An Overview of VoIP Regulation in Africa
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1 An Overview of VoIP Regulation in Africa Workshop on VoIP Fourth Africa Internet Summit and Exhibition (AFRINET) Abuja, 23 January 2005 Presentation by Marcel Belingue Manager, Communications, CTO
2 Content Key facts The market for VoIP Status of VoIP regulation in Africa Policy and regulatory approaches Making the business case for VoIP Summary
3 Key facts about telecommunications t in Africa Monopoly-dominated User access is the main obstacle to fixed telephony, not affordability of service VoIP Africa: mostly inbound, but increasingly outbound too Households fixed penetration varies from 48% (Egypt) to as low as 1.1% (Ethiopia) Internet penetration is less than 2% (2004)
4 Key facts about VoIP Liberalisation and end of cross-subsidisation IP-routed calls are cheaper VoIP market entry costs significantly low VoIP surged to 2.06 billion minutes (2003) vs billion minutes in 2002 (ITU); 11% of international traffic VoIP, to grow to as much as 75% by 2007 International carriers to upgrade infrastructure to VoIP e.g. AT&T, NTT, Sprint, MCI Some carriers with VoIP-built networks VoIP end-user handsets for as low as $25
5 The market for VoIP (1) Licensed retail international rates and wholesale rates The arbitrage opportunity (NITEL and SONATEL) From low use/high return commodity to high use/low return VoIP carriers in Africa ITXC (Teleglobe), ibasis ibasis present in 10 African countries Major VoIP call destinations: Senegal, Nigeria, Kenya, Gambia, Zimbabwe
6 The market for VoIP (2) Telcos: If you can t beat them, join them African incumbent operators signing agreements with either ibasis, ITXC or smaller operators Telcos loosing out to the grey market Senegal: first VoIP arrangement between Sonatel and VoIP service providers Chad SOTELTCHAD agreement with ITXC
7 The market for VoIP (3) 300% 250% 200% % 100% 50% 0% Africa Latin America Asia Europe Middle East
8 The market for VoIP (4) Grey market Ghana = $15-25 million a year? Nigeria: 90%? Some attempts to use filtering and traffic restrictions Egypt and Ghana: Reprisals? Progressive approach Requirement to use the incumbent backbone (Nigeria, Kenya and others) Regional VoIP gateways by SONATEL and TELKOM SA Liberal approach Mauritius: 07 International Long Distance (ILD) licences, including MAURITIUS TELECOM, and 01 Internet Telephony Service licence
9 The market for VoIP (5) Opportunities for Africa Network equipment cheaper and easier to install Greater ability to handle network congestions But Disadvantages of VoIP: quality of service; proprietary vs. open software
10 Status of VoIP regulation in Africa Overview Nigeria and Mauritius have legalised VoIP Algeria contemplating the same approach Back door deals arranged between SOTELMA (Mali) and four VoIP operators Kenya examining ways to have VoIP services through cybercafés and ISPs See summary table on p. 30
11 Policy and regulatory approaches Liberal/market approach? Technology approach? (Technology-neutral? possible challenges with number portability, emergency services, etc)
12 Making the business case for VoIP Disruption to incumbents? Governments to take advantage of the new technology? Impact on Universal Service Obligations? Direct value to the treasury and indirect/leveraged value to the economy at large
13 Summary VoIP is a tool that African governments and regulators could use in a number of ways to address a wide range of pressing issues and it is therefore something that needs to be understood rather than feared.
14 Contact Details Marcel Belingue Manager, Communications 26/27 Oxendon Street London SW1Y 4EL tel: +44 (0) fax: +44 (0)
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