Europe and the Others Is the EU Model of regulation suited to Sub Saharan Africa

communications?

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The GSMA is an association and represents over 800 mobile

operators worldwide.

The views expressed today are the personal views of the

speaker and do not necessarily represent the views of the

GSMA.

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A Disclaimer

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Sub Saharan Africa is different, and …

Does this mean that the EU model of regulation should not apply?

… DISCUSS

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Focus on two aspects

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Sub-Saharan Africa is different

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Sub Saharan Africa Is Different —

Compound Annual Growth Rate by Region

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Sub Saharan Africa Is Different — Mobile v. Fixed

24% of mobile connections

Sub Saharan Africa is Different —

Smartphone Penetration

Mobile Money has done more to extend the reach of financial services in

Africa in the last decade than the traditional ‘brick and mortar’

financial industry in the last century (GSMA).

Mobile money = ability to store money in a value repository (a wallet) not

linked to a bank account.

Mobile payments = ability to pay by mobile phone (e.g. Zapper or Apple

Pay). Usually requires active credit or debit card.

Sub Saharan Africa is Different —

Mobile Money v. Mobile Payments

Sub Saharan Africa is Different — Leads on Mobile Payments

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What does this mean

for the EU Model?

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(In my experience and with caveats)

1. EU model needs re-thinking in countries where the fixed network has

scant penetration and is unlikely to become ubiquitously available

FALSE

2. Some countries may incorporate the forms of the EU model, without

really embracing the substance

TRUE

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True or False?

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What EU Model?

• SMP Framework:

– originally intended for fixed, applied to mobile (call termination)

– (properly understood) is flexible

• EU merger control system could be a good (jurisdictional) model

• EU State Aid model could help design least intrusive forms of public

funding/incentives for roll out of infrastructure

• EU precedents exist for output maximising spectrum auction rules

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1. Re-thinking of EU Model?

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Market Definition

• Define product markets } A question of substitutability

• Define geographic markets }

Is it necessary to regulate?

• Three criteria test at retail level and then at wholesale level

Market Assesment

• SMP analysis (market shares, barriers to entry, countervailing buyer power, etc.)

Competitive Market

• SMP not determined

• Previous SMP decisions removed / obligations withdrawn

• Public consultation.

Non-competitive Market

• SMP determination.

• Ex ante obligations imposed.

• Public consultation.

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2. Forms v. substance: SMP Framework

Market Definition

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2. Forms v. substance: SMP Framework

Three criteria test reminder

Absent regulation, is there a sufficient number of players for effective competition?

YES – no regulation

TEST 1 - Are there high and non-transitory barriers to entry? NB: can be: Structural / Legal or Regulatory YES

TEST 2 – Does the market structure does NOT tend towards effective competition? NB: consider the state of infrastructure and service competition

YES

TEST 3 – is competition law insufficient to address the potential market failures? YES

If the answer to the three questions is yes, the relevant retail market is not competitive . Determine SMP and impose proportionate remedies

NO – apply test

Conclusions

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EU Model seems sufficiently flexible

Based on evidence

Applicable to smaller and larger countries

Established:

precedents available

relative jurisdictional clarity

Administrative system of enforcement

EU Model is under stress everywhere

Sectoral application (NB: WTO Reference

Paper) — regulatory creep

Functionally equivalent services regulated

differently

Not well suited to freemium

products/multi-platform businesses

Grappling between data protection and

data as parameter of competition

Not well suited to consideration of

dynamic efficiencies (esp in mergers)

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Discuss

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The Mobile Economy: Sub-Saharan Africa 2015,

https://www.gsmaintelligence.com/research/?file=721eb3d4b80a36451202d0473b

3c4a63&download

2015 State of the Industry Report, Mobile Money,

http://www.gsma.com/mobilefordevelopment/programme/mobile-money/2015-

state-of-the-industry-report-on-mobile-money-now-available

To Know More

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Thank you!