Displaying items by tag: Regulatory

The main challenge facing telecom operators in Africa is competition and regulatory stability, according to Mr. Abdellatif Bouziani, CEO of telecom provider Smart East Africa Group serving Tanzania, Uganda and Burundi. Speaking to Telecom Review, Mr. Bouziani said governments in Africa have sold too many operating licenses which have forced prices down, but operating costs remain the same.

Competition is high in the African telecom market, said Mr. Bouziani. With governments selling up to 6-7 telecom operating licenses, operators are forced to lower their prices, but operating costs remain the same, so they must cut spending to survive. But by reducing spending, operators aren’t able to experience growth. When there’s less cash going into countries, big players suffer, and smaller players suffer even more, he said.

Governments in Africa are the big winners in the equation, Mr. Bouziani explained, because they generate revenue from selling the licenses and collecting taxes and fines from the operators. But that puts pressure on emerging players like Smart East Africa which began operating four years ago. Big operators are suffering because they have big costs, and smaller operators are suffering because they cannot grow.

“We have to do business differently now,” Mr. Bouziani told Telecom Review. “We cannot do it the same way we did 5-10 years ago.” Voice is no longer primary, he explained, therefore the industry needs to get closer to the OTT (over-the-top) players to benefit more from them utilizing operators’ networks. Operators need to be a part of the change rather than taking a back seat and watching it happen, he said.

Smart East Africa launched in Tanzania, Uganda and Burundi in 2014 under Industrial Promotion Services (IPS) Kenya, which in turn is part of the Aga Khan Fund for Economic Development (AKFED). The operator was launched in the three markets to drive innovation in the market and focus more on the youth segment, Mr. Bouziani said.

AKFED is the sole for-profit agency of the Aga Khan Development Network (AKDN) and works in partnership with international organizations and governments to stimulate the private sectors of developing economies, with the aim of generating capital for investment into long-lasting and sustainable development initiatives.

The organization is essentially a development and investment agency, Mr. Bouziani explained. AKDN holds a 51 percent stake in Smart East Africa while Timeturns, the previous owner of Smart, owns a 49 percent stake.

To stand out in the market, the company implemented an “innovation-friendly” environment to foster knowledge and new ideas. Mr. Bouziani said: “We have to take into account how much telecoms has changed with the introduction of OTT, increasing data usage and value added services. We must ask ourselves: how can we play around with all these things to come up with a business model that allows us to survive in this non-conventional industry?”

In 2014, Smart announced plans to invest US$300 million over the course of five years to expand its telecoms networks and services. The company faces stiff competition, with 17 rival operators combined across Tanzania, Uganda and Burundi. The company offers free roaming across the three countries.

British telecommunications colossus BT has announced that it will invest £600m in faster broadband services in rural parts of the United Kingdom. BT believe the investment will enable them to provide all households in Britain with access speeds of at least 10 megabits per-second, which will allow users to be able to stream content from OTT services such as Netflix and YouTube.

Culture Secretary, Karen Bradley has said that the UK government will take into consideration the voluntary offer from BT, whilst also weighing up whether a regulatory approach may be the best way of achieving its ambition to enhance broadband services to all homes and business in the UK.

The proposal tabled by BT consists of a plan from the telecommunications provider to fund the investment themselves, and it would recover costs by charging access to its local networks. BT’s chief executive, Gavin Patterson, claimed that he expected close to 95% of all homes and businesses in the UK would enjoy enhanced broadband speeds by the end of the year.

Patterson said, “We already expect 95 percent of homes and businesses to have access to superfast broadband speeds of 24Mbps or faster by the end of 2017. Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK."

In addition to this, the UK government said that BT’s plan foresaw taking coverage of at least 10Mbps to around 99% of homes and businesses by 2020, with the project estimated to be completed within two years after that. However, the proposal was criticized by representatives of the UK government’s opposition, The Labour Party for not being ambitious enough and called for the proposal to be reexamined.