Freetown — The one good news is that the importance of regulation in this sector is an open secret in many parts of the world.

In the case of telecommunications the priority must be for governments to put in place the regulatory framework to attract private operators - which could vastly increase the number of connections (The Commission for Africa Report, 2005).

For many modern economies, the advent of a competent telecom sector or industry served as a sine qua non for success. The developing world has taken note and significant strides are being made in expanding telecom facilities and networks across Asia, Africa and Latin America.

In Sierra Leone, the buildout of the telecommunications sector is under way, and the pace is showing no sign of abatement. The telecom sector in Sierra Leone may be best described by several words to include evolving, unstructured, unguided, over-bureaucratic, uncontrollable, and unpredictable. The continued growth observed in this sector should come as no surprise. Prior to Celtel deploying its GSM operations, the country was in dire need of a telecom makeover. The demand for modern telecom services had always been very strong and the potential for solid growth coexisted with this demand.

The introduction of a multiplayer mobile communications market was bound to bring a "rush of blood" to a sector that could vaunt of only one player that happened to be on "life support" (technologically). It should be noted that a multiplayer mobile communications market does not guarantee fair and open competition. It introduces a form of "partial-privatization" by eliminating restrictions on the participation of the private sector in the industry.

Changing Market Dynamics The telecom sector is very dynamic with complex layers and networks of infrastructures, evolving technologies, business models and services that require dedicated and in many cases, delicate attention and support from government. The telecom industry in Sierra Leone is exhibiting sign of a market lacking effective regulatory oversight. "Uncontrolled competitive market forces have emerged in the market place that have partly contributed to the prevailing rising phone costs and also to the recent instability in the foreign currency markets", says President Kabbah in a speech given in April of 2004.

More cellular (mobile and fixed wireless) operators (Celtel, Millicom, Comium, Africel, Datatel, Inter-Cellular and Sierratel) have either deployed or are planning to deploy services in the immediate future. Almost all of these operators may also have been granted license or permission to operate international gateways for their international traffic. Datatel is an active player in the ISP market providing broadband and VoIP services to the public. A recently launched Direct-To-Home (DTH) satellite provider (TrendCom - a reseller for TrendTV, Nigeria) announced its plans for providing internet services via its DTH unit. A Business Process Outsourcing (BPO) firm with international gateway terminating facilities is planning the deployment of a carrier-grade mesh network for Wireless Local Loop (WLL) in Freetown. All these activities are significant development for a country that has a mainline penetration of less than 0.8 percent per 100 inhabitants. The underlining trend here is one of a "converged" market. The reformers of this sector should take note of these developments.

Reform Status First and foremost, in embarking on the path of reform, you must admit a problem. The current administration (President Kabbah's government) should be commended for the initiatives already undertaken in the name of promoting private sector participation and competition in this sector. The current telecom market in Sierra Leone is yawning for a sector policy that will promote and sustain market liberalization, provide an enabling investment climate and protect the consuming public.

The current SLPP administration had actually embarked on its liberalization agenda in the late 1990s but its plans were interrupted by the civil war that raged for almost 11 years starting in 1990 through 2000. After the war ended, the government continued with its liberalization program by awarding mobile communications license to GSM operators (Celtel and Millicom respectively). In addition, the government initiated effort to privatize the state-owned monopoly (Sierratel). As of May, 2005 there are seven operators (four currently deployed) licensed to provide cellular/GSM services in the country.

Reform of a traditionally nationalized telecom sector is mainly associated with three components (regulation, liberalization and privatization) and of these three, regulation has proven to be the "cart" leading the horses. Putting the regulatory framework in place before privatizing the firm may help foster competition or ensure that the incumbent monopolist's investment obligations are clear when the firm is privatized (Wallsten, 2003).

The regulation of this sector cannot only apply to the offering of licenses to deploy infrastructures and operate services. Rather, regulation should relate to specific powers and functions entitled an agent (regulator) appointed by the executive (the President) and empowered by law (through the legislature) to execute the government's sector policy, promote industry efficiency and ensure the protection of consumers. Some of the general powers entitled the regulator may include the ability to make rules, enforce telecom laws and to settle disputes among operators or between operators and consumers.

The duties and functions to be performed by this body may include licensing, the regulation of prices, number administration, interconnection facilitation, Quality of Service (QoS) monitoring, equipment standardization, spectrum management and universal access administration. The Draft Telecom Bill currently tabled for parliamentary approval addresses some of these issues. But the approval process has been rather slow. Many of the legal distinctions within the bill may fall short of adequately addressing the reality of the marketplace and the use of the various products and services supported by the industry today.

By the start of 2005, 132 of the 189 member states of the ITU had established a regulator compared to 14 ten years ago (ITU, 2004). The liberalization effort in this country continues without a solid regulatory framework and in the absence of a well-defined National Telecommunications Policy (NTP). The basic interests of the consuming public are left for the commercial players to decide or manage.

Towards the end of 2002, Government opened up competition in the industry with the expectation that a Regulatory Authority would have been in place by the first quarter of 2003. A year has since elapsed without the establishment of such an authority (President Kabbah in a 2004 speech at a Sierratel event in Bo). This statement serves as a "text book" admission of the current problem (regulatory absence) facing the telecom sector.

Looking Forward The advent of new technologies and rising consumer demand are fueling a market growth that has far outgrown any strip of telecom law or code enacted in Sierra Leone since independence. The rapid rise of modern telecom network services such as Wi-Fi, WiMax, VoIP, WCDMA (UMTS) and GSM in this country and the possible convergence of these technologies should be the ultimate reason in forcing us to rethink the way this sector can be managed and regulated from the standpoint of the government.

Authorizing a multiplayer mobile or cellular market may only address one of the many requirements for a successful reform plan, which is liberalization. Liberalization does not by default produce competition. It may eliminate legal obstacles to competition but commercial barriers may remain. Commercial barriers can stifle competition to the degree that the multiplayer market may mimic a cartel-like atmosphere.

The liberalization effort must be backed with a solid and transparent legal and regulatory framework. Regulated competition can foster industry efficiencies, lower prices, and better services for the customer, encourage cost-based pricing and foster market growth.

The slow pace in formulating a sector policy framework along with the introduction of a regulatory framework may not be all that bad after all. Actually, Sierra Leone today is in a far better position than Nigeria in the beginning of the latter's liberalization and deregulation programs. In the late 1990s, Nigeria had already positioned herself in accommodating a revamped telecom sector in the name of the National Telecom Policy Framework published in 2000 and subsequently the Telecom Act of 2003.

Twelve years on, the sector is rife with calls from various quarters including one of the pioneers of telecom reform in that country, Mr. Ironmatu (Former Vice Executive Chairman - NCC) to revisit these platforms. Nigeria's telecom market today is far different than what was perceived or conceptualized in the early days of the deregulation effort.

In Sierra Leone today, we have a sector that is evolving and has been growing steadily in the last five years. Some of the "dos" and "don'ts" (global industry best practices) in the basic tenet of devising and managing a competitive telecom sector may have been observed to this point. We are in the enviable position of knowing what to perceive or conceptualize in reforming this sector. Such position was never accessible to some of the pioneering countries in the effort to liberalize national telecommunications markets in Sub-Saharan Africa. In Sierra Leone's case, we are in the position today to take an "end-to-end" account of the current market conditions and adequately forecast for future public policy and regulatory requirements.

Regulation is the pillar for market efficiency, and industry effectiveness and could serve as a safeguard for consumer exploitation. Solid and impartial regulation of the telecom sector in Sierra Leone can mitigate the risks of political cronyism and industry capture, and provide a qualifying environment for the acceptance of regulatory decisions as decorous for the overall objectives of the industry.

Conclusion With all the failures and negative attributes that one may associate with the history of the telecom sector in this country, the current conditions of the market (domestic and international) has made it possible for us to speak of positive attributes in the same breadth of this sector. The current increase in private investments in telecom activities in the Sub-Region (West Africa) in general must be seen as a beacon of hope rather than a sign of confidence in these heavily restrictive markets. The hope in this case may be connected to supply-side economics. Investor confidence can be gained and preserved through the prudence, transparency and fairness evinced by the regulatory regimes adopted.

The current push to execute a concatenation of reform activities (liberalization, privatization, regulation and deregulation) in Sierra Leone may prove too much to handle for an industry only five years removed from hibernation. Regulation must be seen as a prima for telecom reform. Most of the countries that exemplify success in telecom reform are countries that placed regulatory reform before everything else on the list of reform activities.

In ensuring solid regulatory footing in our telecom sector, it is essential that we tread a well-detailed and well-defined path that is created through the involvement of a consummate representation of the country at all levels and from all facets to include national, district, local, civil society, business and telecom industry representations. In conclusion, the path must include the following: · Consultation with stakeholders: the plan here is for the government to solicit ideas and information from the larger society to feed into a National Telecom Policy Framework and subsequently to a Regulatory Framework · Framing a National Telecom Policy: the government through the appropriate agency or department (Communications Ministry) should articulate the national goals and objectives (e.g. promoting rural access, increasing telecom penetration, increasing the rate of computer literacy, bridging the information divide, etc.) for the development of telecom and ICT and the plan for achieving the stated objectives · Establishing a Regulatory Framework: the regulatory regime must be established through legislative action with the focus of achieving stated reform objectives in support of an independent regulator, private sector participation, fair competition, price regulation, licensing, spectrum management, human development and infrastructure investment, seamless interconnection, market access, etc.

· Implementing a Competition Framework: in this we can have instituted a body that has jurisdiction over competition issues across various commercial sectors. The statutory functions of the competition authority shall include enforcing anti-trust codes, enhancing competition and eliminating anti-competitive behaviors. The National Commission for Privatization (NCP) could play a vital role here as a leading stakeholder in the formulation of this body · Promoting Privatization: here, it should be noted that privatization though "partial" already exist in the form of private sector participation in the mobile segment and for the sake of fairness, the privatization effort cannot be commingled with the regulatory design and implementation efforts. The privatization mode employed for Sierratel must consider the overarching goal of the reform policies for this segment (fixed line). Some of the things to consider include: o Competition Policy for this segment Would this segment be opened to full competition during the pre-privatization or in the post-privatization phase?

o Exclusivity Rights Would the PTO (Sierratel) be granted exclusivity rights? If so, what is the duration?

o Privatization Modes § Privatization with Complete Competition § Privatization with Gradually-Introduced Competition § Liberalization with no action of Privatization § Private sector Involvement without Liberalization or Privatization

Maxwell Massaquoi is a Principal at BroadRange Solutions, Inc. a professional services firm based in Freetown, Sierra Leone. He has over 9 years of telecommunications regulatory and OSS/BSS experience.