Bogere Joseph Alfred1, Dr Julianne Sansa-Otim2 and Ronald ...

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Part 2: The Feasibility of National Roaming in Highly Competitive Mobile Markets: A Case Study of Uganda 53 Key words: national roaming; infrastructure sharing; mobile market; technical feasibility; economical feasibility; Introduction Background The Ugandan telecom sector has gone through a major transformation. Thanks to the successful liberalization process of 1998, Uganda now counts on a good number of telecom service operators, three of which have been in the market for quite a good number of years: MTN Uganda, Uganda Telecom, and Airtel (formerly known as Zain Uganda). Warid Telecom entered the market in February 2008, Orange Uganda launched in March 2009, joined by Smile Telecom and I-Tel among many more others. New entrants are expected to continue to join the market. Increased competition is driving down prices, which may be a big threat to new entrants as they may not be able to compete freely and fairly, due to their low generated geographical coverage area, and lack of enough time to fi nally assemble a complete network to be able to compete. A form of telecoms infrastructure-sharing among the telecom companies can be considered as a better option to further foster the competition and encourage new players in the market. Both the incumbent and the new operators can perceive economic benefi ts whereby the former raise extra revenue by renting out some of their infrastructures and the latter benefi t through reduction in their cost of Capital Expenditure (CAPEX) as fewer infrastructures need to be setup. Infrastructure sharing limits duplication and gears investments toward underserved areas, product innovation, and improved customer service. However, a clear policy and commercially friendly price-regulation mechanism is a pre-requisite for successful infrastructure sharing. Many national telecoms regulatory agencies around the world are driven to favour infrastructure sharing as a way of stimulating competition. They are beginning to formulate policies that would regulate and encourage sharing of infrastructure among telecom companies as a key lever to foster competition and optimize telecom investments [Chanab et al.2007]; Just like those nations in the world, Uganda Communication Commission (UCC) has favoured infrastructure sharing in the past, by setting up “Co-location and Sharing of Infrastructure policy” stated in Policy guideline 16 [UCC 2010]; but the policy has been silent in its implementation in the past, because the Commission wanted to encourage growth and develoment of communication infrastructure countrywide according to the UCC’s service development specialist. The authors of this paper believe this is the right time now to put the policy to work to the benefi t of all telecom stakeholders.
54 Strengthening the Role of ICT in Development Benefits Achieved in Sharing Infrastructure Infrastructure sharing presents a number of advantages that cut across the telecoms service providers, policy makers and regulators, and end users of telecoms services. Some of the advantages include but are not limited to the following; Extra source of revenue: Incumbent operators can generate additional revenue from new entrants who may wish to use their infrastructure. Revenues generated from the infrastructure sharing can exceed 10 percent of the total annual revenue raised by providers. Less investment costs: Infrastructure sharing divides the investment burden among the operators rather than being shouldered by a single operator. Optimized investment contributes to better sustainability of Telecoms operators, justifi es higher investments in the long run due to the reduced or shared risks among the operators and can cut the infrastructure costs by almost a half as predicted by telecoms equipment vendors. Better use of scarce resource: In its simplest form, sharing infrastructure can help optimize the use of national resources. For example over-digging of roads by multiple telecoms providers to lay fi ber cables and copper wires can be minimized if all providers use the same duct if not fi ber cable to transmit their traffi c. Also, the effect of having several towers on one hill belonging to multiple providers may be reduced as sharing infrastructure encourages tower sharing as well, hence better national air space. In its complex form, sharing infrastructure can allow better use of spectrum through either direct leasing of spectrum by providers or through other spectrum sharing techniques like spectrum pooling. Easy Market entry by new players: When infrastructure sharing is enforced, telecoms markets can become more attractive and new players can easily join, increasing competition in the industry with optimized and effective investment. Improved innovation and better customer service: By sharing the network deployment burden and reduction of fi nancial and operational cost constraints, operators can focus their attention towards improved innovation and better customer service hence better telecoms product offerings and fair competition. Achieving Universal Service goals: Sharing infrastructure encourages telecoms operators to undertake network expansion to underserved or rural areas, using fi nances generated from savings, due to less investment cost incurred in urban areas. That way the preset universal service targets by policy makers and regulators can be easily met. Less negative environmental impact: Telecoms infrastructure setup and deployment has had a negative effect on the environment. Infrastructure sharing can be a viable solution to some of the environmental problems, and may be supported by various conservation groups, as less network buildup results into fewer environmental hazards.
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Bogere Joseph Alfred1, Dr Julianne Sansa-Otim2 and Ronald ...

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