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Africa’s ICT Infrastructure
operators and ISPs). Such restrictions have often been placed on operators to protect the incumbent operator—which, at the outset of the liberalization process, usually has the only fiber-based backbone network. The effect of such restrictions is to limit investment and competition because it is reducing the potential market for an operator considering investing in such infrastructure. The licensing framework should be reformed to reduce and preferably eliminate restrictions on the activities of operators, subject to controls on the use of radio spectrum. It should also take account of technological convergence, a global trend that is breaking down the traditional one-to-one relationship between networks and services. This will increase investment, promote competition, and stimulate innovation in technology and services. In 2005, for example, Tanzania introduced a converged licensing framework with four license categories: network facilities, network services, applications services, and content services. As of June 2010, the regulator had issued 16 national and 8 international network facilities licenses, which allow licensees to offer any facilities-based telecommunications service. By following this type of regulatory reform, other countries will also encourage investment competition and innovation in the ICT sector. Avoid reintroducing restrictions on competition. The recent trend toward tighter management of international gateways (to collectively raise international termination charges) is a reversal of the process of liberalization that has been so successful in Africa. It is likely to have an adverse impact on sector development and could reduce sector tax revenues in the long run. It will also have a negative impact on telephone users because they will receive fewer international calls, and this makes a country less attractive to foreign investors. Such measures should not be introduced and, where they exist, should be removed. Privatize telecommunications operators that currently remain under state ownership. State ownership of telecommunications operators provides few benefits to a country. Such operators frequently have a small market share, are often inefficiently run, and are usually subsidized by the state, either explicitly through favorable tax and license-fee treatment, or implicitly through regulatory rules skewed in their favor. Despite this protection (or perhaps because of it), state-owned operators have generally performed poorly and, in most cases, have failed to compete successfully with privately owned companies. The long-run cost of state ownership is that investment and competition are constrained by policies and regulations designed to protect these operators. Half of the countries in Sub-Saharan Africa have privatized their incumbent