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Creating a Global Communication Infrastructure

Presentation Done by: Wafa Abyad Othman Benlamlih Amal Ounir. Creating a Global Communication Infrastructure. INTERNATIONAL COMMUNICATION. PRESENTATION OUTLINE. The privatization of telecommunications Free trade communication Impact of WTO agreements on international communication

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Creating a Global Communication Infrastructure

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  1. Presentation Done by:Wafa AbyadOthman BenlamlihAmal Ounir Creating a Global Communication Infrastructure INTERNATIONAL COMMUNICATION

  2. PRESENTATION OUTLINE • The privatization of telecommunications • Free trade communication • Impact of WTO agreements on international communication • Why services are important? • Liberalization of the telecom sector • Privatizing space: the final frontier • Case study: Intelsat

  3. PRESENTATION OUTLINE Cont. • Key players in the global satellite industry • Hughes Space and communications company • Lockheed Martin Global Telecommunications • Loral Space and communications • Regional Satellite Services • Case study: Murdoch’s News Corporation- “Around he World, Around the Clock” • The world of telecommunications • Implications of a liberalized global communication regime (DEFINITION OF REGIME) • Who benefits from liberalization and privatization?

  4. THE PRIVATIZATION OF TELECOMMUNICATIONS • First the state was the key player in the telecommunicationS sector. • Then, this sector started to open to concurrence and reduced highly the state monopoly. (Style +logical consistency)

  5. FREE TRADE IN COMMUNICATION • Different agreements were signed to liberalize the telecommunication(s) sector • GATT • WTO • GATS

  6. WHY SERVICES ARE IMPORTANT? • Great increase in the exportation of commercial services • $1.3 trillion in 1998 (in relation to what ) • USA most important service exporter (int Table)

  7. LIBERALIZATION OF THE TELECOM SECTOR • With the liberalization of the telecommunication sector, the competition brought deregulation • The new role of ITU is to regulate the sector and provide international standards

  8. PRIVATIZING SPACE – THE FINAL FRONTIER The economic growth lead to a phenomenal growth in the satellite industry, WHY? • They provide a cheap, dependable and fast communication services for international businesses to operate in the global electronic marketplace. • Satellite are able to reach huge areas and they have enable the expansion of broadcast and telecommunicationS all over the world.

  9. PRIVATIZING SPACE – THE FINAL FRONTIERCont. • The inevitable trend toward the privatization of intergovernmental organizations is demonstrated by the case of INMARSAT ( International Maritime Satellite) • It was the first international treaty organization to transform itself into a commercial company. ( April 1999) • There has been a more significant change with the gradual commercialization of the International Telecommunication Satellite Organization ( INTELSAT).

  10. CASE STUDY: INTELSAT • Intelsat was created in 1964 as an intergovernmental treaty organization to operate a global satellite system for telecommunications services on a non-discriminatory basis. • It provided telecommunicationS services to more than 147 countries and to all nations afterwards.

  11. INTELSAT… • It followed the policy of global price averaging, using revenues from high-traffic routes for developed countries and subsidize the less developed ones. • In 1999, Intelsat owned and operated a global satellite system of 19 satellites bringing both public and commercial networks, video and Internet services to over 200 countries around the world.

  12. INTELSAT… • In April 1999, Intelsat went under restructuring from an intergovernmental co-operation to a fully commercial company. • In October 1999, the Assembly decided that Intelsat should be converted into a corporation: “ With an optimal tax, regulatory and operational structure without privileges and immunities.” Intelsat has reached it full privatization by 2001. (break)

  13. KEY PLAYERS IN THE GLOBAL SATELLITE INDUSTRY • The three largest US companies are: Hughes Space and communication, Locked Martin and Loral. (List) • They build 68% of the geostationary communication satellites in orbit and were contracted to build 62% in 1999.

  14. Hughes Space and Communication • It is the most significant satellite manufacturers, accounting for 40% of the commercial satellite services worldwide. • Hughes is a major supplier for the US defense services, designing and launching the LEASAT satellites used by the US government to create a global military communications and surveillance network.

  15. Locked Martin Global Telecommunication • It is the largest defense contractor in the US • In recent years it has expanded itS operations globally and is now the main actor within the privatized Intelsat. • Locked Martin is also building a regional mobile personal communication system including a satellite, ground networks and user terminal.

  16. Loral Space and communication • It is one of the world’s largest satellite communication companies since 1957 and has been awarded contracts to build 196 satellites • Loral’s chairman definition of the company’s goals: “ Loral has moved aggressively to assemble the critical space and information-based building blocks that will results in a seamless, worldwide constellation of multimedia networks.”

  17. REGIONAL SATELLITE SERVICES • The deregulation and privatization of the global telecommunication market had lead to a fierce competition in regional satellite services. • Regional operators in Latin America, the Middle East and Asia are striking alliances to extend their customers beyond their own territories. • The three main regional operators: PanAmSat (Latin America), AsiaSat1 ( Asia), ArabSat ( Arab world). (LIST)

  18. CASE STUDY: MURDOCH’S NEWS CORPORATION • News Corporation,owned by Rupert Murdoch, is the only vertically integrated media company on a global scale. • In the course of 24 hours, it reaches more than half a billion in more than 70 countries with a wide media interest: • Newspapers • Film • Broadcast • Satellite and cable TV • Television production • Internet

  19. CASE STUDY: MURDOCH’S NEWS CORPORATION • Murdoch made efficient use of liberalization of media in • USA • Britain • He risked an amount of money by leasing time on new satellite ventures such as: • Astra • Asia Sat

  20. CASE STUDY: MURDOCH’S NEWS CORPORATION • News corporationmission statementis to push people to interact with its products in every minute of the day and in every time zone of the planet. • In 1998 News Corporation launched Sky Digital (a multiple channel subscription service on British Sky broadcasting)which reached 8 million subscribers. • It owns the largest number of newspapers around the world (in addition to fox channels; however, 74%of its activities focuses on the US market. • News Corporation produces X Files and Simpson competing with the three major networks: CBS, NBC, & ABC.

  21. CASE STUDY: MURDOCH’S NEWS CORPORATION Cont. • Rupert Murdoch is the real competitive advantageof the Corporation. • Murdoch was very successful in choosing the right programs that could attract attention and increase Corporation’s profit around the world. • Another important tool for Murdoch was the use of Information technology. • Murdoch has become politically powerful: • Margaret Thatcher support to liberalize regulations on cross media ownership • Consolidating his position in India • Murdoch was very successful in choosing the right programs that could attract attention and increase Corporation’s profit around the world. • Murdoch’s worldwide presence makes him a significant global media player and News Corporation one of the world’s largest media companies.

  22. THE WORLD OF TELECOMMUNICATION • The expansion of global satellite networkshave had a significant impact on the international telecommunicationS industry. • In fact, the information liberalization had led to • merger activity and corporate consolidation • in the information and communications industries. • A consolidation of business in these industries is likely to lead to global dominanceof the telecoms by 10 to 15 companies in the operator market. • The beneficiariesof telecommunicationS liberalization are telecom operatorssuch as: France Telecom, British telecom, & Ericsson (Sweden.) • The opening up of global telecommunications services is also set to benefit the suppliers of telecommunicationS hardware: USA, Germany, UK, Sweden, & France.

  23. IMPLICATIONS OF A LIBERALIZED GLOBAL COMMUNICATION REGIME • WTOclaims that the expansion of capital through the transitional corporations has contributed to the transfer of skills and capital to the global south • It has also contributed to widening the gap between rich and poor (not mentioned in WTO claims) (THEORY structural imperailisml) • The move to open the barriers world trade by reducing tariff barriers have been unevenly applied. (THEORY Free flow of Info) • Priority was given to the service sectors (financial services, insurance, maritime transport, telecommunication) has benefited the North. (THEORY Daniell Bell) • The areas were the south might have had an advantage were not given much consideration: Labor movement Who are the Beneficiaries? • The biggest beneficiaries of the processes of liberalization and privatization are TNCs which dominate global trade.

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