Creating a Global Communication Infrastructure Presentation Done by: Wafa Abyad Othman Benlamlih Amal Ounir INTERNATIONAL COMMUNICATION

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

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?

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)

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

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)

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

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.

PRIVATIZING SPACE – THE FINAL FRONTIER Cont. 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).

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.

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.

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)

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.

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.

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.

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.”

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)

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

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

CASE STUDY: MURDOCH’S NEWS CORPORATION News corporation mission statement is 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.

CASE STUDY: MURDOCH’S NEWS CORPORATION Cont. Rupert Murdoch is the real competitive advantage of 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’s worldwide presence makes him a significant global media player and News Corporation one of the world’s largest media companies.

THE WORLD OF TELECOMMUNICATION The expansion of global satellite networks have 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 dominance of the telecoms by 10 to 15 companies in the operator market. The beneficiaries of telecommunicationS liberalization are telecom operators such 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.

IMPLICATIONS OF A LIBERALIZED GLOBAL COMMUNICATION REGIME WTO claims 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.