 | Issue: | Global-ICT 2005 |
| Article no.: | 9 | |
| Topic: | Regulating for ICT growth | |
| Author: | Ernest C. Ndukwe | |
| Title: | Chief Executive Officer | |
| Organisation: | Nigerian Communications Commission | |
| PDF size: | 224KB |
About author
Ernest Chukwuka Ndukwe is the Executive Vice Chairman and Chief Executive of the Nigerian Communications Commission. As such, he presided over Africa’s first Digital Mobile Licence auction, in January 2001. Before the NCC, Mr Ndukwe held several senior management positions in the private sector, most recently as Managing Director of a multi-national telecommunications company. He is a past Chairman of the Administrative Council of the African Telecommunications Union, a past Chairman of the West African Telecommunications Regulators Association (WATRA), a Fellow of the Nigerian Society of Engineers (FNSE) and Fellow of the Nigerian Institute of Management (FNIM). Mr Ndukwe has been honoured by many organisations for his professional achievements including: the Distinguished Excellence Award by Nigeria IT Professionals in the Americas (NITPA), Distinguished Merit Award by the Nigerian Society of Engineers, Nigerian Achievers Award 2003 and the Nigerian Information Technology and Telecom (NITTA) Man of the Year Award 2002. The University of Technology, Owerri, awarded Ernest Chukwuka Ndukwe with an honorary Doctorate degree in Technology (DTech, Honoris Causa). He is a recipient of Nigeria’s National Honours, decorated with the rank of Officer of the Order of the Federal Republic (OFR).
Article abstract
Telecommunications can define a country’s success, or lack of it, in the world economy. The telecom regulator’s role is to create a level playing field, attract investment and foster competition and growth in the ICT sector. The key issues that affect telecom investment in Africa include sound economic and fiscal policies, minimized investment risk, stable government policies and independent regulatory institutions. It is the regulator’s responsibility to facilitate licensing and interconnection and build the human resources that drive the sector.
Full Article
The role of a regulator in a developing economy is demanding. It encompasses far-reaching and multi-disciplinary issues. To be successful, the function should be based upon well-defined objectives for investment, infrastructure development, sector efficiency, quality of service, competition, market entry, consumer protection and socio-economic development. Regulatory functions cover virtually every aspect of telecommunications network and service provision, including tariffs, technical standards, resource allocation, competition and inter-operator issues such as interconnectivity and interconnect termination rates. The state has a duty to encourage investment in the sector to provide all its citizens with affordable, high quality Information and Communications Technology (ICT) resources. Regulation draws its relevance from the State’s role as a motivator and impartial umpire. To optimise and accelerate the growth of the African telecoms sector, attention must be paid to key issues that affect investment flow. These include sound economic and fiscal policies, minimum investment risk, investment protection, support infrastructures, minimum political and bureaucratic interference, stability of the government and its policies, independent and strong regulatory institutions and good enabling laws for the sector. Some African countries still need to evolve their institutional frameworks to facilitate replacing monopolies with competition, and removing existing restrictions to local and international private sector participation. As part of this effort, the government controlled operating entities need to be divested of their regulatory and policymaking functions. The privatisation of government owned telecom enterprises and the complete liberalisation of the sector will attract new sources of investment, as well as encourage innovation and competition. Regulatory bodies need adequate funding to be effective. Some of Africa’s National Regulatory Authorities (NRA) lack the necessary funds for training, manpower development and operational effectiveness. To be effective in an environment where operators have ‘deep pockets’, a NRA must be financially and operationally independent of the network operators and service providers. NRAs must never depend on such entities for favours or handouts. Key factors for growth Licensing Licensing terms and processes must be well articulated, transparent, timely and readily available to the public. The terms and conditions must not only be investor friendly, they must also ensure consumer rights. Exclusive licensing, when necessary, must ensure adequate competition and availability of choice by guaranteeing a pre-determined optimum number of operators. Licensing policies that prevent anti-competitive conduct by dominant operators are crucial. Interconnection Regulations should ensure that new entrants are guaranteed seamless interconnection with incumbent and dominant operators. In Mali, Mozambique and Gambia, such guarantees did not exist, so incumbents refused to interconnect new mobile operators for quite some time. The regulatory agencies must be strong enough to enforce interconnection, and ensure it takes place in a timely, transparent and reasonable manner, and the interconnecting parties must have access to quick and independent dispute resolution process. To ensure progress, a non-discriminatory policy with respect to technical standard and specifications, rates and quality is essential. Import duty rebate and fiscal incentives ICT equipment and systems are expensive. Building telecommunications networks is capital intensive. It calls for the massive importation of equipment and systems. Con-sequently, the duties charged by a developing country to import equipment must be low enough not to discourage investors. Countries with high import duties discourage the growth of their telecommunications networks. These governments should look for other sources of revenue such as taxes on profits, value added taxes and others taxes to replace duties on telecoms infrastructure that limit the growth of their ICT infrastructures. Importation procedures should be simplified and special incentives given to qualified investors, manufacturers and software developers to encourage the growth of the sector and stimulate the use of ICTs. Other regulatory measures Most major investors, especially financial institutions, see an independent National Regulatory Authority as a guarantee of regulatory transparency and consistency, a fundamental concern for long-term investment. The growth of the sector, the growth of the market, depends upon the NRA to: maintain technological neutrality, guarantee a level competitive playing ground for all operators, allocate scarce resources such as frequency, numbering plans and rights of way in an objective, timely, transparent and non-discriminatory manner. The NRA must enforce the rules and regulations fairly and firmly. Human capacity building African countries must take human capacity development very seriously and make conscious efforts for skill development intervention through training and re-training of technical and managerial personnel. The establishment of national or regional training institutions is essential. The expansion of our telecommunications facilities depends upon the simultaneous development of the human resources to support the industry. We must develop knowledge, skills and competencies to understand, plan and deploy the complex networks of wireless systems, fibre optics, satellite systems, computers, Internet webs and a host of other telecommunications and information technologies. Manpower requirements for ICT infrastructural development are not limited to engineers and technicians. Financial planners, lawyers, accountants, consultants, business managers, personnel managers, etc., are also required. Skilled middle and upper management personnel need to be well trained and up-to-date. Repatriating African ICT professionals It is time Africa started getting back some of its best brains from other regions of the world. Africans rank among the top professionals in the ICT sector in several developed countries of the world. It is heart-warming to note that new Africa-based multinational companies operating in countries that have opened their markets now employ some of them. A good investment climate, therefore, helps promote the repatriation of the knowledge of Africa’s overseas ICT professionals. Despite the progress in sectorial reforms in some of Africa’s countries, much room for growth still exists in countries where competitive operators have not yet been licensed. African countries must liberalize their telecom markets, license competitive operators and introduce adequate incentives to attract private sector investment and tap into the immense potential for mobile, voice and data services that exist in the continent. The sector today requires a massive inflow of private investments for infrastructure upgrade and expansion. Half-hearted market liberalisation measures have denied many African countries access to investment dollars that could have been available to the sector from local and foreign investors. Governments must resist the pressure to protect incumbent operators and foster the timely establishment of truly competitive markets. The need for governments to provide an environment that will attract serious investors and help market forces thrive cannot be overemphasized. Policies must be aimed at attracting new sources of capital, accelerating network expansion, improving pricing, enhancing quality of service, introducing new technologies and providing access to ICT resources to all citizens at affordable prices. Critical success factors for accelerating ICT growth include a well-articulated national sector policy for market liberalisation, support by the government at the highest level, enactment of appropriate enabling laws, regulations and guidelines and the establishment of a strong, well-funded and independent national regulatory authority.
