Govts. Grapple with Policy, Regulation to Speed Mobile Deployment
LONDON -- British Commonwealth members may run the gamut from industrial nations to struggling African countries, but all agree mobile communications are a key economic driver, they said here Mon. Mobile phones have become “essential tools” of life, with some 2 billion in use worldwide, said Margaret Hodge, U.K. minister for industry, Dept. for Trade & Industry. She was speaking at the Commonwealth Telecom Organization (CTO) Forum. In Africa, cellphones are the “symbol” of use of information & communications technologies (ICTs), with air time traded like currency, she said.
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Many CTO members have liberalized or are liberalizing their telecom markets, but many still have regulatory and policy problems, govt. representatives said. Malaysia is the first Asian country to roll out mobile phone services, said Energy, Water & Communications Minister Lim Keng Yaik. In 2000, it deregulated rates, and now has one of the most competitive mobile tariffs, but the market couldn’t bear more than the 3 current players and several operators went under. One key issue is infrastructure- and tower-sharing to broaden coverage and prevent duplication, Yaik said.
Mobile communications accounted for a hike of nearly 11% in Kenya’s 2005 gross domestic product, Asst. Minister for Communications David Were said. There are now 2 mobile operators with 6.5 million combined subscribers, compared to 200,000 fixed lines, he said. Kenya is trying to deploy commercial 3G services amid challenges: (1) Migrating mobile services now in use to the next generation. (2) Resolving interconnection disputes to ensure seamless connections and transparent networks. (3) Making 3G services attractive and affordable to consumers. The big question, he said, is whether 3G offerings will be for only the wealthy.
Ghana is grappling with quality of service (QoS), choice and affordability issues, said Kwaku Ofusu-Adarkwa, chief dir., Ministry of Communications & Technology. The country suffers from expensive international connectivity and inadequate quality control. It also lacks a robust backbone infrastructure and regulation, legislation and policy needed to address investment risk, convergence and other matters -- but is working on it, he said.
Bermuda, with 37,000 ICT users, has its own problems, Telecom & E-Commerce Minister Michael Scott said. The 20- sq.-mile nation has a legacy Cable & Wireless infrastructure, but its market is “siloed” into mobile, ISPs and others, he said. Convergence demands the govt. liberalize licensing to permit access across technologies, he said.
Mixed Regulatory Approaches
With around 100% 2G coverage, and 80% 3G, U.K. mobile uptake is slowing, a critical factor for the future, U.K. Office of Communications Dir.-Strategic Resources Peter Bury said. Rates of growth in voice and SMS messaging are lower than in the past, but even so, mobile voice revenues rose more than 10% a year in 2000-2005. Data revenues -- from ringtones, mobile TV and the like -- are “very slow to arrive,” Bury said. SMS remains “the engine of growth.”
The U.K. has a “light-touch” in mobile regulation, Bury said. Underlying everything is the need to move from the old “command and control” spectrum licensing regime to one in which the market has more control, he said.
When Nigeria emerged from 29 years of military rule around 1999, its telecom industry was dominated by an inefficient govt. monopoly now being sold, Communications Commission Exec.-Comr.-Engineering & Standards Stephen Bello said. Teledensity was among the world’s lowest -- 400,000 lines for 20 million people. Investors had been turned off by the country’s military regime, and the govt. constantly interfered with its weakened regulator.
Democratic civilian govt. led to an independent telecom regulator, Bello said. In April, the regulator offered unified licensing so spectrum holders can use the resource for any services via any technology. The regulator, now considering licensing its 5th GSM operator, launched a 3G public inquiry in May. To spur competition, Nigeria permits 100% foreign ownership of telecom businesses. It originally limited the number of service providers to 4 to guarantee markets, and gave operators 5 years’ exclusivity so they quickly could recoup investments, plus a 5-year tax break.
Those 5-year holidays have expired, but that regulation made Nigeria Africa’s fastest growing mobile market, Bello said. However, consumers complain of high charges and poor QoS, results of an inadequate communications backbone. Companies dislike the multiple taxes; anticompetition law and law enforcement are lacking; and no mobile-fixed service interconnection rate has been set, Bello said.
Gibraltar’s mobile market remains uncompetitive, said Regulatory Authority CEO Paul Canessa. There is only one operator, retail prices remain largely unchanged and there are few, if any, offers for more competitive services, he said. As an EU member, Gibraltar must put in place the e- communications regulatory framework, as it’s now doing.
Jamaica’s telecom needs were served exclusively by Cable & Wireless until 2000, said Paul Morgan, dir.-gen. of the Office of Utilities Regulation. Liberalization raised the combined number of fixed and mobile customers to well over 2 million, with mobile dominating 3-1, he said. Capital outlay grew significantly and retail prices fell.
But Jamaica still has no mobile resale market, Morgan said. The main telecom providers remain big and vertically integrated, and a significant number of new entrants fail. And problems with Jamaica’s competition authority have stymied resolution of antitrust complaints.
The CTO Forum continues through Wed.