World Dialogue on Regulation

Rwanda is set to invite bids for a third telecommunications operator. A third operator could help meet the government’s goal of having at least 5 million GSM subscribers by 2012.

President Paul Kagame said that four companies have informally expressed interest. The four companies include Orascom, an unidentified Israel company, Korea Telecom and Zain International, which operates the Celtel brand in sub-Saharan Africa.

Mr. Kagame said, "By the end of the month we shall officially announce invitation for bids for the third license for mobile and fixed line telecommunication. I have been informally approached on different occasion by these companies. If they are interested they are open to come and express their interest formally."

Romain Murenzi, the Minister in the Office of the President in Charge of Science, Technology, Research and ICT said that a tender process will begin in three or four months. The third license is expected to be awarded to a GSM operator.

Currently Rwanda has only one GSM operator, MTN Rwanda. The other operator, Rwandatel, uses CDMA technology. MTN Rwanda has 600,000 subscribers, a 95% market share. Roughly 90% of calls initiated from the Rwandatel network terminate on the MTN Rwanda network.

Source: The Monitor - WDR/Intelecon Regulatory News. 

ICASA, South Africa's telecommunications regulator, has released proposed regulations governing mobile handset subsidies offered in exchange for lengthy contracts.

The proposals would limit contract terms to two years. Operators would also be barred from automatically renewing contracts and would be required to have the customer sign a new contract when their current one expires.

The new rules would also require that contract terms and conditions are clearer and that the contracts state clearly the contract term and early-termination fees. Operators must also send at least three messages to customers advising them that their contract is nearing its termination period. The contract would be required to state the actual cost of the handset and the value of the handset subsidy being offered. ICASA also wants to ban the SIM-locking of handsets.

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

The government introduced a 10% excise duty on CDMA networks in the Budget last week. The new tax eliminates what some considered a price subsidy that was only benefiting a few operators.

Finance minister Amos Kimunya imposed the excise tax on CDMA operators, after rival GSM operators, such as Safaricom and Celtel, complained on the grounds that they were paying excise tax. Now all wireless operators will pay 10%. The Finance Bill must still be passed by Parliament without amendments.

CDMA wireless local loop (WLL) operators Flashcom and Popote Wireless say they might increase tariffs if Parliament endorses the proposal.

"We will be forced to increase tariffs on the local Popote-to-Popote Wireless calls because of the new tax. We have not yet decided exactly by how much. But it will be around 10 per cent as the level of excise tax," said Edwin Muthi of Popote Wireless.

Mr Joe Kariuki, the CEO of Flashcom, said that Telkom Kenya’s fixed-lines should also be subject to the tax because it is the main competitor to CDMA lines. Only Telkom's fixed wireless product will be affected by the tax. He said Flashcom may increase tariffs.

Telkom Kenya representative, Richard Gitonga, said that the company was studying the implications of the excise tax before making a decision on call charges.

Through the harmonisation, the CDMA operators will lose a significant advantage they have over GSM operators Safaricom and Celtel, as calling charges are likely to converge now. This could mean few consumers will see the need for CDMA phones. CDMA WLL was slowly gaining customers because it was cheaper than GSM-based services.

Source: Business Daily - WDR/Intelecon Regulatory News. 

Peru is implementing a law that would force telecommunications providers to share infrastructure.

According to Peru’s transport and communications ministry (MTC), the new law covers shared access and use of poles, ducts and other network infrastructure. Operators that own infrastructure will also have the right to charge competing operators a reasonable fee for use of their infrastructure. The fees are to include a portion of the operational cost and maintenance of the infrastructure.

Liliana Ruiz, from the consultancy Alterna Peru, says that the law will benefit smaller operators. Ruiz added that, "the law stipulates that the operators should negotiate the fee to share the infrastructure. If they cannot reach an agreement then the regulator should determine the fee to be paid."

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

Transportation and Communications chief Leandro Mendoza has proposed the removal of SMS charges because SMS is considered a value added service and operators’ licenses only allow the collection of fees on voice calls.

The operators are opposed to the government’s proposed actions on SMS pricing, but they have expressed willingness to talk with the government about SMS charges. For instance, Smart Communications says it is willing to hold talks with the government to lower rates for text and voice calls.

Rey Espinosa, PLDT's head for regulatory affairs said the industry is coming out with its official stand on the proposal to make texting free as a means to help consumers cushion the inflationary impact of rising energy and food prices.

In a joint hearing of the House Committees on Information Communications Technology, Oversight and Legislative Franchises, the telecommunications operators claimed that the proposal would adversely affect their income and might result in poor service quality.

Text revenues contribute 55 to 60% of operators’ total wireless service revenues.

Source: Philippines News Agency and Thai News Service -  WDR/Intelecon Regulatory News.

WDR/Intelecon Regulatory News.

Bharti Airtel and Reliance Communication (RComm) disagree with the Telecom Regulatory Authority of India (TRAI) definition of a mobile virtual network operator (MVNO), which involves the "sharing of spectrum" between a mobile network operator and an MVNO. The operators have requested a review of the policy.

Bharti and Rcomm believe that the spectrum sharing required by TRAI’s definition of MVNO implies ownership or co-ownership. The operators believe that if the MVNO has an ownership stake in the spectrum, that would amount to spectrum trading, which is currently not allowed in India. An MVNO with spectrum would no longer be a virtual network operator, but a facility-based operator, making it indistinguishable from a unified access service provider, the two operators argue.

Internationally, MVNO definitions typically do not mention spectrum sharing. Both Bharti and RComm want TRAI to specify that an MVNO does not own spectrum. Bharti and RComm submit that MVNOs were successful in markets that have only a few competitors and where average revenues per user were higher than average. In India, the mobile sector is highly competitive and tariffs are among the lowest in world.

Bharti wants TRAI to allow MVNOs to offer only basic services until the market matures.

Source: Financial Express - WDR/Intelecon Regulatory News. 

China's largest mobile operator, China Mobile, is taking over fixed-line carrier, China Railway Communication (Tietong). The move marks the start of what is expected to be a major sector restructuring.

Jing Li, from Global Insight said, "the long-awaited restructuring of the Chinese telecoms market appears closer than ever before."

The government is believed to be working on a number of mergers between mobile operators and fixed-line operators in order to increase competition. A plan could be released this weekend, Li said.

"A successful restructuring will undoubtedly spur competition in the market as the resultant telecoms players square up to each other," Li said.

Any sector restructuring is expected to affect China's largest fixed-line operator, China Telecom and its smaller rival, China Netcom, as well as mobile operator China Unicom.

China is the world’s largest mobile telephony market, with 560 million GSM and CDMA users, and the government expects that number to reach 600 million soon. Mobile operators say new accounts are growing at double-digit rates, while fixed-line operators are seeing subscriber numbers that are flat or declining.

China Telecom and China Netcom have tried to increase revenues by promoting broadband, Web-based cable TV and other services, but earnings still are growing more slowly than at mobile carriers.

The government is preparing to license third-generation mobile service that will support video, Web access and other services. The new services are expected to increase mobile operators’ revenues further as new services are offered.

Source: Associated Press - WDR/Intelecon Regulatory News. 

The Philippine government wants mobile operators to offer free text messages. “We are studying this now,” Transportation Secretary Leandro Mendoza said. “Carriers should only charge for voice calls because in their franchise, they only pay for voice services. Text messaging is not really considered a [basic] service and should be free.”

Mendoza said the department intends to petition the National Telecommunications Commission (NTC) to remove texting charges, but acknowledged the move would be controversial.

“This will be a long battle. But we believe that texting should be free,” Mendoza said, adding that the Philippines has amongst the highest rates for mobile service in Asia.

The NTC has ruled that text messaging is a value-added or enhanced service that the carriers may offer.

A study by Acision shows that the Philippines is still the leading texting nation in the world on a per-capita basis, with 50 million subscribers sending 1.39 billion messages a day. India was second with over 1 billion text messages from over 220 million mobile subscribers.

Source: Manila Standard -  WDR/Intelecon Regulatory News.