based on network management. (2) Having relatively low penetration of information and commercial technology in rural areas. Jinsheng said China was pushing forward with a network upgrade plan to converge data, voice and images and was toward universal service. “Competition and open markets must not be introduced at the cost of hurting rural areas'” access to services, he said. Jinsheng said Beijing was looking at universal service funding to introduce wireless access to rural community development efforts. He also pledged that China would honor its World Trade Organization commitments. He said: “China will cooperate in the communications field with all economies in all directions.”

Several experts cited the needed to make new technologies affordable for developing countries to tap into potentially huge markets where penetration in areas such as wireless and Internet access was relatively low. Hewlett- Packard Chmn. Carly Fiorina, who bemoaned the deep funding cuts that Western countries had made in R&D funding, also cited the need for companies to invest in education. “We live in a world today where less than 10% of the world’s population can afford to buy the products we make,” she said: “We know we are not graduating enough math, science and engineering students today to fulfill our needs in a decade.”

Figueres said most of the technology on display at the show was produced for the developed world. He asked what the “connectivity equivalent” was to some of the micro-credit projects that had taken off in developing countries. He cited as an example 2-day portions of shampoo sold in some countries at a fraction of what it would cost a family to buy a full bottle, thus making the product affordable. “The barriers to universal ICT deployment are cultural,” he said. “By that I mean a lack of understanding on the part of many decision-makers with respect to how ICT can turbocharge the cause of development.” Among the recommendations that Figueres said he would have “rich countries” make would be to mainstream ICT deployment as part of their overseas investment funds.