Privatizing telecommunications

Selling state-telecom services to the private sector

Implementation

British Telecom (BT) was at the vanguard of privatization when it became a public company in 1985. The end to state ownership required a major culture change in attitudes towards customers and quality, but also provided freedom to take up new opportunities offered by the information revolution. The company changed from being an engineering-led concern to a service-led company.

The collapse of communism in Russia and Eastern Europe has seen capitalism begin to embrace telecommunications. Deutsche Telekom, together with Americtech of the USA, paid $875 million in 1994 for a joint share in Hungary's Matav PTT company. The Czech Republic has also sold a sizeable portion of its national telecommunications concern, SPT Telekom. Various international consortia were active in the bidding.

The path leading toward privatization is not always smooth. In Argentina, the first round of bidding for the public telephone service provider Entel was declared invalid, leading potential bidders to withdraw in exasperation. The process was eventually completed in 1991 with Entel split into a northern section, which was sold to Telefonica de España, and a southern concession, sold to a partnership comprising Italy's STET and France Cables & Radio. Greece has also experienced protracted delays in the attempted privatization of its Hellenic Telecommunications Organization.

The operating environment is a vital consideration for privatization of telecommunications. In the run-up to its share issue, Deutsche Telekom called for clear regulatory guidelines for Europe's telecommunications industry. The European Union governments agreed to end monopolies on their telecommunications networks by 1 January 1998. The use of cable TV, road, rail and energy networks for wider telecommunication services (other than basic phone calls) is in the process of liberalization. Alliances are steadily being formed to address cross-border opportunities for value-added data and private network services. Privatization is proving to be a major catalyst in the rapid transformation of telecommunications services.

Claim

Privatizing telecommunications is a critical issue that threatens public access to essential services. When profit motives overshadow public interest, we risk widening the digital divide, leaving underserved communities without reliable connectivity. This privatization often leads to monopolistic practices, stifling competition and innovation. Furthermore, it compromises data privacy and security as corporations prioritize profits over consumer protection. We must advocate for a balanced approach that ensures equitable access to telecommunications for all, safeguarding our society's future.

Counter-claim

Privatizing telecommunications is a non-issue that distracts from far more pressing concerns. The market has already proven its efficiency, driving innovation and improving services. Government intervention often leads to bureaucracy and stagnation. Consumers benefit from competition, which fosters better pricing and technology. Instead of fixating on privatization debates, we should focus on enhancing digital literacy and expanding access to underserved communities. Let’s prioritize real challenges rather than rehashing an already resolved topic.