Monday, April 23, 2012

Based on the principle of technology neutrality, the ULF permits an operator licensed under a specified market segment to provide any type of communications service that is technically capable of providing. Under the previous regime, a separate licence was required in respect of each type of service offered by an operator even where the services use a single access and transmission network.

The changes in the regime have been long anticipated by telecoms operators who felt that the previous technology oriented licensing approach was untenable in light of technological convergence in the telecoms sector.
Under the ULF, the Commission will issue technology-neutral licences to telecom operators and service providers, who will now be categorised in the following broad market segments:

  • Network Facilities Provider (NFP) – This category covers telecom operators who are authorised to construct, own and operate any form of communications infrastructure (whether satellite, terrestrial, mobile or fixed) within the country. This would include mobile operators, data carrier network operators and local loop providers among others.
  • Applications Services Provider (ASP) – This covers operators who are authorised to provide all forms of services/applications to end-users using the networks of NFPs. This would include internet service providers, internet exchange points and GMPCS service providers among others.
  • Contents Services Provider (CSP) – This category covers telecom operators who are authorised to provide all forms of contents services such as, information services and data processing services. This would include providers of the premium rate services, credit card validation, audio text services and other web based public commercial information providers.

Operators who fall in more than one category will be expected to obtain applicable licenses for all the categories under which they operate.

As was the case under the previous regime, operators are required to apply for assignment of resources such as frequency, numbering and spectrum from the Commission. Operators will also continue to be subject to the requirement of type-approval from the Commission of telecommunication and radio equipment prior to installation or connection to any public switched telecommunication network. The construction of the facilities would still be subject to general local authority planning permission and environmental regulations.

Cross-subsidization between the various license categories will not be allowed under the ULF.  As such, firms with more than one licence shall be required to structure their operations and submit distinct operational accounting returns to the Commission as part of their quarterly and annual compliance returns for auditing purposes.
With the exception of areas where there exists natural limitations say in spectrum availability, the number of licensees in all other areas are to be determined by the market.

The licence fees under the ULF vary depending of the services to be provided but generally consist of the following components:

  • licence application fee;
  • initial operating fee;
  • annual operating fee based on the operator’s annual gross turnover; and
  • (where appropriate) a frequency spectrum access fee and an annual spectrum fee.

The Commission is in the process of facilitating a smooth transition to the ULF with all new players are required to obtain licences under this regime. Existing licence holders may retain their licences or migrate to the new framework under the appropriate new licence(s). The Commission is to ensure that licensees who choose to operate under their existing licenses retain those licenses under the original terms.  However migration is being encouraged and licences issued under the ULF will be on the same or more favourable terms than the existing licenses. The Commission will also not charge fees for horizontal migration from the old regime to the new one.

Angela Waki is a partner at Coulson Harney Advocates