Telecommunications and the Scope of the Market in Services

Abstract

The promised liberalization within the European Economic Community in 1992 is likely to be the most significant economic event of the coming decade. Should this transformation actually occur, it will at last create a market, the world’s largest, appropriate to the economic potential of the region. The free movement of goods, people, and information among 325 million consumers, workers, and stockholders promises to create enormous wealth for Europeans and enormous opportunities for the rest of us. I would like to focus on the role of telecommunications services in this transformation, which I believe is far more vital than is generally recognized. Note I use the word “services.” Much has been written and said about the market for telecommunications equipment, including the “threat” of the Japanese and American manufacturers. I am going to ignore completely the trade in telecommunications equipment problem; I view this market as mature, in which transactions are few in number but large in value, very highly politicized, and well studied by others. What I find of far greater interest is the role of telecommunications services in defining the scope of the market of services, which, after, all is what 1992 is all about.