Page 60 - SAMENA Trends - January 2020

ARTICLE SAMENA TRENDS

Figure 3: Old Assumptions, new realities creating challenges and tensions in relation to
current national regulatory frameworks within
which national network operators operate, as well
as creating implications for taxation, security and
privacy. An added challenge arises in the context
of developing countries, where many population
segments have limited disposable income.
Current business models and certain network
operator practices in service pricing have been
insufficient to provide the investment necessary
to bring coverage to many of these populations.
Moreover, Governments do not have the revenues,
models, expertise or structures to fund 100%
of the development of networks. In addition,
international financial institutions such as the
World Bank, which typically funds development
projects, cannot close the funding gap for every
ICT project. Furthermore, traditional USF models
may not provide comprehensive solutions as
these, by definition, are designed to take USF
contributions only from nationally licensed
network operators and issue grants to operators
to build infrastructure in under-served areas.
Such funding and existing means of distribution,
however, are often grossly insufficient to fund this
coverage gap. There is a need to examine ways to
augment and expand on the current financing and
located outside of the consumption Analysys Mason estimates that mobile investment models.
country. This has impacted network capital intensity will only increase from
operators’ revenues, coupled with 13.2% to 16.3% between 2018 and New approaches to funding and investment are
intense price competition on data 2025. 7 required
packages fueled by the perception of Given the tensions between traditional financing,
broadband as a utility and growing Digital transformation has also investment and corresponding business models
pressures to increase network capex impacted governments and regulators and new digital cross-border market and supply
spending to enable the delivery of more who no longer have jurisdiction over practices, coupled with outdated regulatory
and increasingly complex and high- communication service providers models and the continuing prevalence of
bandwidth content. A 2019 report by that have substituted local services, national borders and networks, new approaches

Figure 4: Global mobile capex and capital intensity

7 See: https://www.ey.com/Publication/vwLUAssets/ey-accelerating-the-intelligent-enterprise/$FILE/ey-accelerating-the-intelligent-enterprise.pdf and original source
“Telecoms capex forecast: Worldwide trends and forecasts,” AnalysysMason, March 2019
60 JANUARY 2020