ITU TELECOM SHOW TO OPEN SMALLER AMID BUDGET TENSIONS

The show comes just weeks before an extraordinary session of the ITU Council, which is seeking a balanced ITU budget and additional information on streamlining efforts. Amid unanswered questions on ITU structural changes and finances, the Council declined to adopt the budget at a May meeting, instead scheduling a rare “extraordinary session” in late Oct., several sources said. Wrangling over the ITU’s budget has spawned a flurry of Swiss press reports indicating some on the Council want Secy.-Gen. Yoshio Utsumi to step down because of concerns about financial management. Several sources told us that while the budget woes had created tension, reports of council members’ demands for Utsumi’s resignation seemed to be overblown. But one source said: “There’s a growing sense of frustration about the lack of transparency.”

At the Telecom show, the U.S. Pavilion, run by the Telecom Industry Assn., has 3,000 sq. meters of exhibit space, half the size of past shows, a source said. In the past, 130 companies bought space there, compared with 40 this time, although the source said that in some cases companies were exhibiting elsewhere in the show because they wanted to depict a global reach. The pavilion still is the largest national exhibit space at Telecom, with Qualcomm as the largest exhibitor, with 225 sq, meters. U.S. companies with displays also include ACE*Comm, ADC, Channel Master, Comverse, PanAmSat and Tekelec.

Industry sources say the smaller scale this year reflects the deep economic downturn in the industry itself. Telecom 2003 marks the first telecom show since the dot-com implosion, with the last held in Oct. 1999, months before the crash. Among those staying away this year is Lucent, in a change from past Telecom conferences. “If you look at what’s going on in the market, we are having to focus our resources on Lucent-sponsored events that are targeted for and with Lucent customers around the world,” a company spokeswoman said. While the company still considers exhibiting at trade shows, she said: “At this point we are having to focus our resources pretty carefully.” Motorola isn’t listed as a stand-alone exhibitor, nor is Nokia. Ericsson’s presence is through Ericsson Turkey. Sprint doesn’t have a standalone booth but is displaying information with Cisco, the company said.

Other companies aren’t renting traditional exhibit space but will have more low-key stands in the Telecom Village, targeted more for customer meetings and company-run seminars, a source said. Cisco said last month it would have a 3-story stand focusing on how carriers could build intelligent packet networks and deploy broadband. Among the most conspicuous absentees this year is Deutsche Telekom, which isn’t listed as stand-alone exhibitor. A company spokesman couldn’t be reached for comment. In the past decade, the company constructed a building so elaborate it was disassembled and erected in Germany after the show, raising media controversy about the scope of spending on Telecom displays.

This year, the ITU is limiting booths to 500 sq. meters, a spokeswoman said. Despite what many expect to be less of an emphasis on glamour and spectacle, the show still has surpassed initial estimates of its size. The ITU originally expected 750 exhibitors to buy booth space, down from 1,146 in 1999, but close to 890 are coming, she said. “These are tough times for telecommunications and ICT [information and communications technology] and Telecom World is a reflection of the industry,” she said. “For that reason, we expect participation at Telecom World 2003 to be lower than it was for the ‘99 event.” Overall expected attendance is 115,000, the spokeswoman said. In 1999, total attendance hit 175,883.

As in past years, the sheer size of the show has focused attention on the progress of the ITU’s finances and policies. The “extraordinary session” of the ITU Council is an unusual step, as is Council’s refusal to adopt the union’s budget at its regularly scheduled May meeting, several sources said. At last year’s ITU Plenipotentiary in Marrakesh, delegates focused on creating a balanced financial plan for the ITU to develop and directed the secy.-gen. to take a number of steps, including reductions in overhead, a source said. At the same time, the Plenipot also created a group of specialists to look at the management and budget of the ITU, which developed 22 short-term, midterm and long-term recommendations for the ITU to implement, the source said. Those recommendations were presented to the May Council meeting, along with a recommendation that a Council Oversight Group be formed to oversee its implementation.

That group, chaired by Jose Mendez of Portugal, has met several times since May, including a Sept. 17 session, several sources said. “Generally, I think the view is that the ITU has done considerable work on the short-term recommendations and that more work needs to be done,” a source said: “The budget shows some improvement.” One sore point at the May meeting that has contributed to recent tension is that the secy. gen.’s office didn’t issue budget documents with what some members thought was sufficient lead time for analyzing them before the Council could act. In one case, a version of the document in one language was released the day before the meeting. But several sources said they expected the Council to approve the budget later this month, although it may have conditions attached.

Among the concerns by Council that led to the scheduling of the extraordinary meeting was that many members felt that reform efforts they had wanted the secy. gen. to carry out weren’t being done or it wasn’t clear whether they were being done. “You don’t know what the details of programs are,” a source said. Other concerns are that too much power is being centralized in the secretariat rather than in the bureaus. The Council’s refusal to adopt the budget in May was “fairly remarkable,” the source said: “A lot of member states rebelled and said we can’t approve a budget.”

“When you don’t have all the facts, you can’t have an intelligent or informed debate,” another source said of the May Council meeting. “I think everybody is feeling frustrated.”