In the past five years, Africa has become an El Dorado for equipment providers, financiers and service operators in the telecommunications sector. Neglected by the rest of the world in many economic sectors, Africa has experienced a technological, economic and social leap due to the industrial success that the Global System for Mobile Communication (GSM) enjoyed on African soil.

Overwhelming change has occurred during the last 10 years, with governmental influence over what were once state-controlled enterprises rapidly diminishing.

The liberalisation of telecommunications services and networks began with reforms of the legal and regulatory frameworks designed to end the incumbent monopolies. New regulatory bodies were created, encouraging the delivery of licences and authorisations to new operators.

The examples of Algeria, Mali, Niger and The Republic of Congo make up a wide range of countries which have opted for such a liberalisation of the national authorities regulating the telecommunications sector. Privatisation of the incumbent has produced mixed results.

Indeed, a great deal of African countries enacted laws liberalising the telecommunications sector in 1999 and 2000.

Niger

In Niger, this coincided with the coup against President Barre, when the National Council of Transitions decided to boost the pending reforms. New laws provided for the creation of a converging regulatory authority for the telecommunications sector and the surveillance of an access fund to the universal service, while opening up networks and services to competition.

Licences are attributed following a tender process and are completed by a specification, the content of which is strictly defined by the law. The authorisation covers the exploitation of independent networks borrowing the public domain, call-back systems and value-added services, which are subject to a simple declaration.

The progressive liberalisation of telecommunications networks and services in Niger led to the development of security usages related to the rules of attribution of the radio-frequency spectrum in a non-discriminatory manner. Further consequences were the certification of equipment on a transparent basis and the regulation of fair tariffs, the resolution of inter-connection disputes and the implementation of universal access to the service.

Despite this liberalisation, the incumbent in Niger, Sonitel, benefitted from a transition period for the development of national structures, receiving territorial exclusivity for "the operation of fixed telephony services open to the public as well as the access to services and international telecommunications networks open to the public" until 31 December, 2004.

Mali

In Mali, where similar moves were arguably rushed, there are concerns that the new licence regime has distanced itself from existing Malian law.

Nevertheless, the ground rules were set for the judicial reform enabling liberalisation. The regime applies to the "establishment of an open telecommunications network, as well as the operating of a telephony service and the establishment of mobile telephone providers".

Although the terminology is vague, the Council of Ministers must determine the specific applicable regime for each service and network.

Modifications have further defined the key licencing regime, which was neglected by the initial text. The new ordinances have also defined the attributes and responsibilities of the Regulations and Telecommunications Committee, which remains under governmental supervision despite its financial and administrative autonomy.

The Republic of Congo

The first attempt to liberalise the telecommunications sector in The Republic of Congo (Congo-Brazzaville) took place in 1997. Further legislation on the liberty of information and communication in 2001 defined the basic network as one exploited by the incumbent of Congolese communications, where the access of other operators to the country is limited solely to the authorisation procedure.

Algeria

In Algeria, numerous governments have tried to encourage the reform of the existing regulatory and legal framework.

Legislation in 2000 provided general rules regarding the post and telecommunications. A complete and coherent regulatory framework was subsequently adopted via a series of governmental decrees on issues including:
. the exploitation regime applicable to each network and service;

. the procedure applicable to the adjudication of licences;

. regulation of the existing operations of Algerie Telecoms;

. the creation of a national agency regulating postal and telecommunications services; and

. the inter-connection of networks and services concerning the installation and/or exploitation of telecommunications equipment.

The Autorite de Regulation de la Poste et des Telecommunications (ARPT), the regulatory authority in Algeria, enjoys complete independence and financial autonomy and has made the sector fully accessible to private operators. All of its members are appointed by the chiefs of state and have at their disposal services specialising in the technical, economic and legal issues involved with regulating the postal and telecommunication services.

The ARPT therefore represents something of a model for African regulators in the telecoms sector.

Issues to consider

Although telecoms regulators in Africa share many of the same needs, they face a wide variety of challenges specific to each country.

In Niger, the Government took into consideration the scarcity of national human resources as well as the small budget available for financing a regulatory project. This explains why, instead of installing regulatory authorities for deregulated sectors of infrastructure such as water, electricity, transport and telecommunications, the Government preferred to create the first convergent regulatory body to oversee a range of activities.

However, the body – the Multisectoral Regulatory Agency (ARM) – was unable to exercise its legal functions due to a change of regime. After the end of the military transition period governed by the National Transition Council, democracy was restored and individuals who had not been involved in the creation of the ARM were appointed to key positions.

The ARM only received the necessary human, material and financial resources three or four years after the ordinance was passed. Nevertheless, the ARM can now control the activities of telecommunications operators as well as the slow liberalisation of the energy, water and transport sectors.

In The Republic of Congo, the consequences of the civil war have stunted the expected linear evolution of the telecommunications sector. Violence resulted in widespread destruction of the infrastructure of the incumbent network.

In The Republic of Congo, however, the title of 'regulatory authority' is deceptive, as the body remains a service provided by the Ministry of Equipment, with frequency management entrusted to the security services of the presidency.

However, reform is now underway and should result in the creation of a truly autonomous regulatory body, which could attempt to restore a damaged telecommunications sector.

Legal analysis

Analysis of the various strands of deregulation on the Continent must remain modest in the face of the economic failures and successes to which it has contributed.

Perhaps contrary to popular belief, telecommunications networks are often more developed in those countries that have the fewest legal barriers. Thus, Sierra Leone and The Republic of Congo have been perceived by global communications operators as economic promised lands for as long as no legal framework at all was applicable.

In most other developing countries, the development of the telecoms sector made it necessary to lighten legal constraints while developing a fair and transparent set of rules.

The reforms in Algeria illustrate this point. Deregulation put an end to a damaging situation that had hurt the telecommunications sector in the country for decades. Under the previous antiquated system, foreign investments were prohibited. Conversely, the incumbent, which stayed under the wing of the Ministry of Posts and Telecommunication until 1999, did not obtain the necessary finances and technical means to evolve as it should have.

Under the direction of a competent and independent regulatory body, numerous private operators have been introduced to the Algerian market. Algeria has successively opened up to competition for market sectors, including GSM networks and services, national traffic and internet access. Developing from a crippled situation to one of the best levels of penetration in the region, Algeria has shown it possesses an extremely dynamic telecommunications market, complemented by a population that has been able to embrace developments in new information technologies and communications.

In Mali, the situation is more ambivalent since, pursuant to the liberalisation, a private operator was awarded a second global licence. Yet the process needs to be accelerated for two reasons. First, the two existing operators must not stay locked in a non-competitive understanding on prices and services. Second, new actors capable of providing diverse services to the population need to emerge.

In Niger, the delay in implementing the regulatory authority illustrates that operators are not eager to invest in territorial coverage as long as they are not forced to by the appropriate authority. The crucial need for regulation functions is created by the greatness of the Sahel desert and the low level of income per capita in the country.

Telecommunications operators must therefore be made to comply with their obligations, with particular reference to their contributions to providing a universal service.

The Republic of Congo illustrates the abyss that can be created by weak liberalisation of the telecommunications sector.

While the incumbent can only provide for three cities in the entire country, the first operator to challenge this situation has already succeeded in servicing a wide range of the territory by providing its services to more than 25 cities.

However, the country remains very unattractive for investors for three main reasons.

First, the authorities are incapable of prohibiting the operators in the neighbouring country from providing service to the border city Brazzaville.

Second, the latest governmental disorders have led to the restoration of the incumbent's monopoly on international traffic.

Third, discriminatory tactics have clearly emerged. Of course, Africa cannot be analysed in a uniform manner. However, as far as new technologies are concerned, national discrepancies will diminish. In these circumstances, attempts are being made to implement a harmonised legal framework for telecommunications in West Africa, following the model of the Organisation for the Harmonisation of Business Laws in Africa.

Remy Fekete is a partner in the intellectual property, technology and electronic communications department at Gide Loyrette Nouel.