Telecommunications in Central America

100
115	Telecommunications in Central America

Raventos, Pedro;

August, 1997 56 Pages

Important links run in both directions between telecommunications and economic development. This paper examines the telecommunications sector in Central America in the context of national and regional growth and sustainable development. Its analysis of the telecommunications sector in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua shows that the sector developed substantially in the last several years even while under tight regulation or monopoly and that current telephone penetration is relatively high in relation to per capita income. Still, unmet demand for telephone service is substantial and geographic distribution of service is uneven. Moreover, revenues rely heavily on international calling, and Central America has the highest traffic imbalance in the world. This paper discusses prospects for expansion of the sector and revenues in each country under a variety of frameworks: continued monopolies; planned or on-going privatization programs; new regulatory frameworks; and/or deregulation. Technology and regulation are moving the telecommunications sector in all countries toward competition, but the approach to reform varies in each country. These different approaches will transform regional cooperation, possibly making certain agreements more difficult but also increasing the potential benefit from regional regulation

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