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MTN, Millicom bemoan 'regulatory challenges' in Africa

MTN, Millicom bemoan 'regulatory challenges' in Africa

Africa's regulatory landscape is proving to be a significant challenge for at least two operators that released their financial results over the last month.

Rob Shuter, Group president and CEO at MTN, with offices in more than twenty countries across Africa, pointed to difficulties the telco encountered during 2017 in its release of financial results last week Thursday.

"MTN delivered a solid overall performance for the year, with progress on many fronts, despite difficult economic conditions as well as operational and regulatory challenges in certain markets."

The challenges encountered in 2017, according to MTN, include regulatory mismanagement and a data network shutdown in parts of Cameroon in the first quarter, regulatory related disconnections in Uganda (where it ended up disconnecting 750 000 subscribers) as well as an ongoing dispute with regulatory authorities in Benin on frequency fees which led to the expulsion of its CEO in that country.

Shuter also spoke about challenges the company is facing in South Africa where a Draft Electronic Communications Amendment (ECA) Bill could alter current regulations on spectrum allocation to the detriment of the telecommunications sector in that country.

"I think the regulatory landscape in South Africa over the last twenty years has worked really well. You've got four operators that compete at an infrastructure level and at a service level. We have the best network in SA of any of the 22 markets we are in; we have the deepest 3G population coverage of well into the 90s and I think we have produced an industry that provided affordable telecommunications services basically across 99% of the republic. The challenge, of course, comes when you move from the voice world to the data world and there is this really high demand for spectrum; so from my perspective, we have got a system that has worked really well. Why are we making a material policy intervention at this time?"

Godfrey Motsa, CEO of MTN South Africa summed proposals in the ECA as "a terrible idea".

MTN has quantified its contingent liabilities from legal and regulatory matters in 2017 at R1 180 000 which is more than double the figure from the preceding year.

Similar sentiment

The sentiments of a regulatory minefield on the continent by MTN which agreed to settle a US$8.5m fine from Rwanda's regulator last year and is currently paying its 2016 Nigeria regulatory fine of N330 billion (the equivalent of R25,1 billion) over a three-year period, are similar to those expressed by Millicom in its Law Enforcement Disclosure Report alongside annual financial results for 2017.

Millicom says it experienced "significant challenges" with regards to overall clarity of laws, legal oversight and separation of powers when it comes to laws around surveillance in particular across the Africa.

"Only one of our African operations (out of three) could be said to have clear laws and processes on who is allowed to make requests for surveillance, customer data or service suspensions, as well as how and in what circumstances those requests may be made. Legal frameworks are in the process of developing across the region. This, coupled with challenges with rule of law and existing laws and processes being followed, makes determination of the legality of requests we receive challenging."

Onica Makwakwa, Africa Coordinator at technology sector advocacy group Alliance for Affordable Internet (A4AI) believes African regulators have not always managed to achieve the right balance in their regulatory activities including on the important issue of pricing transparency in places such as Ghana and Nigeria.

"It has been a mixed bag honestly. I think that the regulators are obviously there to regulate for the market and to ensure a competitive environment between all the players as well as economic viability. The other balance however is to regulate for consumer protection and that is the one area where we haven't seen vibrant and forward-thinking approaches from regulators. Some are doing well but others seem to be struggling with this dual balance."

At the start of 2017, non-profit think tank Research ICT Africa issued a warning for the ICT sector to 'look out' as "we might be seeing a trend of price increase on data on the continent..." following a period of toing and froing on the determination of data costs by Zimbabwe's post and telecommunications regulator Potraz.

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