Q-1: Ms. Cerar, the telecom sector in Argentina went through deregulation only a few months ago. Did the results so far meet with your expectations?
A-1: Global Crossing and other companies have been involved in the deregulation of this market. It had been a significant effort because we worked with the present Secretary of Communications and with President De la Rúa who had been very committed to this matter. We believe very strongly that an open competition was necessary because the telecommunication market is the leading sector of the economy in terms of creating jobs, transferring technologies and promoting additional economic development.
Q-2: What can you say about customers complaining about the fact that tariffs did not decrease as expected?
A-2: The customers are concerned about the prices of local calls. They are also worried about the amount of long distance calls they make because they think that probably they cannot afford it. The first impact of the deregulation did not touch the residential customers in regards to their local calls as much as we wanted to, but you can see a significant reduction in the prices of long distance calls. One of the greatest consequences of the deregulation is the establishment of companies like Global Crossing that provide the infrastructure that is necessary for the development of this sector. The telecommunication operators have to afford the fares of international connectivity. Those levels of costs are hopefully transferred to the corporate customers. Global Crossing was the first company that announced the building of a high technology global network in South America. We entered South America to offer a seamless global high technology network that connects this part of the world to the global network of Global Crossing. Previously, the costs of international calls were a nightmare because the costs of international connectivity for operations from Argentina were really significant. Obviously, we hope the reductions were transferred either to residential or to business customers.
Q-3: Global Crossing is today the first company to connect South America with North America, Asia and Europe through a global IP-based fiber-optic network. Can you tell us more about the technical characteristics of this network?
A-3: Dense Wavelength Division Multiplexing (DWDM) is the best technology that exists today. Global Crossing invested more than $8 billion dollars to build this IP network all around the world. The first system that we operated was the Atlantic Crossing 1, which connects New York to the European Crossing system. The Pan-American Crossing connects California to Mexico, Panama, the USVI and South America. The West coast of the United States is joined with the Pan-American Crossing and with the Pacific Crossing, which is the only system that has capacity today between the United States and Japan. We decided to invest in South America when we realized it was timely to do so as the development of the Internet services and the deregulation of the telecommunications sector was driving the industry. Our network in South America has an initial system capacity of 40 gigabits per second and is upgradeable to 1.28 terabits. South America fit very well with this technological design that the company already had planned. One of our initial challenges was the build-out of the connection from Argentina to Chile. We decided to build the system through Argentina’s principal cities - Buenos Aires, Rosario, Cordoba, Mendoza - with final connection to Santiago and Valparaiso, Chile. We recently launched services in Chile and will soon be connecting Peru and Venezuela to the global network. We expect to complete our entire network in South America in May of this year.
Q-4: Which services are you offering now to the corporate customers?
A-4: Global Crossing offers Carrier services that are based on the provision of managed bandwidth services to carriers and to the Internet service providers. This connectivity is given for a period of fifteen to twenty-five years. We also provide global services to multinational corporations. Our presence in 200 cities is a perfect goal for multinational companies that want to be connected to every part of the world. Global Crossing also offers termination of voice and termination of IP traffic to corporate clients and carriers.
| Q-5: Pessimists say that services such as data transmission are still pretty much underdeveloped in Argentina, and the country might not be ready yet for the implementation of your kind of technology.
A-5: I would not say that Argentina is not ready for data transmission services. Global Crossing is focused on the multinational corporations. They are extremely sophisticated in their requirements. The globalisation has influenced the explosive development of the high tech industry; therefore those countries that can not be connected are left behind. If you talk to every single head of state in Latin America, you would see that the countries are committed to technology and connectivity to the Internet. Global Crossing can provide Internet services at speeds of 1 trillion bytes per second. Once you have tried this, you cannot go back to other services.
Q-6: Are you satisfied with the legal and commercial framework that Argentina is offering?
A-6: Absolutely. Argentina is a country where you do not have any requirements in terms of capital flows. There is a good legal and commercial framework provided by the government to this sector. This is a very committed administration that is trying to create additional tax incentives to improve the commercial possibilities of the telecommunications companies.
Q-7: A few days ago, the Internet division was separated from the Secretariat of Science and Technologies and is going to be part now of the Secretariat of Communications. Do you think that this was a necessary decision?
A-7: I think that was the natural progression of things. The Internet is the communication of the future and is also part of what they call radiodifusion. People will use the Internet for everything. So you shouldn’t separate this service from the Secretary of Communications who is promoting the sector. I agree with the commitment of Henoch Aguiar to promote investments for the development of Spanish contents.
Q-8: What do you foresee for the future of Global Crossing in Argentina?
A-8: I think Global Crossing is a great company with a solid future. We want to have a strong presence in every country of the world where we operate. I am from Puerto Rico and I am very committed to Latin America. I was delighted because Global Crossing gave me an opportunity to develop the South American Crossing, which has 18,000 kilometers in length, and connects all the major cities in the continent. The South American Crossing was announced in March 1999 and began its operations on November 9th 2000. Global Crossing’s strategy is to fill the network with retail services as well as carrier services. The Global Crossing networks are able to provide corporations a big range of services that can connect them to every part of the world. The company will build regional network operation centers and one of them will be in Buenos Aires. We also have data services centers that operate internationally and have advanced Web applications. We cover the whole spectrum of services that multinational corporations and carriers may need.
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