Policies for promoting new ICT services in emerging markets: new networks are not enough

It is well known that mobile networks are ‘leapfrogging’ established networks in emerging markets. Take-up of mobile voice and, more recently, mobile broadband quickly overtook that of fixed services among citizens of most emerging countries because of the added convenience, and lower deployment costs, of mobile networks. 

This leapfrogging has often been assisted by government policies to promote deployment. However, increased access to these networks may not, by itself, increase the availability and adoption of new ICT services.

As with networks, new ICT services can also leapfrog traditional ones. For instance, in Kenya and the Philippines, well over half the adult population use mobile money for transactions – far more than have access to traditional banking services. However, despite the benefits that such new services can bring to unserved or underserved populations, these successes have not been repeated in other countries. In addition to mobile money, policy-makers face a host of other new opportunities to transform the way businesses operate, governments deliver services and citizens interact with one another, but they may need to rethink their policy approach.

In many countries today, Internet policy is a continuation of traditional telecoms regulation, which focuses mainly on infrastructure. Specifically, telecoms regulation generally seeks to extend network coverage through universal access or service programmes, while also introducing mobile and fixed competition to provide new services and limit prices. This approach has often been extended to the Internet, with access plans to bridge the digital divide, alongside competition to increase the speed and/or drive down the price of broadband. These policies have proved successful in extending network coverage – as with voice services, broadband availability is driven by infrastructure investment, which in turn drives end-user adoption.

However, the availability and adoption of new ICT services – which cover a wide variety of sectors, including banking, education and healthcare – cannot be promoted through infrastructure alone. For example, many countries have the network coverage and penetration of Kenya and the Philippines, but none has come close to repeating their success with mobile money. Indeed, rather than providing a roadmap, these successes are more likely to have created roadblocks in other countries, as different interested parties position themselves in an attempt to reap the benefits of new services or block the resulting competition.

The policies needed to promote these services must consider basic building blocks, such as a means of digital authentication for personal services and data privacy rules covering sensitive services, as well as sector-specific rules to facilitate services such as mobile money and banking services. In addition, the services themselves should drive infrastructure requirements – for instance, distance learning is an efficient way to reach remote students, but using video requires high bandwidth and good quality of service. Meeting these infrastructure needs should flow from a broader focus on the resulting services. This broad focus on services should, in turn, be driven from a high level of government that is able to consider the broad range of sectors whose services can migrate online, rather than focus narrowly on the regulation of telecoms services.


Michael Kende is a partner covering telecoms in emerging markets with Analysys Mason

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