Telecommunication Regulatory Reforms Driven by Next Generation Networks:                                         A Case St...
of services independent of and over different                                  Figure 1: NGN architectureaccess and core n...
promising sector for the country and                     instituted by the International Monetaryespecially for its young ...
providing for the corporatization Kenya Post             mandate from the KCA, 1998, the regulatorand      Telecommunicati...
categories demanded that the regulator                   emerging         technological            opportunities,adopted  ...
The new environment has also encouraged                  2006 identifies the promotion of (PPP) as athe Government on the ...
as committing significant public funds                           ions/closed_consultations/WLAN_setowards the development ...
https://www.cia.gov/library/publicati        ons/the-world-factbook/index.html        [Accessed March 2010]    10. Governm...
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Telecommunication Regulatory Reforms Driven By Ngn A Case Study Of Kenya

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Next Generation Networks (NGN) enable the delivery of multiple services independent of and over different access and core networks. This trend of separation of infrastructure and services is challenging existing regulatory models. To take advantage of the opportunities that NGN offer governments are supporting the development of dynamic and responsive regulatory frameworks, to enable incumbents and new entrants to offer new and innovative services.
This paper is provides the regulatory responses to NGN in Kenya using the metrics of regulation and licensing, competition, technology neutrality, resource allocation, interconnection, public participation, universal access and infrastructure sharing.

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Telecommunication Regulatory Reforms Driven By Ngn A Case Study Of Kenya

  1. 1. Telecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of KenyaAbstract challenge of changing their focus fromNext Generation Networks (NGN) enable traditional economic drivers such asthe delivery of multiple services agriculture to become knowledge-basedindependent of and over different access and information economies. In facing thiscore networks. This trend of separation of challenge the, availability and accessibilityinfrastructure and services is challenging to ICT infrastructure is essential. Nationalexisting regulatory models. competitiveness is a key factor in the promotion of Next Generation NetworksTo take advantage of the opportunities that (NGN). Consequently, governments areNGN offer governments are supporting the increasingly supporting initiatives indevelopment of dynamic and responsive technology, product and service innovationregulatory frameworks, to enable in a bid to becoming leaders in cutting edgeincumbents and new entrants to offer new technology.and innovative services. Changes in business models and theThis paper is provides the regulatory regulatory framework in the recent past haveresponses to NGN in Kenya using the largely been influenced changes inmetrics of regulation and licensing, technology. These changes are driven bycompetition, technology neutrality, resource the burgeoning consumer demand for aallocation, interconnection, public ubiquitous networked society deliveringparticipation, universal access and efficient and convenient services. Theinfrastructure sharing. telecommunication industry is characterised 1.1. Introduction by convergence in technologies, allowingThere is growing recognition of the social for the delivery of multiple services andand economic benefits of information and applications accessible from any location.communication technologies (ICT). Many Convergence has led to the growth of NGNdeveloping nations are faced with the which enables the provision of a full rangeTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 1 of 8 
  2. 2. of services independent of and over different Figure 1: NGN architectureaccess and core networks. It is expected thatthis characteristic of NGN will enable futurenetworks to become more pervasive,flexible, and transparent and offer a moreconsistent user-experience.There are various definitions for NGN. Source: GSM Association (2007)NGN definitions vary among partiesdepending on their interests and This paper is a study of regulatoryorganizational objectives. Technically, interventions that encourage innovation,NGN are defined as packet-based, investment and transition to NGN in Kenya.broadband, quality of service (QoS)-enabled 1.1. Introductionnetworks, in which service-related functions The Republic of Kenya is situated in Eastare independent of the underlying transport- Africa, astride the equatorial latitude. 1related technologies . These characteristics Kenya’s population is growing at aboutenable unfettered access for users to 2.9% percent per annum and currently totalsnetworks and to competing service providers about 36 million, 80 percent of whom resideand/or services of their choice. NGN support in the rural areas. A widely dispersed ruralgeneralized mobility that allows consistent and young population, in addition to theand ubiquitous provision of services to recognition of the correlation of ICT and 2users . economic development influence the adaptation of communication technologies. The Kenyan government’s ‘Vision 2030’ development strategy which aims at steering the country to middle-income level has                                                            1  ITU‐T’s Definition of NGN.  Available at :  elected ICT as one of the main drivers tohttp://www.itu.int/ITU‐T/ngn/definition.html [Accessed August 2009]  this economic growth and is central towards achieving industrialization. The Kenyan  government has targeted the Business  Process Outsourcing (BPO) as the new butTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 2 of 8 
  3. 3. promising sector for the country and instituted by the International Monetaryespecially for its young people. Regulatory Fund (IMF) and the World Bank whichreform is expected to ultimately lead to the required the government’s adoption of aachievement the ‘Vision 2030’ which aspires policy framework paper titled, "Economicfor a country firmly interconnected through Reforms 1996-1998”. Liberalization andICT providing business services via the restructuring of the telecommunicationsInternet to companies and organizations in sector was a major component of thethe developed world. reforms that included the separation of postal and telecommunications services;Apart from the national strategy outlined in selling a 30% stake in the incumbentthe Vision 2030, the government has operator to a strategic investor and throughenacted the Kenya Communications public flotation; joint ventures for cellular(Amendment) Act, 2009. Though not phone; and liberalization of pay-phones andstudied in this paper, the act is evidence of Very Small Aperture Terminal (VSAT)political support for the creation of a services.forward-looking and enabling environmentfor the development of NGNs and provides A consequence of the reforms was thefor a coherent approach to regulating the publishing of the Telecommunications andconverged ICT sector Postal Sector Policy Guidelines in 1997 (revised in December 2001) that provided a 1.2. Regulatory Reform roadmap for restructuring and liberalizationTelecommunication sector reform in Kenya of the sector. The policy provided forhas been driven by liberalization and orderly expansion and modernization of theconvergence of technologies resulting in the telecommunications infrastructure up to thereview of the regulatory framework through year 2015 through the inclusion of specificintroduction of additional licence categories targets for telephone penetration andand technology neutrality, respectively. privatizationThe telecommunication sector in Kenya now The sector policy paved way to thedriven by market forces was previously enactment of the Kenya Communicationsdriven by external pressures. These include Act of 1998 (KCA, 1998) which repealed thestructural adjustment program (SAP) Kenya Posts and Telecommunications ActTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 3 of 8 
  4. 4. providing for the corporatization Kenya Post mandate from the KCA, 1998, the regulatorand Telecommunications Corporation licensed players in various market segments.(KPTC), which served both as an operator The policy guidelines granted TKL a five-and regulator (ITU, 2001). The KCA, 1998, year exclusivity period (legal monopoly)split of KPTC into three entities the Postal from 1999 to 2004 in the provision of theCorporation of Kenya (PCK), Telkom international internet gateway, internationalKenya Limited (TKL) and the voice and data networks and services,Communications Commission of Kenya national voice and data networks and(CCK) performing the regulatory functions services, local voice and data networks andof the telecommunications, radio services in Nairobi province. Thecommunications and postal sector. Further, Government’s intention in granting of thethe act provided for the formation of the legal monopoly was to give adequate timeNational Communications Secretariat (NCS) for the company to recouping the investmentcharged with policy formulation and the on the network and reengineering theAppeals Tribunal for communication dispute organization without the ‘risk’ ofresolution. competition.The mandate of the CCK as provided by the In fulfilling the regulatory agenda ofKCA, 1998 is to license and regulate determining the level and terms of entry intelecommunications, postal and radio different market segments and adoptingcommunications services in the Republic of processes for the award of licenses toKenya. The regulator’s functions include: service providers, the new market structureIssuance of licenses for all was reviewed in 2002. The new structuretelecommunications and postal services; outlined the liberalization framework inPrice regulation; Establishment of various market segments, the licensinginterconnection principles; Type approval of requirements and procedures with a view toequipment; Development of numbering hastening investment, promoting penetrationplans; consumer protection and Management of service and enhancing fair competition.of the radio frequency spectrum. However the rapid pace of technologicalGuided by the market structure contained in development that resulted in the blurring ofthe policy guidelines, 2001 and deriving its distinction between various licensingTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 4 of 8 
  5. 5. categories demanded that the regulator emerging technological opportunities,adopted a progressive approach of increase competition and develop the sector.restructuring of the market (CCK, 2005c). The ULF has heightened activity in theKenya like India, redefined the kind of internet sector. Operators and servicelicences required by different players with providers are claiming their stake in nichethe intention to migrate existing licensees to markets by taking advantage of thea Unified Licensing Framework (ULF) by opportunities that the framework present by1st July 2008. positioning themselves to distributeThe ULF permits any form of bandwidth within and across the country’scommunications infrastructure to be used to boundaries through the building of in-provide any type of communications service. country and cross-border fibre networks.The framework also provides the regulator This move by operators to increase coveragean opportunity to progressively structure the and enlarge their customer base has lead tomarket by redefining the kind of licences an initiative to harmonize regulatoryrequired by different players, providing frameworks in East African countriesequal licensing opportunities to all players through the East Africa Regulatory Post andunder a first-come-first-serviced basis, Telecommunications Organizationfacilitating direct interconnectivity between (EARPTO).network operators and limiting The ULF has encouraged service providersanticompetitive practices arising from to diversify service offerings, Wananchivertical integration and cross-subsidization. Group, a local ISP has launched cable-basedThere are three broad licence categories in triple play services offering a combinationthe ULF: Network Facilities Provider (NFP), of television, broadband and telephonyApplications Service Provider (ASP) and services brand named Zuku. WananchiContents Services Provider (CSP). Group aims at increasing the availability andThis licence categorization differs from that reducing the costs of connecting to theof India where licences are classified on the internet as well as pushing up customerbasis of regulatory authorization required. numbers.The main objective of the ULF is to harnessTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 5 of 8 
  6. 6. The new environment has also encouraged 2006 identifies the promotion of (PPP) as athe Government on the basis of the national strategy for the development ofvision to use ICT for economic telecommunications infrastructure. PPP aretransformation to support the deployment an attractive model in countries, such asnational and international fibre optic Kenya, that are building up a technologynetworks to complement investment efforts sector from a low base. Countries areby private sector. These networks viewing the availability of broadbandimplemented through public private networks as significant nationalpartnerships (PPP) include Fibre Optic infrastructure and are setting specific goalsNational Network (FONN) and The East through enactment of appropriate policiesAfrican Marine Systems (TEAMS). and regulation, as well as committing significant public funds towards theFigure 2: Fibre Optic National Network development of these networks. Figure 3: The East African Marine SystemThe government’s intention is to ensurediversity in the provision of affordable,reliable and high capacity international 1.3. Conclusionconnectivity based on the open access Many countries including Kenya areprinciple. The availability of cheaper viewing the availability of networks withinternational broadband access through these broadband capabilities as significantfibre projects is expected to create new national infrastructure and are settingbusiness ecosystem and subsequently socio- specific goals through enactment ofeconomic growth. The national ICT policy, appropriate policies and regulation, as wellTelecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 6 of 8 
  7. 7. as committing significant public funds ions/closed_consultations/WLAN_setowards the development of these networks rvices.pdf [Accessed March 2010]Political support and the establishment of a 5. CCK (2005c) Public Consultation onflexible and responsive regulatory Intention to Merge Licence. [online]framework are critical to encourage Available at:investment in NGN infrastructure. http://www.cck.go.ke/links/consultat ions/closed_consultations/Merge_licReferences ense.pdf [Accessed March 2010] 1. CCK (2008b) CCK Annual Report 6. CCK (2004a) Regulations Governing 2007/2008 Available at : Number Portability. [online] http://www.cck.go.ke/resc/publicatio Available at: ns/annual_reports/CCK_Annual_Rep http://www.cck.go.ke/links/consultat ort07-08.pdf [Accessed March 2010] ions/closed_consultations/Number_p 2. CCK (2008c) Unified Licensing ortability2.pdf [Accessed March Framework [online] Available at: 2010] http://www.cck.go.ke/licensing/telec 7. CCK (2004b) Ruling on Internet oms/telecom_marke_structure.pdf Service Providers dispute on services [Accessed March 2010] offered by Telkom Kenya Limited. 3. CCK (2005a) Proposed Guidelines [online] Available at: for the Implementation and http://www.cck.go.ke/regulations/do Provision of Voice over Internet wnloads/Ruling_on_Internet_Service Protocol (VoIP) services. [online] _Providers_dispute_on_services_off Available at: ered_by_Telkom_Kenya_Limited.pd http://www.cck.go.ke/links/consultat f [Accessed March 2010] ions/closed_consultations/VOIP_ser 8. CCK (2010) Closed Consultations vices.pdf [Accessed March 2010] [online] Available at: 4. CCK (2005b) Guidelines on the use http://www.cck.go.ke/links/consultat of Wireless Local Area Networks ions/closed_consultations.html (WLANS) On Non Protected Basis. [Accessed March 2010] [online] Available at: 9. CIA (2009) The World Factbook http://www.cck.go.ke/links/consultat [online] Available at:Telecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 7 of 8 
  8. 8. https://www.cia.gov/library/publicati ons/the-world-factbook/index.html [Accessed March 2010] 10. Government of Kenya (2009) Kenya Communications (Amendment) Act, 2009. [online] Available at: http://www.communication.go.ke/me dia.asp?id=775. Accessed August 2009] 11. Government of the Republic of Kenya (2007) Vision 2030 Abridged English Version [online] Available at: http://www.planning.go.ke/ [Accessed August 2009] 12. GSM Association (2007) Economic study on IP interworking [online] Available at: http://www.gsmworld.com/document s/ip_intercon_sum.pdf [Accessed March 2010]Telecommunication Regulatory Reforms Driven by Next Generation Networks: A Case Study of Kenya Page 8 of 8 

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