communication sector reform: liberalisation, law and ... · liberalisation, law and regulation and...

RURA - Fair Competition - Quality of Service - Development

Col D. Mudenge Eng. MCM ,Col D. Mudenge Eng. MCM ,ViceVice--Chairperson Regulatory Board &Chairperson Regulatory Board &

Ag Director General Ag Director General -- RURARURA

Communication Sector Reform: Communication Sector Reform: Liberalisation, Liberalisation,

Law and Regulation Law and Regulation and Universal Service policy and Universal Service policy

in Rwanda.in Rwanda.


IntroductionIntroduction

The Rwanda, being one of AfricaThe Rwanda, being one of Africa’’s smallest s smallest Countries, is no doubt the smallest country in Countries, is no doubt the smallest country in East and Central Africa. East and Central Africa.

It has enjoyed a period of stability and democraticIt has enjoyed a period of stability and democraticinfrastructure set up for over twelve years since itsinfrastructure set up for over twelve years since its1994 Genocide Aftermath. 1994 Genocide Aftermath.


IntroductionIntroduction

Unlike Asian countries, Rwanda like other SubUnlike Asian countries, Rwanda like other Sub--Saharan countries is still striving to translate theSaharan countries is still striving to translate thebenefits of its small size, stability, security and thebenefits of its small size, stability, security and theunprecedented clear political support from the topunprecedented clear political support from the topleadership and the expected benefits of the leadership and the expected benefits of the Communication sector into a real national growth. Communication sector into a real national growth.


IntroductionIntroductionThe overall objective of this presentation is to highlight keyThe overall objective of this presentation is to highlight keysteps of Rwanda Communication Sector Reform through :steps of Rwanda Communication Sector Reform through :

a.a. Liberalisation and Commercial Environment Liberalisation and Commercial Environment structure ensuring effective and workable ICT Policy structure ensuring effective and workable ICT Policy implementation;implementation;

b.b. Establishment of laws and Regulation framework of Establishment of laws and Regulation framework of the ICT policy that respond to the Government vision the ICT policy that respond to the Government vision 2020 perspective;2020 perspective;

c.c. Establishment of Universal Access Policy Establishment of Universal Access Policy implementation (required) outputs that shall contribute implementation (required) outputs that shall contribute towards the poverty alleviation efforts and thereby towards the poverty alleviation efforts and thereby enhancing economic development.enhancing economic development.


WHY A VISION ?WHY A VISION ?

All things are created Twice !“Begin with end in mind is based on the principle that all things are created twice. There‘s a mental or first creation and a physical or second creation to all things.“

Stephen R. Covey The 7 Habits of Highly Effective People


Digital Divide

Digital Divide

Universal AccessUniversal Access

Law and Regulatory Framework

Law and Regulatory Framework

Liberalisation, Commercialisation and Privatisation

Liberalisation, Commercialisation and Privatisation

Communication Sector Reform: Liberalisation, Law and Regulation and Universal Service

Policy in Rwanda.


The Role of Communications' Sector Reform in achieving a competitive

liberalised market environment:


The Digital DivideThe Digital Divide


Benefits from full and open competition Benefits from full and open competition of Communications Sectorof Communications Sector

Efficient Regulation:

Greater transparency and predictability

Fair &efficient

Competition:Consumer savings/

Lower prices.

Many Operators:benefit from increased

demand

Workers benefitfrom increased

Employment/Jobs.

Economic performance/Economic Stimulus.Economies expand (GDP),

Gvt benefit From increased tax

revenues

Digital Divide Reduces:Society benefit

From new applications for

health, education etc.


PEST ANALYSISPEST ANALYSIS

CommunicationsReform

PoliticalStable

Full Support

EconomicSteady progress

TechnologyNew Challenges

SocialSignificant impact

• Status of government• Priorities: provision of basic services, job

creation, poverty elimination, growth• Importance of corporate citizenship• Greater focus on governance and

corruption eradication : e-gov

• Deregulation of industry through changes in legislation

• Uncertainty re regulation of new players and their participation in the market • Rapid change and growth in complexity with many new players in the market

• Convergence of technologies and industries• Uncertain consumer uptake of new technologies, readiness and overload• Innovations to influence profitability

• Growing middle-class with growing potential uptake of operators’ services

• HIV/Aids has a significant impact on society with uncertainty about long-term effects e.g. labour, healthcare etc.

• Growing poverty in certain areas• Evolution of media space• E-school

• Status of competitive environment• Status of economy; • Rate of inflation• Uncertainty regarding the impact of oil

prices and exchange rates continue• Pricing models and operational systems

are complicated


Laws and Regulation framework:Laws and Regulation framework:


Laws and Regulation framework:Laws and Regulation framework:•• RURA Law ( Convergence issue)RURA Law ( Convergence issue)•• Telecom Law > < Telecom Law > < ICT Law in preparationICT Law in preparation•• Competition LawCompetition Law


Laws and Regulation framework:Laws and Regulation framework:

Rwanda has integrated the East African Rwanda has integrated the East African Community. Community.

In order to harmonise with East Africa Regulatory In order to harmonise with East Africa Regulatory Framework, Rwanda needs urgently to work withFramework, Rwanda needs urgently to work withothers member states for the harmonisations ofothers member states for the harmonisations offollowing issues, Summarised in form of questionsfollowing issues, Summarised in form of questionsas follows : as follows :


Does the regulatory framework facilitate the provision of Does the regulatory framework facilitate the provision of different services over different platforms (e.g., technology different services over different platforms (e.g., technology NeutralityNeutrality……) ?) ?

Does the regulatory framework support full competition? Does the regulatory framework support full competition?

Does the regulatory framework allow service providers to Does the regulatory framework allow service providers to offer multiple services? offer multiple services?

What are the regulatory policies for these new technologiesWhat are the regulatory policies for these new technologiesand services with regard to numbering, spectrum, universaland services with regard to numbering, spectrum, universalservice, and interconnection? service, and interconnection?


Does the EAC CountriesDoes the EAC Countries’’ legal framework contain the necessary legal framework contain the necessary legislation to support an ICT environment (e.g., intellectual legislation to support an ICT environment (e.g., intellectual property laws, computer crime, electronic transactions, data priproperty laws, computer crime, electronic transactions, data privacy vacy

and security)? and security)?

How much turnHow much turn--around time and process is required for thearound time and process is required for theEAC CountriesEAC Countries’’ legal framework to respond to future changes in thelegal framework to respond to future changes in thesector? sector?


Reforms in Communications:Reforms in Communications:Law and Regulatory perspective Law and Regulatory perspective

The primary purpose of reform is :The primary purpose of reform is :

To get more consumers with better, new, and less costlyTo get more consumers with better, new, and less costlyservices. services.

To Address and Accommodate Pressures from ICT To Address and Accommodate Pressures from ICT LiberalisedLiberalised Market :Market :

incumbents who want ongoing protection, incumbents who want ongoing protection, new entrants seeking special deals/considerations or helpnew entrants seeking special deals/considerations or help( e.g. Right of ways, Interconnection agreement, ( e.g. Right of ways, Interconnection agreement, ……))


Example of An Effective RegulatorExample of An Effective Regulator

An effective regulator is An effective regulator is Adequately funded. (GBP 164m p.a. for Adequately funded. (GBP 164m p.a. for OFCOM)OFCOM)Effectively skilledEffectively skilledWorks in the best interest of the consumerWorks in the best interest of the consumerCreates a level playing fieldCreates a level playing field


Key Issues in Regulatory EstablishmentKey Issues in Regulatory EstablishmentPolicy and Legal frameworkPolicy and Legal frameworkFunctions and Role of AgencyFunctions and Role of AgencyInstitutional and governance frameworkInstitutional and governance frameworkFundingFundingIndependenceIndependenceLead time and Reform ImplementationLead time and Reform ImplementationTransparency, Predictability & FlexibilityTransparency, Predictability & Flexibility


POLICY MAKER:MININFRA

Consumers/Gvt Agencies

RwandatelMTN-Rwandacell/No Competition : Low QoS

No Choice

A Direct Hand



Consumers/Consumer

Associations

Terracom-RwandatelMTN-Rwandacell/Artel/Altech , ISPs

Broadcasting & Other Media

RURA

No Competition : Low QoS

No Choice

Still A Semi Direct Hand



Consumers/Consumer

Associations

RwandatelMTN-Rwandacell/

Artel/ ISPsBroadcasting & Other

ICT Media

RURA

Fair Competition : High QoS

Many /Multiple Choices

Tariffs : More & more decrease


The role of Communications' Sector Reform The role of Communications' Sector Reform in Achieving Universal Accessin Achieving Universal Access

in a competitive environmentin a competitive environment


Overview of Universal Access and Universal Service

The terms universal access and universal service are often used interchangeably, because of their similar meanings, but the difference between the two terms is more than a nuance.

Universal service means that every household in the country has telephone service – traditionally, a fixed-line phone for every household. This is a practical policy objective in many developed countries, but in most developing market countries, it is only a long term goal.


Overview of Universal Access and Universal Service

While universal service may be a realistic policy objective in developed countries, universal access is a more feasible practical goal in many developing countries.

Universal access policies seek to increase access to telecom services on a shared basis, such as on a community or village-wide level.

Universal access programs typically promote the installation of public payphones or public call offices in rural and remote villages or low-income urban areas with the aim of providing a basic and initialconnection to the telecommunications network.


Rural V Urban Economics Funds?Rural V Urban Economics Funds?

Urban SiteUrban SiteCostsCosts

Power Grid?Power Grid?Local Transmission to Local Transmission to switchswitchEasy to reach for site Easy to reach for site engineersengineers

RevenueRevenueMostly outgoing callsMostly outgoing calls

Uneconomic if Uneconomic if interconnect is highinterconnect is high

High site utilisationHigh site utilisationDistribution relatively Distribution relatively easyeasy

• Rural Site– Costs

• High Fuel Cost• High Transmission Cost

– Especially on satellite• Costly to maintain

– Revenue• Mostly incoming calls

– Uneconomic if interconnect is low

• Low site utilisation• Distribution is difficult


Balance!!!Balance!!!

Focus on the end user TerminalsFocus on the end user Terminals

Handsets and ComputersHandsets and Computers……

WLAN, LAN

GSM/WCDMA/CDMA2000 CDMA EVDO

DSL, Cable TV

PANBluetooth


ACCESS IN DEVELOPING MARKETS IS ABOUT THE ACCESS IN DEVELOPING MARKETS IS ABOUT THE COST OF ACCESS, NOT USAGE PRICESCOST OF ACCESS, NOT USAGE PRICES

To him, the barrier to get connected to mobile is…

1. How much to join?

2. How much to stay connected?

3. How much to use?

IN THAT ORDER !!!

The “affordability” barrier for the poorest is:• cost of phones and SIM packs• any minimum spend requirement to remain connected, then• the price of making calls (and even then, compare this to the cost

of a trip to town!)

The focus should be cost of access & End User Terminal Handset !

“ACCESS”: MANDATORY EXPENSE“USAGE”: DISCRETIONARY EXPENSE


Universal Access Policies

The funding of universal access support schemes oftenrequires some form of regulatory intervention.

On one hand,

Governments can impose performance requirements or levies on operators, essentially directing the pay the costsof providing universal access, either through ratemechanisms or through a special “universal access”


Universal Access Policies

On the other hand,

Governments can provide incentives for carriers to provideuniversal access/service on their own. Some form of compensation on carriers that extend their networks or improve service is target areas.

This policy choice, between setting mandate and providingincentives, is often captured or termed as pay or play.

That is a carrier can either pay to support universal accessor undertake to provide it itself.


Universal Access Fund- UAFPresidential Decree

• 2 % of Annual Turnover of each operator• Define Remote or Rural Areas Targets• Invite Bidders to compete• Select the best Bid• Monitor the implementation

Fund Mobilisation/ Equipment from International ICT Organs

• CDMA donated by ITU 2004-2005, Rwandatel was selected• WCDMA donated by China Government, Rwandacell 2007

Government of Rwanda commitment to build a National Broadband Infrastructure ( Fiber Optic, VSAT and Kalisimbi Project ( DVB-T applications)


Universal Access as an opportunity ( Pay or play)

The 30 Districts constituting Rwanda trough their respective Provinces can proactively encourage communities to participate in the development of the Communications sector in their respective areas.

This understanding maturity will provide new opportunities and alternative means of financing universal Access.


Universal Access as an opportunity ( Pay or play)

Rwanda Regulators and Policy-markers are discussing andmay borrow some of the following ideas as ways in whichuniversal access can be promoted:

* Micro-credit programmes. Bangladesh Case Study* Build, Operate and Transfer-BOT "or "Build, Transfer and Operate-BTO" Arrangements e.g. Indonesia and Thailand* Cooperatives and Community-Owned Systems.* Regional Operators. E.g. South Africa ( Under-Served Areas Licences: USALs )


The Market Efficiency Gap and the True Access GapThe Market Efficiency Gap and the True Access Gap

Source: World Bank


Regulatory FrameworkRegulatory FrameworkExperienceExperience

Sharing experiences in the different markets:Sharing experiences in the different markets:

CRASA (Communications Regulators Association of CRASA (Communications Regulators Association of Southern Africa)Southern Africa)

ARICEA (Association of Regulators of Information and ARICEA (Association of Regulators of Information and Communication for Eastern and Southern Africa)Communication for Eastern and Southern Africa)

WATRA (West African Telecoms Regulators Association)WATRA (West African Telecoms Regulators Association)

Etc.Etc.


Rwanda Integrated ICTRwanda Integrated ICT--led Socioled Socio--Economic Attainment TargetEconomic Attainment Target

Universal Access/ Service• Availability• Affordability• Accessibility

DRIVERS:• Peace & Stability• Rule of law & Respect of

Property rights• Absence of Corruption• Fair-Competition

LAW & REGULATION FRAMEWORK

• Regulate terms of entry –“managed liberalisation”

• A biased framework with open access as a central mechanism

• Intervene to create arbitrage opportunities

• Remove legal barriers to invest –“full liberalisation”

• An objective framework with open access as a remedy

• Intervene to correct market failure

Access to existing investmentInvestment in new access

LIBERALISATION, COMMERCIALISATION &

PRIVITISATION

Universal Access/Service as an opportunity

("Pay or Play")

UAF for only the True Access Gap

Transparency & Predictability


The Rwanda Communications Reform should The Rwanda Communications Reform should be an ongoing processbe an ongoing process

Law & Regulatory Framework

Policy

Economic Growth: Communications Sector Growth

Employment, GoodGovernance, GDP

UniversalAccess

Liberalisation

Commercialisation

Privitisation


Thank you

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