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    Namibia Polytechnic Namibia Polytechnic Postgrad Certificate in ICT Policy & RegulationPostgrad Certificate in ICT Policy & Regulation

    December, 2012December, 2012

    Global Trends in Global Trends in ICT Sector ReformICT Sector Reform

    Charley Lewis, LINK CentreUniversity of the Witwatersrand, Johannesburg, South Africa

    Session outcomesSession outcomes

    Participants will be able to:able to: articulate the drivers

    and components of ICT sector reform nationally and internationally;

    describe key global trends governing ICT sector reform;reform; understand the need for and the role of regulation in the ICT sector; describe the need for integrated policy & regulatory approaches to converging technologies / sectors.

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    Session roadmapSession roadmap

    Drivers of ICT sector reformF f ICT f Features of ICT sector reform

    Global trends in ICT sector reform Privatisation vs liberalisation Deregulation & independent

    regulation g ICT sector reform in

    Namibia ICT sector reform issues

    Putting ICT Sector Reform in Putting ICT Sector Reform in Global PerspectiveGlobal Perspective

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    Why Reform the ICT Sector?Why Reform the ICT Sector?

    Why reform the ICT sector?Why reform the ICT sector? What were the key features of the ICT sector 20

    years ago (ie circa 1992)? (telecomms, broadcasting, Internet, IS)

    M k t t t ? Market structure? Institutional framework? Technologies? Sector performance? Contribution to GDP? Network rollout? Pricing structure? Universal service / access? Benefits to consumers?

    What has changed since then? Why reform the ICT sector?

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    Why reform the ICT sector?Why reform the ICT sector?

    What is ICT sector reform? What are the drivers of ICT sector reform?What are the drivers of ICT sector reform? What does ICT sector reform promise? What institutional arrangements are

    required? Why regulate ICT? What makes for effective ICT sector

    regulation?regulation? What are the principles of good regulation? What is regulatory independence? How important is regulatory independence?

    Why did we have stateWhy did we have state--ownedownedtelecomms monopolies?telecomms monopolies?

    Rationales for state-owned monopoliesp Extension of postal services Telecomms as a natural monopoly High barriers to market entry Benefits of economies of scale Importance to security & defenceImportance to security & defence Public / social service obligation of govt Ability to address market failures

    through cross-subsidies etc

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    How did stateHow did state--owned owned telecomms monopolies perform?telecomms monopolies perform?

    Poor network development Poor universal service / access record

    (especially in developing countries) Long waiting lists, poor quality of service Lack of customer responsiveness Inefficiently managed & operated Shortage of capital Shortage of capital Shortage of skills and technology Inability of telecomms to enable economic

    development knowledge economy

    Trends DrivingTrends DrivingICT Sector ReformICT Sector Reform

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    What are some of the key What are some of the key drivers of ICT sector reform?drivers of ICT sector reform?

    Globalisation Neo-liberalism / governance paradigm

    shift Technological change Global institutional pressures Economic pressures

    (role of ICT in economy) Stakeholder pressures

    Lets examine some of these in more detail

    Impact of Globalisation on ICTsImpact of Globalisation on ICTs What do you understand by globalisation? What are some of its main features? And how is it related to ICTs?

    ICT = a key enabler of globalisation as well as a major ICT a key enabler of globalisation, as well as a major output

    ICT = a key driver of economic growth & social development New communication forms - such as GSM, the Internet , 3G -

    undermine economic monopoly arguments, reduce role of the state

    Greater access to information - fundamental to democratisation, informed citizen participation in decision-making

    Nation state undermined power shifted upwards to global markets & multi-lateral forums power shifted downwards to local authorities, communities

    Monopoly provision of telecomms becomes increasingly untenable

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    ICT as a key Driver in the ICT as a key Driver in the Global Economy Global Economy

    Trade in ICT goods, OECD 2009, USD Millions

    Source: OECD 2012

    OECD: ICT Sector GrowthOECD: ICT Sector Growth(1995 (1995 2008)2008)

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    ICT as a key Driver in the ICT as a key Driver in the Global Economy Global Economy

    Contribution of ICT investment to GDP growth, OECD 2000-09.OECD 2000 09.

    Source: OECD 2012

    ICT as a key Driver in the ICT as a key Driver in the South African Economy South African Economy

    South AfricaSource: Comninos et al, 2010

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    ICT as a key Driver in the ICT as a key Driver in the Namibian Economy Namibian Economy

    Source: Sherbourne & Stork, 2010

    Global Telecomms InvestmentGlobal Telecomms Investment(1994 (1994 2004)2004)

    Source: ITU World Telecommunication / ICT Development Report, 2006

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    ICT Sector GrowthICT Sector Growth(2000 (2000 2010)2010)

    Source: ITU, Trends in Telecomm Reform, 2011

    The Jipp Curve:The Jipp Curve:ICT & economic developmentICT & economic development

    Licensed under a Creative Commons Attribution NonCommercial NoDerivs 2.0 SA LicenceSource: Mansell et al, 1997

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    The Jipp Curve 2:The Jipp Curve 2:Broadband & economic developmentBroadband & economic development

    Source: World Bank, 2009

    Economic Impacts of ICTs

    Source: World Bank, 2009

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    Africa:Africa:GDP per


    teledensityte ede s ty

    Which is theegg that

    grows thechicken?

    Role of ICT in DevelopmentRole of ICT in Development

    Source: UNDP, World Development Report 2001

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    Impact of Global Impact of Global InstitutionsInstitutions

    WTO (155 member states) General Agreement on Trade in ServicesGeneral Agreement on Trade in Services

    (1995) Binding on all members, with exemptions

    Agreement on Basic Telecomms Services (1996)

    108 WTO members have made commitments to facilitate trade in telecomms services

    Regulatory Reference Paper (1996) 90 WTO members have made commitments

    World Bank ITU

    So: Why have policySo: Why have policy--makers makers implemented ICT sector reform?implemented ICT sector reform?

    Attract capital & investment, especially FDI Promote modernisation, new technologies Cater for new services (Mobile, Internet etc) Roll out infrastructure, facilities & services Improve management & skill Market efficiency through competition Innovative new services Meet WTO commitments

    Enable global t ade in telecomms Enable global trade in telecomms Raise revenue through privatisation Regulation to facilitate market failure, minimise monopoly

    abuses Benefits to sector and economy

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    Drivers of ICT sector reformDrivers of ICT sector reform Supply-side drivers & demand-side-drivers Globalisation the knowledge economy Governance paradigm shift Neo-liberalism

    Technological change including: Technological change, including: Digitisation and convergence Network modernisation and rollout

    Global institutional pressures, including: Increased role of supranational institutions WTO commitments

    Economic pressures, including Need to attract FDI into the ICT sector

    Market liberalisation sector growth


    Market liberalisation sector growth Privatisation of the incumbent revenue / FDI Demand for new services - from POTS PANS

    Political pressures, including: RSA - social & political transformation

    Forces driving ICT sector reformForces driving ICT sector reform

    Source: Beardsley et al, 2002

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    Components of Components of ICT Sector ReformICT Sector Reform

    ICT policy ICT policy in the knowledge economyin the knowledge economy

    Source: Mansell et al, 1997

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    Elements of ICT sector reformElements of ICT sector reform

    What was the impetus behind telecomms reform in pthe USA?

    What are the main features of ICT sector reform?

    What is the difference between liberalisation and privatisation?

    How do liberalisation and privatisation differ in their effect on market dynamics?

    Components of ICT sector Components of ICT sector reformreform

    Separation of powers & functions Policy formulation government Telecomms regulation independent regulatorg p g Telecomms services commercial operators

    Separation of posts & telecomms Commercialisation of service providers National telecomms / information society policies Privatisation of the incumbent (SEP / IPO) Creation of an independent sector regulator Licensing new mobile operators & additional PSTS /

    broadcasting providersbroadcasting providers Liberalisation - telecomms competition Rate rebalancing (local vs international call charges) Interconnection requirements Universal service & universal access interventions Regulation deregulation re-regulation

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    Separation of Functions:Separation of Functions:Policy, Regulation, OperationsPolicy, Regulation, Operations

    Government( li d l t)

    Direct Influence Indirect long-term


    (policy development)