African governments move to grant 3G licenses

Investor interest in the African telecom market has been heightened with news that the West African region is opening up its market to 3G network roll-out in order to enhance communication.

Like the southern and East African region, West African governments are abolishing their restrictive telecom laws in a bid to develop the telecom sector by allowing international telecom investment.

The Togolese authorities, for example, have announced the country is joining a long queue of African countries in granting a 3G license to a mobile service provider. The country is awarding a license to Togo Cellulaire to let the provider offer advanced mobile broadband services to subscribers and businesses.

Much of Africa's telecom sector is undeveloped and existing mobile providers had for a long time been fighting to be granted 3G licenses in order to provide additional services. Several African governments had refused, in order to protect incumbent operators from competition.

Now, Togo joins Zambia, Zimbabwe, Kenya, South Africa, Tanzania and Nigeria in offering 3G services. Alcatel-Lucent has been awarded a €22 million contract by Togo Cellulaire to build the first 3G wireless broadband network in the country. Alcatel-Lucent will provide a full end-to-end turnkey solution, including its comprehensive converged radio access network (RAN) portfolio, to support both 2G and 3G services over the same platform.

In a statement last week, Alcatel head of activities in Africa and the Middle East Emr El Leithy said, "the company will also supply the operator with solutions for enhancing interconnections among base stations and providing mobile traffic overhauling capabilities along with an integrated flexible wireless management system."

Unlike in the past, several African countries have now developed telecom laws that provide unified licenses for diverse telecommunication operations including mobile telephony, Internet and satellite broadcasting services. African governments now feel that providing one license for an array of services will attract international service providers who had feared to invest in the region because of restrictive license conditions.

Many African countries are now focusing on the harmonization of license procedures to boost the provision of data, Internet backbone, picture messaging and video conferencing services. In Zambia, where VoIP was last year considered illegal and the international gateway regulated by the government, operators can now be licensed in one of three categories: application service providers, network facilities providers and content service providers.

However, service providers are claiming that the fees required for them to get the 3G license are prohibitive. As in other countries in Africa including Zimbabwe, Kenyan-based telecom operators Telkom Kenya and Zain are currently lobbying the government authorities to reduce the US$25 million charge for operators who seek 3G licenses. The Communication Commission of Kenya (CCK) has said that the Kenyan government will not reduce the fee. The fees are regarded as too expensive for emerging telecom companies that already have had to build necessary telecom infrastructure.

"License acquisition problems have been sorted out but the issue of the high fees is what will again slow down the roll-out of the 3G networks as few operators are able to afford the fees," said Walter Tapfumanei, communications officer for the Africa Agency for ICT Development.

Operators want the fees reduced in order to, among other things, cut the cost of network interoperability and the price charged to end-users.

At the same time, there seems to be confusion among the regulators and the ministers in charge communication and technology regarding procedures for awarding 3G licenses. The telecom regulators must first seek approval from the ministries of information and communication technologies before awarding the licenses to the service providers. The regulators also have to wait for a long period of time for the ministries of information and communication technology to approve spectrum for 3G networks.

Generally, regulators have no powers to approve licenses and intervene in the wholesale market among operators.