Good News: Pan-African Roaming following US not EU model

Last year Celtel launched a multinational mobile phone service for Celtel subscribers in Kenya, Tanzania, and Uganda under the name One Network which

"allows customers to move freely across geographic borders without roaming call surcharges and without having to pay to receive incoming calls."

Now I see they've extended the service to include twelve countries. This is very good news, as there are many tribal and cultural groups in Africa that span national borders.

So it's encouraging to see Africa following a path that should lead to roaming competition and long term consumer benefit.  To understand what's at stake here, let me refer to an excellent paper by Scott Marcus on Europe's "New regulatory framework" which compares the US & EU regulatory approaches to roaming.

"In 2000, Vodafone Airtouch merged with Mannesman.  <EU> Commission competition authorities were concerned that the merged firm would be the only entity able to offer pan-European mobile telecommunication services...  <under pressure the> merging parties resolved competition concerns by agreeing to provide roaming tariffs to affiliated and unaffiliated mobile operators on a nondiscriminatory basis.  As a practical matter, this eliminated the merged entity's incentives to offer pan-European service packages..." 

Scott compares this with the US where AT&T Wireless's introduction of Digital One Rate service led to a wave of mergers, alliances and joint ventures as competitors were forced to respond.  Because of that competition, US mobile subscribers now get large buckets of low cost minutes for which there are no long distance and no roaming charges.  As a result, US average minutes-per-subscriber-per-month is four times that of Europe.

Both the US and the EU have well intentioned regulator's, but as far as I know, neither can claim credit for understanding what they were doing or not doing.  Luckily in Africa, there doesn't appear to be an African regulator with any interest in pan-African roaming, so hopefully African roaming will follow the path of competition.  The initial signs are positive.

Comments

[John Middleton]

The EU's termination rates system is a joke - see the UK market where Ofcom was legally obliged to determine Hutchison 3G UK to have significant market power despite the fact it has 5% market share!