Potraz mulls telecoms infrastructure sharing policy

via Potraz mulls telecoms infrastructure sharing policy – DailyNews Live 20 January 2015 by Kudzai Chawafambira

HARARE – The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) is considering introducing a policy that compels infrastructure sharing among telecoms operators.

Zimbabwe’s telecoms operators individually invest and own infrastructure, giving established ones a competitive advantage.

Currently, the country has no standing regulation that promotes infrastructure sharing among telecommunications industry players.

Potraz said telecoms operators and ICT firms could save up to 60 percent in capital expenditure if they adopt the infrastructure sharing model.

“Infrastructure sharing provides opportunities for significant reduction in investments or capital expenditure. Industry sources cite that passive infrastructure sharing can potentially yield overall cost savings as much as between 15 percent and 30 percent, with clear cost savings on yearly site capital expenditure of up to 60 percent (notably due to less investment duplications) in addition to significant savings in operational expenditure (mainly costs of renting the sites, site maintenance, personnel and power, air conditioning and fuel expenses),” the regulator said in a consultative paper it has crafted.

Infrastructure sharing can take a number of forms based on the degree of sharing that is permissible, and depending on the existing licensing and regulatory frameworks as well as national priorities.

In broad terms, infrastructure sharing can be based on the passive elements of a telecommunications network, which is often referred to as “passive infrastructure sharing” or can be based on the active elements also referred to as “active infrastructure sharing”.

Meanwhile, telecommunications industry’s stakeholders are deliberating on the proposed model.

The consultative paper envisages that an infrastructure framework be based on an open access model and this would realise the attainment of universal access to broadband and other information and communication technology (ICT) services on a reliable basis and at affordable prices in line with technological developments.

However, Potraz noted that some players often have access to strategic sites.

“Denying new entrants or small operators access to such resources tends to slow down new entrants,” the regulator noted in the consultation paper, adding that operators who perceived coverage as their competitive tool were less likely to go into voluntary sharing.

Potraz further stated that in order to stem this inhibitor, there might be need for regulatory intervention in the form of mandates or sharing guidelines.

It said another hurdle that operators face and may lead to their failure to enter into infrastructure sharing agreements is the difference in technology and site quality.

“In cases where a joint venture company is created, personnel issues such as labour laws, staff resistance and transformational issues may impede progress on establishing sharing agreements,” said the regulator.

It said that without a properly-crafted asset management model, infrastructure sharing may fail to take off.

“All legal and commercial issues about the jointly owned or shared assets need to be comprehensively covered,” it said.

For new operators, Potraz said, sharing provides a significant opportunity to reduce time to the market in as much as it is a reduction in market entry barriers.

The past five years have witnessed rapid growth in the telecommunications industry as evidenced by the mobile penetration ratio of 106,4 percent as at first quarter 2014 and broadband penetration of 43,1 percent.