Africa-Press – Gambia. Over the past few days, the nation has been embroiled in controversy over PURA’s inexplicable directive to mandate a price floor for mobile data services. According to PURA, price competition among mobile operators has undermined network quality and will affect the long-term sustainability of these firms. The purpose of this article is to show that the reasons provided by PURA are false and that PURA’s leadership has been failing in its responsibility to properly regulate mobile service companies, and current problems faced by consumers is a direct result of that failure. It is always important to make a distinction between poor leadership in government institutions and the regular civil servants most of whom are doing their best.Njogu Bah is not representative of the average PURA employee.
PURA’s role is to license service providers, promote competition, protect consumer interests, ensure quality service provision, and—if we are fortunate—promote innovation. To promote competition, PURA must ensure that monopolistic behavior is prevented and that mobile service providers do not engage in collusion that maximizes their profits at the expense of consumer interests. In most cases, the presence of multiple firms will be sufficient to ensure competition. One indicator that competition is working is observing prices falling to the level of the average cost of service.
But key issue most relevant to the current controversy is quality of service. Quality of service for mobile service providers is determined by factors such as connection speed, reliability, geographic coverage, and data security. Put differently, connections should be fast, have low latency, be available at all times, provide complete coverage of all regions of the country, and uphold data security. Dropped calls, “no coverage” messages, or “network busy” signals are all indicators of poor service quality.
Mobile service regulators such as PURA are empowered to take many actions to ensure that consumers experience a certain minimum level of service quality. Indeed, quality of service guidelines or regulations are standard tools for virtually all telecom regulators around the world. In fact, PURA has its own Quality-of-Service Guidelines, a document that was created after the PURA Act 2001 and Information and Communication Act 2009 were enacted.
To carry out its responsibility of ensuring quality service for Gambian consumers, PURA is supposed to regularly monitor mobile service providers. Mobile service providers are required to provide monthly reports to PURA. PURA, in turn, is supposed to publish quarterly and annual reports on relevant performance indicators. If companies fail to meet standards, they are supposed to face penalties.
Despite the comprehensive principles outlined in its Quality-of-Service Guidelines, PURA largely tracks and publishes just four parameters: call connection success rates, drop rates, call success rates, and handover rates across networks. In most regions of the country, these parameters for all mobile operators have not met the standards when PURA was still releasing information on quality-of-service parameters. PURA has stopped doing this many years ago.
What PURA should have done is mandate that mobile service companies invest in network infrastructure, upgrade their outdated equipment, invest in backup power supplies, and invest in network optimization to improve handover success rates during calls across networks. The government also has a key role to play in helping improve quality. To assist mobile service providers, the government should have provided assistance in improving spectrum access, addressed the energy situation in the country and invest in greater internet backbone capacity (e.g., connecting to more than the ACE undersea cable).
If there is intense competition among mobile service providers to the extent that it degrades service quality and consumer experience, the proper approach is to provide incentives that spur investment in network infrastructure and ancillary services by firms. After all, there is nothing unusual about the volume of data used by Gambians or the total number of subscribers. Infrastructural investment adjusted for the population should have been able to adequately handle mobile data usage if PURA had been doing its job regarding mobile service operators.
Unfortunately, PURA’s leadership and the government have failed Gambian consumers over the years by failing to do their jobs properly. PURA has not published a Quality-of-Service report since 2017. Without tracking, publishing, and using data to hold companies accountable, it is not surprising that the existing networks of some mobile operators have not proven resilient to an increase in demand. PURA has not published an annual report since 2021. PURA’s leadership and the government failed to do what needed done years ago to avert the current degradation in service quality.
PURA not only failed in its core obligation but it seems to recently imply that it has a responsibility that is actually not part of its job. Specifically, it is not PURA’s responsibility to safeguard and monitor the financial health of mobile service providers—it lacks such a capacity. In fact, the government has no knowledge of the financials of any private mobile providers. Even the GRA does not know this information; GRA only receives the financials of these firms when they file their tax returns, but it does not audit them and the capacity is not there.
The owners of Africell, Comium, and Qcell have hired management teams that are well-suited to the task of making these firms profitable, and by all measures, they have succeeded and continue to succeed. Therefore, it is baseless for PURA to cite the financial sustainability of mobile operators as a reason for their misguided intervention. Furthermore, these mobile service firms have been profitable enough to make the necessary investments in infrastructure and equipment.
The decision to implement a price floor, instead of doing PURA doing its job, suggests what is truly at play. In all likelihood, PURA instituted a price floor to protect one or two mobile service providers that are having difficulties facing stiff competition. This would be nothing short of corruption.
Competition by mobile service providers is one of the healthiest developments one can hope for in this sector. Furthermore, it is the most efficient driver of innovation. When a firm faces a competitor lowering its price, it must respond one way or another to avoid losing market share. One way of responding is lowering its own price. This price war can continue until theultimate winner is revealed as the most efficient since they will be able to offer a given level of service at a much lower costthan their competitors. Another way a firm can respond is maintaining its price but offering better quality product and service. In other words, a mobile operator can upgrade its equipment and invest in its network infrastructure. After all, consumers make decisions not only on price but also on quality.
In either case, consumers benefit. They benefit through lower prices and enjoying a larger range of services. This is all possible mainly due to price competition. It therefore makes no sense for a regulator to prohibit competition with a price floor. So, the protests by Gambian youths and activists is completely justified. It is justified as a matter of justice and on economics ground. Gambians have been enduring price increases for virtually every commodity and service over the past few years. These include essential items such as rice, sugar, and cement. It is mind-boggling that the government feels compelled to intervene counter-productively in a sector where market forces have been leading to welcomed price reductions.
As one would expect from an unserious government, we have just received an announcement that a committee will be established to look into this matter. What is there to investigate? This is the same charade as setting up a National Assembly Committee to review the findings of a Commission of Inquiry.
Source: Kerr Fatou Online Media House
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