‘Rigorous Analytical’ Approach Urged in Emerging Markets
LONDON -- Mobile rules that work in developed nations don’t necessarily fit emerging economies, speakers said here Tues. at the Commonwealth Telecom Organization (CTO) forum. Govts. in developing countries should cast policy in the context of broader social and economic issues, Vodafone Group Services International Policy Dir. Neil Gough said. He and others urged caution in forcing one-size-fits-all solutions on developing countries.
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It’s wrong to assume policy-makers and regulators set the rules and the private sector decides whether or not to play, Gough said. Firms weighing venture opportunities look beyond current policy and regulatory frameworks to see how they may change, he said. Operators don’t reject the need for change, he said -- they just want the process to be clear and to have a say. “Good processes build investor confidence,” he said.
CTO nations have shown interest in sharing regulatory best practices, Gough said, adding that Vodafone supports this but is wary of trying to export one country’s rules to another, particularly from developed to developing markets. This is happening with interconnection rules as regulators race to apply EU mobile termination rate set-ups, Gough said. In emerging markets, the wealthy, not the poor, own fixed lines, the ratios of inbound to outbound calls differ from those of developed economies, and penetration varies. Lowering mobile termination rates, as the EU is doing, isn’t relevant in many emerging markets, Gough said.
A fresh regulatory approach is needed that looks at an emerging market’s specifics, Gough said. Communications policies and regulations figure so strongly in national welfare, demanding a more “rigorous and analytical approach” based on case-by-case studies of each nation, he said.
The mobile phone revolution has narrowed the digital divide, said Prof. Leonard Waverman, economics faculty chmn.- London Business School. Communications provide a crucial form of “social overhead capital,” with enormous benefits to consumers and businesses. Telecom uptake helps growth, resulting in the “social dividend.” In many emerging countries, the cellphone constitutes “identity,” he said.
Govts. should realize how crucial communications is to economic development, Waverman said. Competition drives use up, but taxing communications taxes growth, he said.
Taxes and other regulatory obstacles may account for lower penetration of mobile phones in some countries, said Petteri Terho, Nokia dir.-strategy & business development, new growth markets & networks. Short-term spectrum licenses some govts. grant force operators to try to recoup their investments quickly by charging more. To get operators to extend connectivity to less profitable areas must impose universal service schemes, he said. But, Terho said, if govts. want industry to pay for universal service, “copy & paste regulation” isn’t the way to go. Universal service obligations must be tailored to each market and imposed with transparency, Terho said.