New ICT licensing framework explained

THE introduction of a new ICT Licensing Framework through a Cabinet approval is a radical pronouncement that will result in enhanced competition, lower tariffs and improved service for telecommunications and internet, among others.

The new framework is also expected to promote greater citizenry participation in the telecoms industry by encouraging the entry of small and medium enterprises (SME’s) through regionalisation.
Among other benefits is the increase of technological convergence which tends to create new markets and promote competition through increased market power and elimination of barriers to new entrants on the market.
Minister of Transport and Communication Brian Mushimba recommended through a Cabinet memorandum introduction of a Converged Licensing Framework for licensing of existing and new entrants in the information and communications technology (ICT) sector in Zambia.
The new licensing framework will come into effect through the revocation of SI No. 34 of 2010.
Number of market players –  Converged regulation affects not only the number of operators providing different telecommunication, broadcasting and IT services, but also their organisational structure due to horizontal or vertical integration, mergers, acquisitions, and diversification;
Penetration rates of ICT services – Converging services have important influences on the ICT sector.  New services are launched and new operators enter the sector.
This may increase penetration levels. It may, however, also affect incumbents and other players in the market in terms of changing their subscriber numbers and revenues
Infrastructure sharing – In a competitive environment, the issue of infrastructure sharing is of great relevance as it can reduce both roll-out costs and environmental pollution and allow room for more development in the sector.
The new licensing framework will enable incumbent and prospective operators to provide many electronically enabled services to businesses and consumers using a growing variety of technologies through competitive approaches at national, provincial and district levels.
This invariably translates into sub-dividing the country into regions with the upmarket areas such as Lusaka, Copperbelt and Livingstone attracting higher licence fees as opposed to the predominantly rural areas.
This model will enhance the provision of telecommunication services to the unserved and underserved areas, hence bridging the digital divide and help to achieve universal access targets.
Under the Converged Licensing Framework, Government, through ZICTA, will issue network licence, facilities and services. This licence authorises ownership and control of electronic communication infrastructure.
The network facility would mean an electronic communications facility or combination of electronic communications or other facilities that are exclusively or predominantly provided by a single or limited number of licences and cannot feasibly (whether economically, environmentally or technically) be substituted or duplicated in order to provide the service.
Service licence: The service licence will have two categories, A and B. Both categories of licences will enable the licence holder to provide the same services in a market segment. The difference is that category A licence holders will be in possession of a network licence, while category B service licence holders will not be in possession of a network licence. The two are differentiated for purposes of licence fees.
It would be inequitable for a service provider without a network to pay the same licence fees and be subjected to the same regulatory scrutiny as one with a network.
Spectrum is scarce and in high demand. The ‘first come, first served’ model of assigning spectrum has ensured that some frequency bands assigned to the existing operators have been left idle and unutilised, thereby wasting the scarce infinite resource.
This intervention will further ensure that the scarce spectrum resources are assigned to the services and operators that will generate the greatest benefit to the country from the use of the spectrum.
This simplification of the licensing procedure, including the reduction or elimination of the administrative or formal requirements to enter the market and revision of the spectrum assignment model, will encourage the entrance of several players in the ICT market.
The simplification is expected to intensify competition and ensure that people pay cost-reflective tariffs that will hugely be determined by the market.
A stakeholder engagement from a regulatory impact assessment (RIA) conducted by the Central Statistical Office (CSO) and ZICTA in 2013, revealed that majority stakeholders interviewed recommended the need for Zambia to migrate from the existing licensing framework to a converged licensing framework.
The ICT Act No. 15 of 2009, part III (licensing of electronic communications other than radio communications), and section 10, empowers ZICTA to issue two broad categories of licences, namely network and service.
The ICT Act of 2009 further categorises the above licences into two types: individual and class.
Individual licences are major network or service licences with significant socio-economic impact, and have significant regulatory obligations and require extensive use of radio frequency spectrum and other finite resources.
The individual licence for either or network or service purpose, is issued conditionally through a national competitive bidding process announced by the Government through ZICTA.
The class network or service licence, which is a ‘walk-in’ licence, is one whose services are seen to have lower socio-economic impact as compared to services offered under individual licences.
Under the class network licence, ZICTA issues operating licences for wireless internet, public data, public payphone, and private network while internet service and value-added services are issued under the class service licence. This categorisation is made pursuant to the Information and Communication Fees Regulations SI No. 34 of 2010. ZICTA conducted benchmark studies in Kenya and Tanzania who have already migrated their licensing regime to a converged framework.
ZICTA has under the existing licensing framework issued individual network licences at a consideration of K2,160,000 and services licences at a consideration of K5,760,000 for a period of 15 years to all the three (3) mobile cellular service providers, namely Airtel, MTN and Zamtel. They have also issued individual network licences to five data transmission service providers, namely Zesco,CEC Liquid Telecoms, Airtel, MTN, and Zamtel at a consideration of K1,440,000.
Further, ZICTA has issued five public data providers licences at a consideration of K200,000 and one single fixed telephony  service operator, namely Zamtel, at a consideration of K480,000.
Key industry stakeholders were accorded an opportunity to provide feedback and contribute in the process of migrating to the converged licensing framework.  These include governmental agencies such as the Business Review Regulatory Agency (BRRA), Competition and Consumer Protection Commission (CCPC), ICT industry players such as MTN Zambia, Airtel, Zamtel, Vodafone, CEC Liquid Telecoms, Zesco-Fibrecom, and the general public
Under the new licensing regime, Government, through ZICTA, will issue two types of licences in the ICT sector: network licence and service licence. Under these categories, the service provider in a market category will be at liberty to provide as many services as the facility can permit. This is contrary to the previous regime which demanded an operator to own specific licences to provide a service such as voice and data.
The migration to a converged licensing regime will necessitate the removal of unnecessary barriers and costs to establishing and operating a business in the voice and data markets.
This will help speed up the connection of the unconnected three million people through deployment of fixed and wireless technologies in both economically viable and non-economically viable areas countrywide and help propel universal communication services across the country.
The author is public relations officer in the Ministry of Transport and Communication.


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