The Geography of International Business Telecommunications: The Role of Leased Networks

Abstract

International business telecommunications traffic is dominated by large transnational corporations (TNCs) and focused on major industrialized countries such as the United States and the United Kingdom. Leased networks are a small but important part of international telecommunications, especially for large TNCs. Many of these firms (particularly in the banking and finance and electronics industries) view their leased networks as key elements of their global corporate strategy; they have sophisticated networks that use high-speed leased circuits to link major industrialized countries. These TNCs transfer large amounts of information on their networks to support their internationalization of production. The location of regional hubs of international leased networks is an important component of TNCs'internationalization strategy; there is mounting competition between countries to become regional hubs for traffic on international leased networks, particularly in Western Europe and East Asia. The U.K. is by far the most dominant regional hub for Western Europe, although it is likely to face increasing competition from other countries. No single country dominates the Asia-Pacific Region; there is strong competition between Japan, Hong Kong, Singapore and Australia to hub regional leased networks. The international role of leased networks is linked to the geographical literature on information flows and organizational structures, given that these networks are a significant component of the infrastructure facilitating information flows for organizations.

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