Policy and regulation convergence necessary to reduce telecommunications trade barriers

The United Nations Conference on Trade and Development (UNCTAD) 14 that was held in Kenya was a huge milestone for the region. I was indeed honoured to be a panelist on the Ministerial Round Table, discussing Lowering hurdles for Trade: Trade Costs, Regulatory Convergence and Regional Integration, at the Conference.

During the Ministerial Round Table that I was part of, it was collectively settled that while necessary and causative to sustainable development by fostering product standards, existing domestic regulations, in form of Non-Tariff Measures (NTMs), present hurdles prohibitive to regional and international trade.

In this 21^st century business landscape, tariffs are just but a tip of the iceberg, contributing to just about 5 per cent of trade costs. Non-Tariff Measures are now king, constituting to invisible barriers, roughly at 30 per cent of international trade costs.

The Round Table sought to identify these measures and focus on where barriers can be lightened and regional harmonisation accomplished to boost inter and intra-regional trade, making the region more attractive to investment.

Some of the opportunities that could come about through a cautious balance of policy harmonisation are regulation convergence and standardisation across markets, thereby reducing trade barriers, include the burgeoning telecommunications industry.

Anticipated to contribute some $300 billion to Africa’s GDP by 2025 and expected to grow the East African market size to 128 billion USD by the end of 2016, the telecommunications industry has tolerated prevailing trade barriers at the regional level distorting competitiveness as the market opens up to foreign and cross-border investment.

While we strive to position our regional telecommunications industry as the continent’s most competitive space that foreign investors can take note of, we need to clean our Augean stable – we have placed upon ourselves debilitating trade barriers right at home.

Currently, each of the EAC Member States has its own disparate policy. Even with their individual National ICT policies, there is still a colossal gulf of divergence in those policies. Besides the individual National ICT Policies, East African States also have dissimilar policies like  subsidiary policies, telecommunications policies, detached e-Government strategies (e.g. Kenya), and universal service and/or access strategies (for instance Uganda) all affecting the regional telecommunications fortunes, in a way or the other.

Far from the policies, legislation and regulation is by the same token irregular. Save for the functional, autonomous regulators, their focus as individual regulators contrast is glaring.

For example, in the case of licensing, Tanzania’s converged licensing, supports triple-play; telecommunication, IT and broadcasting. Uganda licensing emphasis is on infrastructure licensing, with the objective to develop infrastructure to full competition. In Kenya, the unified licensing framework and market structure’s focus has been at the service level, with some of the segments being international gateways, mobile communication, data operator’s licenses and Internet Service Providers.

Rwanda on the other hand issues an individual and standard telecommunication licence whilst Burundi, only the basic telecommunication licence. These discrepancies in policies call for policy and regulation convergence.

More significantly, policy and regulation convergence will drive the disruptive technological convergence in the region – the trend of blurring interoperability between the telecommunications, IT and broadcasting industry, with the low hanging fruits; the entrance of new market services providers, new services transmission over various networks, mergers and acquisitions in the ICT sector in the EAC and expansion of the ICT industry at the EAC level.

While a lot remains to be done on the policy and regulation front, East African Telco firms like Telkom Kenya, are already relishing the advantages of adjusting to technological convergence. The company has continued to push the boundaries of Internet penetration, through the provision of competitively priced Internet solutions. Pushing the envelope further, Telkom Kenya is working to further improve its overall value proposition to its customers for the long term.

Additionally, with the liberalisation in the telecoms sector, there is need for standardisation of activities from network aspects to application and service issues.  Collaboration amongst operators should be encouraged with a view to ensure efficiency. The approach should however not restrain market development but serve as an enabler for businesses to thrive.

In a nutshell, the Governments of the day and private sector in the telecommunications industry should work in tandem to tackle barriers to regional and intra-African trade and make the region competitive.

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Eddy Njoroge is the Chairman of the Board of Telkom Kenya.