Political and regulatory pressure in Africa will likely adversely affect the telecoms market on the continent. This is according to the 2018 predictions for the telecom industry, released by Strand Consult.
However, Africa is not alone, as Strand Consult CEO John Strand believes that globally 2018 will be a year in which increasing regulation will threaten new technology.
“In 2017, we exposed how politicians and regulators make policy not on evidence, but ideology and idiosyncratic preference. We see counter-trends: some countries want to open the door for markets to drive a dynamic future while others want to double-down on failed policies of the past,” says Strand.
He says knowledge of public affairs and regulation is becoming increasingly vital for telecoms CEOs.
“Some operators accept bad regulation as part of the new normal while others challenge it in court. Financial analysts incorporate regulatory burden as one of the parameters for assessment, and CEOs need to be ready for their questions about the impact of regulatory policies.”
According to Strand, the regulatory world “was brutal” in 2017; and 2018 will likely be similar.
“Around the world, and especially in the EU, regulation is effectively a re-nationalisation of networks, but without financial compensation to the shareholders. Policymakers have made rules for mobile coverage, faster broadband, free roaming, data protection and intellectual property, many rules which negatively impact shareholder value.
“Moreover, regulators justify their actions by saying they are protecting the Internet and preserving democracy, but the real question is whether it’s a cover for politicians to take control of communication and shut down their political enemies,” he adds.
“Africa wants to get more investment in the networks that are the foundation of the modern society, and consolidation is needed among many players across a region with high penetration, high churn and low ARPU [average revenue per user],” he says.