Workshop on Licensing and Auctions: approximation to the EU framework.

26-27 April 2017 Cologne, Germany

Licensing and auctions are two of the most critical regulatory issues when it comes to market
Regulation and therefore have a strong economic impact. A flexible licensing system as we see in the EU is the basis for sustainable competition. Mainly all countries opening the telecom markets for competition start with the one or the other form of licensing system. Since the introduction of market opening and market regulation in the EU under the so called “Open Network Provision” in 1997, the EU established a rather flexible system of a so called “general authorization”. This means that everybody can start a telecom business as long as he is fulfilling basic criteria. No (artificial) shortage of available licenses. Only for the introduction of a new MNO the limiting criteria is the availability of frequency spectrum. However, in most EU member states MVNOs are foreseen or rather possible.

The fundamental different Licensing approaches within the EU and outside reflect a basic regulatory principle: MENA and GCC countries have the principle “every economic activity in Telco is forbidden, unless they are explicitly allowed by a license”, while in the EU there is the principle “every economic activity is allowed, unless there is a specific restriction of the freedom formulated in a license” (basically if scarce resources like spectrum are involved and physically limit the number of possible competitors). Hence market dynamics and the introduction of competition is limited outside the EU. Rigorous systems of licensing are therefore hindering the freedom of market development and competition.
Especially with the rapid change of the telecommunications ecosystem, the introduction of OTT players in the market and the rise of new technologies like IoT, M2M, etc. the question of a state of the art license system and the availability of relevant spectrum is crucial.

So the question is how far we are and what it can be envisaged in the MENA countries in the near future.

Recommendation

Improve Licensing System

The governments and authorities should take into consideration a review of the current licensing systems with a possible switch to a general authorization system, where possible. Conditions may be specific to every country as concerns the use of scarce resources and explicit public interest goals.