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The Role of Telecommunications in Political and Economic Development in Eastern Europe

The Role of Telecommunications in Political and Economic Development in Eastern Europe. ISOM 591 April 17, 2000. Impact of Telecom on Eastern Europe and Russia. Nations faced with moving from totalitarianism to democratic societies and market economies.

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The Role of Telecommunications in Political and Economic Development in Eastern Europe

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  1. The Role of Telecommunications in Political and Economic Development in Eastern Europe ISOM 591 April 17, 2000

  2. Impact of Telecom on Eastern Europe and Russia • Nations faced with moving from totalitarianism to democratic societies and market economies

  3. Impact of Telecom on Eastern Europe and Russia • open communication played a major role in the democratization of these countries • telephone communications • ex: Comstar phone line provided access to the outside work • media broadcasts • ex: satellite television reception difficult to control

  4. Impact of Telecom on Eastern Europe and Russia • access to information is an essential ingredient in democratization • impact of the outside press and media • citizens have access to outside information through telecommunications channels like satellite broadcasts and telecommunications gateway switches • telecom in Eastern Europe and Russia is behind the western world

  5. Impact of Telecom on Eastern Europe and Russia • Problems they face • availability of investment dollars • need to train the local work force • lack of free market enterprise • culture did not encourage entrepeneurship • state-run monopolies • large parts of the countries still without basic communication services • lack of full exchange of goods and services with other economies

  6. Western Corporate Initiatives • Siemens has expanded into eastern Europe • AT&T, Ericsson, Nortel have joint ventures • US West established the first cellular service in St. Petersburg • fiber optics projects include connecting Copenhagen to St. Petersburg

  7. Financing Strategies • Need to escalate investment in telecom infrastructure • projected cost is hundreds of billions of dollars • install international digital switches • license cellular operators • build or license packet-switched networks

  8. Financing Strategies • Need for private investment • flexible equity ownership arrangements • joint ventures • management contracts • conventional debt financing • create a financial subsidiary to raise capital • local phone companies to serve regions • upgrade networks

  9. Policy Issues Facing Developing Countries • Need a regulatory framework and policies to protect the public interest typical of the industrialized nations • allow alternative providers to enter the markets • establish cooperatives for providing local service • determine ways to facilitate transfer of technological and managerial expertise

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