WayForward@ITREALMS

Saturday, February 17, 2007

70 countries yet to embrace liberalisation


The Global System for Mobile Association (GSMA) has said that liberalisation has facilitated reduction in the cost of international call tariffs in some African countries, including Nigeria, just as it decried lack of similar policies in 70 countries globally, while 21 of such nations are on the continent.

Nigeria was specifically mentioned as witnessing a slash in international calls by 90 per cent since liberalisation of telecommunications sector in 2001.

GSMA in a study released recently on “Gateway Liberalisation: Stimulating Economic Growth” noted that Kenyan mobile operator Safaricom, for example, received an international gateways license in 2006 and was able to cut international call prices by 70 per cent, whereas, “the price of international calls from Nigeria has fallen by more than 90 per cent since liberalisation.”

The association also said that consumers enjoy more reliable and cheaper services after the introduction of liberalisation of telecom market in any given country, thereby boosting competition.

According to the study, with liberalisation on stream, “the economy benefits from increased investment, job creation and export-led growth.”

The study noted that some of the 21 affected African countries are Benin; Botswana; Burkina Faso; Cameroon; Cape Verde Islands; Central African Republic; Chad; Djibouti; Equatorial Guinea; Eritrea; Ethiopia; Gambia; Libya; Namibia; Niger; Sierra Leone; Sudan; Swaziland; Tanzania; Tunisia; Zimbabwe.

The group pointed out that by contrast, monopolies hold markets back, citing an instance with Bangladesh, where it was discovered that an international gateway monopoly is maintained, telecoms investment as a percentage of gross domestic product (GDP) is 70 per cent lower and call prices are two to three times higher than the average for developing countries.

Chief Government & Regulatory Affairs Officer at GSMA, Mr. Tom Phillips, noted for “Bangladesh-based businesses, competing in the global market, the cost of communicating is substantially higher, putting them at a competitive disadvantage.”

He pointed out that since countries first began introduction of competition into the international gateways market more than 20 years ago, the trend has gathered pace and the benefits to consumers, business and governments in an increasingly global economy, are now beyond doubt.

He also said that the study showed that as many as 70 countries have yet to recognize the importance of competition in this vital gateway to international markets. In a mobile-centric world, and particularly in developing economies, monopolies throttle development and add significant costs.”

Equally, the study found that the old arguments used to sustain international gateway monopolies are simply no longer valid because, whether competition is outlawed or not, new technologies, such as Voice over Internet Protocol (VoIP) and Very Small Aperture Terminal (VSATs), could bypass the monopoly, and account for up to 6 per cent of international call volumes, even though use of such technologies is often illegal.

“The incumbent international gateway monopoly business model is past its sell-by date; governments should liberalise this market immediately and all stakeholders will benefit,” he said.

Average calculated from the case study sample were driven from Kenya, Malta, Morocco, Nigeria, Sri Lanka, Indonesia, Egypt and Bangladesh.GSMA noted that VoIP, a category of hardware and software enables people to use the Internet as the transmission medium for telephone calls, while VSAT an earthbound station used in satellite communications of data, voice and video signals, excluding broadcast television.



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2 comments:

OSB said...

Hello Remmy,
Your blog is informative and good job for being consistent and up to date! i have a few questions;
does liberalisation in telecoms entail opening up ur country to competition?
In Nigeria today are all operators able to bypass NITEL for routing international calls?

osa

OSB said...

Hello Remmy,
Your blog is informative and good job for being consistent and up to date! i have a few questions;
does liberalisation in telecoms entail opening up ur country to competition? and in Nigeria today are all operators able to bypass NITEL for routing international calls?

osa