Sincere collaboration needed to drive future-proof funding models

Shameel Joosub, Vodacom Group CEO Blog

Critical to the continued success of the ICT sector is the need to narrow the trust deficit between the four critical stakeholders of the sector – the policy maker, the regulator, the private sector and civil society. In an ideal world, these stakeholders work harmoniously to ensure that the sector continues to invest to extend network coverage where it is most required.

Particularly when one considers that the mobile telecommunications sector represents one of the most significant success stories of the modern African economy over the last 20 to 25 years. Through mobile connectivity, Africa has witnessed significant development.

Considering the noticeable progress that has been made in the quest to provide access to all – first for voice and now for data and other services – it would be reasonable to conclude that the current funding and business models have worked well. The funding and business models have fostered partnerships that have incentivised the investment of billions into ICT sectors across Africa and the rest of the world.

But what may have worked in the past is not necessarily the blueprint for the future.

It is for this reason that the third session of the Ministerial Roundtable at the International Telecommunication Union (ITU) conference ITU Telecom World 2018 in Durban will explore new financing and business models required to advance digital transformation and move towards smarter societies throughout the world.

During the session, we will ask: what can we learn from the initiatives and recommendations presented in other platforms such as the OECD roadmap for digitalization, or the Broadband Commission discussion paper “A New deal: investing in our common future. Policy recommendations to close the broadband gap”? What successful case studies and best practice in public private partnership can we draw on? How can governments provide a healthy investment climate through transparent, fair and stable initiatives in areas such as regulation, licencing, taxation and spectrum?

The easy conclusion that one can likely draw in advance is that partnerships are the solution. Given the fact that each critical stakeholder will have vastly differing vested interests, actively working towards narrowing the various trust deficits has never been more critical in the context of a 4thIndustrial Revolution that threatens to widen inequality in markets that lag behind.

Closing the rural coverage gap, for example, cannot be achieved by the industry alone. Governments should play their part by implementing policies and regulations that eliminate unnecessary costs, enhance flexibility, and increase investor confidence.

The options available to connect rural populations include amongst other things, prescribing rural coverage obligations as part of spectrum licence conditions, effective utilisation of Universal Service Funds and providing subsidies to drive appetite.

Subsidies which can be direct monetary grants to indirect incentives, such as tax rebates can spur operators’ moves to extend coverage and ensure sustainable financing models.

An example of a well-targeted subsidy, noted by the GSMA, is the tax rebate system introduced in Malaysia in 2014. This, which gave corporate income tax rebates (up to 70%) on capital investment in rural areas, and exemptions on import duties for last mile connectivity equipment, giving a direct incentive for operators to increase their investments in rural coverage. It’s a prime example of an innovative solution premised on a collaborative effort.

We need innovative solutions to this and many other issues that will be widely debated at this year’s ITU. From a Vodacom perspective, we are proud to be one of the sponsors of this year’s conference as it brings together leading experts from all over the world to discuss Sustainable Development Goals within ICT. Look forward to seeing you there!

About the Author

Shameel Joosub, Vodacom Group CEO

Shameel is the CEO of Vodacom Group since September 2012. He is a former CEO of Vodafone Spain. He was previously theManaging Director of Vodacom South Africa from March 2005 to March 2011 prior to taking up the position as CEO of Vodafone Spain. Prior to that, he was the Managing Director of Vodacom Service Provider Company from September 2000 to February 2005, and Managing Director of Vodacom Equipment Company from 1998. Shameel served on the Vodacom Group Board from 2000 until March 2011, when he was seconded to Spain. He was re-appointed to the Vodacom Group Board in September 2012 after his returnfrom Spain. Shameel was also appointed as non executive director of Vodacom Tanzania and as non executive director and member of the Audit committee of Safaricom respectively in August 2017.

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