Intelecon Regulatory News
 

July 22, 2010

Jordan: Tax Incentives for ICT Sector

According to a report from The Jordan Times, new tax incentives for the ICT sector are intended to make Jordan a regional ICT centre.

The government has implemented numerous tax incentives for Internet and communications services providers. The measures, effective August 1, include a reduced sales tax on Internet services that is unified at 8% regardless of the technology used or the beneficiary. The existing sales tax on Internet connections was 8% for households, 16% for businesses and 16% for wireless Internet. Under the new regime, the tax will be 8% for all three services.

The new rules exempt exported ICT services from income tax. This exemption includes items such as computer services, economic feasibility studies and services related to legal, engineering and audits. Jordan's Minister of Information and Communications Technology, Marwan Juma, said that increased incentives for the ICT sector, whose exports reached USD 209 million in 2009, will make the country more competitive in attracting investors. Juma noted that the number of workers in the sector reached around 70,000 people as of the end of 2009.

According to Juma, broadband providers will be exempt from annual fees of USD 910,000 if they expand their services outside Amman and pass the tax breaks on to customers in the form of price reductions.

July 20, 2010

Uganda sets interconnection charges

According to an IDG report from Edris Kisambira and Olusegun Abolaji Ogundeji, the Uganda Communications Commission (UCC) has reduced mobile interconnection rates as part of an attempt to reduce end-user charges.

Former UCC executive director, Patrick Masambu, wanted to leave office at the end of 2009 with mobile interconnection issues resolved, but MTN Uganda took the UCC to court, seeking a permanent injunction restraining the UCC from fixing interconnection rates. MTN later withdrew its suit and agreed to negotiations that involved UCC, the Ministry of ICT and the other operators.

Last week, the UCC reduced termination rates to Ush131 (USD 0.057) per minute from a high of Ush181 (USD 0.079) (charged by MTN) for both fixed and mobile connections. SMS termination rates are now Ush30 (USD 0.013). Basic transit charges for calls are not expected to exceed Ush25 per minute (USD 0.011).

"Following the conclusion of consultations, the Commission hereby notifies the public that the above interconnection rates shall be applied as default interconnection rates," according to Patrick Mwesigwa, acting executive director of UCC.

Until now, each of the players in the Uganda telecommunications market charged other operators an interconnection rate designed to maximize profit. MTN had been charging Ush181 (USD 0.079) per minute to connect calls from other networks - Ush81 (USD 0.035) more than Uganda Telecom charged.

New operators have been critical of the policy of allowing operators to determine their own interconnection charges. The argument is that if interconnectivity is not regulated, the charges can stifle competition and innovation, and reduce penetration.

July 16, 2010

South Africa: Government establishes broadband targets for 2019

Timeslive.co.za reports that South Africa's Minister of Communications, Siphiwe Nyanda, has released the "Broadband Policy for South Africa".

All South Africans are to have a public internet access point offering at least 256kb/s download speeds within two kilometres of their homes by 2019. The policy defines broadband as, "an always available, multimedia capable connection with a download speed of at least 256 kb/s". Nyanda acknowledges that South Africa's broadband definition is far below the developed country level, which is typically at least 1mb/s, but believes that it is a realistic target for South Africa.

"Government's objectives include social upliftment and economic growth. One of the methods to achieve these goals is to increase the access to and availability of broadband services," Nyanda said.

The universal access target for 2019 requires public access available to everyone within two kilometres of their homes. The policy also requires that at least 15% of households, compared to only 2% today, should have individual broadband access. All municipalities should have electronic communication network connectivity by 2019.

The policy defines the roles of the regulator, ICASA, and the universal service agency, USAASA. It makes the Minister of Communications the sole "custodian of all issues on broadband and related matters". The policy also provides for a "Broadband Inter-governmental Committee" reporting to the minister to manage the policy. The committee's first task is to assess the current broadband status and to list the market players.

July 14, 2010

Gambia: Globacom Awarded License

According to This Day, four months after it was awarded a license in Senegal, Globacom has received another license that will enable it to operate in Gambia.

Globacom said that the latest license approval was presented to the company in Banjul. It now has operating licenses in Nigeria, Ghana, Benin Republic and Cote d'Ivoire, in addition to Senegal and Gambia. The company started operations in Nigeria in August, 2003, and in Benin in June 2008. It has also concluded plans to roll out services in Ghana.

The license will allow Globacom to land its trans-Atlantic submarine cable, Glo 1, in Gambia, with opportunities to extend the network to neighbouring countries. It also gives the company the right to carry traffic for other operators, the government and wholesale customers in Gambia.

July 5, 2010

Chile: Government Launches Major Telecommunications Sector Reforms

Chile's Minister of Transport and Telecommunications, Felipe Morande, in an interview with El Mercurio, announced significant changes to the country's telecommunications industry.

The government's goal is to implement regulations that enable cross-platform competition, whether fixed, mobile or internet. In order to achieve their objectives, the first step will be to implement uniform telephone numbering so that all devices that exist today use nine digit dialling. This will take effect in 2011. The second step is to implement number portability. The aim is that if a fixed or mobile subscriber wants to switch to any other fixed or mobile provider, they can do so with the same number. The Minister says the goal is to have number portability in place by mid-2011.

The last major step is to phase out the current national long distance calling structure. The government is considering a draft regulation creating four macro-areas for the charging of domestic calls. The changes are expected to facilitate connectivity between adjacent regions. The long-term objective is to totally eliminate national long distance calling. However, the government says that this will not occur before 2014.

Another major development announced by Morande is the government's decision to subsidize consumer demand for Internet access. To date, the government has only subsidized operators who bid to provide service in underserved areas.

"We'll have to implement a demand subsidy for Internet adoption increases, particularly in lower income urban areas," said Morande. He added that this will cost between USD 200 million and USD 300 million per year in 2013 and 2014.

The objective is to reach 70% household broadband access by 2014. Today, the average penetration of OECD countries is 65%, in Chile it is 33%.

The government is also pushing a multilateral effort to lower international bandwidth costs. The proposed strategy is that each ECLAC country (Chile, Argentina, Brazil, Uruguay and Peru) combine their global bandwidth demand to generate economies of scale to bring down the cost and pass on the savings to end-users.

Finally, on July 1, the government sent Congress a bill which would allow the entry of infrastructure operators. These operators will have the ability to lease their infrastructure to more than one telecommunications provider. Today, infrastructure operators such as those proposed in the new bill cannot operate in Chile.

July 2, 2010

Ghana: SIM Registration Began July 1

Myjoyonline.com reports that the National Communications Authority's (NCA's) new SIM card registration policy took effect on July 1.

New mobile customers in Ghana must provide personal details, backed by an official national identity document to their service provider before a new SIM card is activated. However, existing customers have up to one year to register their SIM cards.

According to the NCA, SIM card registration will help curb crime. Director General of NCA, Paarock Van Percy says this will also help control the increase in unsolicited text messages that spread fear and panic among the populace.

"It helps in this situation of curtailing or to some extent, minimizing threats and all the mischievous calls and text messages that come with it," Van Percy said.

Van Percy added that, "obviously if the operators don't comply then the whole exercise falls flat on its face from day one. Thankfully the operators have all been extremely cooperative".

MTN representative Haruna Shaibu said that most of its service centres have been equipped to register both new and old customers. Ike Cudjoe, of Vodafone, says they will use both manual and electronic means to register customers at its retail centres. Tigo manager Enoch Vanderpuye says the operator has deployed agents across the country to get people registered.

Earlier in 2010, when SIM card registration became a national issue, the IMANI Centre for Policy and Education expressed their reservations about SIM card registration. Among their concerns were issues of privacy, potential abuse of personal data and the costs of SIM card registration being passed on to the consumer.

Franklin Cudjoe, a fellow at the policy think tank said that the centre still has problems with the time period within which the companies are supposed to gather information from consumers.

Describing the policy as over-ambitious, Cudjoe said it would create a false sense of security. "It is as if as soon as mobile phones [SIM cards] are registered crimes would not be committed and that you will have your peace of mind."

From all indications it appears that operators are ready to implement the SIM card registration policy. What is uncertain is whether street vendors who are the primary points of contact for most customers are also ready.

June 28, 2010

G20 Summit Document: Principles for Innovative Financial Inclusion

The recently-concluded G20 summit in Toronto produced a final summit document on the "principles of innovative financial inclusion".

According to the document, "innovative financial inclusion" is about improving access to financial services for poor people through the spread of new approaches. The document outlines nine principles that would aid in the creation of an enabling policy and regulatory environment for innovative financial inclusion. The principles are based on lessons learned from policymakers around the world, especially developing country leaders. The principles seek to create conditions conducive to spurring financial inclusion while protecting financial stability and consumers. They are not rigid requirements but are intended to be a guide for policymakers.

1. Leadership: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.

2. Diversity: Implement policy approaches that promote competition and provide market-based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers.

3. Innovation: Promote technological and institutional innovation as a means to expand financial system access and usage, including by addressing infrastructure weaknesses.

4. Protection: Encourage a comprehensive approach to consumer protection that recognises the roles of government, providers and consumers.

5. Empowerment: Develop financial literacy and financial capability.

6. Cooperation: Create an institutional environment with clear lines of accountability and co-ordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders.

7. Knowledge: Utilize improved data to make evidence based policy, measure progress, and consider an incremental "test and learn" approach acceptable to both regulator and service provider.

8. Proportionality: Build a policy and regulatory framework that is proportionate with the risks and benefits involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation.

9. Framework: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value; and market-based incentives to achieve the long-term goal of broad interoperability and interconnection.

June 25, 2010

Lebanon: Ministry of Telecommunications and VoIP

Matt Nash writes in a Now Lebanon article that in an effort to stop illegal voice over IP (VoIP) operations, Lebanon's Ministry of Telecommunications (MoT) is enforcing parts of a 2002 law that banned VoIP technology.

According to a June 9 ministry press release, illegal VoIP call centres cost the state USD 150 million per year in lost revenues. With a monopoly in the country's fixed-line sector, long-distance tariffs remain high. It is unclear how the MoT is enforcing the VoIP ban from a technical standpoint, but it is upsetting business people and users.

Phillippa Biggs, an economist with the International Telecommunications Union, said that commercial VoIP bans are still common around the world. However, countries in North Africa, the Middle East and South Asia are beginning to lift their bans, said Riad Bahsoun, CEO of a Lebanese IT company and the vice chairman of the industry group SAMENA Telecommunications Council.

The ban has not completely halted the use of popular VoIP application Skype. Many users otherwise affected by the ban report they can still use Skype to call from computer to computer, but not from computer to telephone. Enforcement of the ban is complicated by the fact that a significant number of internet users in Lebanon pay illegal operators for access.

June 23, 2010

South Africa: ICASA Act Amendments in the Works

According to an ITWeb article, South Africa's Cabinet has approved potential amendments to the ICASA Act that could improve the efficiency and effectiveness of the telecommunications and broadcasting regulator, the Independent Communications Authority of SA (ICASA).

"The essence of the proposed amendments is to strengthen the regulator's capacity to help it carry out its mandate with efficiency," said Department of Communications (DOC) spokesperson Tiyani Rikhotso.

ICASA has struggled with extensive lead times in the creation of regulations, only to have a number of their efforts halted by legal action from telecommunications operators. In 2009, ICASA chairman Paris Mashile called for the Electronic Communications Act to be rewritten, saying the legislation is a labyrinth. Soon after Mashile's call, the DOC said it would change the laws in order to make ICASA more effective. Cabinet's approval of amendments to the ICASA Act was the final hurdle in the DOC's efforts.

Rikhotso says the proposed legislation will address operational and structural issues that have hindered ICASA, and will offer increased clarity regarding the responsibilities of ICASA's executive and council. The changes are also intended to speed up turnaround times on regulatory matters, and the general efficiency of the organisation.

Rikhotso says that any changes must support the requirement that the regulator be independent. He says the modifications will be published soon and made available for public comment.