World Dialogue on Regulation

Egypt's telecommunications regulator has postponed the bidding deadline for a second fixed-line license. The National Telecom Regulatory Authority (NTRA) cited global market turbulence and interconnection uncertainty as reasons for the delay.

The NTRA said the postponement to September 18 would give the regulator more time to "lay the foundations" for a fixed-mobile interconnection agreement. The deadline had already been moved from June 19 to July 29.

The sale of the license will end state-run Telecom Egypt's fixed-line monopoly.

In April, it was reported that Ericsson and two Arab operators had bought the conditions booklet. Other companies that expressed interest in the license include France Telecom, Orascom Telecom, Egypt's Alkan and Giza Systems, Etisalat, Atheeb, Alcatel-Lucent and Noor Financial of Kuwait.

Source: Reuters -  WDR/Intelecon Regulatory News.

During the first six months of 2008, the government of Argentina cancelled 63 telecommunications licenses.

The licenses were cancelled primarily for lack of activity. Most of the cancelled licenses were value added service licenses, for services such as data transmission. There are currently 3,344 telecommunications licenses in Argentina.

"If the companies have no activity or revenues and do not pay taxes or contribute to the universal fund, it is normal and correct for the government to cancel the licenses," Alejandro Prince of Prince & Cooke said.

Prince added that the process of issuing licenses used by SeCom, the telecommunications ministry, is very slow. In the first half of 2008, 18 telecommunications licenses were issued by SeCom.

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

Value-added service providers, including Internet service providers (ISPs), may be required to contribute to the Universal Service Obligation Fund (USOF) in order to subsidise broadband in rural areas.

Today, service providers are required to pay 5% of their adjusted gross revenue to the USOF. ISPs and other value-added service providers are exempted from this levy.

The USOF could be used to subsidise Bharat Sanchar Nigam Ltd's (BSNL’s) rural broadband services. Broadband uptake in India has been slow. Total broadband connections as of April 30, 2008, were 4.01 million. The government’s target was nine million broadband connections by 2007 and 20 million by 2010.

The Department of Telecommunications (DoT) is developing a new strategy to increase broadband penetration, particularly in rural areas. Using the USOF is part of the DoT’s strategy. The plans would be phased in and involves the use of common service centres (CSCs) being set up by the department of information technology (DIT) in schools, primary health centres and gram panchayats.

The government is also planning to subsidise its broadband initiative using existing USO funds. The DoT has about US$ 3.5 billion of unutilised resources in the USOF.

Source: The Economic Times - WDR/Intelecon Regulatory News.

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.