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BTA Seminar The benefits and costs of liberalisation : how to go about liberalisation in Africa

BTA Seminar The benefits and costs of liberalisation : how to go about liberalisation in Africa. Bill Wigglesworth Gaborone, 31 January 2005. Themes. Benefits of liberalisation: Prices, market share, customer service; Costs of liberalisation: Investment duplication;

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BTA Seminar The benefits and costs of liberalisation : how to go about liberalisation in Africa

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  1. BTA SeminarThe benefits and costs of liberalisation : how to go about liberalisation in Africa Bill Wigglesworth Gaborone, 31 January 2005

  2. Themes • Benefits of liberalisation: • Prices, market share, customer service; • Costs of liberalisation: • Investment duplication; • Infrastructure versus service competition; • Impact on the economy • Impact of additional mobile operators and/or virtual mobile operators • Lessons from experience relevant to liberalisation in Africa and Botswana

  3. Benefits of liberalisation • Improved efficiency: low cost production; commercial pricing • Downward pressure on prices: better value for money • Faster innovation: new and better services • Responsiveness to customers: availability of services • Market growth: lower unit costs • An efficient and prosperous sector contributing strongly to the economy

  4. Costs of liberalisation • Investment duplication: • Two networks more expensive than one • Costs can be minimised, and benefits maximised, by allowing full range of technologies on any network • Investors will be cautious, if allowed to be • Infrastructure versus service competition: • “Build or buy” option should be kept neutral • So competitors can build if existing networks fail to perform

  5. Impact on the economy • Growth of the telecommunications sector • Fiscal benefits of prosperous companies • Economic welfare benefits of cost oriented pricing: usage no longer distorted • Expanded usage of communications across the economy • Availability of ICTS for other sectors: eg Botswana cattle farmers; high class tourist operators; craft industries; support sectors

  6. More mobile operators? • The wrong question: mobile capability one aspect of convergence of services on high speed packet switched IP networks • Cost profile of radio based services allows proliferation on more limited core networks • Cost savings through facilities sharing • Competition possible at service level only • Three players looks sustainable in most environments: demand is clear

  7. Lessons of experience • Strong independent regulation essential • Openness and transparency indispensable • Regulatory independence not absolute: manage relationship of confidence and trust with Ministry; no surprises • Government’s policy role central to success: informed and realistic • Set practicable goals that will allow investors to create a prosperous sector

  8. How to go about it in Africa • Develop clear policy aims that relate to actual costs and benefits of current technology • If in doubt, opt for competition • Allow competing network operators to provide services using wire line or radio: Seychelles, South Africa and Uganda are showing the way • Move to full services competition as soon as possible: due in South Africa tomorrow • Ensure that the regulator has the powers, resources and government support to do the job effectively with minimum political intervention

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