Western Africa ECOWAS Regional...

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Report No: AUS0000215

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Western Africa

ECOWAS Regional Communications:

Toward Integration of Infrastructure and Services

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August 13, 2018

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Digital Development Department

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© 2017 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved

This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. {YEAR OF PUBLICATION}. {TITLE}. © World Bank.”

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mailto:[email protected]

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Executive Summary Advancements in the provision of communications and data services are providing the West Africa region

with new approaches not only for people to communicate and access information, but also for the

facilitation of trade, financial transactions, and service delivery (such as entertainment, digital learning,

and telemedicine). The digital space is becoming an industry in its own right, disrupting traditional

business models and providing new economic opportunities, especially for youth. A new dimension of

regional integration and pathway for the regional digital economy is fast emerging.

Global experience shows that the pursuit of a regional digital economy is multidimensional and requires

significant coordination and concerted effort by member states. Regional communities in Asia and Europe

have launched dialogues and programs on creating a “digital single market” in their respective regions

(figure ES.1). While the end goal of the digital single market concept is a seamless online market where

efficiencies are promoted, it requires the development of foundational layers to support such a market.

At the base of the foundation is the communications infrastructure or the single connectivity market,

which increasingly consists of fiber optic backbone networks with high-capacity bandwidths and capillary

networks, including FTTx 1 and 3G, 4G, and 5G mobile networks. The focus of this study is on this

foundation, to examine the status of the connectivity market to identify the bottlenecks in the

development of regional communications. The study provides recommendations in the context of

advancing the regional integration and regional digital economy agenda in Western Africa.

Figure ES.1. Digital Single Market Foundations

Source: World Bank.

Status of International and Regional Connectivity

In the past decade, the West Africa region has witnessed significant advancements in the provision of

communications and data services. With the arrival of new international bandwidth capacity through

submarine cable systems, the cost of international bandwidth has come down, in some instances by 50-

80 percent. West African countries have continued to open the mobile market for competition, and today

there are more than 320 million mobile subscribers in the Economic Community of West African States

(ECOWAS) region alone. These advancements have shown significant impact; however, the uptake of

Single connectivity market

Single data market

Single

online market

▪ Ensure data protection and privacy laws

allow cross-border data transfers

▪ Share cybersecurity resources in region

▪ Remove cross-border barriers to

infrastructure and connectivity

(wholesale and retail)

Remove Cross-Border barriers

▪ Ensure e-commerce, digital services and the functions

that support them all work across borders

▪ Remove trade and customs barriers for goods

purchased online

Promote Digital Market

▪ Where relevant, create scale for

these analogue complements

across the region

▪ Digital ID

▪ Digital payments

▪ E-transactions

▪ Consumer protection

▪ Data protection and Privacy

▪ Cybersecurity

▪ Content regulation

▪ Infrastructure

▪ Services

Digital

Skills

Innovation

environ-

ment

Hard infra’

(e.g.

power)

Capital

FinancingEnabling

environment

Digital

leadership

▪ Digital public services

▪ Trade & customs

▪ Logistics

4

broadband Internet services in West Africa has experienced slow growth (figure ES.2). Faster growth in

this area will be needed to fuel the digital economy.

Figure ES.2. Mobile Internet Subscribers as a Share of Total Mobile Subscribers, 2010–18

Source: GSMA Wireless Intelligence. Note: Data for 2017 and 2018 are forecasts.

There is already significant physical cross-border connectivity in the region: all but four of the ECOWAS

states have a fiber optic cable network that interconnects physically to an adjacent country. However,

these interconnections are primarily used for voice communication, and there is a lack of internet

protocol connectivity for data transmission. This suggests a possibility that the existing infrastructure is

not being fully utilized for cross-border data transmission. Further, the region still lacks Internet

exchange points (IXPs) and data centers, which can help regional communications traffic to remain

within the region. Without these exchange and storage capabilities, regional traffic often must transit

through a European city. This adds to the transit cost, and increases the possibility of latency increases,

which both impacting the end-consumers.

In addition to the national digital infrastructure development taking place across member states, there

are further opportunities to leverage alternative infrastructure projects—energy transmission, railways,

roads, and so forth—that carry fiber optic networks across the region. Entry of alternative infrastructure

operators in the wholesale telecommunications market can stimulate competition and instantaneously

add significant regional capacity, but requires extensive efforts at the national and regional levels to

develop the necessary legal, policy, and regulatory environments.

Traditionally, legal and regulatory frameworks with a national focus have been developed in countries in

the region, primarily driven by mobile-focused interests. Thus, although domestic mobile markets have

flourished over the past decade, a regional vision for data or broadband connectivity has been missing.

Cross-border interconnection is primarily used to facilitate voice calls on mobile roaming. Furthermore,

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50%

60%

70%

80%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Western Africa Eastern Africa Middle Africa Northern Africa Southern Africa

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there is limited competition, with four pan-regional operators in West Africa that offer wholesale

services in the West Africa region and about 10 other providers that provide limited cross-border

connectivity. Due to the geographic size of the region, there is little overlap of the networks; hence, they

consist of clusters of single-operator markets. There are several regulatory bottlenecks to regional

communications:

• Regional licensing of operators. Currently in the ECOWAS region, an operator licensed or

authorized as an operator in a member state is not recognized in other member states.

• Open access policy, especially for dark fiber. Open and fair access policies for backbone

infrastructure running through a country and cross-border to another country are largely

missing.

• Infrastructure sharing and colocation. Specific regulations or guidelines for access to the core

network by other network operators are lacking. These include guidelines on sharing masts and

poles, spaces in buildings with termination and switching equipment, ducts and so on.

• Dispute resolution. In many ECOWAS member states, there are currently no specific provisions

allowing operators established in an ECOWAS member state to settle a dispute with an operator

in another member state.

Furthermore, the lack of a regional outlook to the development of the communications market in

ECOWAS has led to an absence of a framework for regional wholesale pricing. This is evidenced by the

limitation of Reference Interconnect Offers (RIO) to national operators only and no explicit offers for

access to cross-border interconnection points were found.

Low-Cost International Mobile Roaming: Boosting Consumer Welfare

The communications market in Africa still relies heavily on 2G voice services, constituting 55 percent of

total subscriptions, but this is projected to decline to 10 percent by 2023.2 Internationally, regional

economic communities have leveraged the digital sector to strengthen regional economic integration,

while also promoting consumer welfare through increasing the affordability of services, including the

reduction and eventual elimination of roaming charges.

A reduction or abolishment of roaming tariffs would constitute a reduction in operator revenues in the

medium term. However, it would create a large consumer surplus—by one estimation amounting to

US$775 million over the next four years for the region.3

Globally, regional roaming initiatives have been met with varying degrees of success and have followed

different approaches. However, a common outcome across all initiatives is a significant increase in

roaming usage, which can be seen as an indicator of the consumer surplus. In Kenya, for example, the

volume of calls went up by 264 percent when regional roaming rates were abolished.4

There are a total of 21 mobile operators in the ECOWAS region serving the 320 million subscribers, with a high degree of market concentration between the top 5 operators. Roaming prices offered by operators in the region are highly heterogeneous across countries, operators and visited countries, varying by over 10 times for the same type of voice call, depending on the roaming location for subscribers of the same home network. The same spread is also observed for data traffic with the price of 1 MB of roaming data

6

usage varying from US$ 0.08 (MTN Liberia within the MTN zone) to US$ 60 (Airtel Ghana roaming in Senegal).

In addition to the high heterogeneity in roaming prices across the region, the prices are generally high—

in absolute terms - and this comes to the forefront when average prices across the region are compared

with regulated prices in Europe, the Gulf Cooperation Council, or East Africa. The price for a call to home

made in ECOWAS is 23 times higher than in Europe, and that for data roaming in ECOWAS is 65 times

higher than in Europe.5 Furthermore, roaming prices are considerably higher when compared to domestic

prices, a differential that cannot be solely attributed to costs associated with roaming.

The wholesale markets in the region display similar trends as the retail markets. The roaming market is

comprised of retail and wholesale components, at the domestic and international levels. In addition to

operating costs, such as network and signaling costs, a roaming call incurs certain tariffs, which are high

compared with those in other regions and vary significantly within the region.

Roaming regulation aims to develop the retail market to maximize utility for consumers and profit for

operators. However, other aspects, such as incentives to invest or eliminating fraud and arbitrage that

can arise in international traffic, should be considered as well. The evolution of international roaming in

four regions shows broadly two approaches:

• Voluntary, private sector–led models in East and Southern Africa

• Purely regulated models in the European Union and six Gulf Cooperation Council countries.6

Some of these measures may be taken unilaterally by a single country; others may be implemented

between two or more countries7 or applicable within a regional economic community. Examples of the

different categories of regulatory intervention available to national and regional regulatory bodies are

noted in table ES.1. The International Telecommunication Union is currently pursuing an initiative relating

to the decrease of international roaming prices under the ITU Global Dialogue on International Mobile

Roaming—Let’s Roam the World.8

Table ES.1. Range of regulatory options

Option range Example

Light regulatory intervention Improve customers’ understanding of roaming prices

Beyond some financial threshold, submit the pursuit of roaming services to obtaining the expressed consent of the customer

Intermediary regulatory intervention

Retail price cap and often wholesale price cap

Extensive regulatory intervention Unbundling of roaming services from national services

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Recommendations and Conclusions

Economies of scale and network effects are critical for driving the growth of the digital economy,

starting from telecommunications infrastructure and services. This is particularly pertinent for several of

the ECOWAS countries that are too small in isolation to pursue development of a digital economy. And

most individuals in the ECOWAS region remain disconnected from the Internet. In addition to the large

size of the region, its inherent heterogeneity further increases the importance of developing subregional

linkages. For example, the West African Economic and Monetary Union offers an opportunity for a

subset of ECOWAS member states to forge stronger partnerships in developing their digital economies.

Yet, there are overarching principles to which all countries should adhere, including on their borders:

• Regional licensing. The shift from national to regional licenses for operators, including

alternative utility and transport operators, could accelerate regional expansion and potentially

draw more competition into parts of the region.

• Liberalization and competition. There are likely to be instances where there will be natural

monopolies, particularly the long-distance wholesale providers (or carrier’s carrier). The region

currently lacks frameworks for competition policy and significant market power regulation,

which has led to a situation where dominant behavior is largely left unchecked.

• Open access and infrastructure sharing. Policies and regulations that promote the use and

sharing of infrastructure, including infrastructure sharing, rights of way, and colocation, would

encourage efficient use of infrastructure and allow smaller operators to participate in cross-

border communications. This would also include the alternative infrastructure providers.

• Transparency of tariff information. Increasing the visibility of retail prices would protect

consumers from bill shock and could encourage the use of cross-border communications.

Transparency of wholesale prices (reference interconnection offers) together with the other

open access principles could be catalytic for the efficient utilization of infrastructure.

• Harmonization of sector laws, policies and regulation: Adopting a regional outlook to digital

infrastructure, as well as services such as mobile roaming, requires harmonization of the sector

across the region. This first entails addressing underlying inefficiencies in national markets.

• Aggregation and localization of content. In parallel to easing voice and data traffic across

borders, the region would benefit from keeping regional traffic regional. Even countries that do

not have robust and secure data infrastructure, such as IXPs and data centers, could host their

content in another country in the region that has these capabilities.

• Capacity building of regulators. The ECOWAS member states are on different rungs of the digital

economy ladder, much of which depends on the size of the market, but also the capacity of the

relevant institutions. The transposition of the regional supplementary acts, for example, can be

a complex process involving multiple agencies, laws, and regulations. Capacity building of

regulators and other agencies would be needed in areas such as licensing and pricing

regulations.

A collaborative approach to the digital economy would help deepen existing socioeconomic ties and

circumvent the potential widening of the digital divide between countries. The region has seen

8

significant investments in infrastructure, but further deployment is required to achieve universal

coverage objectives and reinforce the robustness of regional networks. The next challenge is to get the

enabling environment right for voice and data transmission across borders. This would lay the

foundation for producing digital content that is pertinent to the people and businesses of the West

Africa region—digital government services, financial services, entertainment, and innovation.

9

Abbreviations and Acronyms ACE African Coast to Europe ASN autonomous system number COMESA Common Market for Eastern and Southern Africa CSLG Côte d'Ivoire, Sierra Leone, Liberia, and Guinea Countries Electricity Networks

Interconnection CRASA Communications Regulators Association of Southern Africa EAC East African Community ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States EU European Union GCC Gulf Cooperation Council ICT information and communications technology IMR international mobile roaming IOT inter-operator tariffs IP Internet protocol ITR international termination rate ITU International Telecommunication Union IXP Internet exchange point LTE Long-Term Evolution MB megabyte Mbps megabits per second MNO mobile network operator MoU memorandum of understanding MRU Mano River Union MTR mobile termination rate NCC Nigerian Communications Commission OECD Organisation for Economic Co-operation and Development OECS Organization of Eastern Caribbean States ONA One Network Area PPP purchasing power parity RIO reference interconnection offer RWG Roaming Working Group SADC Southern African Development Community SAT-3/WASC South Atlantic 3/West Africa Submarine Cable SMP significant market power SMS short message service UMA Arab Maghreb Union WAEMU West African Economic and Monetary Union

10

Table of Contents

Contents Page No.

I. Introduction 11

II. Status of International and Regional Connectivity 15

International Connectivity 15

Cross-Border, Terrestrial Fiber Optic Connectivity 16

Alternate Infrastructure Carrying Fiber Cables 17

Low Development of Internet Protocol Connectivity and Local Content Hosting 18

Regulatory Barriers to Cross-Border Use of Existing Infrastructure 21

Recommendations 28

III. Low-Cost International Mobile Roaming: Boosting Consumer Welfare 31

Potential for a Regional International Roaming Regime 32

Current State of International Mobile Roaming within ECOWAS 36

Potential Barriers to Affordable Regional International Roaming 41

Lessons from Regional Roaming Experiences 47

Recommendations 56

IV. Conclusion 57

11

I. Introduction In the past decade, the West Africa region has witnessed significant advancements in the provision of

communications and data services. With the arrival of new international bandwidth capacity through

submarine cable systems, the cost of international bandwidth has come down, in some instances by 50-

80 percent. West African countries have continued to open the mobile market for competition, and today

there are more than 320 million mobile subscribers (of which 176 million are unique) in the Economic

Community of West African States (ECOWAS) region alone. The number of smartphone connections has

doubled in the past two years to 112 million. Although 65 percent of these connections are still largely

driven by 2G voice services, it is estimated that mobile broadband connections will grow from 35 to 95

percent by 2025.9

These advancements provide new channels not only for communication and accessing information, but

for the facilitation of trade, financial transactions, and service delivery (for example, entertainment, digital

learning, and telemedicine). There are more than 50 active mobile money services in the region, with

104.5 million mobile money accounts, which generated transactions amounting to US$5.3 billion in

2017.10 The digital space is also becoming an industry in its own right, disrupting traditional business

models and providing new economic opportunities, especially for youth. This is further evidenced by the

presence of more than 140 active tech hubs in the region. A new dimension to regional integration, and

a new pathway to a regional digital economy, is fast emerging.

However, global experience shows that the pursuit of a regional digital economy is multidimensional and

can require significant coordination and concerted effort by the member states. Recognizing this, regional

communities such as the Association of Southeast Asian Nations and European Union have launched

dialogues and programs on creating a “Digital Single Market” in their respective regions. The vision of the

Digital Single Market concept is a seamless online market (figure 1) where barriers to social and economic

interactions are reduced and efficiencies increased. The single online market is supported by foundational

layers, including an enabling data environment or the single data market that is needed to safeguard the

transition to an increasingly data-focused economy by establishing robust frameworks for cybersecurity,

data protection, and combating online fraud.

Another foundational building block is the communications infrastructure or the “single connectivity

market,” which increasingly consists of fiber optic backbone networks with high-capacity bandwidths and

capillary networks, which include FTTx11 and mobile networks. The focus of this study is on the very

foundation on which the digital economy would sit—the communications infrastructure or connectivity

market in the ECOWAS region. The study examines the status of the connectivity market to identify

bottlenecks to the development of regional communications and provides recommendations in the

context of advancing the regional integration and regional digital economy agenda. Since mobile

broadband is the primary mode of connectivity access in West Africa, the second part of the study focuses

on regional international mobile roaming as a service that leverages cross-border linkages of digital

infrastructure. Additionally, the dominance of 2G voice services in the region makes international roaming

a pertinent use-case for studying the telecommunications market at the regional level.

12

Figure 1. Digital Single Market Foundations12

Source: World Bank.

Currently, intraregional trade, as a percentage of total trade, ranges from 2 percent (Cabo Verde) to 60

percent (The Gambia), with an average of 9 percent among West African countries.13 Migration data

reveal that 64 percent of total migration in ECOWAS is internal to the region, following varying routes and

patterns across countries. This points to the heterogeneous landscape of West Africa, which consists of

overlapping groups of communities and markets. As in other sectors, language plays a key role in the

subdivision of the region, with Anglophone, Francophone, and Lusophone countries forming the

overarching groups. It is largely in this context that the telecommunications markets have developed,

servicing markets largely based on the three languages.

Yet, there are other considerations that would need to be taken into account to move toward a regional

digital economy in an inclusive manner. About 80 percent of the population in the ECOWAS region lives

in rural areas, and many of the telecom operators are still focused on increasing subscriptions in urban

centers close to the international submarine cables along the coastline. Communities based on common

languages across the region also form boundaries. For example, the Hausa-speaking area stretches 800

kilometers from northern Ghana to Chad and straddles eight countries in West Africa. Fulani herdsmen

and seasonal workers between Burkina Faso and Côte d’Ivoire cross national borders every year, which is

illustrated by the many mobile money transactions along the routes taken. The challenge for the region is

to chart a course toward seamless communications connectivity.

This has been an age-old challenge that has required many revisions to the approach taken to ease and

increase cross-border communications—namely, due to the rapid and continuous evolution of

communications technology as well as the increase in private participation in the sector. One of the

earliest regional telecommunications projects was Intelcon I, which was launched in 1984 and ended in

1994 with the completion of 13 interstate telecommunications copper cable links. Intelcon II, launched in

1997, focused on extending connectivity in urban areas and between the capital cities. Around 2010, the

West Africa region saw another surge in investments in large-scale fiber optic cable infrastructure to

facilitate international and cross-border communications. This last phase of investments saw an increase

Single connectivity market

Single data market

Single

online market

▪ Ensure data protection and privacy laws

allow cross-border data transfers

▪ Share cybersecurity resources in region

▪ Remove cross-border barriers to

infrastructure and connectivity

(wholesale and retail)

Remove Cross-Border barriers

▪ Ensure e-commerce, digital services and the functions

that support them all work across borders

▪ Remove trade and customs barriers for goods

purchased online

Promote Digital Market

▪ Where relevant, create scale for

these analogue complements

across the region

▪ Digital ID

▪ Digital payments

▪ E-transactions

▪ Consumer protection

▪ Data protection and Privacy

▪ Cybersecurity

▪ Content regulation

▪ Infrastructure

▪ Services

Digital

Skills

Innovation

environ-

ment

Hard infra’

(e.g.

power)

Capital

FinancingEnabling

environment

Digital

leadership

▪ Digital public services

▪ Trade & customs

▪ Logistics

13

in private participation and entry of other utilities into the market carrying fiber along their networks

(power grids and railroads).

These investments and projects ran parallel to several fruitful regional integration initiatives, such as the

free movement of persons, goods, and services between the countries in ECOWAS and the free trade

agreements and single currency under the West African Economic and Monetary Union. The vision for

free movement of communications and its role in the further advancement of the regional integration

agenda have been echoed and supported by regional and donor entities such as the African Union, African

Development Bank, International Telecommunication Union, Islamic Development Bank, and World Bank

Group. A significant body of work on the policy, legal, and regulatory frameworks has been developed to

guide the sector’s development, including the enabling environment for private participation and

competition.14 The results of the concerted efforts led to the weaning-off of costly satellite services

through increased international submarine cable connectivity and increased competition in the mobile

market. This has subsequently led to increased uptake of mobile phone services, as is being experienced

in other regions on the continent (figure 2).

Figure 2. Total Unique Mobile Subscriptions, 2008–18


Although these figures show an impressive upward trend, the uptake of broadband Internet services is

showing a slower trend in growth. Figure 3 shows the percentage of mobile Internet subscribers

(smartphones and tablet devices) as a share of total unique mobile subscribers. The figure shows that

West Africa in particular is experiencing slow growth. Demographic factors, such as income level and

geographic location, are likely hampering uptake in the West Africa region as opposed to Southern Africa,

which has higher average income (figure 4).

0

20,000,000

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60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

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200,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Southern Africa Middle Africa Northern Africa

Eastern Africa Western Africa

14

Figure 3. Mobile Internet Subscribers as a Share of Total Mobile Subscribers, 2010–18


Figure 4. Factors for the Within-Country Digital Divide in Africa

Source: World Development Report 2016, Digital Dividends.

In terms of cross-border communications, the numbers available are also concerning. Most data or

Internet traffic that originates from and is terminated in the West Africa region is routed through a

European city. This adds to the transmission cost, which is then passed to the subscriber, and it increases

the chance of network latency. Moreover, this is a missed opportunity for local and regional telecom

operators to keep the regional market regional, and for local data centers and other digital platform

providers to store and manage local data and content as a business. Furthermore, mobile roaming within

the region is low, with roaming minutes constituting 0.03 percent of total traffic in the region’s largest

0%

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2010 2011 2012 2013 2014 2015 2016 2017 2018

Western Africa Eastern Africa Middle Africa Northern Africa Southern Africa

15

market, Nigeria. The reasons for this may include limited social and economic activity at some of the

national borders, but an evident challenge is the high price of roaming charges, which can lead to “bill

shock” when the subscriber has a negative reaction if their phone bill has unexpected charges. This

situation is symptomatic of the lack of a regionally focused policy framework that would address the

bottlenecks to the cross-border use of the infrastructure and provision of services. Other regional

experiences, such as in the European Union and Arabian Peninsula, have shown that the pursuit of an

integrated communications market is a long one, but real impact is observed at each milestone.

Based on the aspirations of West African regional bodies to move toward a single connectivity market and

subsequently a regional digital economy, this study aims to identify the key bottlenecks in the

development of regional communications. The study focuses on two segments of the communications

value chain, starting with the wholesale backbone networks that carry traffic across borders and then

examining the status of the regional roaming market to assess how roaming fees affect cross-border

communications. Various aspects across the value chain (for example, tariffs and taxation) can also affect

other segments; hence, the study tries to identify those symptomatic issues that stem from the broader

sectoral challenges. The study draws from studies funded by the Public-Private Infrastructure Advisory

Facility15 that were conducted upon the request of the ECOWAS Commission. Although the data and

analysis focus on the ECOWAS member states, the recommendations reflect the needs of the wider West

Africa region.

II. Status of International and Regional Connectivity

a) International Connectivity

For international connectivity, all coastal countries in the ECOWAS region, except Guinea-Bissau, are served by international submarine fiber optic cable connections. Submarine cables are usually owned by a consortium of operators, with one or two large operators entrusted to manage and maintain the cable system. West Africa is largely connected through three consortiums, the South Atlantic 3/West Africa Submarine Cable (SAT-3/WASC),16 which became operational in 2001; Nigeria’s Main One17 cable system, which became operational in 2010; and the Orange/France Telecom–led African Coast to Europe (ACE)18 cable system, which first became operational in 2012. Burkina Faso, Mali, and Niger, being landlocked, do not have direct access to a submarine cable landing station. Currently, Mali and Niger are connected to the ACE cable system through Orange, and further backbone deployment is underway for Burkina Faso to connect to ACE.

In telecommunications, whether submarine or terrestrial, it is important to have options to route through several cable systems (redundant networks) in the event of a cable outage (map 1). Outages have been reported in West African countries in the past several years, which has left countries that have access to only one submarine cable system in a communications blackout, at times spanning a few days or a couple of weeks. Ghana, Côte d'Ivoire, and Nigeria have secure access to multiple submarine cable systems; Senegal is in a vulnerable position, as its alternate route includes an older generation of cable systems provided by SAT-3/WASC and Atlantis-II. Six countries do not have alternate submarine routes or competitive landing points, including Guinea, Guinea-Bissau, Liberia, Sierra Leone, The Gambia, and Togo. There is therefore a need to develop redundancy and competition for access to submarine cable systems to ensure reliable international connectivity.

16

Map 1. Submarine Cable Systems Connecting to Africa

Source: https://manypossibilities.net/african-undersea-cables/.

b) Cross-Border, Terrestrial Fiber Optic Connectivity

Currently, all but four of the ECOWAS states have a fiber optic cable network that interconnects physically

to an adjacent country. These networks consist of the “backbone” of the national communications

infrastructure, which is often treated as an essential facility—infrastructure that requires high investment

or sunk costs, which in turn may inhibit new entrants from coming in or would justify a natural monopoly,

depending on the market characteristics. The backbone consists of the wholesale market for reselling

capacity to retail operators, including mobile operators and Internet service providers. Map 2 shows that

all but Guinea-Bissau and Liberia have a national fiber optic backbone, and there are cross-border links at

most of the ECOWAS borders. Guinea and Sierra Leone have fairly extensive national backbones, through

self-financing in the case of Guinea and funding from the Islamic Development Bank in the case of Sierra

Leone.

https://manypossibilities.net/african-undersea-cables/

https://www.flickr.com/photos/ssong/35774979346/

17

Map 2. Regional Cross-Border Points

Source: “Missing Links and Infrastructure Sharing Study” prepared by a team of consultants: Claude de Jacquelot,

Mike Jensen, Bernard Sanchez, Rémy Fekete, Ananda Covindassamy, David Guitton, and Iheb Nomme.

c) Alternate Infrastructure Carrying Fiber Cables

Fiber optic cables are carried by other utility service networks, such as electricity grids and oil and gas

pipes, and are laid during the construction of railroads and highways. The fiber is used by the utility or

transport companies to communicate and manage their assets and operations, but this consumes very

little capacity. In countries with an enabling regulatory environment, these companies lease capacity as

would a wholesale telecom operator. Apart from Phase3 Telecom from Nigeria, which is a power company

that leases its fiber bandwidth capacity, there are two electricity projects underway that potentially could

provide communications services (wholesale):

• The Mano River Union (MRU) consists of Côte d'Ivoire, Sierra Leone, Liberia, and Guinea (CSLG),

which together kick-started the construction of a 1,303-kilometer electricity interconnector under

the Countries Electricity Networks Interconnection (CSLG) project in 2017. An African

Development Bank report on “Updating the MRU Countries Electricity Networks Interconnection

(CSLG) Studies for Deployment of Public Broadband Services” examines the potential use of the

excess capacity of the CSLG’s optical fiber to provide those missing national and cross-border links.

ACE

ACE

Sat-3ACE

WACS

Sat-3ACE

ACE

ACE

ACE

WACS

Sat-3ACE

Sat-3ACE

WACSMainOne

Glo-1

Sat-3ACE

WACSMainOne

Glo-1NCSCS

Sat-3WACSNCSCS

ACE

C de Jacquelot 2016

AtlantisWACS

18

The report concludes that there is significant potential to use the CSLG power transport cables to

interconnect the four countries.

• The development objective of the Organisation pour la Mise en Valeur du fleuve Gambie (The

Gambia River Basin Development Organization) Interconnection Project for Africa is to enable

electricity trade between The Gambia, Guinea, Guinea-Bissau, and Senegal.

Furthermore, the Blue line rail, which aims to connect Abidjan-Ouagadougou-Niamey-Cotonou-Lomé and

the proposed fiber optic cable to follow the route of the Algeria-Nigeria-Chad Trans-Saharan Road (Route

Trans Saharienne), could provide redundancy networks to reinforce connectivity between the landlocked

countries. However, there are two bottlenecks for the mentioned projects. First, the region in general

lacks a regulatory and licensing framework for pan-regional operators, including alternative infrastructure

operators; hence, they are unable to participate as a wholesale provider in the countries they transit.

Second, in the case of the two electricity projects, the West Africa Power Pool Secretariat has yet to

develop a viable business model on how the extra fiber capacity would be utilized and marketed to

operators in the countries they will operate in as electricity providers. The related policy and regulatory

barriers are further examined in the following section.

d) Low Development of Internet Protocol Connectivity and Local Content Hosting

Much of the communications traffic that is intended for another West African country first leaves the

region and transits through a European city before it reaches its destination back in the region. This adds

to the cost of the transmission, as it goes through an international or European service operator, which

can cause latency or time delay in signal exchange and is a missed opportunity for local and regional

operators to keep the regional market regional. The physical cross-border connectivity primarily carries

E1 cross-border links the are used by voice service providers, namely mobile operators, for international

connection and roaming. E1 links are configured to be dedicated to voice services and do not carry

enough bandwidth for the broadband Internet market. Map 3 shows the fiber optic cable or E1 capacity

that is open at the national borders allowing for cross-border voice communications.

The transmission of higher capacities (data or broadband speed Internet) across national borders is

usually not the responsibility of country policy, but is a commercial decision to enter an interconnection

agreement with another operator based on a “handshake.” This study found no formal arrangements

between any two ECOWAS countries to interconnect two main data or Internet protocol (IP) operators

whether it be telco operators, data centers, or other hosting businesses, indicating that the wholesale

operators are expanding their own infrastructure rather than entering interconnection agreements

(map 4). However, IP cross-border connectivity has been negotiated between landlocked countries and

their adjacent countries to facilitate traffic to and from the landlocked country to reach submarine cable

landing stations for international connectivity (Bamako, Ouagadougou, and Niamey).

19

Map 3. Networks Carrying E1 Capacity across Borders, 2016

Map 4. Cross-Border IP Connectivity, 2016



C de Jacquelot 2016

ACE

ACE

Sat-3ACE

WACS

ACE

ACE

ACE

WACS

Sat-3ACE

Sat-3ACE

WACSMainOne

Glo-1

Sat-3ACE

WACSMainOne

Glo-1NCSCS

Sat-3WACSNCSCS

ACE

Sat-3ACE

AtlantisWACS

C de Jacquelot 2016

20

A key indicator of IP development is the number of autonomous system numbers (ASNs). Within the

Internet, an autonomous system is a collection of connected IP routing prefixes under the control of one

or more network operators. The African Network Information Centre is the Regional Internet Registry

for Africa and is responsible for the distribution and management of Internet number reSource in its

service region, which includes Africa and the Indian Ocean region. Figure 5 shows the breakdown of

ASNs for the continent, which indicates that while Nigeria is second in the number of ASNs after South

Africa, the rest of the West African countries require further IP development.

Figure 5. Number of ASNs, West African Countries

Source: African Network Information Centre (https://www.afrinic.net/en/services/statistics/as-numbers).

As regional traffic is being routed through Europe, websites, data, and digital content intended for local

consumption are also being hosted outside the West Africa region. These include government and

business websites focused on providing information and services to West African citizens and

businesses. Looking at the top 10 websites in five countries—Côte d’Ivoire, Ghana, Mali, Nigeria, and

Senegal—all are hosted outside Africa, namely in Europe. The number of websites that are locally

hosted is generally low in comparison with other regions (figure 6). Some of the reasons include the lack

of IP connectivity, lack of Internet exchange points (IXPs) through which content is cached and

exchanged between the local operators between their autonomous networks, and lack of data centers

to store securely large amounts of digital information and host it close to users so that the data

transmission costs are minimized.

Infrastructure for content exchange and storage therefore needs to be developed further. It is

envisioned that once this layer of content platforms becomes more prevalent and affordable, there

would be a surge in the creation of local content, whether it is for public services, entertainment, or

business. This situation is also a missed opportunity for the information technology companies in the

21

region to provide middle-layer services for content storage and creation. The African Union has funded

some IXPs across Africa at the national and regional levels. For example, there are more contributions to

Wikipedia from Hong Kong SAR, China, than from all of Africa combined, despite that Africa has 50 times

more Internet users.

Figure 6. Websites Hosted Locally, ECOWAS Member States

Source: Source: “Missing Links and Infrastructure Sharing Study” prepared by a team of consultants: Claude de

Jacquelot, Mike Jensen, Bernard Sanchez, Rémy Fekete, Ananda Covindassamy, David Guitton, and Iheb Nomme.

e) Regulatory Barriers to Cross-Border Use of Existing Infrastructure

Legal and regulatory frameworks have been developed in member states with a national focus and have

primarily been driven by mobile-focused interests. Resultantly, while domestic mobile markets have

flourished in the past decade, a regional vision for data or broadband connectivity has been missing. Cross-

border interconnection is also primarily used to facilitate voice calls on mobile roaming.

As table 1 shows, there is significant variation between member states across key legal and regulatory

areas in the existence of regulation/laws pertaining to these and other areas, as well as in their

implementation.19 For example, nonnational telecom operators cannot provide fiber infrastructure in

member states, except in the cases of Burkina Faso and Senegal, where it is possible on a reciprocity basis,

and in Guinea, where it is possible for telecom operators without national licenses to operate submarine

Nigeria; 1187

Senegal; 62

Ghana; 93

Côte d’Ivoire; 52

Burkina Faso; 44

Mali; 19

Benin; 14

Togo; 15

Mauritania; 22Cape Verde; 24

Guinea; 18

Gambia; 13

Niger; 12

Sierra Leone; 2

Liberia; 2

CEDEAO Nombre de sites Web hébergés (06 2016)

22

landing stations through an association or consortium. Similarly, the lack of harmonization of legal and

regulatory regimes around the provision of dark fiber, infrastructure sharing, and access reinforces the

national outlook toward the development of connectivity infrastructure, rather than regional. Although

the various ECOWAS Commission Supplementary Acts pertaining to information and communications

technology (ICT) addressing these concerns have been transposed into national regulation in most

member states, their implementation has been a challenge.

Table 1. Implementation of ECOWAS Supplementary Acts

Country Harmonization of policies

Access & interconnection

Legal regime

Numbering plan

Radio-frequency spectrum

Personal data

protection

Electronic transaction

Benin ✓ ✓ ✓ ✓ ✓ ✓ ✓

Burkina Faso

✓ ✓ ✓ ✓ ✓ ✓ ✓

Guinea-Bissau

✓ ✓ ✓ ✓

Cabo Verde

✓ ✓ ✓ ✓ ✓ ✓ ✓

Gambia, The

✓ ✓ ✓ ✓

Ghana ✓ ✓ ✓ ✓ ✓ ✓ ✓

Guinea ✓ ✓ ✓ ✓ ✓ ✓ ✓ Côte d'Ivoire

✓ ✓ ✓ ✓ ✓ ✓ ✓

Liberia ✓ ✓ ✓ ✓ ✓ ✓ ✓

Mali ✓ ✓ ✓ ✓ ✓ ✓ ✓

Niger ✓ ✓ ✓ ✓ ✓ ✓

Nigeria ✓ ✓ ✓ ✓ ✓ ✓

Senegal ✓ ✓ ✓ ✓ ✓ ✓ ✓

Sierra Leone

✓ ✓ ✓ ✓ ✓ ✓ ✓

Togo ✓ ✓ ✓ ✓ ✓ ✓ ✓

Source: GSMA/Detecon Consulting; World Bank consultant. Note: ECOWAS = Economic Community of West African States; WAEMU = West African Economic and Monetary Union.

All the coastal countries in the region, except Guinea-Bissau, have international connectivity through

submarine cables, and all but four countries have cross-border terrestrial interconnection. When

combined with the alternate Source of fiber optic infrastructure through utilities, transportation, and

energy projects, the region is well placed to begin developing a single connectivity market by better

utilizing the infrastructure that is available.

WAEMU directives Previous or existing laws/decrees or orders ECOWAS supplementary acts Domestication in progress

23

Increasingly, the bottleneck to the development of regional connectivity is not with infrastructure

constraints, but the lack of a regional framework of regulation and intergovernmental agreements. The

main shortcomings, which this section examines, are limited competition and cost effectiveness in the

supply of services. The following are the interrelated challenges for better infrastructure utilization at the

regional level:

i. Lack of Regional Competition in the Wholesale Segment

Four pan-regional operators in West Africa offer wholesale services in the region: Etisalat/Maroc Telecom,

Orange, MainOne, and Phase3 Telecom (table 2). About 10 others provide some cross-border

connectivity. Due to the geographic size of the region, there is little overlap of the networks; hence, they

consist of a cluster of single-operator markets. MainOne and Phase3 Telecom, two Nigeria-based

operators, operate in the same countries, namely, Nigeria, Benin, Togo, Ghana, Côte d’Ivoire, and Burkina

Faso. Advancement in cross-border communications is therefore being driven by the expansion strategies

of the individual operators. The four operators also provide retail services in the countries where they are

located. (The second part of this study examines the mobile segment of the market.)

Table 2. Main Wholesale Operators in West Africa

Etisalat/Maroc Telecom has developed a cross-border network through its acquisition or investment in operators in Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Nigeria, and Togo (as well as other countries in other regions in Africa). Note: Etisalat has exited Nigeria.

Orange has built a regional platform through its acquisitions in Burkina Faso, Côte d’Ivoire, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, and Sierra Leone. In Senegal, Côte d’Ivoire, and Mali, Orange is the main player (in wholesale and retail), and it heads the ACE submarine cable consortium.

24

MainOne is a Nigerian company that began as the operator of the MainOne submarine cable and extended this terrestrially to Benin, Burkina Faso, Togo, and Ghana. MainOne is in the process of connecting Burkina Faso with Côte d’Ivoire.

Phase3 Telecom, a Nigeria-based wholesale telecom infrastructure provider, is connecting its fiber optic infrastructure running on power grid infrastructure in Nigeria to other ECOWAS countries, including Benin, Togo, and Niger, with ongoing plans to extend the network to Ghana, Côte d’Ivoire, and Senegal.



At the national level, the number of de jure monopolies and instances of exclusivity have greatly decreased over the years, due to efforts driven by the ECOWAS member states. However, de facto monopolies or exclusivity remain in some countries for access to and/or the provision of national and international infrastructure (submarine landing stations and national backbone infrastructure). Additionally, there are instances where some rights are in practice reserved to a limited number of players, such as limited consortiums for access to international capacities. Such restrictions, which can concern various rights of way and permission for activities, are difficult to detect and identify, since they can result from provisions of licenses or authorizations that are not publicly disclosed. Such de jure and de facto monopolies and specific rights prevent other actors from accessing certain reSource and rights of way under optimal conditions, carrying out certain activities, or providing certain services that are paramount for the development of cross-border connectivity (such as access to/provision of international and national capacities). De jure monopolies and specific rights are contrary to ECOWAS legal provisions, since Article 9.1 of the Supplementary Act A/SA. 3/01/07 on the Legal Regime Applicable to Network Operators and Service Providers provides that “Member states shall refrain from granting licenses with exclusivity or special rights, except when mandated by the country's policy or legislation, when dictated by the unavailability of necessary reSource or other relevant reasons.”

Furthermore, there is a general lack of guidelines and implementation of existing guidelines on how to

address significant market power (SMP), that is, operators that are in a dominant position within a

geographic area and able to price services over the marginal cost, among other aspects. For example,

under the current European Commission Directives, an operator identified to have SMP is subject to

“specific obligations such as the requirement to produce a reference interconnection offer and the

obligation to have cost-oriented tariffs (except for mobile operators).”20 According to the Organisation for

25

Economic Co-operation and Development (OECD), an operator is presumed to have SMP if it has more

than 25 percent of a telecommunications market in the geographic area in which it is allowed to operate.21

Article 19.2 of the Supplementary Act A/SA. 2/01/07 on Access and Interconnection in Respect of ICT

Sector Networks and Services requires the ECOWAS Commission to publish (i) guidelines for market

analysis and assessment of market power and (ii) a recommendation on relevant markets in products and

services in the telecommunication sector that can be regulated ex ante. The wholesale market has a direct

impact on the prices offered to individual and institutional consumers. As figure 7 shows, the cost of

international bandwidth varies extensively within the region and, in certain cases, a bulk of that cost is for

terrestrial bandwidth in the country and not for international connectivity to Europe.

Figure 7. Price of International Bandwidth (US$/Mbps/month)


Mike Jensen, Bernard Sanchez, Rémy Fekete, Ananda Covindassamy, David Guitton, and Iheb Nomme. Note: Mbps

= megabits per second.

The impact of SMP is worse for landlocked countries that need to route traffic over terrestrial networks

and through cross-border points of interconnection to gain access to international capacities. The price of

international bandwidth is between 1 and 4 percent of total cost (figure 8), depending on the route taken

to access a submarine landing station, and the rest of the cost is incurred in accessing terrestrial backbone

networks.

0

200

400

600

800

1000

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Africa : Price of international bandwidth Mbps/month/$ (country-EU)Prix de la bande passante internationale ($/Mbps/mois)

Western Africa

26

Figure 8. Mali’s Costs for Accessing International Bandwidth

Source: Malitel

ii. Lack of Framework for Regional Wholesale Pricing

A reference interconnection offer (RIO) is an offer document setting out matters relating to the price

and terms and conditions under which a carrier will permit the interconnection of another carrier to its

network. The objective of the RIO is to promote competition and efficient use of existing infrastructure.

Several reference offer catalogs were collected and analyzed for this report. Eight offers for access to

national capacity (active and passive) and international infrastructure were gathered. In at least two

countries, Nigeria and Ghana, national and international bandwidth offers are not regulated. In

summary, the features of RIOs in the region are as follows:

• Among the various RIOs analyzed, all explicitly state that the offers are only intended for

national operators.

• There are no explicit offers for access to cross-border interconnection points.

• While most regulated offers propose colocation services at the national interconnection points,

none of them explicitly offers access to cross-border interconnection points.

• National capacity offers are not adapted to the much larger volumes required by cross-border

data transmission.

• Of the eight offers analyzed, only five propose offers for rates above 2 megabits per second

(Mbps), and two only provide prices on request.

• The offers of two RIOs available in six of the eight countries have large differences in access fees

and rental fees, and there is a lack of harmonized structure for RIO obligations across the region

(some are based on distance (kilometers) per month or year).

STM1 link is the minimum offer for a reasonable IP broadband or data link. It corresponds to the

connectivity of 1,500 fixed broadband access or 5,000-7,000 mobile device connections per day

4% 1%

1% 13%

95%87%

Côted'Ivoire Sénégal

InternationalBandwidthPrice StationtoMaliBorder MaliBordertoBamako

27

(smartphone or tablet). The main capacities at the backbone level are in billions of bits per second

and/or STM4/16/64 (backhaul and small backbone). Offers for bandwidth exceeding 2 Mbps are

available in a limited set of countries. Only three of the eight countries analyzed offer 1 STM1 for

national capacity. Operators negotiate and reach agreements among themselves for this level of

capacity, often through capacity swaps.

iii. Other Regulatory Enabling Environments Driven by National and Mobile-Focused Interests

The existing policy and regulatory frameworks at the national and regional levels (ECOWAS

Supplementary Acts) have largely focused on advancing national or domestic connectivity. There is

currently no formal framework for fostering optimal economic and technical conditions for regional or

cross-border communications. As a result, investments in completing cross-border or regional

connectivity remain insufficient, and there is a lack of competition for the provision of services based on

cross-border or regional infrastructure, which maintains nontransparent pricing of wholesale bandwidth

capacity that is unregulated.

Licensing of a telco operator. Currently in the ECOWAS region, an operator licensed or authorized as an

operator in a member state is not recognized in another member state. This applies to the operators of

alternative infrastructure (such as energy grids and roads), who currently have no status or rights

enabling them to participate in the rollout of cross-border or regional networks. In this respect, the

ECOWAS Supplementary Act on the Legal Regime Applicable to Network Operators and Service

Providers encourages member states to exempt some activities from a licensing requirement. However,

in practice, licenses remain necessary to provide basic telecommunications services (such as provision of

national and international capacities, or even provision of dark fibers) in most member states. Such

limitations are implemented through the specific requirement to be a national company to carry out

electronic communication activities. This requirement may be specified in the applicable law or

regulations, licenses and their related specifications, regulatory authorities’ websites, and so forth. As a

result, nonnational telecommunications operators that are willing to develop cross-border networks

cannot provide services in the other member states where such networks would be located.

The Supplementary Act on Access and Interconnection in Respect of ICT Sector Networks and Services

provides that “Member states shall ensure that the general regulatory framework for access and

interconnection incorporates the general community regulation principles foreseen for the

establishment of the West African Common Market, including non-discrimination between companies

established in different States.” Likewise, the Supplementary Act on the Legal Regime Applicable to

Network Operators and Service Providers promotes the coordination of national regulatory authorities

toward the establishment of a single point of contact for licensing and authorization procedures.

However, these provisions remain general, are not sufficiently detailed, and have not been implemented

by most ECOWAS member states.

Open access policy, in particular to dark fiber. Open and fair access to backbone infrastructure running

through a country and across the border to another country would trigger an increase in cross-border

communications. It is notable that there are no RIOs for dark fiber indefeasible rights of use (IRU) or

28

wavelengths. Under most legal and regulatory frameworks, nonnational operators cannot benefit from

the rules applicable to access and interconnection, which prevent them from gaining access to national

capacities, international capacities, and dark fiber. Yet, access to such reSource is necessary for the

deployment of cross-border or regional networks. ECOWAS Regulation C/REG. 06/06/12, on conditions

for access to submarine cable landing stations, which is directly applicable in all member states, aims to

ensure that landlocked countries have equal access to submarine fiber that the coast countries have.

Infrastructure sharing and colocation. Related to the principle of open access, specific regulations or

guidelines are required for access to the core network by other network operators. These include

guidelines on sharing masts and poles, spaces in buildings with termination and switching equipment,

trenches through which the fiber optic cable runs, and so on. Rights of way and access to electric power

may require securing additional approval from the granting authority, which should be obtained before

the infrastructure-sharing arrangement between operators can be finalized. And currently there is no

“dig once” policy whereby construction of ducts and pipes underground is planned for the needs of the

various operators and future needs so as not to dig the ground multiple times, which has significant cost

implications as well as disruptions to roads and other facilities (around 75 percent of the cost to lay fiber

underground is in construction and works).

Dispute resolution. One of the best practices in telecommunications is the clear guidelines for dispute

resolution procedures. Yet, in many ECOWAS member states, there are currently no specific provisions

allowing operators established in an ECOWAS member state to settle a dispute with an operator in

another member state. Such dispute settlement procedures are essential to ensure that difficulties

faced when developing cross-border networks can be solved adequately and in a timely fashion. The

ECOWAS Supplementary Act on the harmonization of Policies and of the Regulatory Framework for ICT

sector provides for specific rules dealing with this issue. However, the provisions of this article are not

directly applicable in member states, and most member states have not transposed this article in their

domestic law.

f) Recommendations

The agenda for the transition from a national to a regional regulatory framework and from mobile

network-centric policies to data traffic policies points to the need for a renewed commitment toward

the objective of easing cross-border communications connectivity. The following recommendations

consider the regional and national levels:

➢ Regional Legal and Regulatory Frameworks

National legal and regulatory frameworks are currently designed to foster the growth of the

communications sector at the national level. Although some regional frameworks have been put in

place (such as the ECOWAS Supplementary Acts), there is scope for improvement in their

transposition and implementation. Hence, while national infrastructure and international

connectivity through submarine cables have developed, investments in regional cross-border

connectivity, policy, and regulatory measures for market development and the provision of the

resultant services at affordable costs by the private sector have lagged. The development of a

formal framework to foster optimal technical and financial conditions for regional connectivity,

29

which shifts the focus from developing individual domestic markets to a single connectivity market,

is necessary to develop further regional connectivity.

The ECOWAS Supplementary Acts provide a strong framework for governments and national

regulatory authorities to develop the necessary national legal and regulatory frameworks to foster a

regional market for digital infrastructure. Transposing and implementing these acts into national

frameworks in a prioritized and staggered manner can serve as a starting point toward developing

such a regional outlook for digital sector regulation. The following areas are identified as priorities

for the consideration of member states and their national regulatory authorities:

• Regional licensing regime. Facilitate telecom operators that are licensed or authorized in a

member state to provide certain services across the region, such as the rollout of passive

infrastructure, leasing of dark fiber, and so forth. Similarly, enable owners of alternate

infrastructure, such as utilities, to roll out national as well as regional networks. In doing so

regionally, it is recommended to develop a single window for licensing and authorization

for infrastructure development that facilitates engagement with the necessary authorities.

Relevant ECOWAS Supplementary Acts: Article 3.1 of Supplementary Act A/SA. 2/01/07 on

Access and Interconnection in Respect of ICT Sector Networks and Services; Articles 8.1 and

30 of the Supplementary Act A/SA. 3/01/07 on the Legal Regime Applicable to Network

Operators and Service Providers.

• Significant market power and competition. Addressing SMP at the national and regional

levels is necessary to promote competition and a marginal cost–based pricing mechanism

for services in the region, which is the cornerstone for regulating ICT markets. In addition

to identifying and outlining necessary action to address SMP, measures should be taken to

prevent the creation of such market distortions in the future. This requires significant

efforts at the national level through periodic market analysis to assess SMP and the

implementation of pro-competition measures, such as open access obligations to

infrastructure, price ceilings, liberalization of critical infrastructure (such as gateways), and

so forth.

Relevant ECOWAS Supplementary Acts: Article 9.1 of the Supplementary Act A/SA. 3/01/07

on the Legal Regime Applicable to Network Operators and Service Providers; Article 19.2 of

the Supplementary Act A/SA. 2/01/07 on Access and Interconnection in Respect of ICT

Sector Networks and Services.

• Passive infrastructure sharing and dark fiber. Although Article 10 of the Supplementary Act

A/SA. 2/01/07 on Access and Interconnection in Respect of ICT Sector Networks and

Services lays down provisions for the national authorities promoting the sharing of passive

infrastructure, they do not cover specific aspects, such as rules applicable to accessing

alternative infrastructure, publication of the list of active and passive infrastructure by

operators, and conditions for passive infrastructure sharing. It is recommended that the

ECOWAS Commission, in conjunction with member states, detail the applicable provisions

for passive infrastructure sharing across the region.

• Dispute resolution. In Burkina Faso, Guinea, Côte d’Ivoire, Mali, and Senegal, operators

established in other ECOWAS member states benefit from the right to go before the

regulatory authority, but the same is not true for other member states. To achieve the goal

of establishing a West African Common Market, it is necessary to have an independent

30

dispute resolution mechanism or authority that is accessible to entities from all member

states.

• Standardized data collection. Accurate and periodically updated data on connectivity

infrastructure at the national level—aggregating to regional data—is a must for optimal

utilization of the existing infrastructure. It is recommended that the ECOWAS Commission

establish standardized reporting guidelines for infrastructure data, which should be

collected and published periodically. The key data that are needed include, but are not

limited to, the number of base transceiver stations (BTS) by type, fiber infrastructure,

point-of-presence (POP) sites, and the capacity of each type of connectivity infrastructure.

This effort also provides an opportunity to integrate geospatial information into the data

sets and create digital connectivity maps and informational platforms for the region. This

would include information on the presence and availability of passive linear infrastructure,

such as roads, rail lines, and electricity grids.

➢ Supply-Side Enablers at the National Level

• Reference interconnection offers. The lack of availability and transparency of wholesale

connectivity prices is a bottleneck for operators without large-scale infrastructure to connect

across borders. A lack of standardization in the technical information provided and high degree

of variation in the price points of RIOs were observed, with all reference offers limited to

national stakeholders only. It is recommended that the ECOWAS Commission mandate the

publication of standardized RIOs at the national level, with a long-term goal of operators (and

owners of passive infrastructure) eventually providing regional RIOs.

• Alternate infrastructure. The utility, energy, and transportation sectors can play a significant role

in developing national and regional backbone infrastructure. The Senegal River Development

Organization (OMVS) and CSLG projects can be used as key drivers of subregional cross-border

connectivity and serve as examples for leveraging future infrastructure projects in the region. By

allowing non-telecom operators to engage in rolling out connectivity infrastructure such as dark

fiber, national and regional connectivity can expand at a more rapid pace. This requires

development of the necessary legal and regulatory frameworks at the national level, which can

integrate regionally and promote infrastructure sharing and utilization of alternate Source of

infrastructure at the regional level. Additionally, it can foster greater competition in the

wholesale market and address SMP-related concerns to an extent. It can also serve as a starting

point to implement a regional “dig-only-once” strategy, contracting infrastructure developers to

lay fiber optic cable and commercialize the available infrastructure using innovative business

models, as regulated by national authorities.

• Subregional connectivity. Creating multiple subregional hubs of fiber optic infrastructure and

digital platform infrastructure (data centers, exchange points, and cyber security centers) and

leveraging alternative infrastructure projects, such as the Senegal River Development

Organization and CSLG, could promote robust and secure national and subregional digital

ecosystems. This would in turn provide different options for redundancy networks for the

individual countries. In this instance, the heterogeneous economic and market groupings within

the region could be turned into an advantage.

31

➢ Demand-Side Stimulation (Regional IP Usage)

Most member states have yet to establish neutral IXPs, and many that have been established are

operating sub-optimally. Without an enabling environment that fosters the growth of independent

networks, which would require more IXPs, regional traffic will continue to leave the region and be

interconnected in Europe. This, in turn, does not allow the price of regional IP interconnection to be

as competitive as international interconnection. This is further evidenced by websites receiving the

highest traffic from the region all being hosted outside Africa. Promoting local content development

and hosting in the region will redirect a large proportion of international IP traffic within the region,

and thus reduce the cost of regional interconnection and bandwidth due to higher traffic volume.

Developing greater IP usage through establishment and implementation of comprehensive

broadband strategies at the national and regional levels should be an immediate priority.

III. Low-Cost International Mobile Roaming: Boosting Consumer Welfare Although the communications market in Africa still relies heavily on 2G voice services, which constitute

55 percent of total subscriptions, it is projected to decline to 10 percent by 2023. 22 Internationally,

regional economic communities have leveraged the digital sector to strengthen regional economic

integration, while also promoting consumer welfare through increasing the affordability of services,

including the reduction and eventual elimination of roaming charges. Roaming does not form a large part

of mobile operator revenues, but it has traditionally been a high-margin business segment, partially due

to the need to compensate for the high risk of subscribers’ bad debt, delayed payments, and potential

fraud, among other reasons.

Estimating the market for international roaming requires information on prices and volumes (of calls and

data usage) for each operator in each country, as well as information on cross-border movement. Such

data are not widely available for the region, as transparency in retail pricing is not enforced, and the

information would include commercially sensitive data owned by mobile operators. Additionally, the

limited international experiences in regional mobile roaming regimes do not allow for accurate estimation

of the price elasticity of roaming and resulting changes in consumer behavior. This study aims to highlight

the current state of international mobile roaming in the region and the challenges to the reduction and

abolishment of roaming charges. This section also highlights challenges to the development of a regional

outlook for the sector, particularly since the roaming market includes wholesale and retail elements.

On the one hand, the reduction or abolishment of roaming tariffs would constitute a reduction in operator

revenues from the service in the medium term. On the other hand, it would create a large consumer

surplus, which, by one estimation, would amount to US$775 million over the next four years for the

region.23 Table 3 presents the estimated consumer surplus per inhabitant due to the abolishment of

roaming based on the same study. For comparison, the ECOWAS region has a higher population and lower

gross national income per capita than the Gulf Cooperation Council (GCC) and European Union.

32

Table 3. Transfer of Welfare (Additional Consumer Surplus) (US$ per inhabitant)

GCC (2012) $1.8

EU (2009 to 2013, yearly average) $5.0

ECOWAS (2017 to 2020, yearly average) $0.6

Source: “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Progressus including Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. Note: ECOWAS = Economic Community of West African

States; EU = European Union; GCC = Gulf Cooperation Council.

Regional roaming initiatives have been met with varying degrees of success and followed different paths.

A common result across all initiatives is a significant increase in roaming usage, which can be seen as an

indicator of consumer surplus. In Kenya, for example, the volume of calls increased by 264 percent when

regional roaming rates were abolished. Similarly, in France, call volumes increased by 50 percent when

tariffs decreased by 50 percent, and more recently, some European operators have reportedly seen an

increase in roaming data usage of 870 percent.24

Operators across Africa, including in the ECOWAS region, have recognized the potential of the roaming

market and developed on-network roaming plans in response. Additionally, certain country pairs within

ECOWAS have started implementing free roaming to benefit consumers and facilitate greater integration.

As highlighted in the previous section, the region has significant infrastructure, and the retail market is

gradually moving toward seamless movement. However, regional policy and regulatory efforts can further

aid in the development of this market. In addition to increasing consumer welfare, affordable regional

roaming can help smaller operators provide services to their subscribers and not be burdened by the costs

associated with being in a net payable situation.

The roaming market also allows taking a regional view of mobile communications, since it entails

wholesale (requiring interconnectivity) and retail elements of the communications market. Analyzing this

market enables the identification of underlying issues for greater harmonization of the sector at the

regional level.

a) Potential for a Regional International Mobile Roaming Regime

Affordable and seamless roaming can help develop regional economic activity. To assess the potential for

roaming, the following subsections consider trade, migration, and tourism flows within the region as

proxies.

i. Trade Flows in ECOWAS

Trade flows within ECOWAS can serve as a proxy for regional economic activity that can be further

supported through affordable roaming services. As highlighted in figure 9, regional trade as a percentage

of total trade varies from 2 to 60 percent, with an average of 9 percent across member states.

33

Figure 9. Intra-ECOWAS Trade (%)

Source: UN COMTRADE data.

As a possible and observable proxy to estimate potential development for roaming, the trade exchange

values show that there is no significant difference between ECOWAS countries and countries in other

regions. Additionally, this analysis demonstrates that the most important trade flows are between Nigeria

and other countries, as Nigeria is the biggest economy in the region (figure 10).

Figure 10. Major Trading Parties within ECOWAS: Annual Trading Value (US$, millions)

Source: UN COMTRADE data.

ii. Migration Flows within the ECOWAS Region

Intra-ECOWAS migration flows as a portion of total migration flows are significant, accounting for 64

percent. Only 30 percent of migrants from ECOWAS reside outside Africa, of which 15 percent are in

Europe, 6 percent in North America, and 9 percent in the rest of the world. The main countries of origin

60%

46%

38%

29%24% 23%

20% 19% 19% 17%

8%4% 2%

9%

% of trade with other ECOWAS countries

0

500

1000

1500

2000

2500

3000

Nigeria/ Côte

d'Ivoire

Nigeria/

Ghana

Nigeria/ Niger

Mali /Senegal

Nigeria/

Senegal

Côted'Ivoire

/Burkina

Faso

Côted'Ivoire

/Ghana

Côted'Ivoire/ Mali

Ghana/

BurkinaFaso

Senegal/

Nigeria

Senegal/ Mali

Guinea/

Ghana

SierraLeone /Senegal

Annual trading value (million USD)

34

for migration within ECOWAS are Burkina Faso (1.4 million), Côte d’Ivoire (0.9 million), and Mali (0.8

million). Côte d’Ivoire (2.4 million), Ghana (1.7 million), Burkina Faso (1.0 million), and Nigeria (0.8

million) are the largest destination countries (map 5).

Map 5. Migration within the ECOWAS Region a. By country of origin

b. By country of destination

Source: “A Survey on Migration Policies in West Africa,” International Center for Migration; consultant analysis.

Note: The map in panel a excludes migration to Ghana.

Coted’Ivoire(- 0.9 m)

Sierra Leone(- 0.2 m)-

Mali(- 0.8 m)

Guinea-Bissau(-0.1 m)-

Ghana(-0,4 m)

Niger(- 0.3 m)

Guinea(- 0.4m)

Nigeria(-0,1 m)

Senegal(- 0.2 m)

Liberia(- 0.3 m)

Benin(-0.4 m)

The Gambia(- 0.0 m)-

CapeVerde

(-0.0 m)

Burkina Faso(-1.4 m)

Migration stock within the ECOWAS Regionby country of origin (1)

Source : A survey on Migration Policies in West Africa, ICMPD et OIM, Consultant Analysis(1) Excluding migration to Ghana

between 0.0 and 0.5 million


Between 1.0 and 1.5 million

Togo(- 0.3 m)

Coted’Ivoire

(+ 2.4 m)

Sierra Leone(+ 0.1 m)-

Mali(+ 0.1 m)

Guinea-Bissau(+0.0 m)-

Ghana (1)

(+1.7 m)

Niger(+ 0.2 m)

Guinea(+ 0.4m)

Nigeria(+0,8 m)

Senegal(+ 0.1 m)

Liberia(+ 0.1 m)

Benin(+0.2 m)

The Gambia(+ 0.3 m)-

CapeVerde

(+0.0 m)

Burkina Faso(+1.0 m)

Migration stock within the ECOWAS Regionby country of destination

Source : A survey on Migration Policies in West Africa, ICMPD et OIM, Consultant Analysis(1) estimates






Togo(+ 0.1 m)

35

iii. Short-Term Travel and Tourism within ECOWAS

Analysis of short-term migration and travel is another way to assess the potential market for roaming.

Higher levels of economic integration in the region may be associated with increased short-term regional

travel and support tourism in the region, as citizens can travel freely within the region. International

tourism currently exceeds one billion persons a year and has been growing at an annual rate of 3 percent.

Tourism in Africa has varied over the past year between 55 million and 62 million persons, which

represents 5 to 7 percent of world tourism. Figure 11 highlights the share of tourism between some of

the countries, which ranges between US$15 and US$43 per incoming tourist.

Figure 11. Total and Internal Tourism in ECOWAS

Source: “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Progressus including Olivier Jacquinot,

Katia Duhamel, Laurent Cohen, and Russel Southwood.

Lengths of stay vary from 3 to 8 days (figure 12). In addition to overnight visitors (0.6 million), Nigeria has

an important flow of same-day visitors (3.4 million), likely due to its economic size and position as an

international hub in Africa.

Figure 12. Lengths of Stay in Days

Source: “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Progressus including

Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood.

257

191

33

152

600

44

327

110

70

836

132

7

62

43%

37%

24% 24%22%

15%

19%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

100

200

300

400

500

600

700

Benin Burkina Faso Guinea Mali Nigeria Sierra Leone Togo

Internal ECOWAS tourism vs Total ECOWAS tourismin thousands and %

Total Internal %

8 8

7 76.5

4.43.9

3.4 3.1 3

0

1

2

3

4

5

6

7

8

9

36

International tourism is still in its developmental stages in Africa, and it is expected to grow as incomes

increase and the various regional integration efforts across the continent mature. Given the low average

lengths of stay and relatively high amount of internal travel within the region, the roaming market

demonstrates potential for growth.

b) Current State of International Mobile Roaming within ECOWAS

A total of 21 mobile operators in the ECOWAS region serve 320 million subscribers, with a high degree of

market concentration among the top five operators. Figure 13 highlights the market share of each of the

operators in the region and reveals three distinct groups:25

➢ Tier 1. Five operators with more than 10 percent of the market share (MTN, Airtel, Etisalat, Orange,

and Globalcom), totaling 89 percent of the regional market

➢ Tier 2. Two operators that are part of large international groups (Vodacom and Millicom), with more

than 2 percent of the market share each

➢ Tier 3. The remaining 14 operators, representing less than 6 percent of the regional market.

Figure 13. Regional Market Share (%)



Among the five biggest operators, four are present in Nigeria, the largest market in the region (50 percent

of the regional market). The geographic footprint of these operators across the region can facilitate the

ease of interconnectivity and reduce roaming costs.

31

,7%

16,0

%

16,0

%

13

,0%

12,0

%

2,7%

2,5%

1,2%

1,1%

1,0

%

0,8

%

0,5

%

0,4%

0,4%

0,2

%

0,2%

0,1%

0,1

%

0,1

%

0,0

%

0,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

Regional market shareTier 1: 89%

Tier 2: 5% Tier 3: 6%

37

MTN is present in all the coastal countries from

Nigeria to Guinea-Bissau (except Togo), thus

benefiting from excellent international and

regional connectivity.

Airtel is present mainly in the eastern part of the

region and is in the process of selling its

operation in Burkina Faso to Orange.

Etisalat (Maroc Telecom) has significant

presence in the region.

Orange has a very large geographical footprint in

the region, which was further strengthened

through recent acquisitions of operations in

Liberia, Burkina Faso, and Sierra Leone.

Globalcom has the smallest geographical

footprint among the top five operators, with presence in three coastal countries.

CoteD’Ivoire

Sierra Leone-

Mali

Guinea-Bissau-

Ghana

Niger

Guinea

Nigeria

Senegal

Togo

Liberia

Benin

The Gambia-

CapeVerde

Burkina Faso

CoteD’Ivoire

Sierra Leone-

Mali

Guinea-Bissau-

Ghana

Niger

Guinea

Nigeria

Senegal

Togo

Liberia

Benin

The Gambia-

CapeVerde

Burkina Faso

CoteD’Ivoire

Sierra Leone-

Mali

Guinea-Bissau-

Ghana

Niger

Guinea

Nigeria

Senegal

Togo

Liberia

Benin

The Gambia-

CapeVerde

Burkina Faso

CoteD’Ivoire

Sierra Leone-

Mali

Guinea-Bissau-

Ghana

Niger

Guinea

Nigeria

Senegal

Togo

Liberia

Benin

The Gambia-

CapeVerde

Burkina Faso

as of December 2015new acquisition

CoteD’Ivoire

Sierra Leone-

Mali

Guinea-Bissau-

Ghana

Niger

Guinea

Nigeria

Senegal

Togo

Liberia

Benin

The Gambia-

CapeVerde

Burkina Faso

38

The primary motivation behind further development of international mobile roaming in the ECOWAS

region is to facilitate the fluidity of cross-border exchanges, be it communications, goods and services,

people, or cultural. Estimating the impact of seamless and affordable roaming in terms of increased

traffic and usage is challenging, and only now are we seeing preliminary data from the European Union

after the adoption of Regulation No. 2015/2120 in June 2017, which abolished roaming tariffs. From the

consumers’ perspective, the main obstacle to the use of roaming is unaffordability, which pushes a large

portion of the latent demand or potential customers to resort to substitution offers, such as buying local

SIM cards or using over-the-top (OTT) services on Wi-Fi networks. These options have drawbacks for the

consumer and cannot offer the continuity and seamlessness that affordable roaming can. Additionally, it

may become increasingly difficult to obtain SIM cards for short stays, as more countries strengthen their

Know Your Customer requirements.

All the major operators have roaming agreements with each other and provide roaming services to their

customers across the region. Table 4 summarizes the availability of roaming tariff information on the

websites of the region’s main telecom operators. Only Airtel provides tariffs for all the ECOWAS countries

where it operates; the other operators provide tariffs for up to 40 percent of their market.

Table 4. Availability of Roaming Prices

Source: Operator websites. Note: The green indicates that the information is provided,

red indicates that the information is not provided, while white indicates the operator is

not present in the country.

Analysis of the available tariffs demonstrates the existence of two pricing strategies for roaming, as

adopted by the major operators:

• Preferential on-net roaming offers. Airtel and MTN offer standard roaming and “one network” roaming. One network roaming or preferential on-net roaming refers to operators providing specific prices for customers connecting to the home operator’s network in another country. For instance, Airtel customers in Nigeria can benefit from on-net tariffs if they connect to the Airtel network in Ghana. These on-net offers—which are advertised as “Roam Like Home” by

Availability of

roaming tariffs

MTN

GroupAirtel Etisalat Orange

Nigeria

Ghana

Cote d'Ivoire

Mali

Senegal

Burkina Faso

Guinea

Benin

Niger

Togo

Liberia

Sierra Leone

Guinea-Bissau

39

MTN and “One Airtel” by Airtel—propose low roaming tariffs, with little or no markup compared with home prices.

• Standard roaming. Orange and Etisalat tend to propose only all-network roaming prices. The two operators indicated that they were moving toward more aggressive pricing. In particular, Orange mentioned that new roaming-specific bundles, including those offering a predetermined volume of voice, short message service (SMS), and data at a fixed price, had been introduced recently. However, these new bundles are not clearly presented on the websites under roaming information.

The roaming prices offered by operators in the region are highly heterogeneous across countries, operators, and visited countries. Figure 14 highlights the current observable prices in visited countries for local calls and calls to the home country. The prices are presented by home country and specific operator combinations, where the bottom value of the bar indicates the minimum price, and the top of the bar indicates the maximum price observed. For example, in the case of an Airtel customer from Ghana, a roaming call from Nigeria to the home network in Ghana costs US$0.8 per minute, while it costs US$9.2 per minute while roaming in Senegal. Similar variation is noticeable across visited countries when analyzing roaming prices across other parameters. The price of a local call may vary from US$0.0426 (price for Airtel Niger roaming in Ghana) to US$11.3 per minute (price for Airtel Sierra Leone roaming in Burkina Faso). The same spread may be observed for calls to home and for data traffic. In the latter case, the price of 1 megabyte (MB) of roaming data usage varies from US$0.08 (MTN Liberia within the MTN zone) to US$60 (Airtel Ghana roaming in Senegal).

Figure 14. Price of Voice Roaming in ECOWAS (US$ PPP per minute)

Source: Operator websites. Note: PPP = purchasing power parity.

The minimum and maximum prices are not always comparable, since minimum prices may be limited to

on-net offers (connection to the same network). Similarly, figure 15 highlights the variation in data

roaming prices.

2,9

1,5

0,8

0,8

0,8 1,1

0,7

0,2

0,6

24

,2

13

,3

9,2

8,4

7,2

5,4

3,3

3,2

2,9

2,5

0,8

0,4

0,0

5,0

10,0

15,0

20,0

25,0

30,0

Price per minute for a call to home in visited country (USD)

2,9

0,4 0,5

0,2

0,8 0

,0

1,1

0,7 0,7

0,6 0

,8

11

,3

4,1

4,0

3,3

3,2

2,9

2,7

2,4

1,9

1,6

0,9

0,3

0,0

2,0

4,0

6,0

8,0

10,0

12,0

Price per minute for a local call visited country (USD)

40

Figure 15. Price of Data Roaming in ECOWAS (US$ PPP per MB)

Source: Operator websites. Note: MB = megabytes; PPP = purchasing power parity.

In addition to the high heterogeneity in roaming prices across the region, the prices are generally high—

and this comes to the forefront when average prices across the region are compared with regulated prices

in Europe, the GCC, or East Africa. Figure 16 illustrates the ratio between the average price observed in

ECOWAS and regulated prices in East Africa, the GCC, and Europe. The price for a call to home made in

ECOWAS is 23 times higher than in Europe, and the price for data roaming in ECOWAS is 65 times higher

than in Europe.27 Furthermore, roaming prices are considerably higher compared with domestic prices—

a differential that cannot be solely attributed to the costs associated with roaming, as will be seen in

subsequent sections of this report.

1,2

1,6

1,9

6,7

3,8

11

,6

3,6

1,2

0,3 1,

2

0,5

0,1

60,6

42

,0

32

,7

31

,1

29

,1

22,6

17

,9

13

,2

11,6

2,9

1,8

0,4

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

Price per MB (USD) in visited country

41

Figure 16. Ratio of Prices for Voice and Data in ECOWAS Compared with GCC, EAC, and Europe

Note: EAC = East African Community; ECOWAS = Economic Community of West African States; EU = European Union;

GCC = Gulf Cooperation Council; ONA = East Africa One Network Area.

c) Potential Barriers to Affordable Regional International Roaming

The most significant concern from the consumers’ perspective on roaming usage is price. Additionally, the

lack of published offers and complexity of pricing increase the fear of bill shock, further decreasing

incentives to utilize roaming services. The low volume of traffic acts as a disincentive for mobile operators

to allocate reSource to developing the roaming market through commercial offers and competitive pricing.

From the operators’ point of view, there may be few or no incentives to reduce roaming rates. The

assumption here is that high prices generate high margins, although from a very small volume, and that

the price elasticity of roaming traffic has not been proven to be important.

Although this market situation makes it difficult to assess the true size of the roaming market, evidence

from the European Union is starting to emerge, almost a year after the ruling on roaming came into effect.

BICS—the leading international wholesale connectivity provider—reported an 800 percent increase in

roaming traffic in the European Union in 2017 compared with 2016.28 While operators may have to rethink

their roaming business model, early evidence from the European Union suggests that the market

expanded, leaving scope for efficient monetization through bundles and offers.

Roaming prices (barring on-net roaming) in ECOWAS are generally higher than in other regions and vary

significantly within the region. This section analyzes potential reasons behind the current state of roaming

prices in ECOWAS.

42

i. Relatively High and Highly Varying National Retail Prices

The price levels in the domestic mobile markets of ECOWAS member countries can be analyzed based on

advertised offers on operator websites, for comparisons within and between regions. This section uses a

basket methodology—similar to the methodology used by the OECD—applied to all tariff schemes of

operators representing at least 80 percent of the total market share in each country. The benchmark

covers 80 countries and more than 6,000 tariff schemes. Purchasing power parity (PPP)29 is used to

provide relevant international comparisons.

Figure 17 compares the price of a basket of 100 calls and 300 MB of data usage per month. This basket

corresponds to a predefined mix of 300 national and international calls (with average split of on- and off-

net calls). The price is calculated for each operator in the country, as the lowest price resulting from all

the operators’ tariff schemes, and then the price per country is calculated using the market share of each

operator.

Figure 17. Price of a Medium-Usage Basket across ECOWAS (US$ PPP)


Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. Note: ECOWAS =

Economic Community of West African States; MB = megabytes; PPP = purchasing power parity.

There are significant disparities between countries, with a ratio of 1 to 5.8 for the same consumption

basket between the least expensive country (Guinea) and the most expensive (Togo). Figure 18 shows

that on average in ECOWAS, prices for this medium consumption basket are the highest compared with

other African regions, the Middle East and North Africa, and the European Union, although some countries

in ECOWAS have significantly lower prices.

204169 154 135 120 111

78 72 66 49

702

40

14080

0

100

200

300

400

500

600

700

800

Price of basket 100 calls - 300 MB (USD PPP)

43

Figure 18. Price of a Medium-Usage Basket: ECOWAS versus Other Regions (US$ PPP)


Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood.

Note: COMESA = Common Market for Eastern and Southern Africa; ECCAS = Economic Community

of Central African States; ECOWAS = Economic Community of West African States; EU = European

Union; GCC = Gulf Cooperation Council; MB = megabytes; PPP = purchasing power parity; SADC =

Southern African Development Community; UMA = Arab Maghreb Union.

The comparison using a high-consumption basket of 300 calls and 1 gigabyte of data, as shown in figures

19 and 20, reveals a similar situation, with average prices in ECOWAS being the highest, while prices are

lower in some individual countries.

Figure 19. Price of a High-Usage Basket across ECOWAS (US$ PPP)

Source: “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Progressus including Olivier

Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. Note: ECOWAS = Economic Community

of West African States; GB = gigabytes; PPP = purchasing power parity.

71

59

4640

33

24

80

50

0

10

20

30

40

50

60

70

80

90

ECOWAS SADC ECCAS COMESA GCC UMA EU WeightedAverage

Price of basket 100 calls - 300 MB (USD PPP)

428

354

270 259 247 233205

144119 116

455

115

234204

050

100150200250300350400450500

Price of basket 300 calls - 1 GB (USD PPP)

44

Figure 20. Price of a High-Usage Basket: ECOWAS versus Other Regions (US$ PPP)

Source: “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Progressus including Olivier

Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. Note: COMESA = Common Market for

Eastern and Southern Africa; ECCAS = Economic Community of Central African States; ECOWAS = Economic

Community of West African States; EU = European Union; GCC = Gulf Cooperation Council; GB = gigabytes;

PPP = purchasing power parity; SADC = Southern African Development Community; UMA = Arab Maghreb

Union.

The higher domestic call prices on average are a contributing factor to high roaming prices. The

heterogeneity in roaming prices can also be explained by the inherent heterogeneity of domestic call rates

across the region. This variation, or lack of harmonization in retail tariffs, should be a policy focus area for

national regulators and regional authorities, to address challenges in the roaming markets.

ii. Similar Trends in Retail and Wholesale Markets

The roaming market is comprised of retail and wholesale components, at the domestic and international

levels. In addition to operating costs, such as network and signaling costs, a roaming call incurs certain

tariffs—domestic and international mobile termination rates (MTRs) and inter-operator tariffs (IOTs).

These costs, in addition to the operating costs pertaining to all calls, are supported by the home operator

(operator of the customer’s country of subscription) or passed on to the home operator by the visited

operator. The IOT, also referred to as the wholesale price in the roaming market, is an important

component. The IOT corresponds to the price paid by the home operator to the visited operator for any

outgoing call, and it is aimed to cover the costs encountered by the visited operator for the call. No IOT is

charged in the case of incoming calls, and only termination rates apply.

The MTR is the cost of terminating a call on the network of another national operator and is generally

supposed to be cost oriented according to national regulations, but very often that is not the case. The

MTR varies significantly across countries in the region, from US$0.01 (in Ghana) to US$0.12 (in Cabo

Verde), as shown in figure 21.

203

175

121

8873

42

204

129

0

50

100

150

200

250

ECOWAS SADC ECCAS COMESA GCC UMA EU WeightedAverage

Price of basket 300 calls - 1 GB (USD PPP)

45

Figure 21. MTR in the ECOWAS Region (U.S. cents)

Source: Regulators’ decisions; operators’ reference interconnection offers. Note: ECOWAS = Economic Community of West African States; MTR = mobile termination rate.

Figure 22 shows the comparison between the European Union and ECOWAS for the level of MTRs. The

figure highlights that MTRs in ECOWAS countries are generally significantly higher than in Europe, in

addition to varying significantly within the region.

Figure 22. MTR: Europe versus ECOWAS (U.S. cents per minute)

Source: Body of European Regulators for Electronic Communications; regulators’ decisions; operators’ reference interconnection offers. Note: MTR = mobile termination rate.

1,11,7 2,0 2,0

2,83,5

4,0 4,1 4,25,1

6,8

9,3

12,1

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Mobile termination rate (USD cents)

Mobile termination rate (USD cents) Average

Termination cost (low range) Termination cost (high range)

,5 ,6 ,8 ,9 ,9 ,9 ,9 ,9 1, 1, 1,1

1,1

1,1

1,1

1,1 1,1

1,1

1,2

1,2 1,2

1,2 1,2

1,2 1,3 1,3

1,4

1,4 1,4

1,4 1,7 1,

9 2,1

3, 3,3

6,9 7

,8

1,1 1

,7 2, 2,

2,8 3,

5 4, 4,1 4,2

5,1

6,8

9,3

12

,1

0

2

4

6

8

10

12

14

Mal

ta

Hu

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y

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nm

ark

Fra

nce

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rway

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King

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and

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deMobile termination rates (USD cents per minute): Europe vs ECOWAS

Europe ECOWAS Average Europe Average ECOWAS

46

It is often argued that the underlying costs for MTRs are much higher in African than in European countries,

mainly due to less traffic volume, lower density requiring sparser networks, and operating difficulties such

as the provision of electricity. Since MTRs are mandatory fixed costs that all roaming calls terminating on

a different network incur, the high variation between MTRs across member states may be an obstacle for

reducing and harmonizing roaming prices in the region. It appears that, in most cases, MTRs are not cost

based; instead, they are marked up to include an excess margin in national mobile termination. This excess

margin constitutes a significant difference between a local roaming call and an ordinary call. Additionally,

operators have minimized their exposure to MTRs with a high on-net share of traffic through lucrative on-

net offers.

Calls made to the home country or other international destinations while roaming incur international

termination costs. As shown in figure 23, international MTRs vary from US$0.08 (in Nigeria30) to US$0.70

(in The Gambia). Additionally, the existence of supplementary taxes or price floors (especially in Guinea,

Ghana, and Benin), as well as price ceilings for international MTRs (Sierra Leone), further complicate and

add heterogeneity to roaming tariffs. Although the costs of national and international termination are

fairly similar (only international transit cost should separate them), a high variation is observed between

them across all the countries except Nigeria.

Figure 23. International MTR and MTR (US$)

Source: “An Assessment of International Voice Traffic Termination Rates,” Policy, Competition & Economic Analysis Department, July 2015, National Certification Corporation. Note: MTR = mobile termination rate.

Data calls are also subject to the wholesale markets, and data roaming calls involve two fixed-cost

components: data transit from the visited country to the home country, and data connection in the home

country (similar to data connection for any subscriber of the home operator). There is high variation in

international IP transit prices across member states, and these rates are generally high in the region

compared with global benchmarks. Figure 24 highlights the current price of international bandwidth,

0,08

0,17 0,

21 0,24 0,26

0,27

0,27

0,27 0,

30

0,31 0,33 0,

38

0,38

0,50

0,70

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

International MTR and MTR (USD)

Int'l MTR (USD) MTR (USD) Average Int'l MTR

47

ranging from US$50 to US$552 per Mbps per month. Addressing the affordability of mobile Internet in

domestic markets will have direct effects on roaming data prices as well.

Figure 24. Price of International Capacity in ECOWAS (US$/Mbps/month)


Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. Note: ECOWAS =

Economic Community of West African States; Mbps = megabits per second.

The last kind of fixed cost incurred for roaming calls is IOT. Currently, IOTs in the ECOWAS region are a

result of bilateral agreements between operators or agreements between operators and carriers offering

wholesale roaming. As a result, data on IOTs are confidential and not available publicly. Since IOTs are not

regulated and are only dependent on commercial agreements between operators, the level of IOT may

vary significantly among operators and countries. Additionally, smaller operators may not have adequate

bargaining power to negotiate favorable IOT and remain in net payable positions. The estimated average

level of IOT in the GCC is US$0.5 for calls to home and US$0.28 for calls to local areas.31 The wholesale cap

in Europe has been reduced to €0.05. Other estimations in Southern and West Africa32 suggest high rates

for data roaming: US$11 per MB in Angola, 10.78 in Mauritius, 1.05 in Zimbabwe, and 0.42 in the Kingdom

of Eswatini.

d) Lessons from Regional Roaming Experiences

Roaming regulation aims to develop the retail market to maximize utility for consumers and profit for

operators. However, other aspects, such as incentives to invest or eliminating fraud and arbitrage that

can arise in international traffic, should be considered as well. In this section, we present the evolution of

international roaming in four regions, which broadly followed two approaches:

• Voluntary, private sector–led models in East and Southern Africa, with Southern Africa

analyzed as an ongoing initiative

• Purely regulated models of the European Union and six Arab GCC countries.33

552

13696

60 55 50

0

100

200

300

400

500

600

Liberia Benin Burkina Faso Côte d'Ivoire Gambia Senegal

Price of international bandwidh (USD / Mbps / month)

48

The International Telecommunication Union (ITU) describes various measures for promoting international

communications at affordable prices34:

(i) Empowering consumers to benefit from efficient competition and regulation, so that they have

the information and transparency to take appropriate actions

(ii) Identifying measures for improving the way the market works

(iii) Creating proposals for regulatory actions, which may include measures to lower rates.

Some of these measures may be taken unilaterally by a single country; others may be implemented

between two or more countries35 or applicable within a regional economic community, such as ECOWAS,

the Southern African Development Community (SADC), the European Union, the Organization of Eastern

Caribbean States (OECS),36 or others. Table 5 gives examples of the different categories of regulatory

intervention available to national and regional regulatory bodies. The ITU is currently pursuing an initiative

relating to the decrease of international roaming prices under the ITU Global Dialogue on International

Mobile Roaming (IMR) called Let’s Roam the World.37

Table 5. Range of Regulatory Options

Option range Example

Light regulatory intervention Improve customers’ understanding of roaming prices

Beyond some financial threshold, submit the pursuit of roaming services to obtaining the expressed consent of the customer

Intermediary regulatory intervention

Retail price cap and often wholesale price cap

Extensive regulatory intervention Unbundling of roaming services from national services

i. One Network Area Initiative in East Africa

In the EAC, where markets were historically integrated and more formally harmonized through the

activities of the East African Regulators of Postal and Telecommunications Organization, the

telecommunications markets were among the earliest in Africa to open. Prices for domestic calls were

driven down by competition, but roaming charges remained high. The regulatory association responded

positively to international trends and local pressures to open international gateways. Kenya, the last to

open its international gateway, finally gave in to regional pressures in 2004. The high cost of roaming had

already become an issue within the region, characterized by its progressive regulation and political

pressures on the regional regulators’ association, the East African Regulators of Postal and

Telecommunications Organization, to explore ways to accommodate proposals by then Celtel (Zain38) in

2006, to offer a roaming charge-free, integrated service in the region.

Zain, through its operations in East Africa, launched One Network by removing roaming charges and

allowing customers to move seamlessly across its networks in Kenya, Tanzania, and Uganda. The initiative

changed the dynamics in the region and strengthened Zain’s market position in each country. In Uganda,

in which it was weakest, Zain moved from fourth to second position within a year. Shortly thereafter,

Vodacom in Tanzania, Safaricom in Kenya, MTN and UTL in Uganda, and MTN Rwanda announced a service

49

offering cross-border services at the price of the country of origin. Within months, roaming charges had

disappeared across all networks in East Africa.

Relying on this private initiative, the EAC made a joint commitment in 201439 in the framework of the

Northern Corridor Integration Projects to create the One Network Area in four countries belonging to the

EAC (Burundi, Kenya, Rwanda, and Uganda), with the benefits also being extended to South Sudan so that

all calls between member countries would be billed as though they were local (table 6). The agreement

led to a pact between Safaricom, MTN, and Airtel Uganda that enables subscribers to receive calls for free

while in Uganda and pay a flat rate of US$0.1040 for calls to other East African countries.

Practically, the new tariff regime was agreed to by Kenya, Uganda, Rwanda, and South Sudan at the fifth

Heads of State Summit for the Northern Corridor Projects held in Nairobi in May 2014. Tanzania and

Burundi (EAC countries) are not part of the deal because they missed meetings that led to the planned

regional tariff plan. The statement further mandates member states to exempt regional calls from

surcharges applied by local operators on international incoming calls as well as additional charges on

subscribers on account of roaming within the region. Accordingly, there shall be no charges for receiving

calls while roaming within the region and subscribers traveling within the member states will be charged

as local subscribers in the visited country.

This has required telecom operators within the region to renegotiate bilateral agreements to ensure full

implementation of the One Network Area by September 1 for Uganda, Kenya, and Rwanda and December

31 for South Sudan, regardless of the telecommunication provider of the customer.

Table 6. Implementation Schedule of the One Network Area Initiative

► Heads of state directed the implementation of the One Network Area by December 31, 2014.

► August 2014, Ministers of Information and Communications Technology gazetted the

implementation guidelines of the One Network Area.

► Early implementation of the One Network Area was set for September 1, 2014 for Kenya, Uganda,

and Rwanda.

► Rwanda and Kenya launched the One Area Network on October 6, 2014.

► Uganda launched the One Area Network on January 7, 2015.

► Tanzania and Burundi launched the One Area Network on July 15, 2015.

More recently, the EAC has announced that it is willing to expand this initiative to include data and mobile

money services.41 Kenya, South Sudan, Uganda, and Rwanda will be the first countries in the region to

benefit from the expanded initiative. Adoption of the One Network Area has led to dramatic changes in

roaming tariffs. Figure 25 shows examples of the evolution of tariffs,42 with roaming rates dropping by 20

to 97 percent.

50

Figure 25. Examples of Changes in Tariffs since Adoption of the One Network Area (US$ PPP)

Source: “A Case Study of ONA,” International Telecommunication Union, 2016. Note: ONA = One Network Area; PPP

= purchasing power parity.

The early results have been remarkable (box 1). Inbound roaming calls to Kenya from Rwanda increased

by over 950 percent, from ~63,000 minutes in September 2014 to over a million minutes by December

(see figure 26). This success with mobile voice traffic could encourage operators to cut data roaming

charges, in this case without regulatory intervention. The Uganda Communication Commission also

reports a tripling of roaming traffic after the introduction of the One Network Area.43

Figure 26. Examples of Increases in Volume of Voice Roaming since Adoption of the One Network Area

-22%-54% -59% -54%

-75% -80% -89% -88%-44%

-83%-44%

-97%

-20%-64%

-100%

0%

100%

200%

300%

400%

500%

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

Evolution of roaming rates between september 2013 and December 2015 (USD PPP)

September 2013 December 2015

51

ii. Ongoing Approach in SADC

In 1997, SADC45 established the Communications Regulators Association of Southern Africa (CRASA),

formerly the Telecommunications Regulatory Association of Southern Africa, a forum of communications

regulators in the region. It was established under the SADC Protocol on Transport, Communications and

Meteorology and has among its goals to: (i) attain regional integration and development goals, (ii) achieve

economic growth, (iii) accelerate poverty reduction, and (iv) achieve sustainable development. In

Box 1. Capitalizing on the Momentum for Eliminating Roaming Charges There have been several initiatives to reduce roaming charges in the West Africa region. One of the initiatives was kick-started at a Smart Africa conference. Founded in 2013 and headquartered in Kigali, Rwanda, Smart Africa is a commitment to accelerate sustainable socioeconomic development on the continent, ushering Africa into a knowledge economy through affordable access to broadband Internet and usage of information and communications technology (ICT). On April 18, 2016, in Kigali, a meeting of the Ministers of ICT, the Directors General of Telecommunications regulatory authorities, and representatives of the telecom operators from member states of Smart Africa was held with the main objective to adopt a regional telecommunications framework aiming to implement the One Africa Network. This initiative should now be extended to all 11 member states of the Smart Africa Alliance.44 All member countries have agreed to establish anti-fraud systems and measures against grey traffic. Implementation was set to start in May, with a report on the initiative to be presented during the African Union summit slated for July in Kigali, and operators within the region shall be required to renegotiate their bilateral agreements to ensure the full implementation of the One Network Area. Initiatives and memorandums of understanding (MoUs) in the West Africa region include the following:

• On August 8, 2016, in Conakry, Guinea, the Governments of Guinea and Mali signed an MoU abolishing roaming and harmonizing interconnection rates between their countries. This MoU follows decisions made during the Smart Africa Alliance meeting held in Kigali on July 17-18, 2016.

• On November 24, 2016, in Ouagadougou, Burkina Faso, telecommunications regulatory experts from G5 countries in the Sahel conclave in a technical meeting recommended the abolition of roaming charges between their countries (Mauritania, Mali, Burkina Faso, Niger, and Chad).

• On November 28, 2016, in Abidjan, Côte d’Ivoire, the regulatory authorities of Senegal, Côte d'Ivoire, Mali, Burkina Faso, and Guinea signed an MoU on the basic principles for the implementation of free roaming between these countries of West Africa by March 31, 2017 at the latest. The MoU includes the establishment in each country of a national technical committee led by the regulatory authority and comprising all the operators and the governmental authority in charge of telecommunications. Additionally, telecom regulators must guarantee some prerequisites, such as the fight against fraud, suppression of international surcharges, and cost orientation of termination rates.

• On January 3, 2017, in Dakar, Senegal, the Director General of the Telecommunications and Postal Regulatory Authority of Senegal announced that in March Togo joined the Abidjan protocol for free roaming.

Capitalizing on this momentum will require follow-through on implementation, as many of the MoUs do not have a defined strategy and timeline. Furthermore, the next challenge would be to come to an agreement on reducing data roaming charges.

52

particular, SADC wants to enhance regulation and promote regulatory harmonization as a means to

promote investment in the sector, regional integration, and universal network development and universal

access to ICT services.

The high cost of international roaming was identified as a particular area of concern and a Regional

Alliance Task Team46 was set up to investigate ways to reduce the high cost of international roaming. A

study recommended the following actions for the short term, including that any directives should “not

impose significant costs or regulatory burden on mobile operators and they also do not require

appreciable reSource from regulators or CRASA.” Other guidelines included the following:

• Implementation of regulated roaming data collection to be made by all members’ regulators

and compiled by CRASA

• Promotion of multilateral cost reduction and roaming hubbing

• Lower the regulation and cost of the international voice gateway (including but not limited to

gateway licensing policy)

• Increased transparency and consumer protection

• Price control regulation by agreement subject to a full regulatory impact assessment before

adopting this approach.

According to these recommendations, SADC has published the Guidelines on Transparency and Roaming

Service. The guidelines apply to SADC mobile operators in their provision of roaming services to SADC

customers in the region. The guidelines set out the minimum requirements for information provided by

mobile operators to ensure that there is transparency in the tariff information on regional mobile roaming

service:

Tariff information:

a) Tariff per minute of incoming and outgoing voice calls:

i. Within the visited SADC country

ii. To the home country

iii. To elsewhere in SADC.

b) Tariff per SMS sent and received:

i. Within the visited SADC country

ii. To the home country

iii. To elsewhere in SADC.

c) Tariff per MB for data and picture/video messaging.

SMS notification on entry to a visited country:

a) Operators shall send an SMS to every SADC customer upon entry into a visited SADC country when

the customer connects to a visited SADC country’s network.

b) The SMS notification shall contain the minimum information as per Annex 1.

c) The SMS notification may also be sent to customers on a balance call limit wherever it is

economically feasible for the operator to do so.

Further, the ministers recommended the implementation of the second Regulatory Impact Assessment.

On the basis of the said Regulatory Impact Assessment, it was decided that the SADC Home and Away

Roaming Project should be implemented in three phases as follows:

53

• Phase I: Liberalization, Transparency, Information, and Data Collection

• Phase II: Roam Like at Home

• Phase III: Cost-Based Price Regulation.

At this stage, information on the implementation of the initiative is publicly unavailable, although a

report points to the complexity of implementing Roam Like a Local. It is complex for the consumer and

imposes a heavy administrative burden on the regulators and operators. Furthermore, it is not the most

effective approach to facilitate moving toward lower international roaming prices. Accordingly, the

report recommends the implementation of an alternative framework, based on the concept of Roam

Like at Home. Based on this recommendation, CRASA has recently decided to launch a cost-modeling

tool to provide costs for wholesale and retail access to the member states.

iii. European Union Roaming Regulation

Unlike the East and Southern African cases, where the development of roaming was primarily driven by

competitive pressures in the private sector, the European Union has followed a regulatory approach to

roaming policy over the past 10 years. The European Union’s approach relies on harmonization of

domestic market factors, such as termination rates, and the use of domestic and international wholesale

tariff regulation. The sustained effort in supporting the development of international roaming in the

region culminated in the adoption of Regulation No. (EU) 2015/2120 “laying down measures concerning

open Internet access and amending Directive 2002/22/EC on universal service and users’ rights relating

to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on

public mobile communications networks within the Union” (the “New Regulation”) in October 2015. In

addition to retail pricing cuts and related affordability measures, the European Union has enhanced

transparency and consumer safeguard measures.

Among other innovations, the new regulation provides further price cuts for users of roaming services,

with roaming prices aligning with domestic prices as of June 15, 2017. On December 16, 2016, the

European Commission adopted implementing acts47 setting out detailed rules on the application of the

fair use policy, the method applied to assess the viability of the abolition of roaming charges in more detail,

and on the application for authorization that the roaming service provider must transmit the purposes of

this assessment (table 7).

Table 7. Price Development for International Roaming Services in the European Union, 2014–17 (price excluding tax)

Service July 1, 2014

(“eurotarifs”)

April 30, 2016

(maximum amount of the

additional fee)

June 15, 2017

Calls made

(minutes) 19 c€ National tariff (+5 c€)

Domestic price (no extra charge, subject to

“reasonable usage”) Calls received

(minutes) 5 c€ National tariff (+1.14 c€)

54

(SMS)

(sent) 6 c€ National tariff (+2 c€)

Internet

(month†) 20 c€ National tariff (+5 c€)



In addition to the regulation on retail pricing, the operators are required to respect the additional

obligations for transparency and consumer safeguards, such as:

• Sending their customers an information message on tariffs for voice and SMS, each time a

user finds himself in a situation of international roaming, as well as the rates of service data

as soon as they are used in roaming for the first time in a member state.

• Sending notification to the roaming customer when the customer has consumed all the voice

services volume, SMS, or data corresponding to a reasonable use, as and when reasonable

use regulation is implemented.

• Blocking data services automatically upon exhaustion of data the roaming fair usage limit.

iv. Gulf Cooperation Council Roaming Regulation

The Cooperation Council for the Arab States of the Gulf, originally known as the GCC, is

a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf,

except Iraq. Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab

Emirates (Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain, and Fujairah). The roaming

regulation initiatives in GCC countries have almost followed a similar schedule as the EU reforms, as seen

in figure 27.

Figure 27. GCC and EU Roaming Rates Reduction Schedules

https://en.wikipedia.org/wiki/Regional_integration

https://en.wikipedia.org/wiki/Intergovernmental_organization

https://en.wikipedia.org/wiki/Arab_states_of_the_Persian_Gulf

https://en.wikipedia.org/wiki/Iraq

https://en.wikipedia.org/wiki/Bahrain

https://en.wikipedia.org/wiki/Kuwait

https://en.wikipedia.org/wiki/Saudi_Arabia

https://en.wikipedia.org/wiki/United_Arab_Emirates

https://en.wikipedia.org/wiki/United_Arab_Emirates

55

IMR has been a topic of intense discussion and concern in the GCC region. In response to these concerns,

the GCC Ministerial Committee implemented a roaming regulation in 2010, which introduced price caps

on the retail and wholesale levels for calls made within the visited country (local calls) and on calls made

to other GCC member states (international calls), including the home country.

More recently, the GCC ministers have called for an assessment of the effectiveness of the existing

regulation and a review of all other IMR services (including data, voice calls received, SMS, picture/video

messaging, and video calls) to determine whether further regulation is needed. Accordingly, the GCC

Roaming Working Group (RWG) has finalized a report 48 after a public consultation held in September

2014. The GCC Ministerial Committee for Post, Telecommunications and Information Technology

approved the recommended regulations in its 24th meeting of June 9, 2015 held in Doha, Qatar.

They concluded that retail and wholesale price controls are effective approaches to achieve lower roaming

prices. To avoid any disruption to operator revenues and profits, the glide path approach toward the

desired retail and wholesale price caps was adopted. Wholesale price caps apply as of January each year

and retail price caps apply as of April each year, to enable the GCC regulatory authorities to ensure that

wholesale price caps are implemented before the retail prices that depend on them. The wholesale price

caps for the different international roaming services were determined based on a calculation that started

from the underlying cost estimates of the visited network in 2012 and allowing a sufficient markup that

exceeds any reasonable measures of the weighted average cost of capital. Home network operators are

subject to the retail price caps, which were set to cover the wholesale payments to the visited network

(wholesale roaming charges) plus a markup at a level reasonably above other incurred costs. For some

types of roaming services (such as incoming voice calls), the price cap also covers other costs incurred by

the home network, including traffic termination and international transit.

In addition to the price controls, the RWG report proposes the adoption of several supporting measures,

such as:

• Collection of statistics. The report proposes to initiate a biannual comprehensive collection of data

associated with the provision of roaming services (and termination rates).

• Billing increment. The RWG proposes the adoption of regulation on maximum billing units: per minute

for voice and per MB for data offers based on volume of usage.

• Measures to reduce bill shock. The RWG proposes the adoption of bill-shock warning measures

(typically by means of SMS) for consumers when their usage approaches a threshold, and to cut off

the service when the threshold is exceeded unless the consumer signals a desire to continue.

• Long-Term Evolution (LTE) local breakout. One characteristic of LTE roaming is the possibility of local

breakout. The working group has proposed mobile network operators (MNOs) to explore this feature.

This technical option allows the visited network to hand off data traffic to the Internet directly without

the need for traffic to be hubbed back to the home network. Therefore, LTE roaming would potentially

reduce the costs of data roaming substantially by eliminating the need for international connectivity

between the home and visited networks. Such measures (excluding LTE breakout) currently have only

been implemented by MNOs in Oman.

56

e) Recommendations

Mobile network operators in the ECOWAS region have taken significant steps toward developing the

regional roaming market, by adopting success models that they had tested in other regions of

operations. However, international cases have demonstrated that effective and harmonious

development of a regional roaming market requires policy and regulatory interventions with a clear

timeline or glide path addressing fundamental prerequisites. This study of the roaming market in

ECOWAS has highlighted that a significant number of challenges facing the sector can be addressed

through legal, policy, and regulatory interventions at the national and regional levels. This subsection

lists key recommendations for developing affordable regional international roaming in ECOWAS.

Increase harmonization of the markets across the region. There is high variation among ECOWAS

member states across all the mobile sector measures, such as retail tariffs, roaming plan availability,

wholesale connectivity prices, MTR regimes, and so forth. For the broader purpose of regional

integration, the ICT sectors across member states would need greater coordination and harmonization.

This entails addressing inherent challenges and distortion in the sector at the national level that lead to

low coverage and affordability of services. Development of the roaming market, which is comprised of

wholesale and retail voice and data elements, to promote affordable regional roaming requires

implementation of a combination of targeted and sector-wide legal, regulatory, and policy interventions.

Key areas that can have significant impact are

• Liberalizing international gateways. International voice and data connectivity is essential for

roaming. Liberalized international gateways are the cornerstone of a well-functioning

international connectivity market that promotes open and nondiscriminatory access.

Additionally, being the most upstream element of the broadband value chain, the economic

impact of liberalized international gateways can be significant for consumers of domestic data

services as well as for international roaming.

• Promoting cross-border interconnection. As examined in section II, terrestrial cross-border

linkages are not only critical for landlocked countries, but also promote competition in the

international connectivity market of coastal economies with international connectivity through

submarine cables. Promoting greater cross-border connectivity for voice and data services can

enable smaller mobile operators to remain competitive in the roaming market where they tend

to remain in a net payable situation.

• Addressing SMP. The mobile communications market is highly concentrated at the national and

regional levels. This is also true for the overall digital infrastructure market. Addressing SMP at

the national level, in the mobile and wholesale markets, while adhering to standardized regional

principles should be a priority for regulators. Globally, competition stimulation is a common

priority identified across critical components of the digital sector.

• Promoting open access across the value chain. Open and nondiscriminatory access to services

across communications value chains promotes competition and innovation in services. As the

sector goes through greater regional integration, by building on regional infrastructure

57

development and regulatory harmonization efforts, the principle of open and nondiscriminatory

access should be followed across all the elements of the value chain in the sector.

Engage in dialogue with the private sector. The ECOWAS Commission could facilitate periodic

consultations between national regulatory authorities, governments, and mobile operators to

understand sector challenges and bottlenecks to offering affordable roaming. Additionally, this would

provide a platform for the national regulatory authorities to encourage mobile operators to upgrade

their technical infrastructure to facilitate real-time roaming billing so as to address consumer concerns

related to bill shock. The challenges faced by the larger and smaller MNOs in the region can be diverse,

particularly in the roaming market. Hence, the national regulatory authorities would benefit greatly

from a range of insights through periodic private sector consultations on the topic.

Select a retail pricing model for regional roaming. A decision should be taken at a regional level, in

consultation with the private sector, on the retail pricing model to be adopted for regional international

roaming. With the larger operators already moving to the Roam Like at Home model, it may serve as the

basis for a harmonized regional retail pricing model.

Develop a regional roaming strategy and glide path. Upon selection of the appropriate pricing model, a

detailed strategy with guidelines and a glide path for prices in key markets should be developed. The

private sector’s initiative in offering roaming-specific retail plans is a positive step that indicates

recognition of the potential of this market. Price reduction is bound to have a negative impact on MNO

revenues in the short run; hence, it is necessary to follow a gradual glide path that addresses the retail

and wholesale markets and is supported with the necessary legal, policy, and regulatory environment.

Enforce transparency and consumer information measures. In addition to the interventions targeting key

markets within the sector, raising consumer awareness and transparency of roaming pricing should be a

priority. International cases provide several examples of initiatives and good practices that can be

adopted at the regional level by ECOWAS and enforced through national regulatory authorities. These

measures could include mandatory publication of clear retail roaming tariffs on MNO websites, SMS

notification of roaming tariffs upon arrival in a visited country, education on fair usage limits, and so

forth.

IV. Conclusion Economies of scale and network effects are critical to drive growth of the digital economy, starting from

telecommunications infrastructure and services. This is particularly pertinent for several of the ECOWAS

countries that are too small in isolation to pursue development of a digital economy, and the majority of

individuals in the ECOWAS region remain disconnected from the Internet. In addition to its large size,

the inherent heterogeneity in the ECOWAS region further increases the importance of developing

subregional linkages. For example, the West African Economic and Monetary Union offers an

opportunity for a subset of ECOWAS member states to forge stronger partnerships in developing their

digital economies. Yet, there are overarching principles to which all countries should adhere, including

on their borders. The principles can be grouped in the following manner:

58

• Regional licensing. The shift from national to regional licenses of operators, including alternative

utility and transport operators, could accelerate regional expansion and potentially draw more

competition into parts of the region.

• Liberalization and competition. There are likely to be instances where there will be natural

monopolies, particularly the long-distance wholesale providers (or carrier’s carrier). The region

currently lacks frameworks for competition policy and SMP regulation, which has led to a

situation where dominant behavior is largely left unchecked.

• Open access and infrastructure sharing. Policies and regulations that promote the use and

sharing of infrastructure, including infrastructure sharing, rights of way, and colocation, would

encourage efficient use of infrastructure and allow smaller operators to participate in cross-

border communications. This would also include the alternative infrastructure providers.

• Transparency in tariff information. Increasing the visibility of retail prices would protect

consumers from bill shock and could encourage the use of cross-border communications if

consumers are able to understand the pricing system beforehand. Transparency of wholesale

prices (RIOs) together with the other open access principles could be further catalytic for

efficient utilization of infrastructure.

• Aggregation and localization of content. In parallel to easing voice and data traffic across

borders, the region would benefit from an effort to keep regional traffic regional. Whereby even

those countries that do not have robust and secure data infrastructure, such as IXPs and data

centers, could host their content in another country within the region that has these

capabilities.

• Capacity building of regulators. The ECOWAS member states are on different rungs of the digital

economy ladder, much of which depends on the size of the market, but also the capacity of the

relevant institutions. The transposition of the regional supplementary acts, for example, can be

a complex process involving multiple agencies, laws, and regulations. Capacity building of

regulators and other agencies would be needed in specific areas, whether it be licensing or

pricing regulations.

A collaborative approach to the digital economy would help deepen existing socioeconomic ties and

circumvent the potential widening of the digital divide between countries. The region has seen

significant investments in the infrastructure, and further deployment is required to achieve universal

coverage objectives and reinforce the robustness of regional networks. The next challenge is to get the

enabling environment right for voice and data transmission across borders. This would lay the

foundation for the production of digital content—digital government services, financial services,

entertainment, and innovation—that is pertinent to the people and businesses of the West Africa

region.

1 FTTx stands for “fiber to the x,” whether residential, commercial, or other types of buildings or facilities. 2 GSMA Mobile Economy West Africa, 2018.

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3 Study on Policies to Reduce Mobile Roaming Rates, prepared by Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. 4 https://www.mobileworldcongress.com/session/a-new-roaming-era-breaking-down-digital-borders/. 5 There is no regulated price for data in the One Network Area yet. 6 Bahrain, or the Kingdom of Bahrain; Kuwait; Oman, or the Sultanate of Oman; Qatar; Saudi Arabia, or the Kingdom of Saudi Arabia; and the United Arab Emirates. 7 Examples include New Zeeland and Australia, Singapore and Malaysia, and Singapore and Brunei, but also the One Africa Network initiative, binding to 11 countries across Africa under the Smart Africa Initiative. 8 http://www.itu.int/en/ITU-D/Regulatory-Market/Pages/Roaming_info.aspx. 9 GSMA Intelligence, The Mobile Economy: West Africa, 2018. 10 GSMA Intelligence, The Mobile Economy: West Africa, 2018. 11 FTTx stands for ‘fiber to the x’, whether residential, commercial or other types of building or facility. 12 Source: World Bank. 13 Source: UN COMTRADE. 14 Some analytical works include: “West African Common Market Project: Harmonization of Policies Governing the ICT Market in the UEMOA-ECOWAS Space,” International Telecommunication Union and European Union, 2005; “Regionalizing Telecommunications Reform in West Africa,” World Bank, 2007; and “ECOWAS Regional Infrastructure Development Master Plan,” ECOWAS Commission, 2016. 15 This study draws and adapts from the “Missing Links and Infrastructure Sharing Study” prepared by a team of consultants: Claude de Jacquelot, Mike Jensen, Bernard Sanchez, Rémy Fekete, Ananda Covindassamy, David Guitton, and Iheb Nomme; and the “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. 16 The SAT-3/WASC cable system became operational in 2001 and connects Portugal, Spain, Canary Islands (Spain), and Senegal. Then to Côte d'Ivoire, Ghana, Benin, Nigeria, Cameroon, Gabon, Angola, and South Africa. In South Africa, the cable system connects to the South Africa Far East linking it to Malaysia. 17 Main One currently connects Portugal, Ghana, and Nigeria (Lagos); there are reported plans to connect Morocco, Canary Islands (Spain), Senegal, Côte d'Ivoire, Nigeria (Bonny), Gabon, the Democratic Republic of Congo, Angola, South Africa, and Namibia. 18 The ACE cable system connects France, Portugal, Morocco, Canary Islands (Spain), Mauritania, Senegal, The Gambia, Guinea, Sierra Leone, Liberia, Côte d'Ivoire, Ghana, Benin, Nigeria, São Tomé and Príncipe, Cameroon, Equatorial Guinea, Gabon, the Democratic Republic of Congo, Angola, Namibia, and South Africa. The World Bank supported the initial connection costs for Benin, The Gambia, Guinea, Sierra Leone, Liberia, and São Tomé and Príncipe. 19 Assessment of where a country is in terms of implementation and enforcement is a complex task, as they have been transposed in a disparate manner through various legal and regulatory instruments. 20 https://stats.oecd.org/glossary/detail.asp?ID=6755 (accessed January 24, 2018). 21 https://stats.oecd.org/glossary/detail.asp?ID=6755. 22 GSMA Mobile Economy West Africa, 2018. 23 “Study on Policies to Reduce Mobile Roaming Rates,” prepared by Olivier Jacquinot, Katia Duhamel, Laurent Cohen, and Russel Southwood. 24 https://www.mobileworldcongress.com/session/a-new-roaming-era-breaking-down-digital-borders/. 25 Regional market share is calculated as the total number of subscribers for each mobile operator in the entire ECOWAS region divided by the total number of mobile subscribers in all ECOWAS countries. 26 All retail prices are converted to U.S. dollars in purchasing power parity according to 2015 International Monetary Fund data (https://www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx). 27 There are no regulated price for data in the East Africa One Network Area yet. 28 https://bics.com/roaming-and-bics-take-centre-stage-at-mobile-world-congress-in-live-panel-session/. 29 PPP exchange rates ae from the International Monetary Fund database. 30 Nigeria increased the international termination rate (ITR) from ₦3.9 to ₦24.9 in September 2016. The rationale, as mentioned by Nigerian Communications Commission (NCC) in the decision (Public Notice - Review of International Termination Rate, Nigerian Communications Commission, October 5, 2016) was that “in comparison with other African countries’ ITR, Nigeria’s termination rate at $0.03 [is] relatively too low and this will likely impact negatively on the inflow of revenue to the Nigerian economy.” The case of Ghana, which increased ITR

http://www.itu.int/en/ITU-D/Regulatory-Market/Pages/Roaming_info.aspx

https://stats.oecd.org/glossary/detail.asp?ID=6755

https://www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx

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from US$0.10 to US$0.19 in 2009, and Uganda, imposing a tax of US$0.09 on inbound international calls that substantially increases ITR were cited by NCC. Additionally, it was observed that “while regulatory authorities tend to protect service providers and consumers, telcos and the government would prefer higher rates that brings in hard currency and can fund investment, expand domestic network, fund innovation and improve quality of service.” 31 Ibid. 32 “ITU Regional Economic & Financial Forum of Telecommunications/ICT for Africa International Roaming, SADC Perspective,” Mr. Leweng Mphahlele, Manager, Economic & Financial Analysis, Independent Communications Authority of South Africa. 33Bahrain, or the Kingdom of Bahrain; Kuwait; Oman, or the Sultanate of Oman; Qatar; Saudi Arabia, or the Kingdom of Saudi Arabia; and the United Arab Emirates. 34 ITU, “Charging in International Mobile Roaming Service,” September 2012, https://www.itu.int/rec/T-REC-D.98-201209-I/fr. 35 As examples: New-Zealand and Australia, Singapore and Malaysia, and Singapore and Brunei, but also the One Africa Network initiative, binding 11 countries across Africa under the Smart Africa Initiative. 36 OECS comprises nine member states: Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines, Anguilla, Martinique, and the British Virgin Islands. The Eastern Caribbean Telecommunications Authority Council of Ministers has announced it will look closely at the possibility of eliminating roaming charges within the OECS territories by 2017. http://dominicanewsonline.com/news/homepage/news/technology/ectel-explores-the-elimination-of-roaming-charges-in-oecs/. 37 http://www.itu.int/en/ITU-D/Regulatory-Market/Pages/Roaming_info.aspx. 38 Bharti Airtel acquired Zain in 2010. 39 http://www.nciprojects.org/sites/default/files/downloads/5th%20Joint%20communique.pdf. 40 “One Network Area in East Africa,” Tim Kelly, World Bank Group, and Christopher Kemei, Communications Authority of Kenya, 2016. 41 http://www.pcworld.com/article/2905792/east-africa-expands-one-network-area-to-include-data-mobile-money.html. 42 All data are from “A Case Study of ONA: East Africa One Network Area Roaming Initiative,” ITU report, 2016. 43 All data are from “A Case Study of ONA: East Africa One Network Area Roaming Initiative,” ITU report, 2016. 44 The implementing countries include Côte d’Ivoire, Gabon, Kenya, Mali, Uganda, Senegal, South Sudan, Chad, Rwanda, and Burkina Faso. 45 Comprising Angola, Botswana, the Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Madagascar, Mozambique, Namibia, the Seychelles, South Africa, the Kingdom of Eswatini., Tanzania, Zambia, and Zimbabwe. 46 http://www.crasa.org/crasa-content/id/74/crasa-roaming-task-team/. 47 Commission Implementing Regulation (EU) 2015/2352 of 16 December 2015 setting out the weighted average of maximum mobile termination rates across the Union. 48http://www.cra.gov.qa/sites/default/files/Final%20Consultation%20Report%20%20-%20International%20Mobile%20Roaming%20%28IMR%29%2020150621.pdf.

https://www.itu.int/rec/T-REC-D.98-201209-I/fr

https://www.itu.int/rec/T-REC-D.98-201209-I/fr

http://dominicanewsonline.com/news/homepage/news/technology/ectel-explores-the-elimination-of-roaming-charges-in-oecs/

http://dominicanewsonline.com/news/homepage/news/technology/ectel-explores-the-elimination-of-roaming-charges-in-oecs/

http://www.itu.int/en/ITU-D/Regulatory-Market/Pages/Roaming_info.aspx

http://www.nciprojects.org/sites/default/files/downloads/5th%20Joint%20communique.pdf

http://www.pcworld.com/article/2905792/east-africa-expands-one-network-area-to-include-data-mobile-money.html

http://www.pcworld.com/article/2905792/east-africa-expands-one-network-area-to-include-data-mobile-money.html

http://www.crasa.org/crasa-content/id/74/crasa-roaming-task-team/

http://www.cra.gov.qa/sites/default/files/Final%20Consultation%20Report%20%20-%20International%20Mobile%20Roaming%20%28IMR%29%2020150621.pdf

http://www.cra.gov.qa/sites/default/files/Final%20Consultation%20Report%20%20-%20International%20Mobile%20Roaming%20%28IMR%29%2020150621.pdf

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