2. 1 How to compete in a liberalized Telecommunications Market ADRIENS Millennium Edition

3. 2Objectives This presentation:  Gives an appreciation of the global marketplace for trade in services.  Defines the changing global & regional telecommunications market.  Presents industry best practices (strategies) for taking advantage of the market signals.  Introduces a “road map” for service providers.

4. 3 …Consumers are spending differently… 1.In the Agrarian Age, 70% on goods, 30% on services. 2.In the Industrial Age, 60% on goods, 40% on services. 3.In the Infotronics Age, 50% on goods, 50% on services. 4.And moving to 30% on goods, 70% on services. Source: Ruthven, P, Social Landscape of the 21 st Century, IBIS Business Information, 1997:14

5. 4 1. Markets are being globalized… 1. Markets are being globalized… 1.Markets are driven by freedom to move goods & services; freedom to move people, and freedom to move capital. 2.The deepening of the free flow of factors of production (globalisation) is powered by free trade (liberalization), developments in technology, and changing consumer behaviour. 3.The framework of the rules within which economic activity takes place is defined in the framework of the WTO, FTAA & the CSME.

6. 5 The CSME means competitiveness free movement of five categories of workers – university graduates, media workers, sportspersons, artistes and musicians; & the Article 46 allow for the free movement of five categories of workers – university graduates, media workers, sportspersons, artistes and musicians; & the harmonization and transferability of social security rights, the elimination of the requirements for passports, permit of stay & permit of work. Labour mobility: 1. Makes for more efficient allocation of resources. 2. Reduces labour market pressure, regulates the price of labour, increases productivity, adjusts movements in wages & productivity, & boost output.

7. 6 ECTEL WI Cricket LIAT OPPS OECS ECCB CSME Source: World Bank Survey of OECS Countries, 2005

8. 7 Why is there support for CSME? …Regional growth & purchasing power 1.Between 1961-2002, average per capita GDP growth for a median Caribbean country was 2.8%, higher than Latin America in every decade (World Bank, 2005). 2.There is an expanding middle class in the Caribbean society, a highly liquid financial system, and evidence of the making of a credit society.

9. 8 Some countries are among the most indebted economies (% of GDP, 2003)

10. 9 …persistent human capital flight…. The Caribbean may have the lowest number of migrants in the OECD countries, but has the fastest rate of increase & the highest emigration rate in the world. Source: IMF, 2004

11. 10 …youth purchasing power (%) Education/SecUnemployment Antigua/Barbuda8113 Dominica9156 Grenada8824 St Kitts/Nevis10011 St Lucia7737 St Vincent/Grenadines6739 OECS8132 Jamaica6752 Trinidad/Tobago.6940 Source: Wendy Cunningham, World Bank, June 7, 2005

12. 11 The t elecom market… Worldwide telecommunications revenue totaled $2.1 trillion in 2004, up 9.4 percent from 2003. The U.S. market accounted for $785 billion, while other regions spent a combined $1.4 trillion. Overall spending on telecommunications will grow at 10.5% annual growth rate. Among the 25 major industry growth segments, the product winners include Web Conferencing and Video Conferencing; & Prepaid Telephony, including wireless and Internet. Source: Telecommunications Industry Association (TIA) 2005 Market Forecast

13. 12 …but penetration rate is low Teledensity ( Main lines per 100 persons) ICT Access (Internet users per 10,000) Caricom Avg. 27.70507.96 Canada 65.512,014.15 USA 66.455,014.91 Source: Caricom Secretariat, 2003 For the OECS, regional cellular penetration increased from 2.3% in 2000 to an estimated 63% by end the first quarter of 2004. Direct investment increased from EC$108m in 2001 to EC$234m in 2004. (World Bank, 2005)

14. 13 4. How to become an industry winner ecome a brand-led industry winner by building capacity, and increasing efficiency. In market driven by fierce competition, converging technologies, and customer power, b ecome a brand-led industry winner by building capacity, and increasing efficiency. Industry winners have: 1.Modernize their IT infrastructure to reflect current technologies in an effort to maintain market share and increase revenues. 2.Adapted & re-engineered their processes to get rid of production and distribution rigidity. 3.Adopted an aggressive posture in small markets. Digicel, AT&T Wireless (Cingular) have been very active, purchasing licenses and launching service throughout the region in an attempt to secure their position as regional players.

15. 14 4. Control Pricing & service Bring expenditure in alignment with revenue in order to cushion against price movements. Reduce overheads by outsourcing selective services. Target investment capital in product lines in which you have competitive advantage. Reduce unit price of instruments in high demand market in order to maximise revenue from accessories. Establish industry standards for employees. Raise productivity levels.

16. 15 Thank you for your patience! patience! Your comments, questions & outbursts are welcome