ITU chief challenges governments to back industry

By:
James Pearce
Published on:

Houlin Zhao, secretary general of the International Telecommunication Union, calls for $450bn to be spent on expanding internet connectivity

The United Nations is challenging national regulators and governments to support telecoms operators to help meet its goal of connecting half the world by 2020.

The International Telecommunication Union (ITU), a branch of the UN, says that at the end of 2015, 41% of households across the world had internet access, but it is aiming to connect 50%, or more than 3 billion people, by 2020.

Speaking at the Huawei Ultra Broadband Forum in Frankfurt, Germany, Houlin Zhao, ITU secretary general, said the industry will need to invest an estimated $450 billion in infrastructure.

"I was speaking to [América Móvil chairman] Carlos Slim and he claims that figure will need to be much higher," said Zhao in his opening keynote. "But to hit the UN target, we need to increase GDP by between one or two per cent.

"Telcos continue to carry out major investments in infrastructure. So we have to support them, especially in poorer areas. We need to create a good environment to encourage them to invest there."

In his speech, he acknowledged challenges the industry faces, including a reduction in revenues as more people opt to use OTT services instead of traditional telecoms services such as calls or SMS.

On top of this, customers are demanding higher speeds and the latest technology, such as 4G or fibre, but want prices to stay low. Despite this, he claimed, heads of state see published profits and assume the industry is doing well.

"We try to convince head of states that although telcos are making good business, they still could survive from the very difficult period following financial crisis over the last decade, but they face big challenges.

"The public want low prices, but upgrades to the infrastructure and better services. 3G to 4G to 5G, to high speed internet connections. And there are challenges from the OTT market.

"Telcos continue to carry out major investments in infrastructure. So we have to support them, expecially in poorer areas. We need to create a good environment to encourage them to invest there.