At the start of this year, the countries that signed last year's World Trade Organization basic telecommunications agreement began progressively opening their markets to competitive entry and increased foreign investment. The 72 nations that have signed the agreement account for 93 percent of global telecommunications revenue, and three-quarters of all international telecommunications traffic now originates in countries which permit competition. Up to now, phone tariffs have been broadly based on the length of a call and the distance of the connection - or whatever the market would bear. Carriers were sovereign in their own countries, and established tariffs according to bilaterally negotiated settlement payments. The EU and WTO agreements signaled the end of that system and a move toward a multilateral payments structure.
Technology makes the price of conveying information derisory.
International telephone calls, increasing at a rate of 15 percent a year, cost at least three times as much as domestic calls over the same distance, yet the actual cost of providing the services may be the same. Industry experts say technology and competition is certain to continue driving down prices, and telecommunications operators will rely for revenue on the value-added services they can provide rather than on the length and distance of communications. Monopoly suppliers, increasingly confined to developing countries with abysmal levels of phone service, will find it increasingly difficult to maintain their pricing levels. It is seeking to put a cap on such payments. The whole question of tariff structures is coming under revision this week at the ITU's World Telecommunications Policy Forum in Geneva.