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Regulation of Network Interconnection and Network Access

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The Liberalisation of the Telecommunications Sector in Sub-Saharan Africa and Fostering Competition in Telecommunications Services Markets

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 6))

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Abstract

This chapter focuses on the issue of access in the telecommunications sector. Access in the telecommunications sector encompasses various arrangements involving an operator or service provider acquiring facilities or services from another operator in order to enable it to deliver communications services to its own customers. Examples include: interconnection, network access, for example, local loop unbundling and access to co-location; and infrastructure sharing.

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Notes

  1. 1.

    This is based on the definition of term ‘access’ in the European Union telecommunications legal framework. See the Council Directive (EC) 2002/19 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), Art 2 (a).

  2. 2.

    Emma McCormack, ‘Access and Interconnection’ in Ian Walden and John Angel (eds), Telecommunications Law and Regulation (2nd edn, Oxford University Press 2005) 216.

  3. 3.

    Stanley J Liebowitz and Stephen E Margolis, ‘Network Effects’ in Martin E Cave, Sumit K Majumdar and Ingo Vogelsang (eds), Handbook of Telecommunications Economics: Structure, Regulation and Competition Volume 1 (Elsevier 2002) 76.

  4. 4.

    Richard Whish and David Bailey, Competition Law (7th edn, Oxford University Press 2012) 12.

  5. 5.

    Marcel Canoy, Paul de Bijl and Ron Kemp, ‘Access to Telecommunications Networks’ in Pierre A Buigues and Patrick Rey (eds), The Economics of Antitrust and Regulation in Telecommunications (Edward Elgar 2004) 136.

  6. 6.

    Livi Cricelli, Francesca Di Pulo, Massimo Gastaldi and Nathan Levialdi Ghiron, ‘Mobile Networks Competition and Asymmetric Regulation of Termination Charges’ in S Raghavan, Bruce L Golden and Edward A Wasil (eds), Telecommunications Modeling, Policy, and Technology (Springer 2008) 124.

  7. 7.

    An overview of case law focusing on the telecommunications sector in Sub-Saharan Africa shows the prevalent issue of contention as interconnection charges. See for example, Botswana Telecommunications Corporation v Mascom Wireless Pty(Ltd) and Vista Cellular (Pty) Ltd BTA Ruling 1/1999 in Botswana; Kencell Communications Ltd v TKL Communications Appeal Tribunal (2003) in Kenya; TDM (Telecomicacoes de Mocambique E.P) vs. Vodacom, Cellnet Tanzania v Mobitel, Vodacom and Tritel (TCRA 2004) in Tanzania; and MTN Uganda Limited v UCC Miscellaneous Cause No. 225 of High Court Civil Division 2009 in Uganda. These cases all dealt with the issue of call termination costs in the telephony market.

  8. 8.

    For the European Union, see Council Regulation (EC) 2887/2000 of 18 December 2000 on unbundled access to the local loop [2000] OJ L366/4 recital 3 that justifies mandating access to the fixed copper local loop of former state monopoly operators on the ground that that new entrants do not have widespread alternative network infrastructures and are unable, with traditional technologies, to match the economies of scale and the coverage of operators designated as having significant market power in the fixed public telephone network market. With regards to the United States, the enactment of the Telecommunications Act of 1996 was primarily meant to introduce competition in the local loop which was under the monopoly control of incumbent local exchange carriers (ILECs), see in particular section 251 of the Telecommunications Act.

  9. 9.

    Emma McCormack, ‘Access and Interconnection’ in Ian Walden and John Angel (eds), Telecommunications Law and Regulation (2nd edn, Oxford University Press 2005) 216.

  10. 10.

    Ibid.

  11. 11.

    Mary Shirley, Fred Tusubira, Luke Haggarty, and Frew Gebreab, ‘Telecommunications Reform in Uganda’ (2002) World Bank Working Research Paper 2864/2002 38.

  12. 12.

    Ibid.

  13. 13.

    Sentel had to wait 14 months to eventually interconnect with Sonatel’s network according to ‘Senegal-Telecoms Market Overview, Statistics & Forecasts’ (2006) 18 <http://www.altongp.com/previousprojects/Tellecommunications/Senegal/Senegal%20%20Telecoms%20Market%20Overview,%20Statistics%20&%20Forecasts.pdf> accessed 15 June 2017.

  14. 14.

    Roger G. Noll and Mary M. Shirley ‘Telecommunications Reform in Sub-Saharan Africa: Politics, Institutions and Performance’ 43 <http://dev.wcfia.harvard.edu/sites/default/files/656__nollshirley.pdf> accessed 15 June 2017.

  15. 15.

    Ibid.

  16. 16.

    Eli Noam, ‘Interconnection Practices’ in Martin E Cave, Sumit K Majumdar, and Ingo Vogelsang (eds), Handbook of Telecommunications Economics: Structure, Regulation and Competition Volume 1 (Elsevier 2002) 397-398.

  17. 17.

    Satellite television has been more successful in Africa than Cable TV. One reason for almost non-existent cable TV market in Sub-Saharan Africa is that the construction of private networks for the distribution of cable TV services is not permitted. See IBP USA, Africa: Telecommunication Industry and Internet Business Opportunities Handbook (International Business Publications 2003) 251.

  18. 18.

    Eli Noam, ‘Interconnection Practices’ in Martin E Cave, Sumit K Majumdar, and Ingo Vogelsang (eds) Handbook of Telecommunications Economics: Structure, Regulation and Competition Volume 1 (Elsevier, 2002) 397-398.

  19. 19.

    Emma McCormack, ‘Access and Interconnection’ Ian Walden and John Angel (eds), Telecommunications Law and Regulation (2nd edn, Oxford University Press 2005) 220.

  20. 20.

    Eli Noam, ‘Interconnection Practices’ in Martin E Cave, Sumit K Majumdar, and Ingo Vogelsang (eds), Handbook of Telecommunications Economics: Structure, Regulation and Competition Volume 1 (Elsevier 2002) 398.

  21. 21.

    Mark D J Williams, ‘Advancing the Development of Backbone Networks in Sub-Saharan Africa’ in Information and Communications for Development: Extending Reach and Increasing Impact (World Bank 2009) 55.

  22. 22.

    PwC for UCC, ‘Consultation Document 1: Competition Market Analysis’ (2008) 9.

  23. 23.

    This information is based on interview with Ann Rita Ssemboga, (former) Economist, UCC (Kampala, Uganda 7 December 2011).

  24. 24.

    This is based on the interviews conducted in Uganda with legal representatives of telecommunications operators, MTN Uganda Limited, Airtel, (then) Warid Telecom, and Smile Uganda, UCC personnel, and telecommunications policy-makers and telecommunications industry experts. See, the Appendix A to this study for full list of interviewees.

  25. 25.

    Though a formal complaint was never submitted to UCC.

  26. 26.

    Mark Armstrong and Julian Wright, ‘Mobile Call Termination’ (2009) 119(538) Economic Journal F270, F271.

  27. 27.

    PwC for UCC, ‘Draft Report on Competition and Dominance in the Ugandan Telecoms Sector (Part 2): Interconnection and Retail Cost Study’ (2009) Unpublished 1. However, small telecommunications operators who entered the telecommunications market after 2008, for example, Smile Uganda are not considered dominant according to UCC personnel.

  28. 28.

    Nera Economic Consulting, ‘Competition, Interconnection, and Price Regulation, Module 2: ICT Regulation Toolkit’ (January 2007) 20.

  29. 29.

    Jean-Jacques Laffont and Jean Tirole, Competition in Telecommunications (MIT Press 2000) 180 highlights the problem of FTM in European telecommunications markets stemming from the high charges for termination on a mobile network. In the UK, telecommunications regulator, Oftel (now Ofcom) initially focused on FTM. See Monopolies and Mergers Commission (MMC), ‘Cellnet and Vodafone: A Report on a Reference under Section 13 of Telecommunications Act 1984 on the Charges Made by Cellnet and Vodafone for Terminating Calls from Fixed Line Networks’ (1998) <http://www.ofcom.org.uk/static/archive/oftel/publications/1995_98/pricing/cmmc1298.htm> accessed 15 June 2017. Similar concerns were raised in Mark Armstrong, ‘Network Interconnection in Telecommunications’ (1998) Economic Journal 545 and Marcel Canoy, Paul de Bijl, and Ron Kemp, ‘Access to Telecommunications Networks’ in Pierre A. Buigues and Patrick Rey (eds), The Economics of Antitrust and Regulation in Telecommunications (Edward Elgar 2004) 146.

  30. 30.

    Jerome Bezzina, ‘Interconnection Challenges in a Converging Environment: Policy Implications for African Telecommunications Regulators’ (June 2005) World Bank 22 <http://event-africa-networking.web.cern.ch/event-africa-networking/cdrom/Worldbank/interconnectionFinal.pdf> accessed 15 June 2017.

  31. 31.

    Anders Engvall and Olaf Hesselmark, ‘Options for Terrestrial Connectivity in Sub-Saharan Africa’ (April 2005) 5 <http://www.scanbi-invest.com/download/ExSum_OptTe.pdf> accessed 15 June 2017.

  32. 32.

    See for example, ‘NCA Announces Interconnection Rate Regime for Period 2012-2014’ <http://www.nca.org.gh/downloads/Interconnect_News.pdf> accessed 15 June 2017 pertaining to interconnection rates in Ghana; TCRA, ‘Determination on Review of Telecommunications Network Interconnection Rates in the United Republic of Tanzania’, Interconnection Determination No.2 of 2007; Tanzania Communications (Interconnection Rates Determination No. 3 of 2013) Notice, 2013.

  33. 33.

    Damien Geradin and Michel Kerf, Controlling Market Power in Telecommunications: Antitrust vs. Sector-Specific Regulation (Oxford University Press 2003) 65.

  34. 34.

    Telecommunications Act, 2006, Act No. 15 of 2006, and Guidelines on Interconnection for Botswana Telecommunications Sector <http://www.bta.org.bw/sites/default/files/documents/INTERCONNECTION_GUIDELINES.pdf> accessed 15 June 2017.

  35. 35.

    Kenya Information and Communications Act, Cap. 411A; and the Kenya Information and Communications (Interconnection and Provision of Fixed Links, Access and Facilities) Regulations, 2010).

  36. 36.

    Nigeria Communications Act 2003 and the Telecommunications Network Interconnection Regulations of 2007, SI 2007/33.

  37. 37.

    Electronic and Postal Communications Act 2010 and the Electronic and Postal Communications (Interconnection) Regulations of 2011.

  38. 38.

    Principles of fair and efficient interconnection are prescribed at the international level in the WTO Reference Paper on Basic Communications of 2007. Although the paper is not binding for all WTO Member States, it is binding for some members. The relevant Member States in Sub-Saharan Africa are: Cote d’Ivoire, Kenya, South Africa, Uganda, Mauritius, Ghana and Senegal that committed to the Agreement. Furthermore, the principles of interconnection are recommended or provided for at the regional level. Examples include the Asia-Pacific Economic Coordination (APEC), ‘Framework and Principles for Telecommunications Interconnection’ <http://www.apec.org/Meeting-Papers/Ministerial-Statements/Telecommunications-andInformation/2000_tel/annex_c.aspx> accessed 15 June 2017; CITEL, ‘Guidelines and Practices for Interconnection Regulation of 1999’ for South American countries; and the Council Directive (EC) 2002/19 of March 2002 on access to, and interconnection of, electronic communications networks and associated facilities [2009] OJ L337/37 (Access Directive). For Sub-Saharan Africa, see ITU, ‘West African Common Project: Harmonisation of Policies Governing the ICT Market in the UEMOA-ECOWAS Space- Interconnection’ 5 <http://www.itu.int/ITUD/treg/projects/ituec/Ghana/modules/FinalDocuments/Interconnexion.pdf> accessed 15 June 2017.

  39. 39.

    Scott W Minehane, ‘Legal Theory and Practices: Interconnection’ (ITU 2005) <http://www.itu.int/ITUD/treg/Events/Seminars/2005/Thailand/08%20Legal%20Theory%20and%20Practices%20-%20Interconnection.pdf> accessed 15 June 2017.

  40. 40.

    Based on interviews conducted with legal personnel at telecommunications companies, Airtel Uganda, Warid Telecom (now part of Airtel Uganda), MTN Uganda Limited, and Smile Uganda. See Appendix A for the list of interviewees.

  41. 41.

    Ibid. The interviewees identified interconnection as a key competition-related issue but did not list refusal to interconnect among the key interconnection concerns.

  42. 42.

    Communications Act 2013, s 58(1).

  43. 43.

    It should be noted that with the full liberalisation of the telecommunications sector in Uganda the introduction of the Ministerial Guidelines of 2006 put in place a new licensing system which replaced the major/minor licence system. Under the new licensing system anyone can apply for a Public Infrastructure Provider (PIP) licence, a Public Service Provider (PSP)-Voice and Data licence, or a Public Service Provider (PSP)-Capacity Resale licence.

  44. 44.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg. 5(1).

  45. 45.

    Ibid, reg 5(2).

  46. 46.

    This was affirmed by the representatives of the three mobile operators: interview with Ronald Zakumumpa, legal counsel (Kampala, Uganda 29 November 2011); interview with Dennis Kakonge, Director Legal, Airtel Uganda (5 December 2011 Kampala, Uganda); and interview with Zulaika Kasujja, legal counsel, Smile Communications Uganda (Kampala, Uganda 16 December 2011).

  47. 47.

    Hank Intven, Jeremy Oliver, and Edgardo Sepulveda, Telecommunications Regulation Handbook: Interconnection (World Bank 2000) 3-6.

  48. 48.

    Ibid, 3-7.

  49. 49.

    According to the WTO Reference Paper on Basic Communications, art.2.2.

  50. 50.

    Interconnection Directive, Directive 97/33/EC, art 4(1).

  51. 51.

    Ibid.

  52. 52.

    Jongyong Lee and Duk Hee Lee, ‘Asymmetry of Mobile Termination Rates and the Waterbed Effect’ 6 (23rd European Regional Conference of the International Telecommunications Society, Vienna, July 2012) <http://hdl.handle.net/1041960353> accessed 15 June 2017, report that national regulators in Austria, Czech Republic, Denmark, Estonia, Greece, Hungary, Malta, Portugal, Sweden and the UK now prescribe symmetric mobile call termination rates.

  53. 53.

    The 22 million mobile telephone subscribers account for more than 98 percent of telephone subscriptions in Uganda.

  54. 54.

    Based on data from the MTN Uganda Limited website <www.mtn.co.ug> accessed 15 June 2017.

  55. 55.

    Although MTN has a significant market share above the 25 per cent triggering a presumption of dominance under the Fair Competition Regulations, the UCC does not regard any mobile operator as dominant in the voice telephony market. This is based on findings of a competition analysis study of Uganda’s telecommunications of 2008 sector commissioned by the UCC and undertaken by PricewaterhouseCoopers (PwC). See PwC for UCC, ‘Draft Report on Competition and Dominance in the Ugandan Telecoms Sector (Part 2): Interconnection and Retail Cost Study’ (2009) Unpublished 11.

  56. 56.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 14(4).

  57. 57.

    Ibid.

  58. 58.

    See for example, Botswana Telecommunications Corporation v Mascom Wireless Pty (Ltd) and Vista Cellular (Pty) Ltd BTA Ruling 1/1999 (case from Botswana); Kencell Communications Ltd v TKL Communications Appeal Tribunal (2003) (case from Kenya); TDM (Telecomicacoes de Mocambique E.P) vs. Vodacom (case from Mozambique), Cellnet Tanzania v Mobitel, Vodacom and Tritel (TCRA 2004) (case from Tanzania); and MTN Uganda Limited v UCC Miscellaneous Cause No. 225 of High Court Civil Division 2009 (case from Uganda).

  59. 59.

    Jean-Jacques Laffont and Jean Tirole, Competition in Telecommunications (MIT Press 2000) 180 highlights the problem of FTM stemming from the high charges for termination on a mobile network. See also Mark Armstrong, ‘Network Interconnection in Telecommunications’ (1998) 108 (448) Economic Journal 545, which discusses competitive bottlenecks and uses fixed-mobile termination as the main example; and Marcel Canoy, Paul de Bijl, and Ron Kemp, ‘Access to Telecommunications Networks’, in Pierre A. Buigues and Patrick Rey (eds) The Economics of Antitrust and Regulation in Telecommunications (Edward Elgar 2004) 146.

  60. 60.

    Mark Armstrong and Julian Wright, ‘Mobile Call Termination’ (2007) 119 (538) Economic Journal F270.

  61. 61.

    Economists recommend regulation of mobile call termination rates to mitigate the competition problems arising from mobile call termination being a competitive bottleneck. See in particular, Mark Armstrong, ‘Network Interconnection in Telecommunications’ (1998) 108 (448) Economic Journal 545; Jean-Jacques Laffont and Jean Tirole, Competition in Telecommunications (MIT Press 2000); and Mark Armstrong and Julian Wright, ‘Mobile Call Termination’ (2007) 119 (538) Economic Journal F270.

  62. 62.

    PwC for UCC, ‘Draft Report on Competition and Dominance in the Ugandan Telecoms Sector (Part 2): Interconnection and Retail Cost Study’ (2009) Unpublished 15.

  63. 63.

    Ibid.

  64. 64.

    Warid Telecom was unsurprisingly not happy with the interconnection rate charged by MTN Uganda Limited. This is gleaned from an interview with Paul Mwebesa, Head Legal, Warid Telecom (Kampala, Uganda 23 November, 2011).

  65. 65.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 15.

  66. 66.

    Paul Noumba Um, Laurent Gille, Lucile Simon, and Christophe Rudelle, A Model for Calculating Interconnection Costs in Telecommunications (PPIAF and the World Bank 2004) 13.

  67. 67.

    A study by the World Bank in Sub-Saharan Africa recommends cost-oriented pricing. See Paul Noumba Um, Laurent Gille, Lucile Simon, and Christophe Rudelle, A Model for Calculating Interconnection Costs in Telecommunications (PPIAF and the World Bank 2003). The European Commission justifies the cost-based pricing approach on the grounds that it promotes product efficiency because low termination rates facilitate low retail call charges and higher consumption. See ‘European Commission Staff Working Document Explanatory Note Accompanying Commission Recommendation on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU’ <http://ec.europa.eu/information_society/policy/ecomm/doc/library/public_consult/termination_rates/explanatory.pdf> accessed 15 June 2017.

  68. 68.

    Mary Shirley, Fred Tusubira, Luke Haggarty, and Frew Gebreab ‘Telecommunications Reform in Uganda’ (2002) World Bank Working Research Paper 2864/2002 42.

  69. 69.

    PwC for UCC, ‘Consultation Document 1: Competition Analysis’ (2008) Unpublished.

  70. 70.

    Interview with Abdul Musoke, Market Analyst, UCC Headquarters (Kampala, Uganda 18 November 2011).

  71. 71.

    At the time of the UCC’s publication of the interconnection rates ceiling, mobile operators had all an interconnection rate of Uganda shillings 181 (US$ 0.07).

  72. 72.

    UCC, ‘LRIC Reference Rate Determination of 2009’.

  73. 73.

    UCC, ‘LRIC Reference Rate Determination of 2012’.

  74. 74.

    Interview with Ronald Zakumumpa, legal counsel, MTN Uganda, (Kampala, Uganda 29 November, 2011). A similar view was expressed in the interview with Dennis Kakonge, Director Legal, Airtel Uganda (Kampala, Uganda 5 December 2011). Mr. Kakonge called for the amendment of the Communications Act, Cap.106 to provide UCC with clear powers to regulate interconnection rates.

  75. 75.

    MTN Uganda Limited v UCC Miscellaneous Cause No. 225 of 2009 High Court Civil Division.

  76. 76.

    Ibid.

  77. 77.

    Ibid.

  78. 78.

    MTN Uganda Limited v UCC Miscellaneous Cause No. 225 of 2009 High Court Civil Division.

  79. 79.

    UCC, ‘LRIC Reference Rate Determination of 2012’.

  80. 80.

    Julius Businge, ‘Telecoms Fear Losses over New Mobile Interconnection Rates’ The Independent (Kampala, Friday 15 June 2012) <http://www.independent.co.ug/business/business-news/5925-telecoms-fear-losses-over-new-mobile-inter-connection-rates> accessed 15 June 2017 The newspaper reports that MTN Uganda was resisting implementation of the lower MTR arguing that the UCC MTR ceiling was not binding.

  81. 81.

    Communications Act 2013, s 59(1).

  82. 82.

    Julius Businge, ‘Telecoms Fear Losses over New Mobile Interconnection Rates’ The Independent (Kampala 15 June 2012) <http://www.independent.co.ug/business/business-news/5925-telecoms-fear-losses-over-new-mobile-inter-connection-rates> accessed 15 June 2017.

  83. 83.

    Nicola Theron, ‘The Competitiveness of the SA Mobile Market- Will the Entry of Virgin Mobile Increase Competition?’ Econex, Research Note 4, June 2006.

  84. 84.

    Jongyong Lee and Duk Hee Lee, ‘Asymmetry of Mobile Termination Rates and the Waterbed Effect’ 6 (23rd European Regional Conference of the International Telecommunications Society, Vienna, July 2012) <http://hdl.handle.net/1041960353> accessed 15 June 2017 report that national regulators in Austria, Czech Republic, Denmark, Estonia, Greece, Hungary, Malta, Portugal, Sweden and the UK initially regulated interconnection rates asymmetrically.

  85. 85.

    Ibid, 6 reports that national regulators in Austria, Czech Republic, Denmark, Estonia, Greece, Hungary, Malta, Portugal, Sweden and the UK now prescribe symmetric mobile interconnection rates.

  86. 86.

    See Call Termination Regulations of 2010, Government Gazette No.33698, 29 October, 2010 permitting operators with less than 25 per cent market share to charge rates above the prescribed ceiling. Vodacom and MTN with market shares above 25 per cent are therefore bound by the interconnection rates while the smallest operators Cell C and 8ta can charge up to 20 per cent more for interconnection.

  87. 87.

    This is expounded on in Chap. 2 of this study, Sect. 2.4.

  88. 88.

    Ibid.

  89. 89.

    Jongyong Lee and Duk Hee Lee, ‘Asymmetry of Mobile Termination Rates and the Waterbed Effect’ 2 (23rd European Regional Conference of the International Telecommunications Society, Vienna, July 2012) <http://hdl.handle.net/1041960353> accessed 15 June 2017.

  90. 90.

    Based on interview with Godfrey Sengendo, (then) Manager Spectrum Management, UCC (Kampala, Uganda 22 November 2011).

  91. 91.

    The government bodies have faced strong opposition from the incumbent mobile operators demanding for compensation that the government bodies are unable to meet. This information was obtained during the interview with Ronald Zakumumpa, legal counsel, MTN Uganda (Kampala, Uganda 29 November 2011).

  92. 92.

    A new entrant refers to operators that entered in the mobile market after full liberalisation of the telecommunications sector in 2006.

  93. 93.

    The high costs arise from the need to set up more mobile masts since higher frequency bands offer lower transmission ranges.

  94. 94.

    MTN Uganda Limited and Airtel Uganda had an aggregate subscriber base of approximately 17 million in 2015 while Uganda Telecom and Orange (now Africell) had 2 and 1 million subscribers, respectively.

  95. 95.

    This is according to interview with Zulaika Kasujja, legal counsel, Smile Communications Uganda, (Kampala, Uganda 16 December 2011).

  96. 96.

    Warid Telecom’s market growth is due to its on-net tariff plan that offered free on-net calls attracting many subscribers to its network.

  97. 97.

    Largest operator MTN Uganda which had a market share of 59 per cent in December 2006 (according to UCC) has seen its market share reduce to 45 per cent in 2008, rise to 55 per cent in 2011 and was currently at around 50 per cent mark as of December 2015 based on statistics from the MTN Group Quarterly Reports.

  98. 98.

    Jongyong Lee and Duk Hee Lee, ‘Asymmetry of Mobile Termination Rates and the Waterbed Effect’ 6 (23 European Regional Conference of the International Telecommunications Society, Vienna, July 2012) <http://hdl.handle.net/1041960353> accessed 15 June 2017.

  99. 99.

    The two largest mobile operators control close to 80 per cent of the market in South Africa, Cell C which has been in the market since 2001 has only been able to acquire a 10 per cent market share.

  100. 100.

    Stephen Esselaar and Keith Weeks, ‘The Case for the Regulation of Call Termination in South Africa: An Economic Evaluation’ <http://www.ictregulationtoolkit.org/en/toolkit/docs/Document/4009y> accessed 15 June 2017.

  101. 101.

    Nicole Theron and Johann van Eeden, ‘Asymmetric Mobile Termination Rates in South Africa’ Econex Research Note 21, February 2011; and Nicola Theron, ‘The Competitiveness of the SA Mobile Market-Will the Entry of Virgin Mobile Increase Competition?’ Econex, Research Note 4, June 2006.

  102. 102.

    Nicola Theron, ‘The Competitiveness of the SA Mobile Market-Will the Entry of Virgin Mobile Increase Competition?’ Econex, Research Note 4, June 2006; Stephen Esselaar and Keith Weeks, ‘The Case for the Regulation of Call Termination in South Africa: An Economic Evaluation’ <http://www.ictregulationtoolkit.org/en/toolkit/docs/Document/4009y> accessed 15 June 2017; Nicole Theron and Johann van Eeden, ‘Asymmetric Mobile Termination Rates in South Africa’ Econex Research Note 21, February 2011; and Christoph Stork and Alison Gillwald, ‘Mobile Wholesale and Retail Price Interplay: the Somewhat Contrary Case of South Africa in Africa’ (19th ITS Biennial Conference, Bangkok, November 2012).

  103. 103.

    See Call Termination Regulations 20 October, Gazette No 33698.

  104. 104.

    Ibid.

  105. 105.

    Ibid.

  106. 106.

    Though it must be a noted that the introduction of asymmetric regulation of interconnection rates has not had a significant impact on the competitive landscape in South Africa’s mobile telephony market. The incumbent operators still maintain a high market share despite Cell C slashing its call prices following the implementation of the Call Termination Regulations of 2010. See Christoph Stork and Alison Gillwald, ‘Mobile Wholesale and Retail Price Interplay: the Somewhat Contrary Case of South Africa in Africa’ (19th ITS Biennial Conference, Bangkok, November 2012).

  107. 107.

    Hank Intven, Jeremy Oliver, and Edgardo Sepulveda, Telecommunications Regulation Handbook: Interconnection (World Bank 2000) 3-8.

  108. 108.

    Telecommunications (Interconnection) Regulations SI 2005/25, reg 5(4)(e).

  109. 109.

    UCC, ‘LRIC Reference Rate Determination of 2009’.

  110. 110.

    Richard Cutcher, ‘East Africa’s First MVNO Loses 8 Months to Interconnect Negotiations’ Humanipo (2nd October 2013) <http://www.humanipo.com/news/33385/east-africas-first-mvno-lost-8-months-to-interconnect--negotiations> accessed 15 June 2017.

  111. 111.

    Ibid.

  112. 112.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 12(1).

  113. 113.

    Ibid.

  114. 114.

    Ibid, reg 13(4).

  115. 115.

    Based on interview with Zulaika Kasujja, legal counsel, Smile Communications Uganda, (Kampala, Uganda 16 December 2011).

  116. 116.

    Richard Cutcher, ‘East Africa’s First MVNO Loses 8 Months to Interconnect Negotiations’ Humanipo (October 2nd 2013) <http://www.humanipo.com/news/33385/east-africas-first-mvno-lost-8-months-to-interconnect-negotiations> accessed 15 June 2017.

  117. 117.

    Ibid.

  118. 118.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 9(1).

  119. 119.

    Ibid, reg 12(3).

  120. 120.

    Ibid, reg 11(1).

  121. 121.

    In absence of RIOs, UCC has proposed to publish its own view of what it considers to be an acceptable interconnection agreement in a Model Interconnection Offer (MIO).

  122. 122.

    This particular issue was raised consistently by representatives of other telecommunications companies in field interviews conducted by the author between November and December 2011.

  123. 123.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 5 (4)(b).

  124. 124.

    Communications Act 2013, s 58(1).

  125. 125.

    Marcel Canoy, Paul de Bijl, and Ron Kemp, ‘Access to Telecommunications Networks’ in Pierre A. Buigues and Patrick Rey (eds), The Economics of Antitrust and Regulation in Telecommunications (Edward Elgar 2004) 136.

  126. 126.

    Harald Gruber, The Economics of Mobile Telecommunications (Cambridge University Press 2005) 184.

  127. 127.

    The United States Telecommunications Act of 1996, section 251, mandates one way access to the local network. The FCC implementing this provision has compelled incumbent local exchange carriers to grant long distance service providers access to their local network. The reason is that the local network has been deemed a bottleneck to competition in the long distance service market. See Robert B Friedrich ‘Regulatory and Antitrust Implications of Emerging Competition in Local Access Telecommunications: How Congress and the FCC Can Encourage Competition and Technological Progress in Telecommunications’ (1995) 80 Cornell Law Review 646, 659.

  128. 128.

    For example, within the European Union, standard fixed broadband lines covered 95.5 percent of all homes in 2012. Most of the population accesses fixed broadband through (DSL) technology, with a market share of 74.6 percent in July 2012. According to European Commission, ‘Broadband Lines in the EU: Situation at 1 July 2012’ (2013) Working Document 7, 20. In 2015, 94 percent of households accessed fixed broadband via DSL technology, see European Commission, ‘Broadband Coverage in Europe 2015: Mapping Progress Toward Objectives of the Digital Agenda’ <https://ec.europa.eu/digital-single-market/en/news/broadband-coverage-europe-2015> accessed 15 June 2017.

  129. 129.

    Council Regulation EC 2887/2000 of 18 December 2000 on unbundled access to the local loop [2000] OJ 336/4 (Local Loop Unbundling Regulation of 2000).

  130. 130.

    In particular, at the time of full liberalisation of the telecommunications sector in the European Union in 1998, the former state monopoly operators had monopoly over the local loop network.

  131. 131.

    With the exception of South Africa, where the South Africa Competition Commission and competition tribunal investigated allegations of refusal to grant access to an essential facility in the value-added services. See Competition Commission v Telkom SA Ltd 11/CR/Feb04 [2011] ZACT 2.

  132. 132.

    In Competition Commission v Telkom SA Ltd 11/CR/Feb04 [2011] ZACT 2, the South Africa Competition Tribunal found Telkom SA liable under South Africa’s Competition Act for refusing to grant access to its fixed network on fair terms.

  133. 133.

    ITU, ‘Key 2005-2016 ICT Data for the World, by Geographic Regions and by Level of Development’ <http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx> accessed 16 June 2017.

  134. 134.

    Ibid.

  135. 135.

    It is worth noting that Nigeria’s incumbent operator, NITEL, remains the primary owner of the fixed copper telephone lines. However, it has lost a lot of the market to operators providing fixed telephones services through the fixed wireless infrastructure. This is according to Mark D. J Williams, Rebecca Mayer, and Michael Minges, Africa’s ICT Infrastructure: Building on the Mobile Revolution (World Bank 2011) 35.

  136. 136.

    ITU, ‘West African Common Project: Harmonisation of Policies Governing the ICT Market in the UEMOA-ECOWAS Space- Interconnection’ 5 <http://www.itu.int/ITU-D/treg/projects/itu-ec/Ghana/modules/FinalDocuments/Interconnexion.pdf> accessed 15 June 2017.

  137. 137.

    Ibid.

  138. 138.

    See Competition Commission v Telkom SA Ltd 11/CR/Feb04 [2011] ZACT 2 and The Local Loop Unbundling Committee, ‘Local Loop Unbundling: A Way Forward for South Africa’ (May 2007) 2 <http://www.ellipsis.co.za/wp-content/uploads/2014/03/local_loop_unbundling.pdf> accessed 15 June 2017, respectively.

  139. 139.

    William B Tye, ‘Competitive Access: A Comparative Industry Approach to the Essential Facility Doctrine’ (1987) 8(2) Energy Law Journal 337, 344.

  140. 140.

    Simon Bishop and Mike Walker, The Economics of EC Competition Law: Concepts, Application and Measurement (2nd edn, Sweet and Maxwell 2002) 238.

  141. 141.

    United States v American Telephone & Telegraph Co., 552 F.Supp.131, 135 (D.D.C. 1982).

  142. 142.

    MCI Communications v AT&T Co., 708 F.2d 1081 (7th Cir.1982). MCI alleged that AT&T had refused to let MCI connect its telephone lines to AT&T’s nationwide system, thereby preventing MCI from competing with AT&T in the long-distance telephone service market. The Seventh Circuit found that AT&T’s refusal constituted monopolisation under Section 2 of the Sherman Act.

  143. 143.

    Competition Commission v Telkom SA Ltd 11/CR/Feb04 [2011] ZACT 2.

  144. 144.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 14(3).

  145. 145.

    Ibid, reg 14(4)(g).

  146. 146.

    Ibid, reg 4.

  147. 147.

    UCC, ‘Post, Broadcasting and Telecommunications Market and Industry Report: Third Quarter’ (July-September) <http://www.ucc.co.ug/files/downloads/Market_&_Industry_Report_for_Q3_July-September_2016.pdf> accessed 15 June 2017.

  148. 148.

    See Chap. 7 of this study which discusses this issue in greater detail.

  149. 149.

    Competition Commission v Telkom SA Ltd, 11/CR/Feb04 [2011] ZACT 2.

  150. 150.

    PwC for UCC, ‘Draft Report on Competition and Dominance in the Uganda Telecoms Sector (Part 2): Interconnection and Retail Cost Study (2009)’ Unpublished 21.

  151. 151.

    Ibid, 22.

  152. 152.

    See Sect 4.6.3.3.6.2.

  153. 153.

    UCC, ‘Post, Broadcasting and Telecommunications Market and Industry Report: Third Quarter (July-September) <http://www.ucc.co.ug/files/downloads/Market_&_Industry_Report_for_Q3_July-September_2016.pdf> accessed 15 June 2017.

  154. 154.

    However, it is likely to be more the case for individual rather than multiple users that will be serviced better via fixed broadband.

  155. 155.

    Ian Lloyd and David Mellor, Telecommunications Law (Lexis Nexis Butterworths 2003) 100.

  156. 156.

    This distinction is clearly made in the Council Regulation EC 2887/2000 of 18 December 2000 on unbundled access to the local loop [2000] OJ 336/4. It provides for the application of the Regulation to metallic local loops and not the new loops with high capacity optical fibre, para 5.

  157. 157.

    John Buckley, Telecommunications Regulation (The Institution of Electrical Engineers 2003) 157.

  158. 158.

    The United States is an exception where the application of local loop unbundling under the Telecommunications Act has been implemented without adhering to the essential facilities doctrine.

  159. 159.

    ITU, ‘West African Common Project: Harmonisation of Policies Governing the ICT Market in the UEMOA-ECOWAS Space- Interconnection’ 5 <http://www.itu.int/ITU-D/treg/projects/itu-ec/Ghana/modules/FinalDocuments/Interconnexion.pdf> accessed 15 June 2017.

  160. 160.

    The Local Loop Unbundling Committee, ‘Local Loop Unbundling: A Way Forward for South Africa’ (May 2007) 2 <http://www.ellipsis.co.za/wp-content/uploads/2014/03/local_loop_unbundling.pdf> accessed 15 June 2017.

  161. 161.

    Ibid.

  162. 162.

    According to European Commission, ‘Broadband Lines in the EU: Situation at 1 July 2012’ (2013) Working Document 7, 20.

  163. 163.

    European Commission, ‘Broadband Coverage in Europe 2015: Mapping Progress Toward Objectives of the Digital Agenda’ <https://ec.europa.eu/digital-single-market/en/news/broadband-coverage-europe-2015> accessed 15 June 2017.

  164. 164.

    Council Regulation EC 2887/2000 of 18 December 2000 on unbundled access to the local loop [2000] OJ 336/4, art 1.

  165. 165.

    Ibid, recital 6.

  166. 166.

    European Commission, ‘Broadband Coverage in Europe 2015: Mapping Progress Toward Objectives of the Digital Agenda’ <https://ec.europa.eu/digital-single-market/en/news/broadband-coverage-europe-2015> accessed 15 June 2017.

  167. 167.

    Ibid.

  168. 168.

    Ibid.

  169. 169.

    ITU, ‘Country Statistics 2000-2015: Fixed_Telephone Subscriptions/Mobile-Cellular Subscriptions: Fixed Broadband Subscriptions’ <http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx> accessed 25 June 2017.

  170. 170.

    ITU, ‘Key 2005-2015 ICT Data for the World, by Geographic Regions and by Level of Development’ <http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx> accessed 16 June 2017.

  171. 171.

    ITU ‘Study on International Internet Connectivity in Sub-Saharan Africa’ (March 2013) 3 <www.itu.int/en/ITU-D/Regulatory-Market/IIC_Africa_Final-en.pdf > accessed 15 June 2017.

  172. 172.

    Ibid.

  173. 173.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 8(1).

  174. 174.

    Ibid, reg 8(1).

  175. 175.

    This is gleaned from Pwc for UCC, ‘Competition Analysis, Model Interconnection Offer (MIO), Reporting Obligations, and Retail Price Regulation’ (2008) 17.

  176. 176.

    GPRS and EDGE technologies have a very limited capacity for data transmission compared to data transmission via the fixed local loop.

  177. 177.

    PwC for UCC, ‘Draft Report on Competition and Dominance in the Uganda Telecoms Sector (Part 2): Interconnection and Retail Cost Study' (2009) Unpublished 4.

  178. 178.

    Nora Mulira, Apolo Kyeyune, and Ali Ndiwalana, ‘Uganda ICT Sector Performance Review, 2009/2010: Toward Evidence Based ICT Policy and Regulation’ (2010) 2(13) Policy Paper 10.

  179. 179.

    Interview with Ann Rita Ssemboga, (former) Economist, UCC (Kampala, Uganda 7 December 2011).

  180. 180.

    Mark D J Williams, Broadband for Africa: Policy for Promoting the Development of Backbone Networks (Infodev/World Bank 2008) 7; Deloitte and GSMA ‘Sub-Saharan Africa Mobile Observatory 2012’ (November 2012) <http://www.gsma.com/publicpolicy/wp-content/uploads/2012/03/SSA_FullReport_v6.1_clean.pdf>; and ITU ‘Study on International Internet Connectivity in Sub-Saharan Africa’ (March 2013) 3 <www.itu.int/en/ITU-D/Regulatory-Market/IIC_Africa_Final-en.pdf > accessed 15 June 2017.

  181. 181.

    UCC, ‘Post, Broadcasting and Telecommunications Market and Industry Report: Third Quarter (July-September 2016)’ <http://www.ucc.co.ug/files/downloads/Market_&_Industry_Report_for_Q3_July-September_2016.pdf> accessed 15 June 2017.

  182. 182.

    Cartesian for UCC, ‘Broadband Internet Access from a Mobile Terminal: Market Assessment’ (2015) 10 <http://www.ucc.co.ug/files/downloads/SMP_Report_Mobile_Broadband_April%202015.pdf> accessed 15 June 2017.

  183. 183.

    Ibid.

  184. 184.

    UCC, ‘Recommendations on Proposed Review of the Telecommunications Sector Policy’ (2005) Policy Review Report 28/1/05.

  185. 185.

    World Bank, 2009 Information and Communications Development: Extending Reach and Increasing Impact (World Bank 2009) 55.

  186. 186.

    The project referred to as the National Data Transmission Backbone Infrastructure (NBI) is currently in the fourth phase with a completion date set for fiscal year 2017/18.

  187. 187.

    Rob Friedan, ‘Unbundling the Local Loop: A Cost /Benefit Analysis for Development Nations’ info 17(6) 3, 4.

  188. 188.

    Ibid.

  189. 189.

    Jerry Hausman and Gregory Sidak, ‘Did Mandatory Unbundling Achieve its Purpose? Empirical Evidence from Five Countries’ (2005) 1(1) Journal of Competition Law and Economics 173.

  190. 190.

    The Supreme Court decision in question was AT&T Corp v Iowa Utilities Board, 525 U.S.366, 199 S.Ct. 721 [1999] where the court upheld the FCC’s local loop unbundling implementation plan but directed the FCC to revise the standards under which it determines unbundling obligations.

  191. 191.

    USTA v FCC, 359 F.3d 554, 561-62.

  192. 192.

    Andrea Renda, ‘Competition- Regulation Interface in Telecommunications: What’s Left of the Essential Facility Doctrine’ (2010) Telecommunications Policy 34 23, 26.

  193. 193.

    Jerry Hausman and Gregory Sidak, ‘Did Mandatory Unbundling Achieve its Purpose? Empirical Evidence from Five Countries’ (2005) 1(1) Journal of Competition Law and Economics 173.

  194. 194.

    Robin Mason and Tommasso Valletti, ‘Competition in Communication Networks: Pricing and Regulation’ (2001) 17(3) Oxford Review of Economic Policy 398, 402.

  195. 195.

    Robin Mason and Tommasso Valletti, ‘Competition in Communication Networks: Pricing and Regulation’ (2001) 17(3) Oxford Review of Economic Policy 398, 403; and Martin Cave and Luigi Prosperetti, ‘European Telecommunications Infrastructure’ (2001) 17(3) Oxford Review of Economic Policy 416.

  196. 196.

    Garrone Paola and Zaccagnino Michel, ‘The Relationship Between Local Loop Unbundling and the Deployment of Alternative Broadband Networks: An Empirical Analysis’ (European Regional Conference of the International Telecommunications Society, Budapest, September 2011).

  197. 197.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 5(1).

  198. 198.

    Ibid, reg 9(1).

  199. 199.

    Telecommunications (Interconnection) Regulations, SI 2005/25, reg 15(1).

  200. 200.

    Communications Act 2013, s 59.

  201. 201.

    The author interviewed legal representatives of telecommunications operators, Warid Telecom, Airtel Uganda, MTN Uganda Limited, and Smile Uganda. Interconnection was the number one concern highlighted by the interviewees.

  202. 202.

    Interview with Abdul Musoke, Market Analyst, UCC Headquarters (Kampala, Uganda 18 November 2011).

  203. 203.

    See, UCC, ‘LRIC Reference Rate Determination of 2009’ and UCC, ‘LRIC Reference Rate Determination of 2012’.

  204. 204.

    Communications Act 2013, s 59.

  205. 205.

    ITU, ‘West African Common Project: Harmonisation of Policies Governing the ICT Market in the UEMOA-ECOWAS Space-Interconnection’ 5 <https://www.itu.int/ITU-D/treg/projects/itu-ec/Ghana/modules/Compil-Guidelines_final.pdf> accessed 15 June 2017; and The Local Loop Unbundling Committee, ‘Local Loop Unbundling: A Way Forward for South Africa’ (May 2007) <http://www.ellipsis.co.za/wp-content/uploads/2014/03/local_loop_unbundling.pdf> accessed 15 June 2017

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    Rachel Alemu

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Alemu, R. (2018). Regulation of Network Interconnection and Network Access. In: The Liberalisation of the Telecommunications Sector in Sub-Saharan Africa and Fostering Competition in Telecommunications Services Markets. Munich Studies on Innovation and Competition, vol 6. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-55318-3_6

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