Sparse densities a turn-off for ICT players

Sparsely populated areas and vast geographical locations are drawbacks for information communication technology (ICT) are drawbacks in attracting new private entrants into the state dominated mobile telecommunications industry, Communication Regulatory Authority (CRAN), Chief Executive Officer (CEO), Festus Mbandeka believes.

The situation is exactly the opposite in neighbouring countries including South Africa, Zimbabwe, Zambia and some of the major economies in the continent, including Nigeria who have the privilege of larger populations and have managed to attract serious investment from independent mobile telecommunication companies to compete for space with Government.

The state-owned Mobile Telecommunications Limited Company (MTC) has been the main dominator in the telecommunication sector since independence catering for about 65 percent of the market, while Telecom, another state entity, has significant market space.

The only other player in industry independent is independently-owned Paratus Telecom, which is still making inroads in both data and voice networks. However, Mbandeka reveals that the country has registered 28 broadcasting licenses and 13 mobile telecommunications licenses.

  “We published various regulations that seek to provide a fair and just regulatory framework that promotes a favourable investment environment for new and current participants. The Communications Act 8 of 2009 directs telecommunications and broadcasting service licensees and utilities to share infrastructure in order to promote competition and other objects of the Act.  According to the Communications Act, all carriers or holders of service and technology neutral service licences must share infrastructure with other licensees or allow the latter to install or utilise telecommunications as well as broadcasting infrastructure in line with the provision of the Communications Act and regulations as published by CRAN from time to time,” he says

Although the Act outlines all procedures, Mbandeka reveals that CRAN is currently in the final stages of stakeholder consultations as it is sets to publish the regulations on infrastructure sharing that would release capital for strategic investments and provides new services offerings and decreases barriers to market entry for new players, as well as foster expansion of services into rural areas based on sharing of infrastructure to reduce capital investment.

 “These regulations will provide for passive and active infrastructure sharing in order to create a level playing field between existing licensees. The regulations intend to lower barriers for new entrants, and enable the offering of a wider range of communications services without unnecessary duplication of infrastructure.”

True to Mbandeka’s assertions, the unavailability of a multiplicity of players in the mobile telecommunication industry leaves the end consumer starved of options and with very little preference when it comes to choosing the affordable product of choice.
Although CRAN is pushing for infrastructure sharing implementation, Mbandeka admits that Namibia has a small scattered population in the rural areas and therefore infrastructure sharing is necessary and important to reduce investment costs.
“Infrastructure sharing has a myriad of advantages for the ICT industry, some of which include reduction in capital and operational investment requirements for infrastructure investments, lowering environmental impact and energy requirements, creation of a new revenue stream, release capital for strategic investments and new services as well as the decrease barriers to market entry for new players,” he explains.

Although there are some dominant players in the market that do adhere to infrastructure sharing policy, the Act requires CRAN to name dominant players in the market, to effectively safeguard fair competition for all players, especially the smaller industry participants. A licensee has to at least have 35% market share in a specific market to be declared dominant.
Mbandeka says, “A dominant carrier is required to lease any infrastructure to any other carrier. However, it is important to note that any abuse of an individual or collective dominant position is prohibited by the Communications Act and CRAN may impose specific obligations on a licensee when the licensee is deemed dominant in the market and may also restrict the provision of telecommunications equipment by a licensee that is dominant.”

He further notes that, “CRAN has published the first spectrum band plan for Namibia in May 2013 creating regulatory certainty in respect of what services may be deployed in which spectrum bands allowing for new entrants to develop their strategy and business plan in line with the spectrum available.”

CRAN has also published the national numbering plan for Namibia making provision for the introduction of number portability once implemented to further lower the barrier to entry for new entrants in that new players will have the possibility to acquire customers without inconveniencing the customer with a number change.

With the aim of attracting more players in the ICT sector, Mbandeka says, “CRAN further creates what is known as regulatory certainty, by virtue of issuing many important regulations, we create an environment of certainty for existing and possible new ICT investors. By creating certainty, investors are more inclined to participate.”

Although CRAN believes that infrastructure sharing could be an option of attracting investment, Mbandeka encourages all licensees to become more active in contributing to the key national initiative aimed at improving the socio-economic situation like the Harambe Prosperity Plan and Vision 2030.

 “From a CRAN perspective, we believe that if all licensees become more active by conducting business according to good corporate governance procedures and in a sound manner, adhere to requirements of the regulatory framework in which they operate, this would lead to robust business practise and innovation.  In addition, licensees are encouraged to have the interest of their consumers as a priority and embrace competition as a means to improve product and service offerings,” he says.