Africa must not follow EU's misguided telecoms regulation

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Strand Consult says ideology-based telecom regulation has turned Europe from a world leader into a world loser.
Strand Consult says ideology-based telecom regulation has turned Europe from a world leader into a world loser.

Telecommunications regulators, policymakers and firms from Africa, Asia and Latin America must learn from Europe's mistakes and not follow them.

This is according to a research note from Strand Consult, which says "ideology-based telecom regulation" has turned Europe from a world leader into a world loser.

"The telecom industry has an important message for the nations of Asia, Africa and Latin America: if you want network investment, economic growth and Internet innovation, don't follow the misguided policies of the European Union (EU)," the research note says.

"EU faces a EUR150 billion gap in network investment, a low growth rate of less than 2% annually for the last decade, and a failure to create world-class Internet platforms (outside of some one-off exceptions, Spotify, Angry Birds, etc)."

Strand Consult says in the late 1990s and early 2000s, the EU was the world leader in telecommunications but has lost ground to the United States, China, South Korea and Japan. Europe was first with 2G, 3G and 4G. But today the US, China and South Korea are light years ahead of Europe on 5G and "European politicians talk a big game without making policy that works".

"The flowering of innovation and investment followed the liberalisation and privatisation of state-owned telephone monopolies and intelligent coordination among technological leaders across Europe. But European regulatory authorities and politicians gave up on that success in favour of ideology. It is easier to make rules based upon feel good, look good politics, rather than facts," Strand Consult says.

"An evidence-based approach requires the analysis of data. This is costly as it requires skilled employees and software tools, and in order to be credible, the analysis needs to be transparent and precise. Regulators would rather make rules based on non-numerical concepts such as public interest, human rights and fairness; topics which don't lend themselves to measurement."

Strand Consult believes developing regions would do better to look at policies and results in the US.

"The US wisely abandoned a two-year experiment to regulate broadband and the Internet like a telephone utility. They returned to the proven policy of permission-less innovation with competition law enforcement. The EU, on the other hand, even in the face of an ongoing crisis of investment decline, has doubled-down on policies that don't work. The EU has adopted one bad policy after another, all in the name of being 'consumer-friendly'," Strand Consult adds.

5G feud

Strand Consult says at Mobile World Congress in 2016, the European Commission and the 5G Infrastructure Association declared Europe would have a leading position in 5G, but the prediction has proved to be wrong and the EU is lagging in 5G innovation.

In fact, the EU faces even bigger worries as it tries to decide if it should rollout next-generation 5G mobile networks using equipment from controversial supplier, Huawei, or whether it should heed US-led security warnings and ban Huawei, but possibly fall behind in the 5G race.

China's Huawei has stepped forward as the leading supplier for the tech that will be the backbone of 5G networks but Western nations are increasingly turning their backs on the company, fearing "national security threats" linked to its close ties to the Chinese government and Chinese intelligence.

According to AFP, experts say Huawei is between six months and one year ahead of Sweden's Ericsson in terms of the quality of its 5G equipment. Number two mobile network equipment manufacturer, Finland's Nokia, is reportedly even further behind.

According to a Deutsche Telekom internal assessment, seen by Bloomberg, the German telecoms company predicts that removing Huawei from Europe's list of 5G suppliers would delay rollout of the technology by at least two years.

SA legislation expected

In terms of local telecoms regulation, South Africans can expect a few changes to be implemented this year.

On 1 March, the Independent Communications Authority of South Africa's (ICASA's) End-User and Subscriber Service Charter regulations will come into force. The regulations will effectively cancel automatic out-of-bundle (OOB) billing and compel operators to allow users to either opt-in or opt-out of OOB pricing for data. The consumer-friendly regulation will also allow for data roll-over and transfer.

There is also likely to be some movement on the Cabinet-approved Electronic Communications Amendment Bill (ECA Bill), which seeks to implement and give effect to the policy objectives set out in the National Integrated ICT Policy White Paper, published in late 2016. The ECA Bill contains provisions such as spectrum allocation, the proposed wireless open access network and rapid deployment policy.

In terms of spectrum, ICASA plans to license high-demand radio frequency spectrum by the end of March.

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