PHONE OPERATORS SEEK FAIR TRADE IN AFRICA

Telecoms

Mobile phone operators are calling for a reduction in international call charges to allow cross-border telecommunications. "More affordable international calls would help Africa become more integrated into the global economy, opening up opportunities for new businesses and jobs," said Gabriel Solomon, director of partnership development in the Global System for Mobile Communication Association (GSMA). He was addressing a meeting of mobile phone operators in Nairobi last week.

The meeting was attended by Africa's leading mobilephone operators and government officials from sub-Saharan Africa.

The association also urged the Eastern Africa Submarine System (EASSy) consortium, which is building a fibre optic submarine cable from South Africa to Sudan, to offer competitive rates to mobile phone companies, as well as government controlled operators. The consortium is made up of telecommunication companies owned by African governments.

Solomon said the governments must learn from the lessons of SAT3-cable, which is seen as an African white elephant, plagued by high charges and under utilisation.

There are more mobile subscribers in the developing world than in the developed world, but in sub-Saharan Africa, penetration is about seven per cent. Currently, more than 83 million people in Africa are connected. "This figure could quadruple before the end of the decade," said  Solomon.

The association says for Africa to reap the full benefits of mobile telecommunications, governments must increase the efficient use of available resources by allowing operators to interconnect networks at market rates. They must also allocate more international gateway licences, particularly to mobile operators who originate and terminate the vast majority of voice traffic.

"The question here," says Mr Solomon, "is how they will support the mobile phone industry to give more affordable services and get more people connected. Obviously, lowering taxes would help, but governments have other tools at their disposal."

"I would advocate liberalisation of the backhaul market as it would enable wholesale interconnection at market rates. This will allow for the efficient use of bandwidth, reduce the cost of calling and increase minutes on use," he said.

He also advocates the removal of monopoly control on international gateways that have been choking African industry. He adds that prices would fall as volumes skyrocket and more trade and employment would ensue. "Similar policy initiatives have brought sustained benefits to many other developing countries around the world," he says. A recent study by the London Business School indicates that an increase of 10 mobile phones per hundred people boosts gross domestic product by 0.6 per cent in developing nations. In contrast, an unpredictable and short-term approach to regulation in many countries in the region inhibits positive progress.

Based on a series of interviews with operators and governments, a study by PricewaterhouseCoopers concluded that consistent and transparent regulation could significantly reduce mobile operators investment risks, allowing them to expand the coverage and capacity of their networks, while reducing the total cost of owning a mobile phone for Africans.

The resulting increase in coverage and fall in retail prices could boost the number of mobile phone users in sub-Saharan Africa from the current 83 million to 108 million. Kenya has some four million subscribers.

The East African