Nigeria Advises Ethiopia against Telecom Libralisation Pitfalls

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Bashir Gwandu

Emma Okonji

The Non-Executive Chair of the Commonwealth International Telecommunications Union (ITU) Group (CIG) and a former Commissioner of the Nigerian Communications Commission (NCC), Dr. Bashir Gwandu, has advised Ethiopia to learn from Nigeria as it moves ahead to liberalise its telecommunications industry for private sector investment.

Gwandu stated this recently while delivering his lead keynote speech at the opening of the Innovation Africa Digital Summit (IAD) 2019 in Addis Ababa, attended by telecoms executives and governments from Africa and around the world.

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.

Gwandu discussed 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.

He stated the need for strong and good regulatory framework, encompassing sensible set of rules that encourages investment and protects the consumer and requiring,effective, professionally competent and sufficiently empowered as well as sufficiently financed regulatory institution.

“Good enable 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,” he said.

Gwandu suggested that government’s 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.

He said the legal framework apart from guaranteeing independence of the regulator, must enable flexibility of the regulator while 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.

Gwandu added: “Liberalisation of 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 slow government bureaucracy to be approving investment funding and yet compete effectively.”

He stated that in looking holistically at the telecoms market, 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 liberalisation 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 further stated that “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.”
“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,” 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 encouraged Ethiopia to participate actively in 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, and advised the government to set objectives properly and to balance pricing of spectrum with rollout obligations.

“For rapid expansion of networks, Ethiopian government which controls land across the country should streamline approval for Right of Way (RoW) and site acquisition, and to make the process a simple and one-stop shop activity” Gwandu further advised.

He also stated that tax holiday has proven to be useful in some markets but even more importantly, 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 telecoms.

Gwandu stated that competition planning should be examined carefully so that 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.