FDI in Telecommunications Services Asia

The paper begins by looking at the data on the scale of investment in the telecommunication services sector across the Asia Pacific region, the reactions to 1997,and traces the country differences, which are displayed in graph form in Appendix 3. Private sector investment in public infrastructure projects is examined, and it is noted that divestitures have played a lesser role in the Asia Pacific region than in others, such as South America and Europe. Greenfield projects and investment in sector expansion, especially in the mobile cellular markets, has dominated private investment in the region.
Table 1 records the growth of mobile services as they overtake fixed line subscribers.
Where privatization has taken place it is often associated with developing the capacity of
local capital markets, and data in Appendix 1 illustrates the relatively high weightings of
telecommunication stocks on local stock markets. Appendix 2 provides a snapshot
contrast with the number of privately listed companies in 1994. There has been a large
increase in the number of listings across the region.

The paper suggests there has been a strong correlation between cases where governments
have strong commitments to the development of the ICT sector in general and to the
development of the telecommunications network in particular, and investment coming
into the sector. The paper looks at various mechanisms through which private sector
participation, including FDI, has been achieved, including means by which governments
have circumvented various legal and political restrictions on the foreign ownership of
national resources.


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