Nairobi, Kenya, 26 – 27July 2010

RELIABLE TELECOMMUNICATION SERVICES FOR ECONOMIC AND SOCIAL

DEVELOPMENT IN AFRICA

Paul Kiage,Manager/Projects M&E

CCK

ITU-T Workshop on Delivering Good Quality Telecommunication Service

in a Safe Environment in Africa (Nairobi, Kenya, 26 July – 27 July 2010 )

Agenda

Overview Analysis of Key factors for

Telecommunications Growth in Africa Economic Benefits Social Benefits Regulatory Approaches Conclusions

2

Telecommunications Overview

It is estimated that 370 million people in Africa are connected through mobile prepaid services 85% (2009) Penetration of about 42% by Q1 of 2009Africa has >80% of the population in the rural. But only 60% - 70% of population coveredExtensively voice service but evolving to data broadband and mobile InternetThe dominant technology: GSM, GPRS/EDGE; 3GSM:- W-CDMA and HSPA.

Nairobi, Kenya, 26 – 27 July 2010 3

ICTs Statistics for top 15 countries in Africa

Country

(source: ITU, 2009)

No. of cellular subscribers in million (2009)

Penetration % (2009)

No. of fixed subscribers in ‘000 (2009)

Penetration % (2009)

Nigeria 73’09 47.24 1’419.0 0.92

South Africa 46’43 92.67 4’319.8 8.62

Egypt 55’35 66.69 10’312.6 12.42

Algeria 32’73 93.79 2’576.2 7.38

Morocco 25’31 79.11 3’516.3 10.99

Kenya 19’36 48.65 664.1 1.67

Tanzania 17’46 39.94 172.9 0.40

Sudan 15’33 36.29 370.4 0.88

Libya 5’00 77.94 1’100.7 17.15

Ghana 15’10 63.38 267.4 1.12

Tunis 9’75 94.96 1’278.5 12.45

Cote d’Ivoire 13’34 63.33 282.1 1.34

DRC 10’16 15.39 40.0 0.06

Uganda 9’38 28.69 233.5 0.71

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Africa: connections per 100 people

Africa’s Digital Divide TrendsAfrica’s Digital Divide Trends

The fixed remains fixed: Therefore Africa must adopt wireless

ICTs Coverage Gap Analysis: 24 AICD

10/04/237

The Governments Regulatory Reforms – Liberalization and increasing competition – Market orientation

Changing customer needs : Voice to broadband services, Mobile Internet, MMS

Globalization /internationalization : International gateways liberalization/Submarine cables and roaming services

Substitute products and technology evolution:

One Network enhancing communication across countries in Africa e.g. Zanin

Key Growth Factors : Industry Forces

10/04/238

Capital Investments: Enabling investment policies

Human resource development initiatives:Technical and managerial skills : development of local poolMotivation and retention to avoid brain drain

Creativity and Innovations: New usage, new markets in rural : For example money transfer services; e-agriculture, e-health, e-education, e-government etc

Technology innovations: LTE, new products, quality, and reliability, affordability of services

Key Growth Factors : Resource Based View

9

Relating ICT Policies to Development There exist positive correlation between

telecommunication and economic development ICT policies in Africa recognises the central

importance of reliable access to telecommunications in the achievement of economic and social goals

Reliable, affordable and easy access to telecommunication services have been identified as key pillars to social and economic development in African countries Kenya included (Vision 2030), Ghana, Rwanda etc

Analysis

Economic Benefits

Contribution to GDP: Telecommunications generates 3.5-5.6 percent of National GDPs in Africa, a significant positive fiscal impact on development

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005

Non-liberalized countries Liberalized countries

Source: AICD

Revenue for Governments: License fees & Taxes

15%

13%

15%

15%

16%

5%

15%

5%15

%

14%

10%

20%

18%

10% 7% 12

%18

%

18%19%

17%

18%

18%

18%

18%

19%

18%

18%

0%

5%

10%

15%

20%

25%

30%

35%

Beni

nBu

rkin

aC

amer

oon

Cap

e Ve

rde

Cha

dC

ongo

DR

CC

ote

d'Iv

oire

Ethi

opia

Gha

naKe

nya

Leso

tho

Mad

agas

car

Mal

awi

Moz

ambi

que

Nam

ibia

Nig

erN

iger

iaR

wan

daSe

nega

lSo

uth

Afric

aSu

dan

Tanz

ania

Uga

nda

Zam

bia

0%

5%

10%

15%

20%

25%

30%

35%

VAT Excise Average VAT

Source: AICD.

Foreign Direct Investment

Influx of FDIFrom negligible Foreign Direct Investment (FDI) a few years back, the telecom sector in Africa has attracted foreign investment on license and infrastructure roll-outThe private sector has driven investment in the sector mostly operations in mobile communications in the form of privatizations of the incumbent Telcos, license fees and infrastructure roll-out http://ppi.worldbank.org/

13

Poverty: An outcome of interaction between and reinforcement of economic, social, and political processes which can lead to exacerbation or alleviation of deprivation experienced by poor men and women (World Bank,2002)

Reliable ICTs has contributed towards reduced poverty

Employment: Directly and indirectly added jobs to employment in the African countries.

Social Benefits – Impact on Poverty and Employment

14

Other Benefits: Increased social networking: face book, MySpace, YouTube etc Increased cultural diffusion, exchange & learning Increased access to relevant information for marketing and

distribution of agricultural products and other goods manufactured in rural Africa

Growth of local industries including relocation of industries from congested urban to rural areas

Accelerated and integrated development of rural areas by playing a catalytic role in development

Increased access and relying of information on medical treatment, education, disaster relief and administrative / improved governance

Improved citizenry empowerment e-government services, m-banking, e-health, e-education etc.

Improved sense of security and ability to contact emergency services

Social Benefits cont’d

15

Unified Licensing framework (ULF) facilitating fixed-mobile convergence

Simplify the licensing regime to accommodate rapid technological change and emerging competition

Service licensing approach as opposed to technology

Review of regulatory framework to attract private investment

Abolish / reduce taxes on handsets and airtime Enabling interconnection policies Integrate Africa into the global network through

fibre optic undersea cables

Regulatory Approaches for Sustainable Telecommunications Development in

Africa

16

Development of infrastructure sharing policies (sites, masts & ducts)

Pursue deeper levels of liberalization by lifting the remaining exclusivities; introduce mobile number portability (MNP) etc

Universal service obligations / roll-out targets

USF to bridge the existing ICT access gaps that are not commercially viable

Regulatory Approaches for Sustainable Telecommunications Development in Africa

17

• ICT technology facilitates service delivery hence its reliability & critical purpose socio-economic development

• Telecom sector liberalization has and is continuing to improve access to telecom services to nearly all segments of the society in Africa• Economic and social benefits have been significant and continue to multiply• Governments are keen to undertake measures necessary to ensure sustained growth in socioeconomic benefits

Conclusion

Thank You!