Telecommunications

In many developing countries the Internet may provide businessmen with a reliable alternative to the expensive and unreliable telecommunications systems of these countries. Commercial users can communicate cheaply over the Internet with the rest of the world. When they send e-mail messages, they only have to pay for phone calls to their local service providers, not for calls across their countries or around the world. But who actually pays for sending e-mail messages over the Internet long distances, around the world? The answer is very simple: users pay their service provider a monthly or hourly fee. Part of this fee goes toward its costs to connect to a larger service provider, and part of the fee received by the larger provider goes to cover its cost of running a worldwide network of wires and wireless stations.

But saving money is only the first step. If people see that they can make money from the Internet, commercial use of this network will drastically increase. For example, some western architecture companies and garment centers already transmit their basic designs and refined by skilled

– but inexpensive – Chinese computer-aided-design specialists.However, some problems remain. The most important is security. When you send an e-mail message can travel through many different networks and computers. The data is constantly being directed towards its destination by special computers called routers. However, because of this, it is possible to get into any of the computers along the route, intercept and even change the data being sent over the Internet. In spite of the fact that there are many good encoding programs available, nearly all the information being sent over the Internet is transmitted without any form of encoding, i.e.

“in the clear”/ But when it becomes necessary to send important information over the network, these encoding programs may b useful. Some American banks and companies even conduct transactions over the Internet. However, there are still both commercial and technical problems which will take time to be resolved.

ADVANCING ROLE OF TELECOMMUNICATIONS IN BANKING

Role of telecommunications in banking as in other businesses nowadays is extremely important. We can even say that this field is critical success factor for the modern bank or banking system.

There are two different approaches in terms of ownership to building banking communications in the world. One approach that is chosen for example by banking system of Russia and some other former Soviet Union countries is building of private banking networks from the start. This approach has certain benefits, mainly from security prospective. On the other hand building private banking networks requires permanent and serious involvement of banks in financing, support and development of telecommunications systems. Other approach is building banking communications over existing public services in the country. Some of main benefits of this approach are relatively low level of investments in communications and possibility of sharing achievements in this field with other businesses. At the same time in the future it will be easier for central bank to minimize it's involvement is this field then in the case of private banking communication systems.

There are number of most important banking systems and services that are based on communications.

Electronic Funds Transfer System - System facilitating electronic transfer of domestic interbank and intrabank (interbranch) payment instruments.

International Financial Telecommunications - Same as EFTS but for international operations.

National Money markets and auctions - System allowing electronic trading of financial instruments and stocks within the banking system.

Centralized accounting and analysis of available reserves and government budget across country

Centralized electronic processing of personal Credit-and-Debit card operations.

The importance of fast and reliable electronic information exchange between financial institutions grows with economy of country and requires deployment of modern technologies in the banking system.

RUSSIA'S TELECOMMUNICATIONS ROADS GET WIDER, MORE EXPENSIVE

In the last days of 2000 the government approved "in principle" of a draft concept for developing the market of telecommunications services, extending till the year 2010. What are the likely implications of that decision?

Under the approved project further efforts in the telecommunications market must be geared to meet the growing demand for communications services. According to the Ministry of Communications, 54,000 communities in Russia have not a single telephone. Communications networks development has been and still is the job of traditional operators. Bills paid by retail subscribers cover a mere 77 percent of local telephone communications costs.

According to the most conservative estimates, the development of the national telephone infrastructure will require an investment of $33 billion over a period of ten years. The number of ordinary telephones will grow from 31.2 million in 2000 to 47.7 million in 2010, and of mobile telephones, from 2.9 million to 22.2 million. The army of Internet users by

2010 will go up from 2.5 million to 26.1 million.