THE PERCEIVED IMPACTS OF WTO (WORLD TRADE ORGANIZATION) ON MAJOR TELECOMMUNICATIONS COMPANIES : (EMPIRICAL INVESTIGATION)

Abstract

ABSTRACT : This thesis attempts to study the perceived impacts of World Trade Organization (WTO) on telecom companies from four selected key dimensions in telecom industry, these dimensions are: international telephone revenue, cost structure, operational structure, and customers' benefits. To provide an overview, changes in telecom industry with regard to competition and industry's pressures, along with World Trade Organization principles, functions and structure are discussed first. To identify impacts of WTO, this thesis uses multiple-case-strategy approach to analyze views of respective officials of five major selected telecom companies. In the empirical section, financial impacts of WTO on five selected companies are quantified for the first two identified dimensions: international telephone revenue and cost structure. After thorough analysis of five case studies, the following are the main outcomes emerging: . International telephone revenue represents the main revenue source for telecom companies. Revenue from this main service will decline as a result of change in market share that major companies will lose for their new and current competitors. In addition to market share loss, telecom companies need to cut their current rates in order to be competitive. . Reforming international accounting (settlement) rates that current exist among telecom companies become a necessity. based, transparent and non-discriminatory accounting regime will be applied along with implementation of WTO principles. . Staff cost accounts for high percentage of operating cost, thus companies needs to reduce this type of cost in order to increase their efficiency and improve their profitability in order to be able to compete in open market access which is required by WTO. . Telecom companies have to maintain high-cost and advanced infrastructure in order to provide telecommunication services. As a result of the implementation of WTO principles, telecom companies will increase annual capital expenditure to be invested in enhancing current networks and/or building new networks to cater for new services and new areas. . Telecom companies will seek to have more alliances with other companies to strengthen their market position in competitive environment, thus current operational structures of most telecom companies will be changed. . The implementation of WTO principles will encourage customers to ask for more benefits to be given to them in form of: low prices, good quality of service, wide range of services to suit their diverse needs. Bering in mind the outcomes reached, in the last section of this thesis some recommendations are made for telecom companies to take advantage of the new changes in telecom industry and to minimize the perceived adverse impacts that will be resulted form the implementation of WTO requirements. Therefore, it is expected a new cost-