Sound telecom regulations a necessity

The telecommunications market is a differently regulated industry the world over. A clear set of principles has been established over time.

These internationally recognised principles for regulation are applied within the local laws and regulatory framework.

They are necessary because the sector has high barriers to entry because of its high capital expenditure, technology and the precedents set in the evolution of the category.

The nature of the business means that operators reach consumers through competing networks.

This requires cooperation by competing commercial interests. An anti-competitive behaviour is likely to deny consumers the seamless access to service they need, irrespective of their choice of network.

This is why the category requires a clear set of rules and powers that create certainty in the sector; setting the rights, obligations, and criteria for application of the laws.

Besides this, the sector requires a regulator to rigorously and professionally apply the rules, even if it hurts, through an appeals process to discipline the regulator and the stakeholders.

In order to ensure that consumers benefit fully from the services the operators have to offer, regulators need to ensure that networks are efficient and reliable, widely accessible (including remote rural areas) and affordable.

DOMINANCE ISSUE

The challenge is to promote favourable market conditions for competition and innovation, while, at the same time, protecting consumers.

The regulators must ensure a clear licensing framework, the rights of new entrants to roll out their own infrastructure, interconnect with and obtain access to other networks, wholesale services pricing based on an up-to-date pricing model, and a retail price regulation framework that leaves room for completion.

The other requirements are a good regulatory toolbox to fight anti-competitive behaviour, universal service funding, fair and transparent spectrum policy, an independent, non-political and professional regulator and an independent, informed and speedy appeals process.

The regulatory regime in Kenya, like in most other telecom markets, is trailing the development, thereby often interpreted in the context of regulating competition between existing operators Airtel, Orange and Safaricom.

But some observers see this as intended to punish the leading player, Safaricom, to the advantage of its rivals.

This interpretation seems logical at face value, especially with focus on the application of post-ante regulations as punishment for abuse of dominance.

However, the reality, and the proper way is to apply the ex-post competition law, a law that prevents abuse of dominance by creating a level playing field through regulatory certainty and predictability for a crucial transition phase, especially because predetermined rules enable swift interventions.

In my understanding, the latter is the objective for which the Communications Authority of Kenya (CA) exists, to promote favourable market conditions for competition and innovation, while at the same time protecting consumer interests.

It should also be the basis on which it appointed a consultant, Analysis Mason, to help determine the market, and make the recommendations for regulation, review and consideration by the stakeholders as ex-post sector laws.

BUDDING BUSINESSES

Its draft report has now been leaked before any direction from the regulator or formal consultation with the operators and other stakeholders.

Regulation should not be seen to punish existing or future operators.

It should enable free enterprise and opportunities for new investments that provide relevant and innovative alternative choices for consumers.

It should also protect consumers from monopolistic tendencies, especially where economic power under one roof presents a barrier to innovation and market development.

This should especially be so in Kenya, where startups and SMEs are the cornerstones of consumer choice through availability of alternative products and services that support the livelihoods of youth through the creation of jobs in the ICT sector.

The CA should reassure the market, investors and all stakeholders on its intentions with the Analysis Mason report, clearly stating its purpose, in order to justify its investment of public funds in it, before it is mutilated and its intentions maligned by all and sundry.

Mr Omondi is a regional telecoms industry communications and regulatory affairs professional. [email protected]