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Telecoms growth is not the result of government policy – expert

05/05/2004, Guy Berger: Highway Africa News Agency

Telecoms growth is not the result of government policy – expert
By Guy Berger (Highway Africa News Agency)

CAIRO- Africa’s rapid growth of cellphones is despite, not because of, policies adopted by governments, a South African expert told an international telecoms conference in Egypt yesterday.

Alison Gillwald of the LINK centre at Witwatersrand University called for a fundamental review of the past five years of policies, arguing that their assumptions were no longer valid. “Policy is only as good as its ability to impact on the development of the sector,” she argued.

Her intervention directly contrasted with the International Telecommunications Union (ITU), convenor of the conference. According to the ITU, “policy and regulatory reforms are the primary reason for this phenomenal growth.”

According to Gillwald, the high growth rate in cellphone lines needed to be seen against the backdrop of a very low base. Highly innovative regulations would be needed to take care of the huge remaining gap.

Enormous business and technical possibilities existed, but were constrained by present policy and regulatory constraints, she said.

Gillwald went on to assess what she called the “four prongs” of African telecoms policy:

* Private sector driven growth had been one assumption, but the results had been depressing.

* The model’s main driver was seen as foreign investment in African telecoms, but inflows had been greatly reduced because of the international recession.

* A third leg had been part or whole privatisation of the state telecoms company. But this had often entailed maximising state assets for short-term financial reasons, or giving away spectrum rights without charging for their actual value.

* The fourth policy prong was protection of the incumbent operator, in the form of limiting competition through giving it a legalised monopoly on certain services. The aim, said Gillwald, had been to attract foreign investors and to roll out phones to poor and rural communities. But there had been an actual decline in the number of fixed line connections.

The four policy assumptions might work elsewhere, but Africa should adapt, not just adopt, foreign policies, she said.

Her main point was that the growth of mobile telephony on the continent had been an unintended outcome of the dominant policy model. It had originally been seen as a sideline servicing the elite who already had access to landline phones.

Gillwald said a new market structure with competitive incentives was needed, and it should be based on a fundamental review of how to increase investment in telecoms.

A similar theme was raised by other conference speakers who urged governments to renegotiate monopoly agreements they had made with incumbent operators.

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