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 Opinion, Markets,
GSM, Telephony, Regulation, Global: The incumbent
international gateway monopoly business model is past its sell-by date;
governments should liberalise this market immediately and all stakeholders will
benefit. This forceful assertion is the conclusion of Tom Phillips, Chief
Government & Regulatory Affairs Officer to the GSM Association.
More than 70 countries still retain a monopoly of
international gateway services when connecting domestic callers to
international numbers. A study by the GSM Association (GSMA) calls for an end
to these monopolies, citing the long-standing and clear economic and social
benefits arising from competition in what is a key sector.
What is more, the study, Gateway Liberalisation:
Stimulating Economic Growth, in calling for the introduction of competition
into the international gateways market, cites two examples - Nigeria and Kenya
- where call prices actually fell by around 90% and 70% respectively when
liberalisation came into being. Call volumes in Nigeria
doubled. The Kenyan example is centred on mobile operator Safaricom, which
received an international gateways licence in 2006 and immediately cut
international call prices by 70%.
Consumers, the GSMA continues, enjoy more reliable and
cheaper services after the introduction of competition, while the overall
economy benefits from increased investment, job creation and export-led growth.
By contrast, monopolies hold markets back. To formulate their conclusions, the
GSMA looked at a sample comprising Kenya, Malta, Morocco, Nigeria, Sri Lanka,
Indonesia, Egypt and Bangladesh.
Bangladesh is an example of the wrong approach; an international gateway
monopoly is maintained, telecoms investment as a percentage of gross domestic
product (GDP) is 70% lower and call prices are 2-3 times higher than the
average for developing countries. Consequently, for Bangladesh-based businesses
competing in the global market, the cost of communicating is substantially
higher, putting them at a competitive disadvantage.
“Since countries first began to introduce competition into
the international gateways market more than 20 years ago, the trend has
gathered pace and the benefits to consumers, business and governments in an
increasingly global economy, are now beyond doubt,” asserts Tom Phillips, GSMA
Chief Government & Regulatory Affairs Officer. “But this study shows that
as many as 70 countries have yet to recognise the importance of competition in
this vital gateway to international markets. In a mobile-centric world, and
particularly in developing economies, monopolies throttle development and add
significant costs.” he added.
The study found that the old arguments used to sustain
international gateway monopolies are simply no longer valid because, whether
competition is outlawed or not, new technologies such as VoIP and VSAT can
bypass the monopoly and can account for up to 60% of international call
volumes, even though use of such technologies is often illegal. “The incumbent
international gateway monopoly business model is past its sell-by date;
governments should liberalise this market immediately and all stakeholders will
benefit,” concluded Mr Phillips.
Despite the trend it reports on, examples still exist of
countries recreating monopolies. Four African countries, Benin, Central African Republic, Sierra
Leone and Zimbabwe,
are currently reinstating international gateway monopolies in a bid to aid the
incumbent fixed-line service provider.
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