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English Language Skills Trade in Information and Communication Services: Public Disclosure Authorized Opportunities for East and Southern Africa Public Disclosure Authorized Final Report on Kenya, Tanzania and Uganda A Study Commissioned by the Global Information and Communications Department, World Bank Public Disclosure Authorized Public Disclosure Authorized Telecommunications Management Group, Inc. Trade in Information and Communication Services: Opportunities for East and Southern Africa ii Trade in Information and Communication Services: Opportunities for East and Southern Africa This study was commissioned by the Global Information and Communication Technologies Department (GICT) of the World Bank and prepared by Telecommunications Management Group, Inc. (TMG). Funding for the study was provided under a Bank-Netherlands Partnership Program (BNPP) grant (Trust fund No 056459). It is based on interviews and research conducted in Ethiopia, Kenya, Rwanda, Tanzania, and Uganda in October 2006 and during follow-up meetings in Kenya, Tanzania and Uganda in September-November 2007 (see Annex V "List of Meetings"), as well as on the reports and articles referenced in the study. TMG would like to express its gratitude for the assistance and invaluable input of Boutheina Guermazi from GICT (Task Team Leader of the trade in ICT project) and Lee Tuthill from the WTO (peer reviewer of the project). Under the grant, a one week seminar was conducted in Geneva to trade and ICT officials from the COMESA region. Discussions and presentations by WTO, UNCTAD, ITU, World Bank and COMESA staff have provided useful input to the report. TMG would also like to acknowledge feedback received on earlier drafts from Bjorn Wellenius, Mavis Ampah and David Tarr. iii Trade in Information and Communication Services: Opportunities for East and Southern Africa Contents 1. Introduction............................................................................................................................ 7 2. Review of ICT-Competitiveness............................................................................................. 9 2.1 ICT Infrastructure and Services ............................................................................................10 2.1.1 Market overview..................................................................................................................................10 2.1.2 Fixed line telecommunications services ..............................................................................................14 2.1.3 International voice services..................................................................................................................18 2.1.4 Mobile communications ......................................................................................................................20 2.1.5 Internet access......................................................................................................................................22 2.1.6 International backbone connectivity ....................................................................................................29 2.1.7 Computer market .................................................................................................................................32 2.1.8 ICT sector ............................................................................................................................................35 2.2 Policy, legal, and regulatory framework ...............................................................................37 2.2.1 Telecommunications law and regulations............................................................................................39 2.2.2 Specialized ICT laws ...........................................................................................................................43 2.3 Business environment..............................................................................................................44 2.3.1 Taxes....................................................................................................................................................44 2.3.2 Electricity.............................................................................................................................................45 2.3.3 Doing business.....................................................................................................................................47 2.3.4 Foreign investment ..............................................................................................................................49 2.3.5 Governance..........................................................................................................................................51 2.4 Human factors .........................................................................................................................53 2.4.1 Overall literacy and education .............................................................................................................53 2.4.2 Skilled labor force................................................................................................................................55 2.4.3 English language skills ........................................................................................................................57 2.4.4 Labor costs...........................................................................................................................................58 3. Trade and ICT...................................................................................................................... 60 3.1 ICT contribution to economic growth ...................................................................................60 3.2 Impact of trade in services on economic growth...................................................................64 3.3 ICT-enabled services ...............................................................................................................65 3.4 Benefits of WTO Commitments in ICT.................................................................................70 3.4.1 Transparency and predictability...........................................................................................................71 3.4.2 Support for domestic reform efforts ....................................................................................................71 3.4.3 More attractive environment for foreign investment ...........................................................................72 3.4.4 Market opening for Initial Study Country exports...............................................................................72 4. WTO and ICT Commitments............................................................................................... 74 4.1 WTO ICT- related agreements ..............................................................................................74 4.1.1 GATS...................................................................................................................................................74 4.1.2 Information Technology Agreement (ITA) .........................................................................................76 4.2 Case Study Countries’ laws and regulations in relation to WTO commitments ...............76 4.2.1 GATS General Obligations..................................................................................................................82 4.2.2 Telecommunications Reference Paper.................................................................................................88 4.3 Legal and regulatory modifications necessary to make full WTO commitments..............97 4.3.1 GATS General Obligations and Telecommunications Services ..........................................................97 4.3.2 Computer services .............................................................................................................................103 4.3.3 Becoming a signatory to ITA.............................................................................................................103 5. Conclusions ........................................................................................................................ 104 Annex I: ICT Enabled Services Index.................................................................................. 108 iv Trade in Information and Communication Services: Opportunities for East and Southern Africa 1. Introduction................................................................................................................................108 2. Categories ...................................................................................................................................108 ICT Infrastructure ............................................................................................................................................108 ICT laws...........................................................................................................................................................109 Business environment ......................................................................................................................................109 Human resources..............................................................................................................................................110 3. Methodology...............................................................................................................................110
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