Telecommunications: Monopoly against the Citizens
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Lack of information is one element and indicator of poverty. Insuficient education and information remain the main causes of the Cycle of poverty. In spite of the declared political will to reduce poverty, the citizens of Southeast Europe, the poorest region in Europe, are systematically denied the right to information, education and communications, through restricted access to telecommunications.
Cheap communications, for example, enabled the poor fishermen in India to increase their earnings manifold. "For less then a penny per minute, the lowest price in mobile telephony in the world, farmers from remote areas can check the prices of their produce in the local markets, to know where they could sell their goods at best prices. They can follow the global trends through internet services, provided by mobile telephone operators, and check the prices of pumpkins and bananas in London or Chicago”, reports the Washington Post in its cover story on revolution that mobile phones started in the fight against poverty in India. ICT is a vital took of development processes, having in mind that it was established as a fact, long time ago, that increased investments in telecommunications have very positive effect on efficiency in other sectors, which ultimately contributes to greater economic growth. Development of telecommunications is extremely important in terms of greater competitiveness of a country’s economy and creation of new jobs. Furthermore, they actually impact the development of democracy, offering technical capacities for transparent governance and better control, as well as more efficient public services. Telecommunications provide for greater participation of citizens in decision-making processes. The development of telecommunications brings radical changes in the functioning of public administration. The e-administration transgresses temporal and spatial barriers and offers the citizens public information at the time and in the space they prefer, in an easily accessible manner. Developed telecommunications open the space for improvements in education, healthcare, management and electronic services and administration, through tele-medicine, distance-learning, e-governance. The study on economic impact of broadband, prepared by experts from the Massachusetts Institute of Technology, shows the importance of developed telecommunications. According to the study, the communities in the U.S. that had broadband access between 1998 and 2002, had greater growth of employment (by 1%) and number of new companies (0.5%). Another recent evaluation prepared by the German Ministry of Economy states that the spread of broadband and accompanying services should lead to increase of German GDP by 46 billion EUR between 2004 and 2010, and to create 265,000 new jobs. Contemporary telecommunications provide access to global knowledge and information databases, influence economy through reduced operational costs, create new business practices and new markets, secure efficient public services for the governments and networking tool for activists. Above all, they enable the citizens of developing country to overcome the chronic lack of resources. Instead, the citizens of SEE are held hostage by the their own national telecommunication companies. In the name of “national interests” and preservation of “companies of national interest”, the citizens of SEE pay expensive, low-quality telecommunication services, if they could access them in the first place. The monopolies are not interested, as it is, in development of new, cheaper services of higher quality. As early as 1988, the European Union made the first steps towards liberalization of telecommunications markets, in order to promote economic and other development. Full liberalization was enacted in 1998, and the package of necessary measures was reviewed on several occasions since that, to achieve the European Information Society project by 2010. The 2003 acquis prescribes that all networks are exposed to competition in the areas of transfer of voice, data, internet, radio and TV communications. According to the report prepared by the European Commission, the new players that entered telecommunications markets in 1998 have lead to falling prices of calls in fixed telephony of 1.6% per year, the number of operators doubled, and users spend 30% less on telecommunications services. In addition, competition has lead to development of new services and technologies.
Prices of local and long-distance calls in fixed telephony in the countries of Southeast Europe remain far below European averages. The low profit margins earned by telecommunication companies, as well as the low profitability of investments in remote, less populated rural areas, however, has led to falling interest of monopolistic companies to provide universal access even to fixed telephony. The most vulnerable and poorest population is, therefore, denied access to basic means of communication. According to Report on SEE Telecommunications Sector, created under the auspices of the programme for monitoring of harmonization of legislation in SEE with EU’s regulations, the number of fixed telephone lines per 100 citizens moves between 37 in Croatia, to only 5 in Kosovo. In addition, with the exception of Croatia and Macedonia, a high proportion of fixed lines in SEE are the so-called “double user lines”.
As cheap as the local calls may be, the citizens find the communication with the rest of the world beyond reach. Citizens in countries with per capita GDP of 12,400 USD in Croatia or 3,800 USD in Montenegro, pay many times more than the citizens of EU for international calls, while EU has per capita GDP of 28,100 USD.
Not even the internet can provide easy communication with the world for SEE citizens. National telecoms mainly keep control of the complete infrastructure, which they rent to internet providers at unfavourable conditions, thus increasing the price of services provided to final users. All the while, the quality of services is maintained at the levels characteristic for the start of the internet. Majority of the already small number of internet users relies on dial-up access to the web. According to the Report (it includes data on Bulgaria and Romania) broadband internet in the region is used by about 1.6% of all users. If broadband internet is available, then the prices present a problem. At the same time, competition in EU has decreased the prices dramatically, so that 41% of household now use 41%, with number of households on dial-up access falling to just 4%.
At the same time, the competition in the EU has caused dramatic reductio nin prices, to the effect that the number of broadband users quadrupled over the past three years. In January 2006, the number of broadband subscribers in EU25 has almost reached the 60 million plateau, with penetration rate of 25%. According to the last EUROSTAT Report, 52% of EU25 households had internet access in the first quarter of 2006, 32% as broadband users. Also, 96% of companies were connected to internet, 75% of which used broadband access. The average price for flat-rate package (1Mb/s speed) in the EU is 37 EUR, with projected fall in that price by at least 14% by 2010. These developments in the EU were enabled by regulatory legislation that insists on competition. Before such legislation is adopted, it needs the political will that cares primarily about the benefits for the users and not the big national monopolies. The European Commission, in its policy documents, takes the position that broadband internet access is one of the requirements for development of information and knowledge-based society. Another requirement is the existence of cheap mobile communications. The EU demonstrated its dedication in that are through its monitoring of roaming prices for its citizens and the continued pressure on operators to lower their prices. According to reports, since the start of this year, the prices of roaming in EU have fallen by 22%. The European Commission recently proposed new regulations in this area, which should further decrease the prices of roaming to levels below 50 cents per minute. The national monopolies in telecommunications rank among the most successful companies. They are a steady source of income for national budgets, excellent objects for political trade-offs regarding board memberships and managerial positions, and constant source of corruption. The longer the monopolistic situation secured by the Government, the higher the price at the time of sale of the telecom. The process of Stabilization and Association, which includes all countries in the region, will ultimately force national governments to accept European norms in the area of telecommunications. In the meantime, the civil society in the region has a lot of space for expansion of activities. Inside that space, between the interests of the political elites and business interests, unless all work is left to the EU, the civil society will have to fight for the right to knowledge, information and communication, good regulations and non-discriminatory legislation, and application of best approaches to legalization of telecommunications market. *** For overview of situations in individual countries in the region, visit the following links: Albania; Kosovo; Croatia; Bosnia and Herzegovina; Macedonia; Serbia. |
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