World Dialogue on Regulation

The National Telecom Regulatory Authority (NTRA), Egypt's telecommunications regulator, will auction a second fixed-line license on June 19. Telecom Egypt is the country’s sole fixed-line operator.

An NTRA announcement said that interested parties would be required to pay US$ 10,000 to obtain auction details beginning March 13. Companies planning to bid would be required to provide an auction guarantee of US$ 1.8 million.

Etisalat Egypt, a unit of the Emirates Telecommunications Corp, says it would bid for the license. Etisalat led a consortium that paid US$ 2.9 billion to become Egypt's third mobile operator in 2006. Orascom Telecom and Egyptian Post have also said they would bid for the license.

Egypt's Raya Technology and Communication said in December it was considering bidding for the license through an alliance with an international operator. Raya works in mobile phone distribution, IT services and call centres business.

Source: Reuters - WDR/Intelecon Regulatory News.

This week, the government of Bangladesh awarded three licenses allowing private operators to offer international services. In a separate auction, two firms were awarded ICX exchange licenses, which allow for the provision of interconnection between voice networks, both domestic and international. Both auctions saw the end of Bangladesh Telegraph and Telephone Board’s (BTTB’s) monopolies.

The three local companies - Bangla Trac Communications, Novotel and Mir Telecom - won fifteen year international services licenses after offering 51.75% of their revenues to the Bangladesh Telecommunication Regulatory Commission (BTRC), commission spokesman Abbas Faruq said.

"The companies will be given licenses in 10 days," Faruq added.

Two other local companies - M&H Telecom and Getco Telecommunications - won fifteen year concessions to operate ICX exchange services. The two operators will pay 65.75% of their revenues to the BTRC. Each licensee is permitted to establish three ICX switches.

Bangladesh has licensed several private operators to offer mobile and fixed-line service. However, state-owned BTTB had a monopoly on international calling since Bangladesh’s independence in 1971. The government’s attempts to preserve the international calling monopoly by banning VoIP services were circumvented, despite the BTRC fining four mobile operators US$ 90 million for illegally transferring international calls in the country.

Source: Agence France Presse and TeleGeography - WDR/Intelecon Regulatory News.

India's Department of Telecommunications (DoT) has approved recommendations from TRAI, the telecommunications regulator, that permit operators to share the active component of their tower networks.

Operators are already allowed to share the passive infrastructure in their tower installations. Passive infrastructure includes the towers, shelters, cooling systems, electric power supply, diesel generators, air conditioning and site leases that enable a network operator to install the active infrastructure such as base station equipment, antennas and backhaul connectivity to the operator’s network.

Sharing active infrastructure should enable operators to save time and money when rolling out networks in new areas as they can now install a larger proportion of their infrastructure onto existing towers. TRAI says that the country would require approximately 330,000 towers by 2010. There are now approximately 100,000 towers in India. The new infrastructure sharing regulations could aid in achieving the government’s objective of having 500 million subscribers by 2010.

In a separate move, the DoT is also proposing new regulations to mandate the sharing of passive infrastructure in areas with high levels of network congestion and where planning restrictions make it difficult to install new towers.

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

Indotel, the Dominican Republic's telecommunications regulator, awarded a contract to fixed line operator Codetel to build broadband infrastructure in rural areas.

Codetel, a subsidiary of América Móvil, chose not to accept the government subsidy of US$ 4.65 million and will finance the project independently. Twenty operators competed for the project. Centennial Dominicana was the only bidder other than Codetel eligible to participate in the final round of the auction, but chose not to bid. The project will provide telephony and internet access to about 1.5 million people living in approximately 500 communities in the poorest areas of the country.

Codetel is the country’s largest fixed and mobile operator, as such, it was not considered a surprise that they won the contract, Miguel Rosario of consultancy Rosario Hiche said. Codetel intends to use a combination of UMTS, ADSL, WiFi and WiMax to complete the project. Claro, Codetel’s mobile arm, is licensed to offer 800MHz CDMA and 1900MHz GSM, so could offer wireless access over its mobile networks. However, Rosario believes WiMax would be the most appropriate technology choice. Three companies rolled-out mobile WiMAX services last October in the Dominican Republic.

Indotel has now built 650 digital access and training centres. On February 14, the company opened three new training centres.

Source: Business News Americas - WDR/Intelecon Regulatory News.

China's Ministry of Information Industry (MII) and the National Development and Reform Commission (NDRC) announced that mobile roaming charges would be lowered effective March 1.

Under the new rate plan, mobile users will pay US$ 0.08 per minute to make calls outside their local service area, and US$ 0.05 per minute to receive calls when they travel to another province. These charges compare with current charges of US$ 0.18 to US$ 0.21 per minute for roaming service. This means that China’s 539 million mobile subscribers will see rate reductions ranging from 54% to 73% that will be implemented starting March 1 and no later than May 1. Service providers could be allowed to delay the implementation of the new plan if time is required to upgrade billing systems.

The announcement also made it clear that no further fees, which are currently an additional US$ 0.01 for every six seconds, would be charged if the roaming charge is incurred on a long distance call. The country's move to reduce prices is in response to increasing complaints from mobile users about the telecom industry making large profits by charging monopolistic prices. Local services currently cost US$ 0.05 per minute for postpaid subscribers, and US$ 0.08 for prepaid users. Some users also receive free incoming calls, depending on their rate plan.

Source: Xinhua - WDR/Intelecon Regulatory News.

Ecuador’s government is demanding that America Movil and Telefonica pay US$ 700 million between them to renew their mobile licenses.

President Rafael Correa is attempting to restructure agreements in a number of sectors to increase state participation in deals he says are unfair to the state.

The proposed license renewal rate is a 600% increase over the US$ 100 million that both operators paid in the 1990s for their concessions. Both firms are in talks with the government over license renewals, which expire this year.

"Between the two operators, the current price of their concessions is about $700 million, even when the price of those concessions could be higher because of how that market is growing," said Jaime Guerrero, the head of CONATEL, the telecommunications regulator.

"A concession cannot cost the same when they had zero clients and now there are about 10 million mobile users," Guerrero said.

America Movil's Porta affiliate and Telefonica's Movistar unit control 96% of the country's mobile market. For America Movil, its Ecuador unit represents only 4.6% of the company's total subscriber base.

Correa has said he wants mobile operators to improve service and lower rates. He has warned that if companies did not comply with the new regulations they might have to leave the country.

Source: Reuters - WDR/Intelecon Regulatory News.

Nigeria's 2006 privatisation of Nitel has failed to turn around the operator and the government wants a new investor to take control.

The government sold 51% of Nitel to Nigerian firm Transcorp for US$ 500 million, but Transcorp has been unable to raise enough money to overcome Nitel's problems.

"Incessant changes and disagreements between board members and top management in Transcorp are a major factor leading to instability in strategy and programme implementation," said a document stating the government's position.

The government still holds 49% of Nitel. The government now wants Transcorp to sell 27% of Nitel to a new investor, which would then purchase a further 24% from the government to take control.

Transcorp was set up with the support of then President Olusegun Obasanjo by a group of his business allies. During the final months of Obasanjo's tenure, Transcorp purchased a number of state assets, including a Hilton hotel in Abuja and a stake in an oil refinery.

Since the end of Obasanjo’s term in May 2007, Transcorp has struggled. In August, investors bought only 36% of the company’s IPO, which had been intended to raise money to repay what Transcorp borrowed to buy Nitel. The new government also took back the oil refinery, saying the privatisation had been improperly conducted.

Source: Reuters - WDR/Intelecon Regulatory News.

Zambia’s telecommunications regulator has delayed applications to enter the mobile phone market after failed bidder Vodacom Zambia took legal action to prevent new entrants.

Vodacom Zambia has filed papers to prevent new license bids, claiming unfair treatment by regulators. Previous negotiations between Vodacom Zambia and the Communications Authority (CA) stopped when the parties could not agree on a frequency band. The CA now says it will wait for the court's ruling before awarding any more licenses.

Vodacom Zambia had partnered with South Africa's Vodacom, but their efforts to secure a mobile license failed. Vodacom South Africa has now abandoned the Zambian venture. Celtel Zambia is the largest mobile operator, followed by MTN Zambia, a subsidiary of South Africa's MTN and Cell-Z, part of state-owned Zamtel.

Source: Reuters - WDR/Intelecon Regulatory News.

The Communications Commission of Kenya (CCK) will institute a unified licensing regime starting 1 July 2008.

The new regime is considered necessary because of changes in the telecommunications sector. CCK is gathering stakeholder feedback in an effort to finalize the new rules. The draft regulations themselves are the result of initial consultations with stakeholders.

In the new licensing regime, there are three license types: network, service and content providers. Network providers - unlike the current system whereby they acquire licenses based on network type - will be granted a unified licence that will include satellite, mobile and fixed-line services. Operators will be able to offer any type of service to end users.

In September 2004, CCK announced its intention to implement a unified technology-neutral licensing framework. Convergence between technology and services has resulted in a situation where multiple services use a single network.

Source: The Nation - WDR/Intelecon Regulatory News.

Namibia could have among the highest telecommunications costs in Africa once the value added tax (VAT) exemption for prepaid services is eliminated.

In 2007, the Ministry of Finance announced that prepaid airtime cards would be subject to 15% VAT starting February 1, 2008.

According to the Namibian Economic Policy Research Unit (Nepru), the tax change, which will happen on Friday, would have a negative effect on economic growth. Economist Christoph Stork says that 92% of mobile users are on prepaid service, and the addition of VAT would likely lead to a decline in Namibia’s economic competitiveness.

Discussing the taxation changes, Stork said, "The burden of that increase is likely to be borne by consumers, the poor and informal small businesses in particular, depending on how much of the increase the operators’ pass-through."

Stork went on to say, "The Government should be concerned with cheaper and wider access to information and communication technologies, in particular for the poor rather than imposing more obstacles to universal access."

He used Uganda as an example of a country whose telecom sector - although in some regards a leading model in Africa - has had its growth stifled by tax increases.

Stork also said three actions are urgently needed from the government: a new telecommunications act, an independent regulator for the telecom sector and clear policy guidelines for the regulator.

"Instead of milking the sector through raising taxes, more effort needs to be undertaken to reduce costs of services. The introduction of competition to Namibia's mobile sector has already led to a considerable price drop," Stork said.

Source: The Namibian - WDR/Intelecon Regulatory News.