Communication Technology

1. Introduction
2. The Death of Distance
3. Global networking: Changing the geography of business
4. Toward global information infrastructure
5. Promise or hype
6. Promises and paradoxes
7. Technological Trojan Horses
8. Competition and Consolidation
9. Access and Control
10. Closing the gap
11. New gaps?
12. Remaining barriers

We are in the midst of global information revolution driven by the convergence and proliferation of information and communication technologies. The telecommunications sector is changing at warp speed, driven by technological innovation that results in new equipment and services, and also by new entrants and alliances between companies with experience in a wide range of information industries from telecommunications to broadcasting of information industries from telecommunications to broadcasting to computer hardware and software to publishing. Three major trends are driving these changes:

The rapid introduction of new technologies and services;

The restructuring of the telecommunications sector; and

Globalization of economies and of communications.

Together these developments are not only changing the world of telecommunications, but the ways people work, learn and interact.

“The death of distance as a determinant of the costs of communications will probably be the single most important economic force shaping society in the first half of the next century.” The death of distance could have profound implications for both individuals and organizations. The ability to work “anytime, anywhere” allows “roads warriors” to work without offices on planes, in hostels, and at client sites, and enable information workers to telecommute from their homes rather than travelling to work. This flexibility can be two-edge for individuals, who can work wherever they choose but may never escape the “virtual workplace.” Organizations may reduce their overhead costs and improve their productivity, but they must also learn how to manage their decentralized work force.

One major technological trend is the extension of “information superhighways” in the form of broadband networks; another is the increasingly ubiquity of communications using wireless technologies (that will however, initially provide access to squirts rather than floods of information). Personal communications networks using microcellular technology will allow people in urban areas not only to talk on pocket-sized telephones, but to transmit and receive data using wireless moderns. In rural and developing areas, these services may be available from low earth-orbiting (LEO) satellite systems.

On an international level, the death of distance has profound implications for the globalization of industries and national economies. Rural regions may lure businesses with their pleasant environment and lower labour costs; however, they are no longer competing only with cities in their own countries. Companies may hire information workers in developing countries where labour is far cheaper, not only for data entry and word processing, but for writing computer programs. Conversely, developing countries now find themselves competing in global markets, where quality and suitability products may be as important as price.

Telecommunications networks now link manufactures with assembly plants, designers with factories, software engineers with hardware vendors, supplier with retailers with customers. No longer is it necessary to have all the expertise in house. Software engineers in Silicon Valley (USA) complain that they are laid off while contractors transmit code from Russia and India. Freelance designers can now send clothing patterns directly to an automated garment factory. Customers can order anything from airline tickets to winter clothing online and do their own banking and bill paying electronically.These rend open opportunities for innovative entrepreneurs around the world. For consumers, they offer more choicer and lower prices because there is no overhead cost for sales clerks and order takers. Yet these changes pose threats to traditional business as well as to employees. Increasingly, companies, that want to compete on price will have to “work smarter” to reduce costs and respond to market changes, while other will have to rethink how to add value to attract customers. High levels of customer services and individualized attention are likely to become more important. As Wells Fargo found, a bank that offers assistance from a human twenty-four hours a day in addition to online electronic banking can attract new customers. And computer vendors that offer free and easy-to-reach customer support may be able to charge a premium, or at least not lose customers to commodity discounters.

Some countries and enterprises may together be able to use telecommunications to create a competitive advantage at the other end of the information work continuum. India has built software developments parks equipped with satellite uplinks, so that foreign high tech companies can hire Indian engineers and programmers at a fraction of the cost of expanding its professional workforce in the United States and India can retain professionals who might otherwise join its massive brain drain. Pakistan is also on this path. Just as North American and European laborers complained in the 1980s about the growth of offshore manufacturing, highly skilled information workers in Silicon Valley in USA now fear losing their jobs to lower paid offshore professionals.

Traditional telephone companies will have to respond to the demand for new and cheaper services as an opportunity rather than a threat if they are to survive. Rather than local monopolies providing telephone services over copper wires, in many countries we may find cable telephone companies, electric utilities and wireless operators competing with telephone companies to reach the end user, offering a combination of voice, data and video services.

These technological and economic trends have led policy makers to call for the construction of “information highways” linking communities and nations. The phenomenal growth of the internet as an information resource, communications tool, and electronic marketplace has focused attention on the need for national and global “Information infrastructure” (Nll and Gll) to bring the Internet and other forms of electronic communications within reach of people around the world.

Against this background, why all hyperbole about electronic superhighways? Several themes recur in these information infrastructure initiatives. There are dual assumptions that converging technologies will result in information services with both social and economic benefits, and that both public and private sectors must be engaged to ensure the installation of national broadband networks. Yet these assumptions need to be carefully examined. Each new communication technology has been heralded as offering numerous benefits. Satellites and cable television were to provide the courses taught by the best instructors to students in schools, homes and workplace in developed world. Videoconferencing was to largely eliminate business travel. Telemedicine was to replace referral of patients to specialists. Computers were to replace traditional teaching with more personalized and interactive instruction.

Thus investment in technology alone will not likely result in major social benefits.

Policymakers in these countries appear aware that public sector stimulus is needed to foster new educational and social service applications; there is widespread belief in the need to fund trials and demonstration projects. Yet seed money for pilot projects may not ensure long term implementation. Schools with International Services Digital Network (ISDN) access will benefit if the services they can access turn out to be cost-effective means of achieving their educational priorities. If the services are perceived as frills, or if there is no budget allocation to buy computers or pay monthly usage charges, connection to the information highway will mean little. Similarly, if insurers will not authorized payment for teleconsultation, or physicians are not authorized to practice beyond their borders, telemedical applications will remain limited. And if prices for connection and usage are beyond the reach of low income and rural residents, small businesses and nonprofit organizations, the much-heralded information society will be very narrowly based.

New technologies and services are alluring, but they also present challenges and paradoxes for the telecommunications industry, user and policymakers. Consider the following: New technologies are introducing changes faster than policymakers can respond. “Call back” services (where calls between countries with high international tariffs are actually originated from a third country with much lower rates such as the United States) are undermining the traditional strategy of monopoly carriers in many developing countries that use high international rates to cross-subsidize domestic rates and generate income that can be invested in domestic infrastructure.

Satellite broadcasting has introduced foreign and commercialized programs in Western Europe and in much of Asia, forcing domestic broadcasters to innovate to hold on to their audiences. The Internet, seen by many policymakers as an important tool for their industries to remain competitive, opens the door to unfiltered information that may be considered inappropriate or illegal in their countries.While telecommunications services are increasingly being liberalized to attract competitive providers, there is also growing tendency to consolidate. The result may be only a few major player.