The SADC Communications Environment

Transcription

1 Strengthening of economic and trade related capacities and competences in SADC The SADC Communications Environment An Assessment of Communications Policies, Laws and Regulations in SADC Member States Presented to GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH Germany / Botswana October, 2013

2 Your contact person within GFA Consulting Group GmbH is Christopher Smith Strengthening of economic and trade related capacities and competences in SADC The SADC Communications Environment: An Assessment of Communications Policies, Laws and Regulations in SADC Member States Short term Report Prepared by: Charley Lewis & Luci Abrahams, LINK Centre, University of the Witwatersrand, Johannesburg Address GFA Consulting Group GmbH Eulenkrugstraße Hamburg Germany Phone +49 (40) Fax +49 (40) E mail christopher.smith@gfa group.de Prepared by: LINK Centre, University of the Witwatersrand 2

3 1 EXECUTIVE SUMMARY In the period 1996 to 2013, ICT infrastructure, services and content in particular electronic communications services (telecommunications and broadcasting) have come to be seen as facilitators of growth, contributing to the improvement of welfare, enabling traditional merchandise trade, as well as offering new trade opportunities. The benefits of the global telecommunications revolution presents opportunities for economic transformation in the broad services sector, as well as in the agricultural sector, both of which make proportionately large contributions to GDP in the countries of the SADC region. Mobile telecommunications, electronic data communications on the Internet and the shift to a digital broadcast environment make economic services and transactions relatively accessible to low income users, high income users, large firms and SMEs alike, although local access and usage prices are still high compared to world prices. The high price for fixed Internet access on the continent has seen a shift to mobile Internet access via smart phones and tablet devices. The experience of the African continent, and global trends, indicate that cycles of innovation in ICT infrastructure, e commerce and e services are fostered by competitive markets for infrastructure, services and content. SADC Member States seek to take advantage of the opportunities offered by ICT related trade and the benefits this can offer to a country s economy. However, global and regional competition to attract investment for ICT related trade is fierce. SADC Member States need to take further steps to liberalise and advance their telecomms and broadcast markets, in order to build e commerce and digital economies. Therefore, along with various institutional, legal and regulatory measures, SADC Member States need to undertake regional and multilateral commitments to make their ICT environments more attractive to investors and to meet consumer demand. The report is divided into three sections. 1.1 The Making of Regional Digital Economies: Themes and Approaches in Policy and Regulation The second section of the report, therefore, broadly introduces the theory pertaining to the influence of the sector on development, noting the character of the sector as an ecosystem in which the actions of various stakeholders can provide foundations for advancement; the importance of global trends in privatisation, market liberalisation and competition, as well as in technological and services innovation, with respect to facilitating economic development in both developed and developing countries. Analysis of the emergence of the WTO regime is briefly discussed. The theoretical discussion is supported by reference to country case studies with African relevance including work on e transformation. The literature investigating and analysing the relationship between the availability of telecommunications infrastructure and services on the one hand and economic growth on the other hand is considered in some depth. Economic impact studies demonstrate multiple Prepared by: LINK Centre, University of the Witwatersrand 12

4 economic impacts, including the causal relationship between liberalisation and the introduction of effective competition in telecomms markets on the one hand and productivity and quality improvements on the other hand. The evidence relating to the appropriate sequencing of ICT sector reform suggests that liberalisation and the introduction of competitive markets produces greater positive impacts than does privatisation. In respect of current technology trends, the literature shows the need for policy and regulatory reforms to encourage advanced telecomms and broadband evolution, including through the development of national broadband strategies and plans in the context of competitive markets. These contributing factors suggest the need for a broader frame of reference for future development of the broad electronic communications sector than the more narrow historical frame set in the 1994 GATS agreement or the 1996 Reference Paper on Basic Telecommunications. Global trends in electronic communications policy and regulation have inclined towards alignment with the WTO commitments, even where countries have not signed up to the commitments. This is partly because of the ongoing influence of the WTO trade agreements, combined with the progressive application of the ideas contained in the GATS, its annexes and the regulatory reference paper on basic telecommunications, because of the perceived benefits of the broad principles and regulatory approaches. 1.2 The Communications Environment in the SADC Region The third section of the report presents a regional economic overview and country economic and electronic communications sector profiles, including data on the share of services in the economy, and on Internet and broadband access which represents the future of the communications services sector. It provides a summary perspective across all SADC Member States in respect of each of the five focus areas for telecommunications, broadcasting and audio visual services, namely (i) the market structure, (ii) regulatory regime and state of play, (iii) level of competition, (iv) state of liberalisation and (v) international commitments. Finally, the section provides overall conclusions and recommendations designed to offer ideas as a baseline for the SADC negotiations on the liberalisation of communications services. It may be argued that a review of the commitments made by countries, compared with actual practice of SADC countries, may reveal that commitments are few, yet policy and regulatory practice has tended towards either partial or open competition. It may be further argued that, while many limitations to full competition still exist amongst countries in the region, most countries have increased the number of firms participating in electronic communications markets compared to a decade ago; have regulated interconnection more or less effectively; have introduced forms of universal service obligation that do not create significant barriers to competition; and have a significant degree of transparency in licensing decisions. Those aspects of the WTO commitments which may be less well advanced in the SADC region are the degree of regulatory independence from suppliers of services; and the regulation of scarce resources such as numbers, rights of way and frequencies. The current Prepared by: LINK Centre, University of the Witwatersrand 13

5 phase of negotiations should advance the state of liberalisation and competition, with due attention to advancing modes of supply and limiting restrictions based on legal status, investment and nationality. Such negotiations should advance the participation of local firms in electronic communications markets, not only the participation of globalised firms. Some degree of insight into individual country practices will be gained through this study, though it is important to note that this is a baseline study which requires continuous updates. 1.3 Country Profiles The fourth section contains 15 detailed country profiles, one for each of the SADC member states. Each country profile is split into four major sections, viz: telecommunications, broadcasting, the state of liberalisation, and WTO regulatory reference paper readiness. In respect of each of telecommunications and broadcasting a number of issues are reported on. These include: the licensing framework and its compliance with the WTO W/120 guideline; the market structure, including market share and ownership of the major providers (where such information is available), including foreign entities; the regulatory regime, including restrictions on licensing and market access, and any restrictions applicable to foreign entities; the level of competition, the prevalence of anti competitive conduct, and the existence and competence of a competition authority. The degree of liberalisation in relation to WTO commitments is then assessed for each country. Finally, each country s level of compliance with the WTO Regulatory Reference Paper is assessed, and a regulatory scorecard heat map is produced. 1.4 Recommendations GATS commitments for WTO Member States include cross border supply for non resident service suppliers; consumption abroad; commercial presence; presence of natural persons. GATS commitments are further required to be set out for specific sectors, including limitations on market access; the national treatment obligation; and additional commitments, for example licensing. In respect of telecommunications, the WTO Reference Paper on Basic Telecommunications requires attention to competitive safeguards, interconnection requirements, universal service provision, public availability of licensing criteria, regulatory independence, allocation and use of scarce resources. Negotiating objectives include: technology neutrality; encouraging new and improved offers from LDCs; addressing exclusive rights, economic needs tests, restrictions on the types of legal entity and limitations on foreign equity; commitment to provisions of the telecommunications Reference Paper; elimination of exemptions to most favoured nation treatment. The country studies demonstrate that many, but not all, SADC Member States have liberalised their telecommunications markets, particularly mobile communications markets, and, to a lesser extent, their broadcasting markets. All countries have at least one state or public broadcaster, with a Prepared by: LINK Centre, University of the Witwatersrand 14

6 preponderance of state broadcasters. Many have multiple commercial and community broadcast providers (both TV and radio), while others have limited commercial or community broadcast markets, a distinct weakness for future regional integration of goods and services markets, particularly in terms of the long term social and economic benefits of a transition to digital broadcasting. Digital broadcasting can contribute to stronger social integration across the region encouraging greater cultural exchange, cross regional advertising and other means of economic facilitation still requiring innovation. The data shows that, despite limited commitments in terms of GATS, the regional trend is towards liberalisation of communications services markets, and that while restrictions do exist there is allowance for cross border supply, consumption abroad, commercial presence of non resident suppliers and presence of natural persons. Competition in services markets is held back to some extent by the high cost of entry into infrastructure markets and by weak regulatory environments where regulators have not developed a medium to long term (3 to 5 year) agenda for concerted market liberalisation and ongoing sector reform in order to meet local and regional demand for electronic communications goods and services. This hampers inter regional trade in communications services, and the rollout of broadband Internet and ICT applications as supporting services to other services markets, and hence greater regional economic integration. Much of the detailed information about positions on GATS commitments, alignment with the WTO Reference Paper on Basic Telecommunications, and custom and practice on key issues for negotiation such as technology neutrality, are buried deep in legislation and other documents, some of which are not available on the Internet. Thus, further to the study presented here, an important preparatory activity for the negotiations round would be for each SADC Member State to (1) document their position clearly with regard to GATS commitments, the Reference Paper and ancillary matters as set out above; and (2) for the relevant policy maker and regulator for each Member State to consider what legislative and regulatory reforms are required in the short to medium term (next 1 to 3 years). Telecommunications Market structure: Most Member States need to shift fully from a vertical to a horizontal market structure, leading to a harmonised regional electronic communications market that supports convergence in technologies, markets and services. Such a shift can be supported by amendments to existing legislation, where required. Such a shift can also be supported by regulators applying a horizontal licensing regime that promotes convergence in the broader electronic communications sector over time, eventually promoting convergence in telecommunications, broadcasting and other Internet based e services. In particular, attention should be given to encourage the growth of mobile broadband markets across the region as this presents the best possible platform for universal access to Internet. Mobile broadband also presents an excellent platform for communications services to enable economic development and regional integration of agricultural and services markets, through mobile and Internet enabled e commerce, e business and e government. Prepared by: LINK Centre, University of the Witwatersrand 15

7 1.4.2 Regulatory regime and state of play: The key shift required here is towards greater regulatory independence (structural, functional and financial), in order that communications sector regulators can develop a detailed agenda covering all the major elements necessary for sector reform and addressing all the major mandate areas for electronic communications sector regulators, including creating balance between sector development and encouraging greater competition on the one hand, and promoting consumer welfare on the other hand. Particular issues that require serious regulatory attention are: the set of issues raised in the WTO Reference Paper on Basic Telecommunications, promoting competition throughout the key segments of the value chain for electronic communications infrastructure and services, promoting advanced (broadband) communications infrastructure and addressing the associated spectrum and other resource requirements, e commerce and cybercrime and associated matters, all forms of Internet enabled social and economic engagement, and regulation of costing and pricing Level of competition: The SADC Member States should debate the implications and advantages of moving from partial competition to full competition in mobile markets, as well as what if any opportunities exist for competition in backbone infrastructure including broadband infrastructure markets. This is necessary because competition in electronic network infrastructure markets influences competition in communications services markets. Competition authorities should take a more active interest in general competition matters as they relate to the electronic communications sector. The promotion of robust competition authorities in every domain will be important for the future of electronic communications sector reform, as competition commissions and tribunals are designed to address competition issues of broad application that the sector regulator may not be mandated to address in law State of liberalisation: Requests for market opening and initial offers for market opening should take into account issues of market entry for operators in any country in the region to operate in any other country in the region (which may require a changed regulatory approach to licensing) in the context of market entry for the following market segments: telecoms operators (fixed and mobile), other telecoms firms (offering dark fibre or lit fibre or other infrastructure or value added services), Internet service providers (ISPs), wireless applications services providers (WASPs), and more International commitments: Most Member States could make commitments without going against practice on the ground, as there is already a considerable degree of alignment with GATS. There is significant opportunity for application of the meaning of the commitments in the mobile and broadband markets. There is also significant opportunity for greater alignment with the WTO Reference Paper on Basic Telecommunications. Many of the issues raised in the report point to the need to meet the terms of the reference paper in the shortest possible time, because communications infrastructure and services markets are moving into a more advanced era of services innovation. Prepared by: LINK Centre, University of the Witwatersrand 16

8 Broadcasting Market structure: Broadcast markets are generally highly localised with few foreign operators except for DStv. SADC Member States should conduct research on how to open up their broadcast markets in the context of migration to digital broadcast technologies and services, and should aim to understand what effect digital migration will have on current analogue stations and operators, who will not be protected against signal interference from Too little progress has been made in this respect, with the result that the existing analogue market could be undermined by spectrum interference, while a new digital broadcast market is yet to be formed. CRASA should conduct research on the implications of digital migration for the regional broadcast market Regulatory regime and state of play: Broadcasting has been a Cinderella sector from the regulatory point of view, neglected with respect to the role of regulators in promoting this very important sector for cultural exchange, democratisation and cross regional advertising. Attention should be given to issues of cross media ownership and control, considering what advantages can be gained from greater foreign (regional/international) investment in the future digital broadcast sector, both radio and TV, and what legitimate limitations to such ownership and control could be applied. Attention should also be given to pushing forward to successful digital switchover in all Member States before the ITU cut off date of 2015 for protection of analogue signals. Broadcast spectrum and digital dividend regulation is of significant importance. Regulators should conduct research on the opportunities for cross border supply presented by digital broadcasting and CRASA could prepare a regional regulatory reference paper on the issue. A shift from state to public broadcasters needs to be encouraged by policy makers and regulators across the region and by CRASA. Such a move needs to be supported by the integration, where this has not already been implemented, of broadcasting regulation under the broader umbrella of a single communications sector regulator, and the assurance of greater independence in the regulation of broadcasting services Level of competition: The commercial radio and TV segments show a reasonable degree of competition in many, but not all, countries of the region, though the number of players in the market may be largely due to language preference and geographic availability. The main concern for the future of competition is the shift to digital broadcast markets across the region and the continued existence of a culturally rich broadcast market in the multiple languages of the region State of liberalisation: Policy and regulation with respect to issues of cross border supply become more feasible, and, thus, important in the context of transition to digital broadcast services. Hence the issues pertaining to liberalisation need to be researched, considered and debated in the negotiations round. Requests for market opening and initial offers for market opening pertain to: market entry for operators in any country in the region to operate in any other country in the region, as well as market entry for the following market segments: commercial TV and radio; community TV and radio. Prepared by: LINK Centre, University of the Witwatersrand 17

9 International commitments: The approach to meeting international commitments requires attention with respect mainly to the future reality of digital broadcast markets as the existence of the current analogue markets is limited. Broadcasting transmission is country specific due to spectrum issues, but it has become necessary to address policy and regulation to issues of cross border supply in the converged environment, on the understanding that the broadcast operator is licensed in the country of origin and in the country of transmission. Other audio visual Some data on the other audio visual sector is available from a search of the WTO services database and from the few published documents available, though information is not available for most countries and the information that is available is not current. Commercial markets for the other audio visual services sector are small or non existent in most SADC Member States, except South Africa. In the context of the shift to mobile broadband Internet and digital broadcasting, film and music content can be easily accessible via these technologies, opening a new era for the exchange of local content from the SADC region. In the services negotiations, attention should be paid to encouraging market access and crossborder supply, domestic regulation to promote development of this very important subsector, GATS commitments, emergency safeguards, government subsidies, and other relevant matters. Prepared by: LINK Centre, University of the Witwatersrand 18