“Good enabling laws are not just sufficient, but government support must be total and not half-hearted, coupled with adequate funding that would attract good manpower to the regulator.”
This is the recipe to build a fledging telecommunication industry according to Dr. Gwandu, a former acting executive vice chairman (EVC) at NCC who opined that government role should be restricted to policy formulation whilst a strong, independent regulatory authority should provide stable, transparent, fair, and non-discriminatory access to telecommunications resources in a timely manner.
Dr. Gwandu, who is also the Non-Executive Chair of the Commonwealth ITU Group (CIG), while delivering his lead keynote speech at the opening of the Innovation Africa Digital Summit (IAD) 2019 in Addis Ababa last week advised Ethiopia to learn from Nigeria as it moves ahead to liberalize its telecommunications industry for private sector investment.
The summit was opened by Ethiopian Prime Minister Abiy Ahmed accompanied by some of his Ministers. It was anchored by Extensia of the UK -co-organiser of the IAD Summit. The period of the conference coincided with the time a proclamation is being tabled before the Ethiopian Parliament for debate and consideration to liberalise the country’s telecom sector.
According to Reuters, Ethiopia’s telecoms market is considered to be ‘the big price’ and the last greenfield site in a push to liberalise, and end a state monopoly as well as open-up one of the world’s last major closed telecoms markets.
In his speech at the conference, Dr. Gwandu dissected the telecoms market privatisation and liberalisation processes breaking the issues logically from the point of producing succinct legal frameworks for both the privatisation, and that of the telecoms regulation, right down to the market design and to the choices available to the government when it comes to competition planning up to the spectrum management and eventually service providers regulation.
He stated the need for a strong and good regulatory framework, encompassing a sensible set of rules that encourages investment and protects the consumer and requires, effective, professionally competent and sufficiently empowered as well as the sufficiently financed regulatory institution.
Dr. Gwandu said the legal framework apart from guaranteeing the independence of the regulator, must enable flexibility of the regulator whilst remaining predictable, efficient, effective and accountable. “It should be the role of the regulator to ensure the existence of competition in all segments of the market devoid of market abuse or the exercise of significant market power by the participants,” he said.
He underscored that “Liberalization of the telecom market is essential for rapid network growth as experienced by other countries and private sector participation is essential for attracting investment. Innovation and new technologies in the telecoms sector is fast moving, it cannot wait for the slow government bureaucracy to be approving investment funding and yet compete effectively.”
Bashir Gwandu further stated that in looking holistically at the telecoms market, the international segment should be examined where the complimentary options of international optical fibre and satellite links can be made available in a competitive manner.
According to him, international gateway liberalization and national backbone planning should ensure ubiquitous availability, open access, and finally, on the last mile, the spectrum remains key in view of the lack of sufficient last-mile fixed infrastructure.
He noted: “Mobile is the largest technology platform in human history and mobile broadband is the most dynamic segment of the last mile market. Spectrum is a critical resource for mobile broadband but is only valuable if it is effectively deployed to enable appropriate networks and services for socio-economic benefits to citizens.”
Gwandu further emphasised that as wired infrastructure is limited in Africa except perhaps in South Africa, it is expensive to install. Wireless technology, on the other hand, is easier and faster to deploy and remains critical to expanding broadband access, and spectrum access is critical for wireless broadband deployment, and capacity.
“Robust wireless broadband requires various bands and appropriate slots size for assignment, the slot size determines how many towers an operator will need to cover the area, or re-use pattern or indeed how soon break-even will happen, how sustainable or profitable the telco will be etc,” he said. He cited the mistake made by Nigeria in providing just over three megahertz (MHz) to Code Division Mobile Access (CDMA) operators and expected them to perform.
At the international level, he encourages Ethiopia to participate actively in the International Telecommunications Union (ITU) and African Telecommunications Union (ATU) activities to enhance regulatory harmonisation, thereby promoting economies of scale and enhancing cooperation on roaming, interoperability, Internet exchange points, and development of backhaul infrastructure.
He posited that Ethiopia should align spectrum release and technology neutrality roadmap to enable flexibility in investment, and in spectrum auction process, he advised the government to set objectives properly and to balance pricing of spectrum with rollout obligations.
“For the rapid expansion of networks, Ethiopian government which controls land across the country should streamline approval for Right of Way (RoW) and site acquisition, and make the process a simple and one-stop shop activity” he admonished.
He also stated that tax holiday has proven to be useful in some markets but even more importantly, the multiplicity of sector-specific taxes should be avoided and that the multiplier effect of deferred-taxation will lead to more tax revenue from the sectors that are supported by the telecoms.
Furthermore, Gwandu stated that competition planning should be examined carefully so those resulting companies should remain sustainable –and in selling spectrum, the regulator should ensure appropriate sizes, and also not to sell out all available spectrum at once, which will reduce chances of corrective measures in respect of future competition corrective-intervention.
The Ethiopian government thought it wise to invite telecoms experts from around the world, potential Investors and other market players to partake in the unique forum that examined the best practices that the country can learn from, in its quest to restructure and open its telecoms market for foreign participation.
The event was attended by senior executives from Vodacom Group, MTN Group, Etisalat, Safaricom, France Orange, Vodafone, ZTE, Huawei, Ericsson, Cisco, Airbus, Helios Towers, OneWeb, Mastercard, Intelsat, Thuraya, IBM, IFC, and several others which included Ministers from Africa, most especially the West and East Africa sub-regions.