8.3.2 Implementing a Unified or Multi-Service Licensing Regime – Some Considerations

Implementing a unified or a multi-service authorization regime is a significant undertaking for a regulator.  Considerable resources will be necessary to ensure that the new licensing regime is well designed and to ensure a successful transition from the old, service-specific authorization regime.  Moreover, given the centrality of licensing to the development of the ICT sector, decisions about implementing a unified or a multi-service licensing regime must be carefully considered.

Each country raises a unique set of conditions and circumstances that impact the decision about whether to adopt a unified or multi-service authorization regime.  There are some issues that are relevant in almost all countries, however.  One important consideration is the existing degree of convergence in the ICT sector.  In Hong Kong, China, for example, the transition to the unified carrier licence regime began with a set of consultations related to deregulation in light of fixed-mobile convergence. 

Another important consideration is the degree of competition in the ICT sector and the ability to prevent anti-competitive behaviour through ex ante or ex post regulation.  A unified or multi-service licensing regime may not be advisable if such a regime would expose vulnerable service providers to unfair competition by dominant service providers.  A related consideration pertains to whether maintaining service-specific authorizations creates unfair competitive advantages for certain types of service providers.  This consideration may arise where a service that was previously not considered substitutable for another subsequently becomes increasing substitutable and where provision of the two services in question are subject to different regulatory terms and conditions. 

In India, for example, the move to the converged licensing framework began after complaints arose when “basic service operators” (BSOs) were permitted to offer “limited-mobility” services over Wireless Local Loop (offerings abbreviated as WLL(M)) using CDMA technology in their coverage areas.  This service innovation proved immensely popular since prices were generally lower for this service than for GSM cellular mobile services.  BSOs were also able to offer all-India mobility using the CDMA WLL(M) technology, which contributed to the popularity of this service innovation.  As the popularity of WLL(M) services offered by BSOs grew, a dispute emerged involving the BSOs and GSM cellular carriers.  WLL(M) services were increasingly seen as largely substitutable for GSM services.  However, GSM cellular carriers had paid substantial amounts for their licences, and they complained bitterly that when they had made those investments they had not known that they would face competition from WLL(M) providers offering similar services.  The competition between BSOs and the cellular carriers spilled over into litigation.  Ultimately, the Telecommunications Regulatory Authority of India (TRAI) and the courts had to find a balance between promoting service penetration and ensuring a level playing field among operators.  This dispute led to the initiation of a consultation on the possible creation of a unified access services licence (UASL).  This consultation set India on the path to adopting a converged licensing framework.

Another factor that influences the adoption of a unified or multi-service authorization regime is the regulatory objective of encouraging the innovation of new services and applications.  Nigeria identifies this objective as being one of several objectives of its unified licensing framework.  (See Box 1.)  Given the rapid pace of technological innovation, countries view unified and multi-service authorizations as a means of facilitating the roll-out of new services and of ensuring that the regulatory regime does not constrict the development of the ICT sector.