ICT: Creating a fairer more competitive market?

ICT: Creating a fairer more competitive market?

ICT: Creating a fairer more competitive market? The regulatory environment for Africa’s ICT sector is continuously improving. African countries with ICT regulatory bodies have grown in number from 26 in 2000 to 44. Moreover, they are increasingly independent from their governments.

According to the International Telecommunication Union, 60% of bodies are independent of their country’s executive. There are also signs that these regulatory organisations are becoming more assertive, but this has led to disputes with telecommunications companies. For example, in July the Communications Commission of Kenya refused to renew the licence of telecoms giant Safaricom unless it addressed problems relating to its “poor” service and forked out $27m by June 2014.

Similar disputes are taking place in other African countries. The Nigerian Communications Commission also recently called on South African telecoms firm MTN to look again at its tariff policies. MTN stands accused of unfair competition. Currently, calls between MTN numbers are allegedly a third of the price compared with those to other networks. Zambia’s regulatory agency has taken three providers – MTN Zambia, Airtel and Zamtel – to court over allegations that they have failed to meet minimum standards.

Various regulatory changes that should benefit consumers have either recently been implemented or are in the pipeline. For example, in late spring, regulations in Nigeria now allow customers to change between the major mobile providers every 90 days without having to change phone number. It is hoped that this move will increase competitiveness and help down drive down prices.

Currently Nigeria has one of the worst rankings for affordability of mobile service – it ranked 135 out of 161 in a 2012 report on affordability undertaken by the International Telecommunications Union. Meanwhile, Safaricom is pushing for East African governments to put talks to address high regional cross-border roaming charges on the agenda. Currently it costs about 18 KSh/minute ($0.20) to call abroad within East Africa, compared with 10 KSh/minute ($0.11) to call the US.

With its flourishing mobile money market, Kenya is also tackling the issue of how to regulate the market, especially with a view to stemming money laundering. Transfers of amounts over KSh100,000 ($1,150) could warrant investigation, in accordance with new guidelines.

Nonetheless, certain African countries still stand accused of discriminatory regulation. “Governments have a crucial role to play to facilitate further ICT development in Africa and should create a policy environment that enables ICT development, and coordinate and partner with the private sector in order to drive market growth. Some countries are much further along this regulatory path than other,” says Hagan from IDC.

In particular, regulatory bodies from some countries are charged with allowing certain companies to dominate. In Mozambique, for example, one fixed-line operator effectively decides tariffs while fixed-line operators in countries including Kenya and Namibia also enjoy unwarranted protection from regulatory bodies, claim critics.

Setting the trend
Hagan also emphasises that the role of the authorities should go beyond matters of regulation. “The public sector is also typically a major consumer of internet-enabled products and ICT services, which creates an opportunity for governments to lead by example as technology first adopters, and support citizens’ entry into the digital era,” she says. 

Kenya is perhaps a trendsetter in this regard. E-governance has been a major priority for Kenya as part of the Kenya Vision 2030. At the moment several ministries in the Kenyan government are developing electronic information platforms. But other countries are keen to also lead by example by developing e-government infrastructures. For example, in September Rwanda unveiled plans to craft an eGovernment Master Plan with the help of the National IT Promotion Agency of South Korea.

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Written by African Business Magazine

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