Creating a Global Communication
Infrastructure
Presentation Done by:
Wafa Abyad
Othman Benlamlih
Amal Ounir
INTERNATIONAL COMMUNICATION
PRESENTATION OUTLINE
1. The privatization of telecommunications
2. Free trade communication
a. Impact of WTO agreements on
international communication
3. Why services are important?
4. Liberalization of the telecom sector
5. Privatizing space: the final frontier
6. Case study: Intelsat
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PRESENTATION OUTLINE
Cont.
7. Key players in the global satellite industry
a. Hughes Space and communications company
b. Lockheed Martin Global Telecommunications
c. Loral Space and communications
d. Regional Satellite Services
8. Case study: Murdoch’s News Corporation“Around he World, Around the Clock”
9. The world of telecommunications
10. Implications of a liberalized global
communication regime (DEFINITION OF REGIME)
a. Who benefits from liberalization and
privatization?
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THE PRIVATIZATION OF TELECOMMUNICATIONS
First the state was the key player in the
telecommunicationS sector.
Then, this sector started to open to concurrence and
reduced highly the state monopoly. (Style +logical
consistency)
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FREE TRADE IN COMMUNICATION
Different agreements were signed to liberalize
the telecommunication (s) sector
GATT
WTO
GATS
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WHY SERVICES ARE IMPORTANT?
Great increase in the exportation of commercial
services
$1.3 trillion in 1998 (in relation to what )
USA most important service exporter (int Table)
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LIBERALIZATION OF THE TELECOM SECTOR
With the liberalization of the telecommunication
sector, the competition brought deregulation
The new role of ITU is to regulate the sector
and provide international standards
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PRIVATIZING SPACE – THE FINAL FRONTIER
The economic growth lead to a phenomenal
growth in the satellite industry, WHY?
• They provide a cheap, dependable and fast
communication services for international
businesses to operate in the global electronic
marketplace.
• Satellite are able to reach huge areas and they
have enable the expansion of broadcast and
telecommunicationS all over the world.
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PRIVATIZING SPACE – THE FINAL FRONTIER
Cont.
The inevitable trend toward the privatization of
intergovernmental organizations is
demonstrated by the case of INMARSAT (
International Maritime Satellite)
It was the first international treaty organization
to transform itself into a commercial company. (
April 1999)
There has been a more significant change with
the gradual commercialization of the
International Telecommunication Satellite
Organization ( INTELSAT).
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CASE STUDY: INTELSAT
Intelsat was created in 1964 as an
intergovernmental treaty organization to
operate a global satellite system for
telecommunications services on a nondiscriminatory basis.
It provided telecommunicationS services to
more than 147 countries and to all nations
afterwards.
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INTELSAT…
• It followed the policy of global price averaging,
using revenues from high-traffic routes for
developed countries and subsidize the less
developed ones.
In 1999, Intelsat owned and operated a global
satellite system of 19 satellites bringing both
public and commercial networks, video and
Internet services to over 200 countries around
the world.
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INTELSAT…
In April 1999, Intelsat went under restructuring
from an intergovernmental co-operation to a
fully commercial company.
In October 1999, the Assembly decided that
Intelsat should be converted into a corporation:
“ With an optimal tax, regulatory and
operational structure without privileges and
immunities.” Intelsat has reached it full
privatization by 2001. (break)
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KEY PLAYERS IN THE GLOBAL SATELLITE INDUSTRY
The three largest US companies are: Hughes
Space and communication, Locked Martin and
Loral. (List)
They build 68% of the geostationary
communication satellites in orbit and were
contracted to build 62% in 1999.
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Hughes Space and Communication
It is the most significant satellite manufacturers,
accounting for 40% of the commercial satellite
services worldwide.
Hughes is a major supplier for the US defense
services, designing and launching the LEASAT
satellites used by the US government to create
a global military communications and
surveillance network.
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Locked Martin Global Telecommunication
It is the largest defense contractor in the US
In recent years it has expanded itS operations
globally and is now the main actor within the
privatized Intelsat.
Locked Martin is also building a regional mobile
personal communication system including a
satellite, ground networks and user terminal.
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Loral Space and communication
It is one of the world’s largest satellite
communication companies since 1957 and has
been awarded contracts to build 196 satellites
Loral’s chairman definition of the company’s
goals: “ Loral has moved aggressively to
assemble the critical space and informationbased building blocks that will results in a
seamless, worldwide constellation of
multimedia networks.”
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REGIONAL SATELLITE SERVICES
The deregulation and privatization of the global
telecommunication market had lead to a fierce
competition in regional satellite services.
Regional operators in Latin America, the Middle
East and Asia are striking alliances to extend
their customers beyond their own territories.
The three main regional operators: PanAmSat
(Latin America), AsiaSat1 ( Asia), ArabSat (
Arab world). (LIST)
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CASE STUDY: MURDOCH’S NEWS CORPORATION
News Corporation, owned by Rupert Murdoch, is the only
vertically integrated media company on a global scale.
In the course of 24 hours, it reaches more than half a billion in
more than 70 countries with a wide media interest:
Newspapers
Film
Broadcast
Satellite and cable TV
Television production
Internet
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CASE STUDY: MURDOCH’S NEWS CORPORATION
Murdoch made efficient use of liberalization of media in
USA
Britain
He risked an amount of money by leasing time on new satellite
ventures such as:
Astra
Asia Sat
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CASE STUDY: MURDOCH’S NEWS CORPORATION
News corporation mission statement is to push people
to interact with its products in every minute of the day
and in every time zone of the planet.
In 1998 News Corporation launched Sky Digital (a
multiple channel subscription service on British Sky broadcasting)
which reached 8 million subscribers.
It owns the largest number of newspapers around the
world (in addition to fox channels; however, 74% of its
activities focuses on the US market.
News Corporation produces X Files and Simpson
competing with the three major networks: CBS, NBC,
& ABC.
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CASE STUDY: MURDOCH’S NEWS CORPORATION
Cont.
Rupert Murdoch is the real competitive advantage of the Corporation.
Murdoch was very successful in choosing the right programs that could
attract attention and increase Corporation’s profit around the world.
Another important tool for Murdoch was the use of Information technology.
Murdoch has become politically powerful:
Margaret Thatcher support to liberalize regulations on cross media ownership
Consolidating his position in India
Murdoch was very successful in choosing the right programs that could
attract attention and increase Corporation’s profit around the world.
Murdoch’s worldwide presence makes him a significant global media player
and News Corporation one of the world’s largest media companies.
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THE WORLD OF TELECOMMUNICATION
The expansion of global satellite networks have had a significant impact on
the international telecommunicationS industry.
In fact, the information liberalization had led to
merger activity and corporate consolidation
in the information and communications industries.
A consolidation of business in these industries is likely to lead to global
dominance of the telecoms by 10 to 15 companies in the operator market.
The beneficiaries of telecommunicationS liberalization are telecom operators
such as: France Telecom, British telecom, & Ericsson (Sweden.)
The opening up of global telecommunications services is also set to benefit
the suppliers of telecommunicationS hardware: USA, Germany, UK,
Sweden, & France.
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IMPLICATIONS OF A LIBERALIZED GLOBAL
COMMUNICATION REGIME
WTO claims that the expansion of capital through the transitional
corporations has contributed to the transfer of skills and capital to the global
south
It has also contributed to widening the gap between rich and poor (not
mentioned in WTO claims) (THEORY structural imperailisml)
The move to open the barriers world trade by reducing tariff barriers have
been unevenly applied. (THEORY Free flow of Info)
Priority was given to the service sectors (financial services, insurance,
maritime transport, telecommunication) has benefited the North. (THEORY
Daniell Bell)
The areas were the south might have had an advantage were not given
much consideration: Labor movement
Who are the Beneficiaries?
The biggest beneficiaries of the processes of liberalization and privatization
are TNCs which dominate global trade.
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