ALTHOUGH the World Bank has applauded the fledging developments in the Information and Communications Technology (ICT) sector in Nigeria and other African markets, it said that the reform process that has driven the improvements in the sector in the continent is yet to be concluded.Specifically, the World Bank informed that some countries lag far behind others, and the region as a whole lags behind other leading developing countries. It opined that completing this reform agenda should therefore be a major strategic objective for the sector.The agenda, according to the World Bank can be divided into two parts: full liberalisation and effective regulation. They are aimed at promoting effective competition in the sector.In a 310-page document with the title: 'Africa's ICT Infrastructure: Building on the Mobile Revolution', obtained by The Guardian, the World Bank explained that for Africa to further liberalise the ICT sector, it must among other things, issue more licenses across all segments of the market; reform the licensing framework; avoid reintroducing restrictions on competition; privatise telecommunications operators that currently remain under state ownership.In the areas of regulation, it advised among others that Nigeria and other African markets must as a matter of urgency; ensure that regulators are independent of government; strengthen the legal powers of regulators to implement regulatory decisions; improve the regulation of interconnection; improve the allocation and management of radio spectrum.Others are for Africa to introduce other pre-competitive regulatory measures; promote facilities sharing through proactive regulatory initiatives; strengthening the human capacity of regulatory authorities; promotion of regulatory harmonisation through regional bodies among others.The global financial institutions explained that state ownership of telecommunications operators provides few benefits to a country, adding that such operators frequently have a small market share, are often inefficiently run, and are usually subsidised by the state, either explicitly through favourable tax and license-fee treatment, or implicitly through regulatory rules skewed in their favour.Despite this protection or perhaps because of it, the World Bank reasoned that, state-owned operators have generally performed poorly and, in most cases, have failed to compete successfully with privately owned companies. It stressed that, the long-run cost of state ownership is that investment and competition are constrained by policies and regulations designed to protect these operators.The World Bank, which noted in the 310-page document that the terms by which networks interconnect and then carry traffic that originates on different networks are a key determinant of the price and the quality of service that customers receive, stated that, operators typically push the prices that they charge one another for termination well above cost, and these higher wholesale prices feed through into higher retail prices.'Operators also often under-provide interconnection points so that subscribers experience difficulty in connecting to a subscriber of another network. These interconnection arrangements require tight regulation, and the global trend has been to push interconnection charges down toward cost through regulatory controls,' it stated.On allocation of spectrum, the World Bank said the allocation and management of the spectrum can have a major impact on the value of operators' investments, and arbitrary changes in spectrum allocations can have a significant disruptive effect on the market, stressing that spectrum allocation and management practices in Africa are often a disincentive to market growth and innovation.It advised that governments and regulatory authorities should consider the global trend toward predictable, transparent, and more market-based mechanisms for spectrum allocation and management. This, according to the bank will improve investor confidence in the sector and allow operators and Internet Service Providers (ISPs) to innovate and bring in new technologies to improve the services provided to the public.However, the World Bank said though it is clear that liberalisation and competition meet many of the sector objectives, the sector is unlikely on its own to meet all of them, such as, for example, 100 per cent mobile network coverage. It stressed that an important role of the public sector is therefore to provide incentives for companies to meet these objectives.Besides, the global financial institution noted in the document that, for Africa to expand its coverage of the Global System for Mobile telecommunications (GSM) network across the continent, it requires a total expenditure of $15.5 billion between 2007 and 2015. Of this, $6.9 billion is for areas that are potentially commercially viable, with the total cost of expanding networks to cover the eight per cent of the population that lies outside these areas amounting to $8.7 billion, or about $1 billion per year.Access to finance, according to the World Bank is often seen as a constraint on economic development in Africa, but the telecommunications sector appears to have overcome this constraint by accessing a wide range of financing sources to fund the rapid expansion of networks.The report noted that operators and governments in sub-Saharan Africa are investing heavily in the region's ICT sector, stressing that about $5 billion a year or one per cent of Gross Domestic Product (GDP) is been invested.It informed that private sources accounted for the majority of capital investment in the sector, but that operators that remain under state ownership invest a significant amount of money. According to the World Bank, Official Development Assistance (ODA) from outside the region is still marginal overall.The World Bank informed that between 1998 to 2008, Nigeria's telecommunications sector was able to attract an investment of over $12.7 billion, far behind South Africa's $18 billion.Other top ICT investment countries in Africa, according to the World Bank include, Kenya ($2.9 billion); Sudan ($1.8 billion); Uganda ($1.6-billion); Senegal ($1.5 billion); Tanzania ($1.4 billion); Democratic Republic of the Congo ($1.2 billion); Ghana ($1.1 billion); Angola ($1 billion) among others.The World Bank, which said it was cheapest to call the U.S. from Ghana at $0.31 per minute, compared to $0.88 a minute in 2008 from other parts of Africa, noted that Ghana still has a long way to go in order to provide the best network in Africa. 'Kenya and Ghana, for example, are of similar size, but Kenya's networks are growing much more quickly ' with 6,445 km versus Ghana's 919 km of backbone network currently under construction', it stated.The World Bank adduced to the fact that, African capital markets, corporate bond markets, and commercial bank loans all have played key roles in financing investment in the telecommunications sector in the continent, but stressed that, securities exchanges in sub-Saharan Africa are generally underdeveloped, reason why telecommunications businesses were relatively well represented in them and have successfully used exchanges to raise investment finance.Besides, the report informed that despite the wave of privatisation and liberalisation of the telecommunications market in Africa, the public sector ' both domestic and foreign, continues to play a significant role in financing ICT development.'Some African governments retain ownership of one of the operators and sometimes allow that operator exclusive control over one or more segments of the market. More recently, governments have begun investing in fiber-optic backbone networks, either directly or through state-owned operators.'However, this strategy imposes significant economic costs on the country: Assets tied up with state-owned operators cannot be used for other, more productive purposes, and when governments have an investment in the market, a tendency is seen to make policy and regulatory decisions to protect that investment, sometimes to the detriment of customers and long-term economic growth,' the report stated.
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