The Communications Regulatory Authority of Namibia (CRAN) recently released its “CRAN Draft Market Saturation Report” wherein they recommended the full privatization of MTC and Telecom Namibia. This move according to them will help create fair competition in the country’s telecom market.
This could promote competition by creating new market players. MTC and TN would potentially compete more with each other if owned by different private sector companies compared to the current situation where both are controlled by the state.
Generally, the telecommunication sector can be made more competitive through private investments by reducing state-ownership. Alternatively, competition may be revived by attracting direct foreign investments through issuing a licence with bundled spectrum that does not have an ownership restriction.
This happens through various mechanisms such as setting prices that are too low for competitors for new entrants to match. In addition, they use exclusive contracts with suppliers or customers, for instance, Telecom Namibia and MTC had such an exclusive agreement with NamPower, for dark fibre lease for many years, thus cutting out any other potentials.
The opening of NamPower fibre services to all licensees based on open access principles may also serve as a model for all state-owned critical infrastructure. This may require that open access principles are also enforced in cases such as infrastructure sharing and rights of way, and this can be done by making it a default business practice instead of being the exception.
Excerpt from the CRAN Draft Market Saturation Report
