World Dialogue on Regulation

TOT and CAT Telecom could be required to pay a 4% universal service levy if they do not make faster progress in rolling out telecommunications services in rural areas.

Suranan Wongvithayakamjorn, secretary-general of the National Telecommunications Commission (NTC), said that both state-owned operators have requested more time to meet their roll-out obligations. TOT says that the slow process of procuring telecom equipment is responsible for its failure.

Both operators agreed to provide service in unserved rural areas in lieu of contributing to the universal service obligation (USO) fund. In Thailand, if operators do not want to provide service in unserved areas, they are required to pay 4% of their revenue into the fund to finance operators interested in serving remote, rural areas.

The NTC has requested more information from TOT and CAT by April 22. If they fail to provide convincing reasons for failing to meet their roll-out obligations, the NTC could order them to contribute 4% of their revenues to the USO fund.

TOT has struggled financially in part because it lost around US$ 446 million in revenue when Total Access Communication (DTAC) and True Move stopped paying an access charge to TOT in November 2006. TOT sued the mobile operators for the overdue payments. The access charge is paid by the three mobile operators on CAT concessions to TOT for connecting their calls to other networks.

More financial difficulties face TOT after an arbitration panel recently ruled that the company has to pay US$ 759 million to TT&T for letting mobile operators use TT&T's network. TOT plans to appeal the decision.

Source: Thai News Service - WDR/Intelecon Regulatory News.

The Arab Regulators Network (AREGNET) will pressure mobile operators to reduce international roaming rates.

In June, the group of regulators will present its recommendations to the Council of Arab Ministers of Telecommunications and Information Technology. The proposals would lead to a one-third reduction in roaming rates over three years.

"The Arab regulators, having considered the proposed self-regulatory principles presented by the mobile industry, believe that the industry has still some way to go in achieving the expectations of the Arab regulators and consequently the level of benefits to be passed to the consumer," AREGNET president Alan Horne said.

"However, we leave the door open for the industry to come back to us with broader reaching and more detailed proposals and measures, which could provide significant tangible benefits to the consumers within a reasonable timeframe," Horne added

The Arab Regulators Network covers twenty-one countries in North Africa and the Middle East.

Source: Cellular-News - WDR/Intelecon Regulatory News.

Ecuador's telecommunications agency CONATEL has extended Telefonica's mobile operating license by fifteen years.

Telefonica is the first mobile operator to renegotiate its contract with Ecuador’s government. In February, President Rafael Correa said America Movil and Telefonica would have to pay a combined US$ 700 million to renew their licenses. That renewal fee represents an enormous increase over the US$ 58 million the mobile operators originally paid for their licenses. CONATEL did not reveal the amount paid by Telefonica to extend its license until 2023.

Telefonica's Movistar unit controls 28% of Ecuador’s mobile market. Around 66% of subscribers use Porta, owned by America Movil. Ecuador’s mobile subscriber base is now 9.8 million, out of a population of 14 million.

Source: Associated Press - WDR/Intelecon Regulatory News.

Jamaica’s Universal Access Fund Company (UAF) has been allocated US$ 21.5 million for its e-Learning project.

The e-Learning project is using ICTs to enhance teaching and learning in Jamaica’s high schools. The ultimate aim of the project is to improve student performance in national examinations. The e-Learning Project is funded through the UAF, which is responsible for providing broadband access to participating schools.

The UAF was incorporated on May 18, 2005 and started operations on June 1, 2005. The UAF is a subsidiary of the Spectrum Management Authority. The company was set up to collect and manage the levy on all international calls terminating in Jamaica. Its core functions and duties are: collecting the universal service levy from operators, analyzing projects and making recommendations to Cabinet on funding, disbursing funds for implementation of approved initiatives and monitoring project implementation.

Source: Jamaica Information Service - WDR/Intelecon Regulatory News. 

Cuba’s government will allow Cubans to buy and use mobiles for the first time. According to figures from the International Telecommunication Union, Cuba has by far the lowest mobile penetration rate in Latin America. Until now, mobile service was restricted to foreigners and government employees.

Cuban telecommunications monopoly ETECSA, 27% owned by Telecom Italia, said it would start offering mobile service to the general public within days. Some Cubans already have mobiles registered in the name of foreigners or their work places. They will now be allowed to subscribe to mobile service in their own names, ETECSA said.

President Raul Castro has started to remove some of the restrictions on Cubans as he attempts to help improve living standards. Castro has promised to quickly remove "excessive regulations and prohibitions".

Other consumer restrictions are also being removed. Starting in April, Cubans will be allowed to purchase computers and DVD players for the first time. Two years ago, DVD players were being confiscated by customs officials upon arrival in Cuba.

One outstanding concern related to consumer goods is that wages are paid in Cuban pesos, but consumer goods must be purchased using convertible pesos (CUCs) worth 24 times more than pesos. Cubans will pay for their mobiles with prepaid cards bought in CUCs. About 60% of Cubans have access to hard currency from cash remittances sent by relatives living abroad, through bonuses or through tips from foreign tourists.

ETECSA said the hard currency it generates through its mobile service would be invested in the expansion of its fixed line network.

Source: Reuters - WDR/Intelecon Regulatory News. 

The Telecom Regulatory Authority of India (TRAI) has called a meeting with telecom sector representatives to discuss an alternative model of imposing access deficit charges to fund the roll out of rural telephones.

TRAI had promised to end the ADC by 2008. However, political reasons could be driving TRAI to continue with the charge for at least one more year. According to government sources, the method of imposing the levy could be modified. Today, operators pay a percentage of their annual revenues as ADC.

One model proposed by TRAI involves giving a discount worth US$ 5.00 to each rural subscriber. The model has not been finalised.

ADC was imposed on telecom operators by TRAI to subsidise services in rural areas. Since BSNL has the largest number of rural subscribers, over 90% of the ADC funds have been allocated to state-owned BSNL. BSNL is in favour of extending the ADC while private mobile operators are opposed to continuing the levy.

“There is no justification to continue the ADC regime any more. TRAI should stick to its commitment of ending the charges by April 2008,” said a representative from a mobile operator.

“The TRAI had itself said in its consultation paper that ADC was not required any more…We don’t think there is any rationale to subsidise rural telephony any more as operators are themselves rolling out services in these areas,” said an industry representative.

Source: The Hindu Business Line - WDR/Intelecon Regulatory News.

The US$ 28.8 million acquisition of Transtel by Neotel, South Africa’s second national operator, was approved by the country’s Competition Tribunal.

Through the acquisition, Neotel gains 550 more staff, valuable networking facilities, a presence in over 100 locations and access to last mile networks connecting to Transtel customers.

Fani Zulu of Neotel said that buying Transtel was important in order to gain access to its network and its technicians.

“Its network is complementary to ours and it’s the last mile that connects to customers, so we can expand that and quickly bring our services to private customers,” he said.

Transtel is a division of Transnet. Transnet will now appoint Neotel as its sole provider of voice and data services for five years. This move will increase Neotel’s annual revenues by at least US$ 75.0 million.

Source: Lesley Stones (Business Day) - WDR/Intelecon Regulatory News.

The government of Kenya is selling 25% of mobile operator Safaricom.

Kenyan Finance Minister Amos Kimunya released the schedule for the Safaricom IPO, which will result in the listing of a 25% stake in the company on the Nairobi Stock Exchange (NSE) on June 9. The government will retain 35% ownership after the IPO is complete. Safaricom has been valued at US$ 2.9 billion. The Kenyan government hopes to raise at least US$ 735 million from the sale.

"I expect we will be generating Ksh50 billion (US$ 735 million) which will go towards ensuring we have an infrastructure to make Kenyan companies more competitive," Kimunya said.

Participants in the IPO will be divided into two categories: domestic investors, including all citizens of the East African Community (EAC), and international investors, which will be made up of foreign institutional investors. Of the 10 billion shares available, international fund managers, investment banks, pension funds and trust managers will get at least 35% of the shares. Esther Koimett, Kenya's Investment Secretary said the government will claw back 15% of the shares set aside for the institutional investors if local demand for shares outstrips supply.

Kenya's newly created Privatisation Commission is overseeing the sale of the shares. The offer opens on March 28 and closes on April 23.

Source: East African Business Week - WDR/Intelecon Regulatory News.