Mobile cellular communications in the Southern African region: Universal access considerations Michael Minges, ITU minges@itu.int The views expressed are those of the author and may not necessarily reflect the opinions of the ITU or its Members.
Workshop on Telecommunication Reform Gaborone, Botswana 35 May 1999
Workshop on Telecom Sector Reform, Botswana, May ‘99
Topics Mobile cellular trends in Southern Africa region Regulatory issues related to mobile cellular
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Mobile cellular in the SADC region Status Growth Substitution Strategic investment Prepaid Roaming
Southern African Development Community
Source: RTR (http://rtr.worldweb.net).
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Workshop on Telecom Sector Reform, Botswana, May ‘99
SADC Mobile Cellular Status Mobile cellular fairly recent to region All SADC countries now have mobile cellular All except one have Namibia GSM
Mobile cellular startup SADC countries Tanzania Sep. 94
Malawi Dec. 95
Angola Feb. 94
Zambia Aug.95
Zim babwe Sep.96
April 95
Swazi land Nov.98
Penetration > 5% ~ 1% 0.2 .05% < 0.1%
Botswana June 98
Mozam bique Nov.97
South Africa June 94 Source: ITU.
Mauritius May 89 Lesotho May 96
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Mobile growth Over 100% growth (excluding South Africa) Almost as many new mobile as fixed subscribers in 1998 Penetration doubling every year
N e w t e le p h on e su bscrib e rs in SADC coun t rie s ( 0 0 0 s) * 250 200
Mobile density
0.21
Fix e d
150 100 50
0.10 0.05
M ob ile
0.02
0 1995
1996
1997
* Excluding South Africa Source: ITU.
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1998
Workshop on Telecom Sector Reform, Botswana, May ‘99
Substitution Mobile cellular quick to implement; less prone to vandalism Low connection fee (compared to fixed); generally little wait for service Mobile functionality advantages
M ob ile ce llula r a s % of t ot a l t e le ph on e su b scrib e rs, 1 9 9 8 Sou t h Africa
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M a u rit iu s
20
Ta n za n ia
20
N a m ibia
16
SAD C* * Excluding South Africa. Source:ITU.
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Strategic foreign investors Country Botswana Botswana Lesotho Malawi Mauritius Mozambique Namibia South Africa Swaziland Tanzania Tanzania Zambia Zimbabwe
Mobile Operator Vista Mascom VCL TNM Emtel TMM MTC Vodacom Swazi MTN MIC TriTel Zamcell Telecel
Foreign Investor France Télécom Portugal Telecom Vodacom (South Africa) Telekom Malaysia Millicom (Luxembourg) Deutsche Telekom Telia (Sweden) Vodafone MTN (South Africa) Millicom (Luxembourg) TRI (Malaysia) Telecel (USA) Telecel (USA)
Stake 51% 49% 51% 60% 50% 26% 26% 32% 31% 57% 60% 70% 40%
Source: ITU.
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Prepaid Provides access to those who might not normally qualify Accounts for majority of new subscriptions in many networks around the world
Vod a com Sou t h Africa Pre pa id su b scrib e rs, 0 0 0 s As % of t otal cellular subscribers
53%
37% 27%
11%
953
480
262
58 'Mar 97 Mar 98 Sep 98 Dec 98 Source: Vodafone.
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Roaming Extra revenue source Can help spur regional integration Not yet widely implemented
GSM Roa m ing in SAD C
L M M N T Z Z TOTAL S Z U M Z A W SADC World Lesot ho 1 Mozam bique 2 6 Maurit ius 2 33 Nam ibia 2 20 Tanzania 1 4 S. Africa 6 69 Zim babwe 1 9 Source : I TU adapt ed from GSM MoU.
“For countries like Lesotho, roaming makes up much of the total revenue” —Vodacom
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Regulatory issues for mobile cellular Market structure Licensing Universal access obligations Pricing Consumer issues
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Market participants & competition Private sector participation
Cellular market structure SADC countries Tanzania
– All SADC countries except one
Competition – 6 SADC countries 100% stateowned Fixed PTO+private investors
Malawi
Angola
Zambia
Namibia
Zim babwe
Number of mobile operators
Botswana
Swazi land
Competitive with fixed PTO participation Competitive no fixed PTO participation
Mozam bique
South Africa
Source: ITU.
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Mauritius Lesotho
Workshop on Telecom Sector Reform, Botswana, May ‘99
Strive Masiyiwa: Cellular folk hero Fought 4 years for cellular license in Zimbabwe Finally launched ECONET in June 1998 Partowner of new Botswana cellular network
“We aim to provide telecommunications to all the peoples of Zimbabwe”
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Mobile cellular licenses How many
– How many operators can market bear?
How long
– Time period of license
How much
– License fees will be passed on to consumers
How about
– Coverage obligations – Technology – Scope
“[License fee] is small because we wish to lower the cost of entry, so as to facilitate affordable tariffs” — SATRA 13
Workshop on Telecom Sector Reform, Botswana, May ‘99
Universal access obligations: coverage Outside of South Africa, coverage typically limited to major towns Licenses should be linked to population and territorial coverage targets Global mobile satellites may help
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Universal access obligations: payphones SADC mobile operators have had few if any universal access obligations Exception is South Africa where they had to install 30’000 cellular payphones in 5 years
Com m u n it y ce llula r p a y p h on e s in Sou t h Africa
35'000 30'000
M TN V oda com
25'000 20'000 15'000 10'000 5'000 0 1994 1995 1996 1997 1998 Source: ITU adapted from Vodacom, MTN.
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Tariffs Still high relative to fixed and compared to other regions Significant regional variation Biggest barrier to mobile access Reasons why – “High retention” – Interconnect charges – Handset & service provider subsidies
M obile ce llu la r t a riff, 1 0 0 m in ut e s, US$ , 3 / 9 9 Malaw i Mauritius
$14 $20 $71
Mozam bique $35
Nam ibia South Africa
$33
Zam bia Zim babw e
$55 $19
SADC
$39
Source: ITU adapted from published operator tariffs.
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Tariffs & competition Competition can help to lower tariffs
Source: Net*ONE (Zimbabwe).
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Handsets Factors affecting handset prices: – Custom duties – Distribution policy – Subsidies
Minimum prices range from zero (bundled with subscription package) to US$ 400
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Affordability With current tariffs, mobile subscriber penetration in SADC (excluding South Africa) will rise over next 5 years to around 1% With best practice tariffs, mobile density can rise to 4.4%
M ob ile ce llu la r su b scrib e r 2 0 0 5 fore ca st , SADC* , ( m ) 1998
2005 curre n t t a riffs
Mobile density Subs cribers
4.4%
1.1%
0.2% 0.2
1.1
* Excluding South Africa Source: ITU.
2005 cost + t a riffs
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Other consumer issues Calling Party Pays Mobile Number Portability Quality of Service
© MACH
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Workshop on Telecom Sector Reform, Botswana, May ‘99
Conclusions Mobile cellular enhances access to communications Must not be viewed as service for privileged Requires regulatory encouragement to extend access to all
©ITU / A. de Ferron
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