TELECOMMUNICATIONS ALLIANCES IN LATIN AMERICA

Spanish General Workers' Union

by Abel Perea Ballesteros, International Affairs,
Telecommunications Sector (FETTC), UGT de España (Spanish General Workers Union)

Until the end of the 1980s, Telecommunications in Latin America, as in the rest of the world, was characterised by the existence of state monopolies which fulfilled the double function of being service operators and controllers of the market. This structure facilitated the extension of services to wide layers of the population in the developed countries, but in other regions like Latin America, due to their political, economic and social characteristics, the expansion of this public essential service was held back.

In recent years, this sector, which requires big investments for development and growth, has clearly become one of the fundamental engines for economic development in these countries.

The economic financial inability of most of the governments of the region to invest in the development of modern telecommunications networks, the failure to extend the services to the wider population, and the urgent necessity of having extended and modern infrastructures in telecommunications to drive economic growth means they have to face a problem not only at political level, but also at social and trade union levels.

Investing in and administering this important sector for economic and social development in the region's countries cannot be achieved by simplistic solutions like leaving it in trust to the external private sector.

Without a doubt, international levels of privatisation and liberalisation has been imposed in the sector in order to stimulate growth, but these new lines of development could lead to situations of deepening social inequality and the consequent failure to achieve progress for all citizens except for a local and international financial oligarchy.

For this, the public powers, jointly with the social agencies, should maintain a very active position in order to administer and control this new reality.

The unions must have to have a truly realistic mentality and be able to be present and offer alternatives for progress and social well-being, as well as the defence of the interests of the workers who face technological and organisational changes associated with market competition.

In Latin America this process of privatisation and liberalisation is characterised by the growing activities of European and American multinationals. The European multinationals have followed the strategy of penetration into this market through the privatisation of the state monopolies, and the Americans have made it by bidding for liberalised services, mainly of mobile networks. Telefonica of Spain, France Telecom and Stet from Italy are the three European operators with a major presence in this region. Telefonica has already carried out a brief report on their acquisitions and participation in the region's operators.

France Telecom and Stet operate jointly in the Telecom Argentina, but separately elsewhere. In Mexico, France Telecom, together with SBC, participate in Telmex and Telcel. STET has interests in Entel Chile, Entel Bolivia, and Etecsa from Cuba.

The North American companies have been very active in recent years for two important reasons; for the growth and economic stability sustained in many of these countries, and for their proximity and the large volumes of traffic between both parts of the continent.

GTE was the pioneer, who, more than 30 years ago, acquired the state operator of the of the Dominican Republic, Codetel. GTE is present also in Venezuela, where it controls the administration of CANTV, and, from 1993, has offered cellular telephony in Argentina by means of their participation in CTI.

Bell South began their strategy in the cellular markets of Venezuela, Argentina, Chile, Uruguay and Panama. Also in Peru commencing January 1997 with the acquisition of the 58.7% of Tele2000, a company that offers television for cable, cellular telephony and paging. But the plans of Bell South are not restricted to the cellular market; they are already present in long distance carrying in Chile, and, through the Domos Group, Mexico.

SBC and Bell Atlantic, as with Bell South, are players who have a share in the long distance markets of Chile and Mexico, besides cellular telephony in these countries. The establishment of the Bell companies, beginning with mobile telephony, has continued with their incorporation into other segments of the market like long distance and transmission of data or television for cable.

AT&T, MCI and Sprint, on the other hand, have traditionally acted in the zone as suppliers of international long distance services. AT&T directly participates itself, or else through its branch, McCaw, operating mobile networks in Colombia, Ecuador, Mexico, Argentina and Venezuela. AT&T also participates in Venezuela's CNTV in telephony, and has a license in Mexico as part of the Alestra consortium. MCI and Sprint, aided in their respective strategic alliances, Concert and Global One, are defending their interests as global operators in the American continent. MCI is licensed to provide long distance services in Mexico as part of the Avantel consortium, and Sprint signed an agreement with Telmex from Mexico in 1995 in order to offer different cross-border services.