The Geneva, Switzerland-based International Telecommunications Union is setting up an investment fund for joint telecommunications ventures in developing countries (CI No 2,603). The new body, WorldTel, aims to narrow the north-south hemisphere gap in telecommunications and telecommunications infrastructure and increase access to the 80% of the world’s population that lacks basic telecommunications. Conventional capital flows from the likes of development banks and institutions are currently insufficient, leading to a $30,000m funding gap each year, says the United Nations agency. The WorldTel organisation will be different from other funding and development organisations in that it will be sector-specific, focussing only on telecommunications and information technology. According to the union, WorldTel’s mission will be to provide financial assistance; access to financing sources, leading edge technologies and management practices; neutrality in providing systems; and information and advisory services. From the investor’s side, client countries will be required to provide guarantees, risk management mechanisms and adequate financial structures to safeguard any investments. WorldTel will be driven by private funding, with equity limited to private financial investors. But governments, telecommunications operators and vendors will be able to take part in projects through debt and/or equity participation at the project level, according to the union. A feasibility study conducted for the union, based on visits to 10 sample developing countries, is said to have found the WorldTel concept commercially viable. Study sponsors endorsing the project include Ameritech Corp, Sprint Corp and AT&T Corp from the US, Cable & Wireless Plc from the UK, the Burgan Bank of Kuwait, NEC Corp in Japan, Nokia Oy in Finland, Telekom Malaysia Bhd and Telstra Corp of Australia. Pekka Tarjanne, the union’s secretary-general, said he plans to appoint an interim board of directors after consultation in New York with major investment banks. Seed capital will then be raised to set up WorldTel and identify the first projects. Initially, the plan is for WorldTel to finance two or three replicable pilot projects in the first half of this year, worth about $40 to $50m each. During a second phase, which will stretch over the next two years, some $200 to $500m worth of projects would be funded, according to WorldTel project manager Terrefe Ras-Work.
