The future of the industry does not rely so much on technology, but rather on leadership and the capability to come up with the right business models”, was how Carly Fiorina, CEO of Hewlett Packard, put it. The internet, in particular, had persuaded many businesses to invest heavily in new technologies, while relying on unrealistic growth expectations. The focus since has turned to services.
Future opportunities, the industry agreed, lie in providing services across new technologies like fixed and mobile wireless platforms, broadband and voice-data interfaces. But any new strategy depends on a well-designed regulatory framework, the conference agreed. As David Currie of the British regulatory body OFCOM suggested, “thanks to deregulation, we have now a much more dynamic, vibrant industry than 20 years ago”.
Regulatory reform, market liberalisation, education and innovation are particularly urgent in regions that are just starting to connect, like most of Africa. True, mobile telephones are spreading, but not so broadband in all markets.
In fact, according to Yasuhiko Kawasumi, rapporteur for an ITU study group on communications for rural and remote areas, ICT technology did not have as strong an impact in rural areas of developing countries as the deployment of radio-based services and wireless local-loop technologies like wi-fi. In Bhutan, wi-fi was used to build a highly effective IP/satellite network for both voice and data, with very low power consumption and costs.
The United Nations and World Bank now accept the potential that wireless technologies hold for developing countries. For experts at the ITU conference, wireless networks require much smaller investment and capital than traditional wire line solutions, using towers, electricity poles, phone booths and other physical supports for their routers without the need to lay new cables. (Some even claim that one day we will be able to get by without fixed infrastructure altogether.)
Wireless networks are flexible in that their performance does not decline when the number of network users grows and the user can take advantage of wireless connections with few limitations. And because wireless systems are built using global industry-wide standards, a number of small independent networks can be built and, at a later stage, merged with others to create a single overall network without loss of quality. But could wireless help poorer countries to trade, via ecommerce for instance? It depends. For now the main issue to overcome would be in secure payment technology for wireless, that some argue, lies in investing more in the integration of diverse networks for data transmission (GSM/UMTS, Bluetooth, WLAN, etc.).
While for card payments some types of wireless communication might not be ideal, for businesses in Africa using the web to make contacts and market their wares, cheap wireless access could make all the difference.
©OECD Observer No 240/241, December 2003