Requirements and challenges in developingnetworks and infrastructure in rural areas in WestAfricaBy:Kolubahzizi T. HowardDirector of StrategyLiberia TelecommunicationsAuthority11-12 June 2013Radison Blu, Dakar, Senegal
Outline• Introduction• Present status of the ECOWAS Telecom Sector• Requirements for Infrastructure Investments• Challenges for Infrastructure Investments• Conclusion
Introduction• ICTs have been very successful in Africa over the pastdecade driven by sector reform, resulting in improvedavailability, quality and reduced cost of connectivity.• Policy changes have triggered reforms and the waytelecom investments have been financed, makingtelecommunications unique among infrastructure sectorsin Africa (Williams et al, 2011).• 557.2 million (62.1%) Africans lived within the reach of aGSM network as of 2006• 340.7 million (37.9%) of inhabitants did not have accessto voice communications.• 314.6 million (94%.0 %) of urban populations had accesscompared with only 242.6 million (43.1 %) of ruralpopulations (Mayer et al, 2009).
Introduction• From 1998 - 2008 $5 billion yearly on average has beeninvested in Sub-Sahara Africa (1 %of total GDP). Most ofthe investment comes from the private sector targetingmobile infrastructure development.• 60 % of this investment has gone to Nigeria and SouthAfrica. Countries promoting competition in the sectorand encouraged new operators to enter the market havereceived higher levels of investments than countries withlimited competition.• Despite the progress made in the mobile sector, othersectors of the telecommunications market have notdeveloped as rapidly.• The reform agenda on the continent is not complete andthere remain barriers to entry in sectors (Mayer etal, 2009).
Present status of the ECOWAS Telecom SectorWorld Bank and ITU figures indicate the following:• Between 1998 and 2008 the number of mobile users grewmore than 247 million, increasing mobile penetration ratefrom less than 1% to almost 33%.• For ECOWAS, during the same period, subscriptions grewfrom 23,530 to 35,670,924.• Nigeria and South Africa combined account for 43% of thetotal number of mobile subscribers in Sub-Sahara Africa.• At the same time the number of fixed lines increased from 1.4subscribers per 100 in 2000 to 1.5 in 2007 and dropped backto 1.4 in 2008, amounting to 16 million fixed-line subscribers.Infrastructure Status
Present status of the ECOWAS Telecom SectorRegulatory Status• All ECOWAS countries have introduced new lawsand regulations covering telecommunications, withthe majority establishing National RegulatoryAuthorities (NRAs) to implement rules governingthe sector and protect consumer’s interests.• Effective regulations supportive of sustainableinvestment requires regulatory independence in thedecision making process which must be non-discriminatory, transparent, objective and free ofpolitical influence.
Present status of the ECOWAS Telecom Sector• 78% of the regulatory heads in Sub-Sahara Africaare appointed by either: Heads of State, theLegislature or a Council of Ministers. In somecountries sector ministers retain power to appointNRA heads, leading to increased political influenceover regulatory decisions (Williams et al, 2011).• Private investment is contingent on a conduciveregulatory environment.• While liberalization has spurred the ICT revolutionin Sub-Sahara Africa, the state of liberalizationacross the region is incomplete.• The process of liberalizing fixed-line markets hasnot progressed much.
• Licensing regimes across the region aregradually evolving from technology specificlicenses to service specific licenses.• However, licensing restrictions in somecountries on terrestrial backbonenetworks, international gateways andsubmarine cables limit the size of operators’networks, while obstacles in obtaining rightsof way and outright monopolies continue tohinder private investments (Williams etal, 2011).Present status of the ECOWAS Telecom Sector
Requirements for Infrastructure Investments• Universal coverage of voice telecommunications - whenmore than 98 % of the population lives within range of amobile telephone signal.• Universal broadband coverage - when a land connectionfor a public broadband facility (such as an Internet café)is available within close proximity of more than 98 % ofthe population.• To ensure universal voice connectivity in Africa andmaintain the infrastructure requires annual investmentsof 0.2% of the combined GDP of the 51 countries studied.This translates to $2.1 billion annually or $18.7 billionfrom 2007 through 2015 (Mayer et al, 2009).
In assessing the public funding gap for universalcoverage the total investment is divided intotwo major categories:• The efficient market gap: areas where fullcoverage is commercially viable and likely tobe funded by private investment underefficient and competitive markets; and,• The coverage gap: areas lacking the potentialfor full commercial coverage.Requirements for Infrastructure Investments
The coverage gap is then divided into twoeconomic zones:• The sustainable coverage gap: areas withenough commercial viability to supportoperating costs, but not capital costs, of ICTinfrastructure; and,• The universal coverage gap: areas lackingsufficient market viability to cover eithercapital or operating costs.Requirements for Infrastructure Investments
• It is expected that voice infrastructure willcover more than 92% of Africa’s population by2015 through private investments, dependentupon the promotion of effective competitionand mobile private sector resources (Mayer etal, 2009)• NRAs must therefore ensure effective andcompetitive regional and national markets intelecommunications and services.Requirements for Infrastructure Investments
Challenges for Infrastructure investmentsMajor challenges to increasing infrastructure investments inWest Africa include the following:1. Completing the sector reform agenda by revisingexisting laws to establish full competition to drivenetwork expansion into the rural areas and boost thedevelopment of more advanced segments of themarket;2. Ensuring that NRAs are institutionally and financiallyindependent of both government and the sector andthat their legal powers to implement regulatorydecisions are strengthened;3. Revising licensing frameworks to accommodate newmarket entrants in all market segments and promotingrapid technological change and competition. Thisrequires reasonable license prices and licensingconditions;
4. Shifting government’s responsibilities away from theownership and management of network operators tothe development of enabling legal and regulatoryenvironments for the growth of the sector;5. Using government finances to developcompetition, ensuring cost based wholesale pricingand reserve capacity for potential new entrants;6. Provisioning low-cost international accessinfrastructure by preventing monopoly control overbottleneck facilities such as terrestrial backbonenetworks, international gateways and cable landingstations;7. Promoting high-bandwidth backbone infrastructuredevelopment through removing licensing restrictionsand the introduction of new private sector operators;Challenges for Infrastructure investments
8. Stimulating innovative use of wireless technologies byrestructuring spectrum allocation and management toincrease competition;9. Improving spectrum management through increasedinvestments in systems and resources to increase theamount of spectrum available for broadband;10. Promoting universal access to ensure extensiveICT/telecommunications availability throughinnovative approaches that provide direct incentivesto operators to provide service in rural areas;11. Identifying new partnerships and new sources offunding and maximizing the potential of existinginfrastructure funding mechanisms; and,Challenges for Infrastructure investments
12. The continued capacity building by NRAs to sustaintheir professional and institutional capacity to meetthe challenges of the rapidly evolvingtelecommunications regulatory environment.Challenges for Infrastructure investments
Relationship between Effective Regulation and Investment inTelecommunicationsSource: Impact of Effective Regulation on Investment, European CompetitiveTelecommunications Association (ECTA) ICT Regulations Toolkit Section 2.1
• The region has made significant gains inICT/telecommunications sector development, butmore needs to be done to increasenetwork/infrastructure investments.• The sector reform agenda must be completed tocreate the required enabling competitiveenvironment that attracts sustainable privateinvestments.• NRAs must regulate effectively. Without effectiveregulations private sector investments are stifled.• Governments must provide the funding to meetthe universal coverage gap to provide access toall inhabitants.Conclusion
REMEMBER!Let’s develop an information society within the ECOWASregion - promote both private sector investments andpublic funding of ICT network infrastructure for our ruralinhabitants.