Arakpogun, Ogiemwonyi (2018) Closing the Digital Divide in Africa: the Role of Mobile Telecommunications and Universal Access and Service Policies
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Citation: Arakpogun, Ogiemwonyi (2018) Closing the digital divide in Africa: The role of mobile telecommunications and universal access and service policies. Doctoral thesis, Northumbria University. This version was downloaded from Northumbria Research Link: http://nrl.northumbria.ac.uk/39643/ Northumbria University has developed Northumbria Research Link (NRL) to enable users to access the University’s research output. Copyright © and moral rights for items on NRL are retained by the individual author(s) and/or other copyright owners. Single copies of full items can be reproduced, displayed or performed, and given to third parties in any format or medium for personal research or study, educational, or not-for-profit purposes without prior permission or charge, provided the authors, title and full bibliographic details are given, as well as a hyperlink and/or URL to the original metadata page. The content must not be changed in any way. Full items must not be sold commercially in any format or medium without formal permission of the copyright holder. The full policy is available online: http://nrl.northumbria.ac.uk/policies.html Closing the digital divide in Africa: The role of mobile telecommunications and universal access and service policies O E Arakpogun PhD 2018 Closing the digital divide in Africa: The role of mobile telecommunications and universal access and service policies Ogiemwonyi Emmanuel Arakpogun A thesis submitted in partial fulfilment of the requirements of the University of Northumbria at Newcastle for the degree of Doctor of Philosophy Research undertaken in Newcastle Business School June 2018 Abstract The liberalisation of telecommunications market in Africa, which was propelled by a sector-wide reform at the turn of the millennium, has led to an unprecedented level of mobile penetration. Despite the progress that has been achieved, evidence also indicates that the market has failed to address the widespread provision of telecommunications, with pockets of digital divides of uneven mobile coverage existing across the continent albeit to varying degrees. The efforts of governments in Africa to close this digital divide have given rise to a range of universal access and service (UAS) policies. The thesis investigates the interplay between market liberalisation, market failure and UAS to understand why digital divide persists across Africa and how this problem could be mitigated. Adopting a qualitative multi-case study approach, the thesis finds that a set of complex issues interact to impede the widespread provision of telecommunications services. Drawing on the public interest and economic efficiency perspectives of market failure, regulatory capacity and transaction costs emerged as the two key underpinning issues on which a model for closing the digital divide in Africa was then developed. We find that since regulators across Africa are largely faced with limited human and financial resources, they tend to lack the capacity to formulate robust UAS policies, implement and effectively monitor UAS activities. On the other hand, since mobile network operators (MNO) are profit driven, the transaction costs of network deployment and maintenance is critical in shaping investment decision so much so that they tend to concentrate on commercially viable areas. The model argues that UAS policy should be formulated in a manner that empowers regulatory authorities with adequate resources to promote widespread access to telecommunication services and, at the same time, facilitate economic efficiency in order to make it feasible for MNO to economically provide infrastructure and services. i Table of Contents Abstract ................................................................................................................................................... i Table of Contents ................................................................................................................................... ii List of Figures ....................................................................................................................................... vi List of Tables ....................................................................................................................................... vii List of Abbreviations ........................................................................................................................... viii Dedication ............................................................................................................................................ xii Acknowledgment ................................................................................................................................ xiii Declaration .......................................................................................................................................... xiv Chapter 1: Introduction....................................................................................................................... 1 1.1 Background to the thesis ............................................................................................................... 1 1.2 Thesis objectives and motivation ..................................................................................................... 5 1. 3 Structure of the thesis ...................................................................................................................... 8 Chapter 2: Sector liberalisation, FDI and the spread of MNO ...................................................... 13 2.1 Introduction .................................................................................................................................... 13 2.2 An overview of the telecommunications market in Africa ............................................................. 14 2.3 FDI and the spread of mobile network operators in Africa ............................................................ 25 2.4 Digital divide .................................................................................................................................. 35 2.5 Country mapping for Eastern Africa .............................................................................................. 41 2.6 Conclusion ..................................................................................................................................... 48 Chapter 3: Market failure and universal access and service .......................................................... 50 3.1 Introduction .................................................................................................................................... 50 3.2 The theory of market failure ........................................................................................................... 50 3.2.1 Causes of market failure ......................................................................................................... 52 3.2.2 Regulatory Instruments........................................................................................................... 66 3.2.3 Criticisms of the theory of market failure ............................................................................... 70 3.3 Universal access and services......................................................................................................... 72 3.3.1 Definition and origin of universal access and services ........................................................... 73 3.3.2 Strategies for funding universal access and services .............................................................. 78 3.3.3 Stages of universal access and services .................................................................................. 82 3.3.4 The future of universal access and services ............................................................................ 86 3.4 Universal service funds in Africa ................................................................................................... 87 3.4.1 Origin, objective and definition of USF ................................................................................. 87 3.4.2 Establishment of USF ............................................................................................................. 88 3.4.3 Funding USF .......................................................................................................................... 90 3.4.4 Administration and disbursement of USF .............................................................................. 93 3.4.5 Summary of USF performance in Africa ................................................................................ 95 3.5 Conceptual framework ................................................................................................................... 98 Chapter 4: Methodology .................................................................................................................. 103 ii 4.1 Introduction .................................................................................................................................. 103 4.2 Ontology and Epistemology ......................................................................................................... 104 4.3 Inductive reasoning and qualitative research................................................................................ 105 4.4 Case study methodology .............................................................................................................