TELECOMMUNICATIONS: Rich And Powerful On The Line At Telecom 95

By IPS Correspondents Reprint | | Print |

David Rocks

GENEVA, Sep 29 1995 (IPS) - Telecommunications will be the developing world’s route to the global market, and the quadrennial industry gathering in Geneva — Telecom 95 — is where the transnational corporate giants will be making sure they get their cut.

Every four years since 1971 the United Nations International Telecommunications Union (ITU) has called the forum to highlight telecommunications investment opportunities in developing countries.

There are more phone lines in Manhattan than there are in all sub- Saharan Africa, South Africa’s deputy executive president Thabo Mbeki told a summit of the Group of Seven richest nations last year. “Half of humanity,” he said, “has never made a phone call.”

According to experts here it will cost 300 billion dollars to bring the developing world’s telecommunications networks up to western standards. The potential profits are enormous.

It is this prospect that has drawn some 800 competing telecommunications companies to Telecom 95 in Geneva. Starting Tuesday, they will collectively spend nearly 500 million dollars making their pitches to countries considering new phone networks.

Some of the larger companies have spent as much as 10 million dollars on marketing, based around elaborate booths built especially for Telecom 95.

Some climb three or four storeys up to the 18-metre ceiling of the exhibition hall; several have their own and escalators to sweep visitors to the upper floors and enormous heat exchangers to pump the Palexpo Hall’s stuffy air out and cool air in.

The stands symbolise the gap between the haves and have-nots of the telecommunications business. “It isn’t cheap,” concedes Bob Raggett, deputy director of corporate affairs for British Telecom.

“It runs into the millions, as you can imagine. But if you’re going to do it you can’t cut back too much because that would defeat the purpose.”

The sheer extravagance of the venture has prompted some critics to say that the event’s planners have lost sight of its original purpose — to help spur telecommunications growth in the developing world — and are using funds that would be better spent elsewhere.

In response, the ITU urged participants this year to tone down the opulence of their displays, but organisation officials say the competition among exhibitors is only natural and that there is little they can do to force austerity on them.

“I don’t think we’ve gotten away from the original purpose,” countered Jean Jipquep, chairman of the board for Telecom 95. “If you’ve got an exhibition, there’s a certain standard that you must uphold.

“The prestige of a firm is always reflected in its stand. It’s part of the image of the company,” he added. But this image is apparently one fledgling telecommunications companies cannot afford.

According to WorldTel, a funding and development arm of the ITU, the telecommunications infrastructure needs of the developing South are estimated at a massive 300 billion dollars.

Because foreign investment in other sectors of the economy is often dependent on a region’s ability to provide commercially viable communications technology, governments in the Third World are increasingly liberalising this industry.

But it is often transnational telecommunications companies that reap the benefits of emerging markets, rather than local or start- up enterprises.

In central and eastern Europe, for instance — where Internet and electronic mail subscription has increased from 5,000 accounts in 1992 to 350,000 today — Microsoft, the world’s largest software manufacturer, and transnational giants Compuserve, IBM and AT&T are gobbling up large shares of the market.

Still, some industry observers believe that many potential customers feel abandoned by the multinationals.

Failed talks last November between U.S. telecommunications giant Sprint Corp. and Italian Telemedia International Ltd. on a possible international alliance prompted the Italian firm to seek out partnerships with small local providers that have no global capacity, but seek to expand their services.

But small local providers cannot hope to catch the eye of the multinationals at a conference where floor space in the exhibition hall is being rented at 450 dollars per square metre.

Some would question Geneva itself as a reasonable locale for the industry’s most important trade show. Lunch in the tent outside the Palexpo will set participants back 50 dollars. The multi- lingual ladies who act as hostesses in the booths charge 50 dollars an hour. A standard hotel room a stiff 400 dollars a night, and a limousine for the company dignitaries is 1,200 dollars a day.

The leading companies have already sent hundreds of staffers and book hotel rooms three or four years in advance. For most of the year leading up to Telecom, they spare no expense on advertising, promotions and publications. Once at the show, they spend lavishly on banquets, receptions, alcohol and flowers to tempt clients.

But despite the delights, many multi-million dollar contracts do get signed at Telecom. Most exhibitors reserve large areas of their stands for conference rooms where company executives can meet with the ministers, general directors and other officials that flood the event.

“The reason you’re at the show is for the audience — you have ministers, top level people,” said Dan Dwyer, who oversees international trade shows for MCI.

“The ITU has 184 members, and all of them send delegations. They expect to meet with the big players. Where else can you spend nine days and meet all of these people?” he added.

For Geneva’s 170,000 citizens, meanwhile, the event ushers in untold hassles, but most wouldn’t have it any other way. A recent study revealed that each Telecom pumps some 400-500 million Swiss francs (350-440 million dollars) into the region’s economy.

“For Geneva, for Switzerland, it’s very important that Geneva hold this exhibition,” said Robert Hensler, the head of the Geneva cantonal government. “Telecom 95 has one foot in the 21st century. It shines a spotlight on the city and it brings in a lot of revenues.”