Are innovations in the new ICT ecosystem pushing the regulator to the wall?  

New forms of regulatory co-operation in the information communications and technology (ICT) space are the only way to ensure that positive dimensions of the new ecosystem are enjoyed by consumers who are assured protection against its negative potential, Kenya’s ICT regulator has said.

While delivering a keynote address on behalf of the Director General, Communications Authority of Kenya (CA) during the CIO Year Ahead Forum in Nairobi, Mr. Matano Ndaro, Director Competition Tariffs and Market Analysis said opportunity to collaborate with the industry stakeholders presents both opportunities and challenges for regulators.

The eventful session organized by CIO East Africa themed: Driving Innovation in Organizations, predicted that the recent rise of innovative technologies and the ubiquity of smart mobile devices have created great opportunities for users and for companies that can leverage global scale solutions and systems.

“It is no secret that regulating the ICT sector is admittedly challenging and calls for a critical balance if we are to realize the intended benefits.  It is evident that regulation and regulatory reform can have both positive and negative effects on the innovation process.”

“There is no doubt that the new ICT ecosystem has unleashed a virtuous cycle, transforming multiple economic and social activities on its way, opening up new channels of innovation, productivity and communication.”

Matano Ndaro, Director Competition Tariffs and Market Analysis

Ndaro pointed-out that technology design deployed by online service providers in particular has proved to reduce transaction costs while allowing for increasing economies of scale.

According to the industry regulator, the ICT sector, has been characterized by dynamism largely driven by innovations, as exemplified by the high rate of growth of the sector.

The Economic Survey of 2018 indicates an average annual growth rate of 10 percent over the last five years, making it one of the fastest and most attractive sectors of the Kenyan economy largely due to innovative mobile solutions and applications that have proliferated in the recent past.

The outlook for both network operators and online service providers is bright as they benefit from the virtuous cycle − as the ICT sector steadily continues to grow and complement innovations to create and power more opportunities for growth said Ndaro. “It is CA’s focus that the impact of CA is felt all the way to grass-root.”

While giving a glimpse of the market, Ndaro noted that mobile subscribers in Kenya today stand at around 46.6 million.  Data/internet subscribers are past the 42 million mark, yet the usage of the 4,623.3 Gbps international bandwith available is merely 21 percent.  He noted that eCommerce is proving its potential with the value of mobile commerce transactions now well beyond 1.552 trillion in a quarter.  These statistics show how much this industry has grown and the potential it has to catapult Kenya’s digital economy.

Various sector players at the Year Ahead Forum were in agreement that the hallmark of business ecosystem in this era of digital transformation is ever deepening inter-connectivity − everything is connected to everything else and therefore the regulation that has evolved in the world of twentieth century ‘industrial silos’ is now obsolete.

During a lively panel session delegates moderated by Fiona Makaka, Associate TMT at TripleOKLaw, the panelists along with over a hundred delegated in attendance were in concurrence that Governments and sector regulators need to find a balance between maximizing the benefits of the new digital business ecosystem and securing optimal policy and regulatory objectives designed to address potential negative consequences of a changed landscape.

Such abuses relate to abuse of market power, abuses of consumer rights and lack of development of local content production among others said Ndaro adding: “Such a balance needs to optimize sector-specific regulation while also creating an enabling environment that contributes to innovation and investment.”

Admittedly Ndaro on behalf of CA said: “It is no secret that regulating the ICT sector is admittedly challenging and calls for a critical balance if we are to realize the intended benefits.  It is evident that regulation and regulatory reform can have both positive and negative effects on the innovation process.”

Among other goals, regulatory reform is intended to enhance are the positive regulatory effects on innovation. The growth in Internet and broadband services which has paved the way for many new services and applications, and regimes that are now challenged to ensure that regulations remain fully responsive to changes in the economic, social and technical conditions.

Many regulators around the globe are still grappling with decisions on how to regulate emerging ICTs such as Over The Top (OTT) services, Internet of Things, Big Data Analytics, Artificial Intelligence and Block chain which emerged as hot issues that industry players will embark on in the year.