2.4 The major international users, the banks, the international providers, the travel and transportation companies, and the global manufacturers are seeing the telecommu- nications operators divide into two groups:
those that are competitive, dynamic, customer-driven, accept change, and offer lower-priced, high quality and high capacity services ...
... and those that advocate a monopolistic structure of limited change, with higher prices and inferior services.
2.5 These users are becoming less tolerant of the monopolistic operators and are building their global networks out of hubs located in competitive city centres such as London, New York and Tokyo. Additionally, these users are gravitating towards private networks and private lines to bypass the local monopolistic operators wherever possible, and to exploit the benefits of having open access to fully digitalised "super highways". In Hong Kong, private lines are growing by over 50% a year, more than three times the rate of public services.
2.6 Many Governments are recognising the limitations of the status quo and are evaluating how they can create a more competitive communications environment. Australia will shortly be introducing a competitor into all fixed domestic and interna- tional telecommunications services. New Zealand has already introduced competi- tion into the domestic long-distance market and into international. The UK is about to go further than any other country by beginning to treat telecommunications like any other industry. The Department of Trade and Industry (DTI) and OFTEL will abolish "beauty contests" and will allocate licences on demand (provided certain technical, pricing and quality standards are met), leaving the market to determine the number of operators (see Exhibit 4).
Exhibit 4: The U.K. Duopoly Review
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Overview
SERVICE
Local
DTI PROPOSALS
New licences to be granted for local fixed links
Cable TV operators to provide telephone services within their franchise and will be allowed to switch traffic
SWITCHED Long Distance
·
Mobile operators to provide fixed-link services
·
Telepoint liberalisation - radio tails to-the-house
·
Price cap maintained at RPI +2.5 to rebalance rates
New licences to be granted for long distance - unlimited compeition
Progressive introduction of "Equal Access"
Interconnection monitored by OFTEL
Price cap on rates set at RPI - 6.25%
International
•
Price cap on BT international tariffs (RPI -6.25%)
·
New licences to be granted for a range of international services except another full fledged international voice carrier
An immediate 10% tariff reduction for all BT international calls
LEASED LINES
Private Circuits
•
Class licences to be granted for self-provided circuits - with interconnection to the PSTN
•
Two-way satellite licences to be granted for domestic and international services - no interconnection to the PSTN at either end
•
Resale of leased circuits permitted