Mrs and Messrs Ministers
Mrs and Messrs Presidents,
Ladies and Gentlemen,
The Royal address that we have just listened to drew,with a clarity and a strength we must greet and make ours, the finality of this Forum devoted to the law making and the regulation in Africa and in the Arab countries. I am thus very happy and honoured to take part in it. I thank the ITU for having taken this initiative, which seems to me essential for the development of information technologies in your countries and for the necessary international co-operation in this field. I also thank very cordially Mr. Terrab, Director-General of the ANRT and co-organiser of this meeting, for accommodating us here, in Rabat and I congratulate him and his team for his success.
The topics retained for your debates, interconnection and the granting of frequencies, are at the heart of the process of opening to competition. But before the technical discussions begin , I would like to give you some overall reflections on the context and the stakes of regulation.
1. Information technologies: a driving force of development
Much is said today about the "digital divide", to indicate a complex reality, which cannot be summarised by a formula. To support the growth of the so-called Southern countries, what is significant today is less to designate this reality than to find solutions to remedy it. That supposes first of all a change of prospect. I share the approach of Chairman Powell, with whom we have today a very specific sympathy, who suggests concentrating our efforts on the "digital development", a term which gathers the people rather than divide them into two categories, and I share simultaneously the objective of the European Commission, recently expressed by Commissioner Poul Nielson, in charge of the development and the humanitarian aid policies, consisting in enabling the population of developing countries to benefit from infrastructures and lasting services accessible by all. Everyone must be able to find his own place and his rhythm in the world-wide digital development.
You are here today because you are all convinced, like me, that information technologies are a formidable economic and social development tool. They will remain such, independently of the overall situation, of the economic uncertainties and, today, of the dramas which affect development in the industrialised countries and by consequence in other areas of the world. Our common objective is that the African continent and the Arab world can take part in the information society, which should not be a privilege of the richest countries.
Social development first of all, because the ultimate purpose of our action in favour of telecommunications is to foster, for the greatest number, the information flow, the access to the knowledge and the communication between people. That supposes initially the generalisation of access to the telephone services in the world; and that passes today, in the Arab and African country and developing countries in particular, by the use of new communications tools such as the mobile telephony and Internet.
But all that supposes the emergence of a market, which leads me to my second point: the economic development. Indeed, we witnessed in Europe since nearly four years that the setting up of an open and competitive economy, therefore the formation of a market, supports economic efficiency, growth, the fall of prices and innovation.
There is not in my eyes a single model of economic development and I consider that each country must be able to adapt the telecommunications liberalisation process to its specificity and to its culture, thus adopting the principles of the global economy. To open a market means enabling the emergence of an offer which must correspond to a demand. However the needs of consumers can be very different according to each country’s History and geography and according to the maturity of its market. In other words, the conditions for creating a market are not necessarily identical in Europe and in most of African countries and the Arab world, where the questions of universal access arise differently.
I also develop this idea when meeting political and economic leaders of the various French regions.
There is on the other hand a certain number of conditions to ensure that a market can grow; some of them are valid for all the countries in all the continents whatever their level of development. Others are more specific to the developing countries. I would like to enumerate some of them before insisting on the contribution which Europe and France can bring to you in this process of economic development.
2. The conditions of the emergence of a market in the developing countries
- the objective: consumer satisfaction
First remark, the key of the development of a market is the consumer, who was initially called a user. Consumers are at the same time an objective for the public policy and a condition for the success of competition. In order for the market to become a reality, it is necessary that the consumer understands the offer made to him and adheres to it; it is necessary that he recognises the offered service as the appropriate answer to the need that he expresses. It is one of the reasons of the success of GSM in Europe and in the world: a simple service, technically reliable, at an affordable price.
Thus, a relevant and effective public policy in this field must above all take the conditions of consumer satisfaction into account, not only for reasons of general interest, but also to allow the reform’s success.
- New economic and institutional relations
The emergence of a true market, place where competitive supply and solvent demand meet, generally supposes a change of the economic and institutional structures.
In the economic field, the incumbent operator must be ready to enter the competition game. That supposes for it to adapt, in particular in terms of organisation and commercial behaviour, which generally require significant cultural changes. Total or partial privatisation of the incumbent operator is not an immediate or preliminary condition to this new behaviour, but it can constitute a strong incentive to the change. In fact, the majority of the Member States of the European Union proceeded to the floatation on stock markets or the partial privatisation of their incumbent operator’s capital.
In institutional terms, the setting up of an effective regulation, enjoying strong competencies, constitutes a decisive asset in the process of opening. The institution of a regulation, transitorily asymmetrical, in charge of implementing strong obligations to the incumbent operator, is initially a necessity to enable the market to emerge and to develop. The regulation must thus rest on a clear and coherent legal basis, making it possible for the regulator to fully exert its competencies, because in the implementation of the national rules, the role of the regulator is to create in the long term and to maintain constantly the conditions of an effective, equitable and fair competition.
The question of the institutional independence of the regulator is undoubtedly a fundamental point, which becomes even crucial when the incumbent operator’s capital remains under majority control of the State. The more significant the State’s share in the capital is, the more independence of the regulator decisive is.
All European countries instituted an independent regulator to show their will to very clearly separate the regulatory functions from operation and thus to protect the regulator from political and economic influence. The Independent Regulators’ Group (IRG) which associates today the regulators of the 15 Member States of the European Union plus 4 other European States, has recently drawn up a common understanding which clarifies the essential criteria of the regulator’s independence. It is naturally at your disposal.
I add that these developments are only possible in a context of institutional and regulatory stability, only way to bring to the market the visibility necessary to its development.
- the respect due to the market’s rhythm
Ten years ago, the telecommunications services were primarily the fixed telephony, i.e. a well identified service, meeting a precise need: to ensure the vocal communication between two fixed points of the territory. The principal stake was to ensure a sufficient coverage of the territory to make it possible to the greatest number to communicate by this means. This stake remains valid; but the development of many new services comes today in addition: mobile telephony, Internet access, mobile data transfer, corporate networks, broadband, etc.
So that one can observe today, within the same country, the coexistence of several markets, which levels of development can be variable. It is essential to identify these various markets, their degree of maturity and the nature of the regulation which must be implemented to them. Because regulation can be extremely different whether it applies to an old or an emergent market, to a mass or a niche market, to a market enjoying a strong competition or a market where the number of players is limited, for example by the availability of frequencies.
In any case, each of these markets evolves at its own rhythm, which is determined mainly by the time necessary to the matching of supply and demand. For a regulator, it is essential to be respectful of the market’s ability to evolve and to find the right balance between, on the one hand, the impulse it must give to stimulate the market’s necessary dynamism and, on the other hand, the preservation of a lasting competition, support of a continuous development. It is in this respect important to avoid day-to-day jolts and accelerations. It is what the example of the UMTS in Europe and elsewhere showed. The very ambitious time-table fixed by the European Union at the end of the year 1998 did not sufficiently take account of the market’s rhythm of maturation, as well in terms of technological preparation as in terms of emergence of a solvent demand. One realises today that it will take a few additional years to be formed.
- Universal access and service
Access to telecommunications networks and services is another crucial point for developing countries. Because competition is not an end in itself; it must undoubtedly be enshrined in a development and regional planning objective, for the benefit of the greatest number. This question covers two complementary realities:
- the equipment of the territory in telecommunications networks. One of the major stakes, for the developing countries, is to cover the population where it is and to take account of the principal circulation axes. That supposes investments, which can be facilitated by competition, supplemented by an incentive policy for the deployment of networks. Several technologies are today available to access the most difficult areas: fixed networks, mobile networks, satellite, wireless local loop, etc... Their complementary features can prove an effective tool to reduce the cost of this coverage. The example of the development of mobile telephony in Morocco deserves in this respect being greeted.
- the access of the largest part of the population to telecommunications services supposes the networks’ deployment throughout the territory but must also take into account the imperative of an equitable access to the services. To answer it, Europe, and singularly France, have recourse to the concept of universal service, which can in particular result in coverage obligations and in a sharing of costs between operators. The universal telecommunications service applies today only to the telephone service. Reflections are led in Europe on the possibility of its extension to new services (mobile, Internet). That could constitute a reference for developing countries, even if the cost and the financing questions of the universal service are not comparable between industrialised countries and other countries.
- In the same spirit, the introduction of information technologies at school represents for all the countries a decisive stake and a major development factor; because the school, instrument of cultural and educational equality, must give to younger generations the essential competencies to meet the requirements of modern life. Privileged place for discovering and getting familiar with new technologies, the school is thus one of the cornerstones of the information society and holds a determining role in what I called a few moments ago the "digital development".
- A favourable international environment
The process of opening a market to competition is better assured when it benefits from a favourable international environment, because of the globalisation phenomenon.. However the evolutions do not always help the developing countries
Two examples may testify:
- the routing of international telephone calls rests traditionally on a sharing of incomes between the originating operator and the terminating operator (accounting rates system). With the emergence of competition in the developed countries, this system is progressively questioned, because alternative traffic routing means exist. During the last years, developing countries have experienced a sharp lowering of their incomes linked to accounting rates. This tendency is particularly unfavourable for them insofar as these revenues represent for them a significant source of financing, for the telecommunications sector as well as for their economy, and a brutal decrease puts them in a difficult situation.
I make a point here of greeting ITU’s efforts to preserve a balanced system: To face the reduction of incomes for the routing of international communications, the ITU adopted several recommendations attempting to preserve the equitable character of the international interconnection system (for telephone calls as well as Internet connections). This action, which tends to support the dialogue between actors with sometimes divergent interests, goes in the good direction.
- the development of Internet supposes the deployment of networks allowing on the one hand the population coverage, and, on the other hand, the interconnection with the world-wide network with sufficient line capacities. However, the deployment of networks which are used as support to Internet remains unequally distributed between the various areas of the world: a divide is identifiable between rich and developing countries, insofar as a deficit of available international transport capacity for traffic originating from or bound to Southern countries can be observed. The existing band-width capacity between North America and Europe is indeed of more than 56 000 Mbit/s whereas it is only of 171 Mbit/s between Europe and Africa. Inequalities appear also inside the territories of these countries between the economically richest areas and the least developed. It is essential to concentrate the efforts on this issue at the international level.
3. Which contribution can France bring to this development?
The international co-operation is an efficient tool to allow Southern countries to develop their telecommunications and information technologies markets. The issue is indeed a very technical one and very capital intensive at the same time; the expertise developed by a certain number of countries which opened their own market can prove to be very useful; assistance to the development can also contribute to the financing of the liberalisation process.
The ITU is a privileged framework to support this co-operation, precisely because of its intergovernmental character, which guarantees the necessary neutrality vis-à-vis economic interests. Today’s high-level meeting is a very concrete illustration of this feature. Other meetings, scheduled in the very near future, will make it possible to enhance the co-operation and the dialogue: I think in particular of the Africa 2001 Summit on next 12 November in South Africa, or of the World Regulators’ Summit organised in Geneva at the beginning of December.
As the European example shows it, co-operation at a regional or even continental scale is a powerful asset to stimulate the development of a market; it indeed makes it possible to increase the size of a market, therefore to favour economies of scale. All initiatives aiming at this objective, as the Royal message has mentioned, must thus be encouraged, based on the example of the European regulators’ Group I mentioned earlier.
But it is also the industrialised countries’ responsibility to initiate, with the means at their disposal, bilateral and multilateral co-operation projects with their Southern partners. The regulators’ role, from this point of view, is going to take an increasing importance.
For its part, France is fully dedicated to follow this initiative, to which it can in my views contribute significantly by enhancing the co-operation with the Arab and African countries, primarily for two reasons:
- A historical and geographical proximity with the Arab and African countries
France has maintained with these countries a strong tradition of co-operation and assistance to the development, and I will say of friendship. Its History and its culture led it to maintain very close relations with many countries which you represent. It considers that the integration of your countries in the global economy is a priority.
This tradition finds today in the information technologies sector, which constitute an essential dimension of the modernisation of a State, a natural ground to develop further.
- The experience of the opening of a market
In addition to this proximity, France enjoys today an already significant experience concerning competition in telecommunications. It fully engaged in the movement which allowed the emergence of a large European market. It created rather early an independent regulatory authority. It represents one of the most significant markets in Europe and everyone agrees today that the liberalisation process bore its fruits: a two digits growth for three years, a drop of prices for all consumers and the development of new services have characterised this market.
It is thus natural that France, and more particularly its regulator is keen to share this experience with the countries which request it.
- The ART: an advisory role for the regulatory authorities
The Authority, which forms the core of the French liberalisation system, is indeed ready to fully take part in this co-operation effort; in fact, it already firmly took this direction since its creation. It maintains bilateral contacts with many countries in order to bring them its know-how in regulating competition.
It receives many executives of the these countries’ administrations and takes part, within the limit of its resources, in their training. It thus endeavours to be available for advising and informing its counterparts of the Southern countries.
It is in this spirit that we signed recently with Mr. Terrab, a co-operation agreement between the ART and the ANRT. It is the first agreement of this type; I am convinced that we will be brought to very soon renew this positive experiment with other partners.
I insist to conclude on a point which seems decisive to me. As regards international co-operation, our objective is not to define or impose a model of regulation. Our role is an advisory and expertise role, in the context of a partnership initiative. While coming here to explain, testify and reflect, I had the ambition to propose, to you and your partners, the tools which will enable you to find your own development model.
I thank you for your attention.