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Telecommunications and Industrial Development

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1 Author(s)
Shapiro, P. ; Telecommunication Sciences Section, Arthur D. Little, Inc., Cambridge, MA

Given a demonstrable correlation between telecommunications and industrial development, an interesting underlying question is: How can a telecommunication system be planned to achieve overall industrial development goals? A response could focus on the technical capabilities of a network, on the telecommunication equipment supply arrangements, and on the tariff structure. High telephone density is a technical attribute of primary importance because telecommunications' value for industrial development is that it provides an infrastructure. This value is not realized until a "critical mass" of telephone density is achieved. Where demand for telecommunication service substantially exceeds supply, screening criteria can be used to give certain classes of users higher priority in concert with industrial development goals. A second area of importance is the selection of plant technology which involves decisions that will affect technical capabilities of the network for 15-20 years or more; for example, crossbar, and electronic switching systems each possess certain advantages which should be considered in the light of local conditions. A local telecommunication equipment manufacturer is a participant in national industrial development. Efficient production of equipment might be supported by continuous and substantial demand from trading partners within a block such as the Andean Common Market. To reduce a telecommunication company's equipment costs, competitive procurement and negotiated allocation of supply contracts are two methods that are feasible particularly with transmission equipment such as microwave radios and cable. Alternatively, where a favored supplier relationship exists, the telecommunication company could benefit from the support of a research, development and engineering group in assessing its product choices. Tariff structure is a major allocator of telecommunication resources that is controllable by telecommunication planners. Price rationing is a conservative response to unsatisfied demand but does not respond fully to the needs of industrial development. Seeking to achieve a "critical mass" of telephone density through subsidized rates would be more responsive. Other tariff structure issues include use of measured versus flat rate - local services, selection of criteria for drawing of local calling area boundaries and utilizing local calling area size as a basis for discrimination in rates. In response to inflation, continual modification of tariff structure is more sensitive to the needs of industrial development than the indexing of the rates, although the latter option requires fewer analytical resources.

Published in:

Communications, IEEE Transactions on  (Volume:24 ,  Issue: 3 )