11-12 June 2013 Radison Blu, Dakar, Senegal

Requirements and challenges in developing networks and infrastructure in rural areas in West Africa

By: Kolubahzizi T. Howard Director of Strategy Liberia Telecommunications Authority

Outline
Introduction Present status of the ECOWAS Telecom Sector Requirements for Infrastructure Investments Challenges for Infrastructure Investments Conclusion

INTRODUCTION

Introduction

ICTs have been very successful in Africa over the past decade driven by sector reform, resulting in improved availability, quality and reduced cost of connectivity. Policy changes have triggered reforms and the way telecom investments have been financed, making telecommunications unique among infrastructure sectors in Africa (Williams et al, 2011). 557.2 million (62.1%) Africans lived within the reach of a GSM network as of 2006 340.7 million (37.9%) of inhabitants did not have access to voice communications. 314.6 million (94%.0 %) of urban populations had access compared with only 242.6 million (43.1 %) of rural populations (Mayer et al, 2009).

Introduction
From 1998 - 2008 $5 billion yearly on average has been invested in Sub-Sahara Africa (1 %of total GDP). Most of the investment comes from the private sector targeting mobile infrastructure development. 60 % of this investment has gone to Nigeria and South Africa. Countries promoting competition in the sector and encouraged new operators to enter the market have received higher levels of investments than countries with limited competition. Despite the progress made in the mobile sector, other sectors of the telecommunications market have not developed as rapidly. The reform agenda on the continent is not complete and there remain barriers to entry in sectors (Mayer et al,
2009).

Introduction
Telecommunications Subscribers, Sub-Saharan Africa, 19982008

PRESENT STATUS OF THE ECOWAS TELECOM SECTOR

Present status of the ECOWAS Telecom Sector

Infrastructure Status World Bank and ITU figures indicate the following: Between 1998 and 2008 the number of mobile users grew more than 247 million, increasing mobile penetration rate from less than 1% to almost 33%. For ECOWAS, during the same period, subscriptions grew from 23,530 to 35,670,924. Nigeria and South Africa combined account for 43% of the total number of mobile subscribers in Sub-Sahara Africa. At the same time the number of fixed lines increased from 1.4 subscribers per 100 in 2000 to 1.5 in 2007 and dropped back to 1.4 in 2008, amounting to 16 million fixed-line subscribers.

Present status of the ECOWAS Telecom Sector

Regulatory Status

All ECOWAS countries have introduced new laws and regulations covering telecommunications, with the majority establishing National Regulatory Authorities (NRAs) to implement rules governing the sector and protect consumers interests. Effective regulations supportive of sustainable investment requires regulatory independence in the decision making process which must be nondiscriminatory, transparent, objective and free of political influence.

Present status of the ECOWAS Telecom Sector

78% of the regulatory heads in Sub-Sahara Africa are appointed by either: Heads of State, the Legislature or a Council of Ministers. In some countries sector ministers retain power to appoint NRA heads, leading to increased political influence over regulatory decisions (Williams et al, 2011). Private investment is contingent on a conducive regulatory environment. While liberalization has spurred the ICT revolution in Sub-Sahara Africa, the state of liberalization across the region is incomplete. The process of liberalizing fixed-line markets has not progressed much.

Present status of the ECOWAS Telecom Sector

Licensing regimes across the region are gradually evolving from technology specific licenses to service specific licenses. However, licensing restrictions in some countries on terrestrial backbone networks, international gateways and submarine cables limit the size of operators networks, while obstacles in obtaining rights of way and outright monopolies continue to hinder private investments (Williams et al, 2011).

REQUIREMENTS FOR INFRASTRUCTURE INVESTMENTS

Requirements for Infrastructure Investments

Universal coverage of voice telecommunications - when more than 98 % of the population lives within range of a mobile telephone signal. Universal broadband coverage - when a land connection for a public broadband facility (such as an Internet caf) is available within close proximity of more than 98 % of the population. To ensure universal voice connectivity in Africa and maintain the infrastructure requires annual investments of 0.2% of the combined GDP of the 51 countries studied. This translates to $2.1 billion annually or $18.7 billion from 2007 through 2015 (Mayer et al, 2009).

Requirements for Infrastructure Investments

In assessing the public funding gap for universal coverage the total investment is divided into two major categories: The efficient market gap: areas where full coverage is commercially viable and likely to be funded by private investment under efficient and competitive markets; and, The coverage gap: areas lacking the potential for full commercial coverage.

Requirements for Infrastructure Investments

The coverage gap is then divided into two economic zones: The sustainable coverage gap: areas with enough commercial viability to support operating costs, but not capital costs, of ICT infrastructure; and, The universal coverage gap: areas lacking sufficient market viability to cover either capital or operating costs.

Requirements for Infrastructure Investments

It is expected that voice infrastructure will cover more than 92% of Africas population by 2015 through private investments, dependent upon the promotion of effective competition and mobile private sector resources (Mayer et al, 2009) NRAs must therefore ensure effective and competitive regional and national markets in telecommunications and services.

CHALLENGES FOR INFRASTRUCTURE INVESTMENTS

Challenges for Infrastructure investments

Major challenges to increasing infrastructure investments in West Africa include the following: 1. Completing the sector reform agenda by revising existing laws to establish full competition to drive network expansion into the rural areas and boost the development of more advanced segments of the market; 2. Ensuring that NRAs are institutionally and financially independent of both government and the sector and that their legal powers to implement regulatory decisions are strengthened; 3. Revising licensing frameworks to accommodate new market entrants in all market segments and promoting rapid technological change and competition. This requires reasonable license prices and licensing conditions;

Challenges for Infrastructure investments

4. Shifting governments responsibilities away from the ownership and management of network operators to the development of enabling legal and regulatory environments for the growth of the sector; 5. Using government finances to develop competition, ensuring cost based wholesale pricing and reserve capacity for potential new entrants; 6. Provisioning low-cost international access infrastructure by preventing monopoly control over bottleneck facilities such as terrestrial backbone networks, international gateways and cable landing stations; 7. Promoting high-bandwidth backbone infrastructure development through removing licensing restrictions and the introduction of new private sector operators;

Challenges for Infrastructure investments

8. Stimulating innovative use of wireless technologies by restructuring spectrum allocation and management to increase competition; 9. Improving spectrum management through increased investments in systems and resources to increase the amount of spectrum available for broadband; 10. Promoting universal access to ensure extensive ICT/telecommunications availability through innovative approaches that provide direct incentives to operators to provide service in rural areas; 11. Identifying new partnerships and new sources of funding and maximizing the potential of existing infrastructure funding mechanisms; and,

Challenges for Infrastructure investments 12. The continued capacity building by NRAs to sustain their professional and institutional capacity to meet the challenges of the rapidly evolving telecommunications regulatory environment.

Relationship between Effective Regulation and Investment in Telecommunications

Source: Impact of Effective Regulation on Investment, European Competitive Telecommunications Association (ECTA) ICT Regulations Toolkit Section 2.1

CONCLUSION

Conclusion

The region has made significant gains in ICT/telecommunications sector development, but more needs to be done to increase network/infrastructure investments. The sector reform agenda must be completed to create the required enabling competitive environment that attracts sustainable private investments. NRAs must regulate effectively. Without effective regulations private sector investments are stifled. Governments must provide the funding to meet the universal coverage gap to provide access to all inhabitants.

REMEMBER!

Lets develop an information society within the ECOWAS region - promote both private sector investments and public funding of ICT network infrastructure for our rural inhabitants.

THANK YOU FOR YOUR ATTENTION