CHAKULA Issue # 10: Telecommunication policy trends in Africa ­ highlights of key issues

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CHAKULA ISSUE NO. 10, MAY 2004: Telecommunication policy trends in Africa highlights of key issues

A Newsletter on ICT Policy issues in Africa

Newsletter of the Association for Progressive Communications (APC) Africa
ICT Policy Monitor Project to mobilise African Civil Society for ICT policy for development and social justice.

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1. Editorial
- Telecommunication policy trends in Africa ‘highlights of some key issues’
3. Links to news and resources on key telecommunication policy issues in Africa
- News Items
- Publications and Resources
4. French Monitor now available
5. Important Notices and Events
6. Subscribing to ‘Chakula’

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1. EDITORIAL

In this issue of Chakula, we bring you stories on ICT policy in Africa and in particular highlight some of the telecommunication policy issues in Africa and their potential to impact on development. Some of these issues have been the highlight of discussions at certain events and meetings during the month of May and we have selected a number of publications, news articles and discussions papers that address these issues at length which can be used as resource by civil society organizations for awareness of these issues and how they impact on development.

Finally we bring to your attention information concerning the upcoming World Summit on the Information Society (WSIS) PrepCom 1 to be held in Tunis later this month.

APC Africa ICT Policy Monitor Team

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2. TELECOMMUNICATION POLICY TRENDS IN AFRICA ­ ‘HIGHLIGHTS OF SOME KEY ISSUES

  • Introduction

During the month of May, we saw a number of activities related to policy developments in the ICT sector and impacts in Africa, the most conspicuous being the recently held ITU Africa Telecoms Conference.

During the ITU conference some major policy issues were discussed with some notable remarks on how current policies could not be attributed to the high growth and penetration of mobile telephony in Africa . Just two weeks ago
another major conference in Uganda of Africa’s ministers of economic planning were at it again on Africa policies and out of this meeting came a key warning regarding Africa’s blind implementation of liberalization policies that are not delivering results . Ghana was at it last week with a review of its national telecommunication policy and the implications and impacts of the liberalisation of the telecommunications industry . Chakula takes a closer look at the telecommunications sector some key policy issues of concern to civil society.

Telecommunications policy in many African countries like elsewhere has evolved over the last decade or so with ongoing sector reforms in the form of privatisation, liberalization of key market segments and consequent competition. Close at hand have also been regulatory reforms that have seen the establishment of ‘independent’ regulatory bodies meant to referee the market place. Behind these reforms and changing trends are policies that cut across many areas and impact on society widely.

Some of the main policy issues surrounding telecommunication policies in many countries have been on privatisation and liberalization of telecommunication sectors of the African countries. These policy reforms driven primarily by international donor agencies such as the IMF and World Bank over the last few years are now in the implementation process and what’s more as mentioned at the Uganda’s meeting, few countries are reaping some results as expected. A key question that comes to mind is, to what extend are these policies aimed at creating trade opportunities that benefit multinational corporations instead of contributing to real national development (as the international financiers tend to portray)?

  • Privatization

A closer look at the status of privatisation of Public Telecommunications Operator (PTOs) in Africa shows that less than 1% of the countries have reached full privatisation (Only Seychelles) and just about 30% have achieved partial privatisation leaving the vast majority of African countries still going through the process .

The rationale to privatise has centred around the need to ensure efficient operations of PTO through private management as opposed to state control combined with expected injections of foreign investment capital. Another reason normally downplayed in the public eye but a key factor that determines the process is the capital inflow expected to go to the
government coffers following the proceeds of the sale of the PTO.

On the opposite side of the debate, anti-privatisation arguments in general point to jobs losses, concerns on affordability and unequal access to services that can follow as governments relinquish control and management
of their telecommunications sector to private corporations.

Without paying too much attention to the statistics of how many countries have privatised and to what extent, Chakula questions how the privatisation process and its outcomes are impacting on the diffusion and much-publicised role of ICT in Development. Policy statements have indicate that privatization implementation should results in reliable and an efficient telecommunications sectors. At the same time privatisation facilitates the injection of foreign capital to the corporations intended for the financing of infrastructure development and ultimately resulting in improved service
provision and increased use of ICT services in the country.

Privatization processes in South Africa and Senegal have achieved positive results such as improved teledensity (the number of telephones per 100 people) and rural telephony penetration. The telecommunications corporations could be said to be a lot more reliable and efficient in service delivery today post-privatisation. We believe other countries going
through the privatization process such as Kenya, Mozambique and Uganda could learn from the South African and Senegalese experiences.

Some governments are eager to privatise attracted by the financial gains from the proceeds of privatisation and hope to use them as way of reducing budget deficits or paying off foreign debts. However, in Tanzania the government recently ended up getting a fraction of the anticipated amount for privatisation. The failure to accrue a significant sum has been cited as the reason the Kenyan government abandoned the privatization process altogether in 2001. A recent report from Kenya claimed that even where governments have been able to obtain good figures from the privatization proceeds, little can be accounted for in terms of use of funds for ICT development such as funds aimed at ensuring universal service or other development funds as set out in national telecommunications policies and ultimately national development goals .

  • Liberalization and Competition

At the liberalization front things have been taking place at a little faster pace compared with privatization as the majority of African countries now have some ‘basic’ liberalized sectors where most countries now have more than one mobile telephone operator and many others are going through the process of allowing a second fixed line operator into the market. The internet market segment has also been vibrant where many countries have partially liberalized the sector giving rise to a myriad of internet service providers (ISPs) although the backbone infrastructure (which connects countries to the international internet) still remains in the hands of the PTOs.

Liberalization advocates outline the benefits of competition which brings about enhanced access to affordable services, new services such as VOIP (telephone-type conversations using cheaper internet connections) and wireless technologies (which enables people to get connected and share high speed internet over a short distance) and related social-economic benefits such as increased foreign direct investments, employment and growth in the ICT sector.

Liberalization sceptics warn of depending on market forces to provide for universe service (where all citizens have access to telephony) and the potential danger of foreign investors taking over local markets where profits could be expatriated and other factors such as threatening local industry and destroying jobs.

The liberalization of telecommunications markets in Africa has been an ongoing process with some positive results in selected areas such as the increased presence of multiple service providers in both mobile and internet market segments. However much remains to be done to open up other segments of the market and especially to ensure local stakeholder
participation. At the opening of the African Ministers conference on trade the Executive Secretary of the United National Economic Commission for Africa (UNECA)warned countries of opening markets with little regard to growth and called for the adoption of policies driven by strategic development objectives .

  • Regulation

The independence of the national regulator is perceived as the most important element that in effect determines how other functions with the regulation aspects are carried out. With an independent regulator in place, then certain basic regulatory functions are expected to be implemented by the regulator the most common among these being

- Promotion of universal service to basic telecommunication services – fostering of competitive markets to ensure efficient, reliable quality and affordable services – delivery of other regulatory functions such as licencing for new services and transparent practices. – prevention of the abuse of market power by dominant firms in the market place – Protection of consumer rights including privacy rights – Promotion of increased telecommunication connectivity through efficient use of spectrum and interconnection.

Regulatory authorities are now operational in many African countries and can be applauded for their efforts to get to this stage given history where regulatory authorities were merely an extension of the government ministries they were supposed to regulate. Today we see some aspects of independence.

The establishment of independent regulatory authorities have been seen as key to the effective development and management of the ICT sector especially in the implementation of key policy areas policy directives such as liberalization of key market segments and ensuring that universal service obligations fulfilled.

Africa ICT Policy Monitor Team

References:

Allison Gillward presentation during ITU Africa Telecoms Conference

2. UNECA ES press release: 37th Conference of African Ministers of Finance, Planning and Economic Development
3. Ghana reviews telecommunications policy
4. Mike Jensen: Privatization Status of African PTOs
5. Kanu regime got Sh18b from privatisation
6. Africa needs to remove obstacles to trade, says Amoako

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3. SELECTED NEWS ARTICLES, PUBLICATIONS AND RESOURCES ON KEY TELECOMMUNICATION POLICY ISSUES IN AFRICA.

  • Moving ahead in Ghana: New telecommunications policy addresses pressing issues in the sector

On May 24, 2004, a public workshop took place in Accra, Ghana, to discuss some pressing issues in the telecommunications sector in Ghana. A discussion document was sent to all invited participants and served as a stimulus for comment and input toward the definition of a National Telecommunications Policy for Ghana. Hosted by the Ministry of Communications, the workshop benefited from the presence of various stakeholders representing the Ministry of Communication, the National Communications Authority, the telecommunications operators, ISPs, media, and civil society, among others.

This workshop will be followed-up by a public forum to be organized late June and for which all stakeholders will have the opportunity to review the draft policy and comment on it (via written comments or by
participating at the forum).

All stakeholders were invited to present their views on the issues raised in the discussion document, both through participation in the workshop, and in further written form, responding to the various topics and questions raised. This new telecommunication policy is being developed in the context of the existing ICT policy and such issues as the sector market structure, access network, licensing, universal policy and competition policy are being addressed. The discussion paper provided options for most issues and raised critical questions that need to be addressed, such as
what are essential telecommunications services (e.g., basic telephone service, internet access) in the context of the universal access policy and what are the license obligations that all carriers should comply with, among others.

APC

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NEWS ITEMS

Africa’s rapid growth of cellphones is despite, not because of, policies adopted by governments, a South African expert told an international telecoms conference in Egypt yesterday.

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More investment, less-government control and efficiency in service delivery seem to be the operative words used by the Parastatal Sector Reform Commission (PSRC) now. The government wants to shed a further 24% stake to investors with 10% going to local investors. Are we witnessing the government losing its grip on the PTO and perhaps opening up markets for a second national operator?

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Advantage Africa! was the theme of the ITU meeting in Egypt which traditionally involves an exhibition and conference (Forum). The exhibition was relatively small, but considering the size of the ICT sector on the continent not unimpressive, with several new technology suppliers demonstrating the potential of their wares to provide low cost access solutions to the continent.

The access constraints, however, lie not in the technology but in the policy and regulatory environments which predominantly prohibit the application of many of these solutions outside of the business of the incumbent, despite the high cost of service across the continent. But such issues were not the focus of most of the Forum’s presentations, despite its claim to examine and discuss telecommunications policy, development, economic and investment issues, as well as their technology and applications aspects.

By Alison Gillwald, LINK Centre, University of the Witswatersrand

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Last week, the Mozambican government presented a bill intending to fully liberalise the telecommunications market.

In 1999 the telecommunications market in Mozambique was opened to the private sector and it was through this that a second mobile phone operator set up a subsidiary to compete withthe cell phone company that is currently 100 percent owned by the public telecoms company TDM. The proposed bill aims to introduce competition in the fixed phone network in order to gradually end TDM’s monopoly over the fixed phone service. The government intends to privatise TDM this year and privatisation would involve finding a strategic partner to take a majority stake in TDM, and attract funding
for expanding the network.

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PUBLICATIONS AND RESOURCES

This paper is a strategic evaluation of telecommunications policy reform over a ten-year period 1993-2002. The focus of the paper is the three countries of East Africa – Kenya, Uganda and Tanzania. The evaluation is framed against policy objectives set out by the three governments and their outcomes as measured against relevance to stakeholders, performance by implementers based on the space created by the reforms, and success in terms of sustainability and impact.

By Muriuki Mureithi
Summit Strategies Ltd. Nairobi, Kenya

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The complex debate around telecommunications liberalization has already been faced in the developed world, and the issues now confront almost every developing country. The dilemmas are not unique to South Africa, but the current situation in this country illustrates the complex issues at stake and how real people are affected by the decisions of the government.

From Bridges.org

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This paper examines the factors driving the recent reform trends in the telecommunications sector around the world, the alternatives available to governments and their implications and interprets empirical data from developed and developing countries in order to determine how best telecom reform is conducted and assesses the role played by privatization,
regulation and liberalization in the reform’s success. It considers the tradeoffs and key issues in implementing the reform, and analyzes the impact on the incumbents’ performance, presents the major challenge of corporate governance, which has become in the past few years the center of acute debates, particularly in the United States and Europe and summarizes the main findings and lessons drawn from previous telecom reform.

By Patrick Farajian

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South African telecommunications policy-making is at a crossroads. This report looks at the current telecommunications sector of South Africa, focusing on existing and proposed government policy, and describing the interests of telecom businesses and other constituencies that influence government decision-making. It also provides analysis and recommendations for balancing the needs of ICT users and the concerns of the public and private sectors, while fostering competition and bringing down telecommunications costs.

By Bridges.org

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This paper critically examines the multiple rationales for telecom, IT, media convergence regulation on the one hand, and multisector utility regulation on the other, and the practical questions of implementation they pose, with a view to contributing to informed policy and regulatory decisions that are now underway in many countries. The conditions that may affect the creation of convergence and multi-sector regulation, ranging from underlying commonality of inputs and the behaviour of regulated firms to considerations that are specific to the regulatory process such as scarcity of regulatory resources and safeguards for regulatory independence, are examined. The paper concludes that ICT and media
convergence issues are primarily about improving the efficiency of market economies, and how changes in regulation can facilitate this process. It is likely to be of primary interest for countries that already have an established effective independent telecom regulator.

By Anders Henten, Rohan Samarajiva and William Melody

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Providing access to telecommunications services in rural areas continues to challenge policy makers and telecommunication operators alike. The problem is complex and solutions require an understanding of the technical issues
as well as the policy instruments used to create incentives for rural service providers. To that end this article presents a brief overview of both technical and policy innovations in rural telecommunications. Technologies discussed include both wireline and wireless networks while policy instruments are presented as following either an ‘obligation’ or ‘incentive’ strategy.

By R. Westerveld and C. F. Maitland

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A general description of the telecom development and present situation in Ghana. The aim of this paper is to analyze this development and situation and to discuss the reasons behind the successes and failures experienced, in particular with respect to investments.

Godfred Frempong and Anders Henten

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A presentation by Hon. Albert Kan-Dapaah, Minister of Communications and Technology, Ghana.

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APC’s new book lays out the issues and dispenses with the jargon to encourage more people to get involved in information and communication technology (ICT) policy processes. This book is for people who feel that ICT policy is important but don’t understand much about what is involved. Chapters cover basic questions such as “What are ICT and internet policies
and why should we care about them?”, studies markets and access, national ICT and internet policy and regulation and looks at specific issues in policy and regulation including privacy and security, cybercrime and gender and ICTs.

Look out for part three that focuses on National ICT and internet policy and regulation. This chapter aims to increase understanding of ICT policy and regulatory issues, especially in developing countries, by addressing the following questions:

- What are the objectives of ICT policy? – How does it link to legislation and regulation? – Who are the key players nationally and globally? – Who governs the internet? – How has telecommunications reform evolved? – What are the objectives of regulation and how doesit work? – What are key reform and regulatory issues and theirconsequences? – What can be done to make decision-making processes more participatory, democratic and transparent?

Download “ICT Policy: A Beginner’s Handbook” free of charge”:http://www.apc.org/books/policy_handbook_EN.zip

To buy “ICT Policy: A Beginner’s Handbook” ($10.00USD plus postage and packing) contact APC at handbook@apc.org

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4. POLICY MONITOR NOW AVAILABLE IN FRENCH

The Africa policy Monitor Website has gone through some improvements and we are now happy to announce that the website can be accessed in French. We have been testing the French version for the last two months and we are satisfied you will find some interesting content in French mostly covering countries from the Francophone Africa. Please do send us your comments or ideas on the website.

Version « bêta » du site francophone de l’Observatoire des Politiques des TIC en Afrique de APC

Dans le cadre de son initiative « Africa ICT Policy Monitor Project», l’association APC met en place la version francophone du site « Africa ICT Policy Monitor », appelée « Observatoire des Politiques des TIC en Afrique». Tout comme le projet, ce site a pour ambition de mobiliser la société civile africaine au sujet de l’importance des politiques relatives aux TIC.

Il référencera et mettra à disposition les informations concernant les TIC en Afrique, du point de vue des politiques des TIC et de la société civile. Ces informations concernent non seulement l’actualité, mais également:

- les « Ressources sur les politiques » : il s’agit de tout document de fond traitant un aspect particulier des nouvelles technologies de l’information, avec un focus sur les questions liées à la société civile ; – les « Evénements et Campagnes » liés aux NTIC ; – les « Organisations et Initiatives » : il s’agit de présenter, de façon non exhaustive, les organisations et initiatives de la société civile africaine traitant des TIC ; le choix est fait pour l’heure de traiter celles disposant d’un site web ; les initiatives d’autres acteurs pouvant intéresser cette société civile seront également répertoriées dans cette rubrique ; – les « Bulletins d’informations » portant sur les TIC, complétés par une sélection de liste de discussion.

D’autres informations plus analytiques seront développées plus tard. Toutefois, dans le cadre de la parution de Chakula, le bulletin d’information du projet, de courts articles analytiques pourront être publiés.

La version française du site vient s’ajouter à la version anglaise qui seule existait auparavant. Les informations publiées dans la version française concernent d’abord l’Afrique francophone, l’Afrique anglophone étant d’abord couverte par le site anglophone. Elles sont généralement classées par thème (accès, genre, logiciels libres, cadre réglementaire et législatif, sécurité, contenu local, etc.) et par pays.

Une version «bêta » du site est en développement et visible

Vous pouvez nous envoyer vos réactions et informations à l’adresse droits.afrique@apc.org

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5. IMPORTANT NOTICES AND EVENTS

A Preparatory Meeting for the Tunis phase of the Summit will take place in Hammamet, Tunisia, from 24-26 June 2004.

Important: Non-governmental organizations (NGOs) and civil society and private-sector entities who wish to participate in the preparatory meeting of June 2004 have to be accredited before registering.

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For those interested to attend the WSIS Preparatory Meeting in Hammamet (Tunisia), 24-26 June 2004: guidelines for fellowships for NGO/Civil Society representatives

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6. SUBSCRIBING TO ‘CHAKULA

Contact: chakula@apc.org

For questions, comments and contributions to the Africa ICT Policy Monitor Project

If you want to subscribe or unsubscribe to Chakula, please go to: http://lists.sn.apc.org/mailman/listinfo/africa-ir-public

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