There was general consensus at the forum that Latin American countries need to develop communications licenses and other policies that are sufficiently general to ensure that the countries are not locked into outdated technologies and industry structures. Latin American countries also need to develop processes that decrease the time required for adapting policies to new technological and market realities, while still providing the consistency and predictability required for the maintenance of credibility for investors. Several Latin American countries have experienced recent political changes, either from elections, constitutional changes, or political coups. Indeed, to government officials from Ecuador, who had planned to attend the forum, had to cancel at the last minute because of political upheaval in the country. Because Latin American countries generally have presidential political systems, political change can cause significant policy changes.
Policy uncertainty adds risk for investors.
This uncertainty can increase the cost of capital in Latin American markets, decrease prices that investors are willing to pay for licenses and privatized state-owned enterprises, and reduces private investment. Service providers and forum participants discussed this issue to identify key issues and options. Commitment to competitive markets emerged as a key issue for operators. Options for countries included strengthening court systems, establishing arbitration systems, regional policy coordination among countries, and independent regulatory agencies. State-owned telecommunications enterprises generally failed to develop infrastructure in rural and poor areas in Latin America.