Daniel Pimienta,, Head of Foundation Networks and Development (FUNREDES)


KEYWORDS: Research Networks, Internet, Telecommunications, Operators, Infostructure, Developing Countries, South, Dominican Republic, REDALC, REDID, REHRED, FUNREDES.


This paper focuses the relationship between Telecom Operators and Research Networks in Developing Countries. The concept of a mutual benefit relationship is presented as a desirable objective. Telecom Operators would benefit from the Research Networks in terms of creation of the data communication and value-added networks markets, as well as in the transfer of technical know-how in the field of networks. The Research Networks would benefit from the Telecom Operators services, primarily with the access to high speed dedicated lines, which represent a large proportion of their expenses. Such synergetic relationship would furthermore represent a benefit for the development of the country. The reasons why negotiation between the two partners is a valuable approach are presented. Some guidelines are shown for the Research Network to direct an efficient negotiation process. A set of arguments are listed for the Telecom Operators to make them confident this is a correct way to pursue, business wise. The paper refers to corresponding ITU/UNESCO recommendations and to the Dominican Republic Research Network experience (REDID, one of the REDALC projects) which served as a prototype for this approach.


The key importance of Telecommunications for development have already been shown (see for instance "Telecommunications and Economic Development", by R.J. Saunders and al, A World Bank Publication, Johns Hopkins, 1983). For different reasons, Science and Technology, is another well identified development asset. Besides their importance for the development of a country, both areas are vital for its independence.

At the time when the technologies and markets of telecommunications, computers and media are merging to create the most important challenge/opportunity for the world development, namely the information infrastructure (or "infostructure"), careful attention should be paid, in the South, to create a synergetic relationship between the Research world and the Telecommunications industries. This is a matter which goes beyond the direct interests of the two groups: it will serve as the basis for appropriate research and development as well as technology transfer, from domestic knowledge and lessons learned abroad. A new form of flexible collaborative research is developing using networks, where research is deployed to actual use with feedback changing both research agendas and use. As a vehicle for research collaboration and distance education, for all sectors, it will build human resources and institutional capacity. The relationship between telecom operators and research networks is, in the developing countries, a perfect opportunity to start trying this new model.

The tariff advantages which could be obtained in such relationship should not be considered as a form of subsidizing (which would come into contradiction with the global liberalizing movement which is on the way in the Telecommunication industry), but rather treated for what it is really: a balanced economic exchange, since there are clear business reasons for the Telecom players to participate in a partnership which both strengthen domestic capacity and the demand for telecom services.

In one side, the cost of international and national communications still represents the most important item in a national Research Network budget and very often the principal difficulty for the growth of these networks in the South. In the other side, in most of the developing countries, the data communication and value-added network markets are slow to emerge and the chicken and egg syndrome between users and services could not be cut easily with classical marketing tectonics.

In the other side, the Research Networks have formed, almost everywhere, the initial base of users for the value-added services, developing a valuable expertise in terms of user marketing and support, data communication technology and information providing. The Telecom Operators are the providers and set the tariff patterns for the use of the data transmission facilities. The terms of supply will cultivate or restrain usage depending on costs.

This actual situation and the practical possibility of a balanced exchange implies a unique opportunity for the creation of partner- type relationships which benefits to both entities and, eventually, the whole country's development.

Looking at the trends for the future of the telecommunication market (in terms of the relative importance of voice and data, and also of information providing vs. data transportation), acknowledging the importance of the role of the research community in shaping the tools and the culture of the information society, the Telecom Operators should understand that partnership with the research people could be a valuable investment for the medium and long term range. In some specific cases, the Telecom Operator may be very sensitive to the short term and then reluctant to loose immediate revenues from that particular market segment, in spite of the expected medium term return of investment. In those cases, they should then perceive the opportunity for a risk-venture where the investment is extremely marginal and where the potential long term benefits could be of major importance. The telecommunications markets are changing too fast and too deeply to justify attitudes with arguments from the past.

This paper pretends, generalizing the successful results of one of the REDALC projects, to conceptualize a framework for negotiation between Research Networks and Telecom Operators based on the concept of mutual respect and mutual benefit.


The foundation of the strategy is that: There is an area of common interest between the Telecom Operators and the Research Networks: the development and growth of a base of users.

Both groups are interested in the growth of the propensity of the citizens and professionals to become fluent users of the New Information and Communication Technologies. One for obvious business reasons. The other one because its vocation is to help the maximum number of researchers in their way to the professional benefits of becoming satisfied and skilled network users. Also, because the most empowered research users from the South, the strongest will be this group to represent and defend the global interests of the South in the emergence of the New Information Society.

The Research Network people presents, for the Telecom Operators, the following unique advantages:

Marginal importance for direct revenues.
The total market for value-added services can be split several ways, one is into professional and residence markets (the mass market, which is, in terms of volume, the more important). If one focus only the professional market (the companies, whether micro, small, medium or large, and whether governmental, profit oriented or not), then, in terms of percentage of companies/institutions, the sum of the universities and the NGOs related to research represents a figure in the order of magnitude of 1%. This is marginal for the potential revenues from telecommunication services (although one could be mislead by short term facts since they have been, traditionally, the first market segment to learn how to use the services).

High influence for indirect revenues
However, the researchers represent a unique and very strong influence upon the market. First, because they teach the future executives, and, second, since most of them represents an example for private companies in terms of capacity for dealing with technology. Furthermore, in most of the countries of the South, economical circumstances drive the researchers to create their own structure (business or NGOs) and to involve them more tightly to the business environment. Last but not least, as non-profit information sites multiply, from research, academic and public sources, the commercial users are accessing them: this benefits business, development and telecom revenues.

No systematic survey and analysis have been made; however the point which is made is intuitively understandable. If one could scientifically measure the correlation between the buying decision of a customer and various parameters such as:

Network technology know-how
The know-how acquired by the community of on-line researchers is well demonstrated and has been translated in an impressive mass of freeware which would represent a serious business share if it had been marketed. The advance of this group in term of creativity for shaping the future of the information highway should not be underestimated. Within this group, in every country observed (from the North as well as from the South), one can find: Provider of valuable information
The researchers are the builder of the first free information base. This asset, originally dedicated to researchers, is equally attractive to professionals and may arise the interest of some casual users. The new commercial players in the Internet are building their information providing above the sound foundation which have been set up by the research community. In the regions where the cost of data communication weight high in budgets, the professional customers, after their first experiences and excitements of graphic navigation, will learn to measure the ratio real information/volume and to appreciate a content based search produced free by the academic world to fill their information requirements in the minimum time/cost investment.

Not competitors.
The vocation of Research Networks is to facilitate the access to the network services to the researcher community, and not to sale services to the whole market. Although, given local circumstances (like the absence of commercial offerings or extremely high data transmission price at any international standards) and the decrease of international support, non profit oriented organizations may be pushed to more business-like practices in order to balance their finances, at cost recovery.

The situations where Research Networks have turned real competitors to Telecom Operators should progressively disappear:

In any case, the negotiation is the correct way to transform the situation without prejudice for both sides.


From the Research Network side
The first and obvious reason why a national Research Network should enter negotiation is to try to alleviate its telecommunication bill, the heavier part of its expenses. But they are more reasons, such as:

From the Telecom Operator side
The first argument is purely business. If the management looks beyond short term revenue maximization to long term market maximization, their are excellent reasons why it is wise to negotiate with the Research Network representatives. Indeed, it could be worthwhile, for the creation of the market, to consider, instead of expensive campaigns of advertisement, the attractively priced offering of accesses to that population. This in turn will indirectly create the demand from commercial users more efficiently than classical marketing. Furthermore, these skilled users would allow a free and efficient bench marking and beta testing of their services, giving another plus in the economical balance.

There is another business reason. The national information infrastructure is usually slow to get organized in the South. Encouraging the research world to fulfill the initial requirements could help them to get a first level of national information basis, a necessary complement to arise the national users interests for getting the connectivity, but also, a primary element to open their market to the outside customers. This, additionally, will provide the local information sites for collaboration and development at the local level.

The last reason is that they could enhance their image as a development -minded player in the country.

The conditions exist for a mutual benefit relationship where: