Regulating for Africa’s future digital economy – A draft agenda to speed things up

The context

When Africa’s first mobile operator launched in DRC, there was no telecoms regulator. The operator had to employ a French lawyer to draft a regulatory framework and it provided no protection to the company. Telecoms and internet regulators were the product of the liberalization of markets, taking away the state’s monopoly over the delivery of what was mainly telecommunications.

Three bodies lay claim to being Sub-Saharan Africa’s first three anglophone telecoms regulators: the Nigerian Communications Commission (1992), the Botswana Telecommunications (1996) and the Uganda Communications Commission (1997). The Nigerian regulator was not really very effective until many years after its launch. In francophone Africa the first regulator was Agence des Télécommunications de Côte d’Ivoire (1995). Many of Africa’s telecoms regulators are over two decades old.

As a product of liberalisation, the regulator existed for two broad purposes: firstly, to encourage the success and financial good health of the sector and secondly, to act as the champion for individual consumers of the new operators’ services. In addition, some of them took on responsibility for Universal Service provision: making sure that those places the market was unable to reach had some kind of service. They were meant to make sure their markets were a competitive ‘level playing field.’

As the successful African telecoms regulators got into their strides, they were perhaps one of the most powerful bodies outside a country’s Central Bank, overseeing what became a booming industry.

The changes

In May 2026 the Nigerian Communications Commission announced that it was reviewing its 26-year-old legal and regulatory framework, which it said was widely considered to be outdated and ill-equipped for modern industry realities. It identified these new realities as including: the vandalism creating a staggering volume of fibre cuts; with currency and energy pressures the difficulties of creating sustainable business models; integrating new technologies like Cloud and AI; and tightening Quality of Service regulation; and forcing broader digital inclusion for historically underserved and rural communities.

So much has changed in the last fifteen years that the industry and its direction of travel is almost unrecognizable.

• De-facto monopolies and duopolies. The original idea was that a country market would have three to four players fighting for customers. If there were just two, they would simply ‘shadow’ each other’s pricing. In the event, most Sub-Saharan African markets are now dominated by a duopoly of players or there is a single dominant player. Some examples include MTN in Ghana and Nigeria, Sonatel in Senegal and Safaricom in Kenya. With a few exceptions, mobile money operators tend towards monopoly and there are many of these across different countries. Where they have been introduced, MVNOs have barely scratched the surface of the monopoly/duopoly problem and they run on the networks of those who have now become a problem. Africa’s larger mobile operators are making above-average returns and these can be justified somewhat by the risk premium the continent is still perceived to have. However, there are still some fundamental questions about rates of return if these are being made in markets with de-facto monopolies or duopolies. Regulators have been completely hopeless in addressing the issue of Significant Market Player (or dominant market player) as there are two strong pressures preventing them: continued Government ownership (and the dividends income they derive) and wider citizen shareholders with an interest in them. And there is also a wider inability of some regulators to tackle tough problems.

• Data exceeds voice. In many countries and for most of the major operators, data revenues are now exceeding those from voice. With smartphones, there has been a shift from voice to data telephony (WhatsApp, Zoom, Telegram, etc) and from SMS to data messages. The end of this journey is that telephony will become data. What’s happening globally will come to Africa: usage will outpace revenues and revenue growth will be flatter. Dealing with data requires near continuous high-level investment with much slower returns than when it was just voice and SMS. 4G will be followed by 5G which, in turn, will be followed by 6G. 3G may be decommissioned but it will be much harder to decommission 2G in the Sub-Saharan African context.

• Dominant position is self-reinforcing: With a number of caveats, the player with the highest volume of traffic gets the best wholesale prices at all levels. This forces the mass market to gravitate towards those whose prices are based on high volumes and shuffles off much smaller data players into the high service/high price enterprise niche. Many African countries have non-competitive wholesale markets with low quality of service, either because there is a dominant MNO or two dancing as a duopoly or an old-fashioned, historic incumbent with monopoly rights. State/private joint ventures (JVs) were invented to circumvent the latter but they have a mixed track record. Reliance in wholesale network terms on a single dominant wholesale operator is a mistake because resilience requires more than one operator to ensure continuous operation. The barriers to speedy roll-out imposed by planning and taxes remain a continuing issue, reinforcing the position of those who have already got larger networks.

• Shifting from mobile to residential and limited to uncapped: In an earlier Substack (https://russellsouthwood.substack.com/p/african-isps-aimed-at-lower-income?r=4tqb) I wrote about the rise of uncapped, digital broadband, which has been most successful in Kenya and South Africa. Lower-income Africans in those two countries are being offered uncapped, home broadband (with either wireless or fibre) and, surprise, surprise, are using it for almost all of the things people elsewhere do. They are not being charged for higher price, mobile, time-capped data. Why has this not happened in other countries? Because there is not a competitive market for things like national and metro fibre. Indeed, in some countries, metro fibre is largely non-existent or very fragmented. MNOs have begun to understand that this shift is occurring and have pitched their tent at the high end of the market with Fibre-To-The-Home. Even here, residential is growing. For example, in a country as poor as Burkina Faso, GVA has over 60,000 subscribers. The point here is that residential households in Africa serve 5+ people and so what appears as only 200,000 broadband subscribers may actually be approaching a million people using the connections. Regulators need to be paying attention to residential household (uncapped) broadband. You can’t live a full digital life just on mobile data as it’s currently charged and defined.

• The shift to platforms. Smartphones have been about a lot more than just phone and message services. The average user has free access to a wide range of social media and entertainment services including Google, Facebook, YouTube, Instagram, Pinterest, TikTok, etc. The same user can call up a cab, transfer money to other people (or into savings) and pay bills. These new platforms are largely external, international platforms over which African regulators have little or no control. There is pretty much an absence of local players, except in financial platforms. There are a range of issues about: access to platforms, the fees charged to be on a platform and the control some platform operators exert. The importance of these platforms is now widely understood by Africa’s rulers, some of whom still periodically shut down the internet to deny access to voices opposing them. (Perhaps we should be grateful to them for conducting this “live thought experiment’. Being without access is no fun and costs everyone money.)

• Unfinished business. As an increasing part of African life is lived digitally, as elsewhere, a whole range of new digital divides have appeared. Also, there are still underserved areas or areas that have no service at all. African regulators often publish the number of subscribers in their country, which, through multiple handset ownership, exaggerates the number of people actually using a handset. Africa’s telecoms markets are increasingly split between those who have access to the full list of digital services (provided they can pay for data) and those with basic phones who have voice, mobile money, SMS services and a torch. These widening gaps need to be addressed otherwise instead of things digital empowering people and creating wealth, they will simply reinforce the haves and the have-nots. Only a handful of country regulators have really made any effort to address universal access. There are two market tools – lower income ISPs (see above) and mobile coverage extenders (https://russellsouthwood.substack.com/p/extending-mobile-coverage-to-hard?r=4tqb) – but neither seem to be getting much attention from regulators. Imagine flipping those optimistic looking subscriber numbers and being asked to state how many of your citizens had no or little service.

What are you actually regulating?

The single most important thing that African regulators are now overseeing is the digital infrastructure of their country and the terms under which users access it. It is like the ‘nervous system’ of a nation, where increasingly large parts of the economy and social and cultural life will be run on it. The much-mooted Digital Public Infrastructure concept has three elements: digital identity, digital payments and safe data exchange. None of these things will happen without a physical digital network that reaches most citizens, operates effectively and at a cost all citizens can afford.

The great leap from the informal economy to increasing reliance on this ‘nervous system’ will occur as people transition from hybrid uses of phones to digitally seamless services. There will be adaptions: Uber had to include cash in the African context but no-one believes that ride-hailing will not be part of Africa’s future digital life. Whatever the benefits of AI are for the continent, there will be no way of taking advantage of them without this physical infrastructure.

This digital infrastructure will increasingly become a utility service that allows citizens full access to Government services and to be able to buy and sell things in the marketplace (physical or digital). If it is a utility service then access to the data required to power daily transactions becomes absolutely central. For example, you cannot have a citizen unable to renew his or her licence because s/he hasn’t got enough data at the right point in the month. You may need to be able to offer educational support in the home for those bringing up children. In other words, two things matter: Is the digital infrastructure reliable? Does everyone have access to it at a cost they can afford?

How the regulator can encourage things to change

As telecoms markets change, telecoms regulators are no longer the central institutions in their markets. Indeed, many of the issues they now face are global and cannot be addressed alone. Working together to create larger ‘single market’ zones can be one approach to helping attract both local, regional and international investment.

In this circumstance, they have two ‘soft power’ approaches that can help them achieve the objective of creating an accessible digital infrastructure.

Leading market discussions. An African regulator is in a uniquely powerful position to lead discussions about what is changing in the communications ecosystem (things like data centres, cloud and AI) and to encourage operators to be more ambitious about what they tackle. If there is an absence of wholesale fibre competition or few mass market residential providers it can raise these absences as things it would like to see filled. At a very practical level, it can be on the look-out for investment and new players to come into the market. It can help define what is in “the public interest’ and how it might be bought about.

Convening power for adjacent areas: There used to be a lot of talk about converged regulation, particularly with broadcast. But as streaming eats into traditional broadcast business models this looks less relevant. The main challenge is that there are now a plethora of operators that are doing things enabled by digital networks and data over which regulators have no direct control.

The list contains a number of quite crucial areas and there is no-one else who can draw them all together in a relatively neutral way. Government might, but as noted above, all too often it has its own stake in the game, through shareholdings in the former incumbent. The long list of adjacent issues includes but is not limited to: what mobile money, banks and fintechs do in the financial sector; how content and services work and are regulated; the uses and regulation of AI; the changes streaming will bring about in broadcasting; and overarching things like energy supply for networks and data centres.

In direct terms, African regulators have broadly two levers they can pull to make things happen:

Control – Intervening directly in markets. The regulator can address market distortions in a number of ways. They can look at whether markets are operating effectively and intervene if they are not. Interventions include: declaring an operator to have significant market power and taking steps to curb that power; network unbundling – asking operators to open their fibre networks to third parties; imposing infrastructure sharing over things like physical ducts; asking for a reference price to ensure transparency; ensuring dark fibre is available to all operators; insisting on cost-based pricing for wholesale; and retail price caps. In their role as consumer champion, they can focus on Quality of Service, Universal Service Obligations and ease of switching from one provider to another. Finally, in terms of spectrum management, they can ease access to spectrum and impose conditions.

All of these are tools and their use only makes sense in the context of a broader vision: the need to have a physical, national digital infrastructure that serves all citizens. Hence the importance of discussing the changes that have occurred in market and why thing will be different in the future. So for example, if data telephony becomes the main way of making calls (so for example, by WhatsApp or Teams), the terms of access to the platforms and the cost of doing so takes on far greater significance. What are the costs of delivering voice services in this way? At another level, if certain operators are charging higher than necessary prices for wholesale links to data centres or landing stations, they can intervene to insist on cost-based pricing.

Given the imperative for speed, with a few exceptions, all of these interventions are slow moving. Self-interested parties will call for external review and weaker regulators will not have the firepower to take on difficult challenges.

Adding competition to the market. The alternative is to make it easier for new entrants to come into the market who can increase the levels of competition. Former incumbents and dominant players need to have competition to “keep them honest.’ Adding another mobile licensee is not the answer to the question. Third or fourth operators rarely get more than a 10-20% of the overall market and divert capital from better opportunities. Adding a mobile operation to an incumbent also rarely produces more competition.

The aim should be to deepen and widen competition in four ways: firstly, through extending geographic services to uncovered or poorly covered areas; secondly, through encouraging other players into new markets like residential uncapped broadband; and thirdly, enforcing fair terms for platform access to outside parties riding on MNO networks (eg fintechs); fourthly, through encouraging “sandbox’ innovation over a time limited period to get some evidence for how things could be done differently.

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Speeding up the future – A possible agenda of ideas

What follows is not a complete list of ideas. Please feel free to tell me about others and I will do a redraft of this section at a later date.

Single digital market As social media types enjoy telling people, Africa is not a country. But unlike India or China, it derives none of the benefits of scale from being a single country. Celtel founder Mo Ibrahim frequently highlights the absurdity of current trade and infrastructure limits, noting it is often more difficult and expensive to move goods from East to West Africa than it is to import them from China. Unifying the market is essential to scale businesses and foster regional growth.

In terms of digital infrastructure, you can’t have 50+ sovereign AI architectures. So why not create an Africa sovereign data bloc that will actually make it easier for all African countries to attract investment into their digital ecosystems? The EU Cloud AI Development Act has seen the light of day and the danger is that again Africa will simply follow.

This sounds like a huge task but there are ways of breaking it down into bite-size chunks. Groups of countries’ regulators can draft and agree sub-regional versions of this type of data sovereignty act. Where legislation exists, its operations can be harmonised between countries.

Another approach would be licence passporting. The Bank of Ghana and the National Bank of Rwanda signed a Memorandum of Understanding (MoU) to create a fintech passporting frame work. This allows a fintech company licensed in one country to operate in the other without needing to obtain a separate licence. The same approach might happen between two countries allowing ISPs (or wholesale fibre sellers or whatever) to operate with one licence across two or more countries. Agreement like this between coastal and landlocked countries might finally open real competitive international access.

Use of data

The most pernicious punishment on those with less money is the expiration of mobile data in time limited periods. On the cheapest bundles, it encourages fear of use and the pricing structure loads a premium on these users. Three countries - Ghana, Nigeria and South Africa - have all made provision for different forms of automatic rollover. More should follow these examples as change will over time produce users who are more regular and do more online.

Acknowledging the issue of data cost, South Africa has introduced three different ways of allowing free access: zero-rated goverment websites (meaning you can access them without any data), free public Wi-Fi hot-spots (offered by three different minicipalities/provinces) and mobile initiatives (for example, MTN Open Time provides registered users free baseline data to access core local and educational portals when they run out of regular data.

Making it easier to compete

Long-time African ISP investor Jim Forster has put forward a market-based infrastructure rights framework which deserves serious consideration. It aims to overcome some of the obstacles experienced by those wanting to roll-out infrastructure. (see:

Free or low-cost spectrum has been an essential incentive for a number of ISPs to roll-out internet access to ever wider areas. South Africa has transformed its wireless landscape by gazetting final "innovation spectrum" regulations, freeing up 900 MHz of spectrum for unlicensed use and dynamic spectrum sharing. Others should follow suit.

Regulators should finally grasp the nettle of underserved or unserved communities. If mobile operators are unwilling to serve these areas, they should be released from their roll-out obligations in these areas and their spectrum given (at no cost on licences where they have to return the spectrum if not used) to those who will provide coverage (organisations already providing mobile coverage extension like AMN, NuRan, iSat and Vanu). They should also encourage and assist the creation of community providers in the harder-to-reach communities where lower margins may ensure a greater chance of success.

Finally, now most markets are much more predictable, the regulators should offer lower licence fees (largely just administrative costs) to categories of operators they want to encourage like metro and wholesale operators and residential broadband providers.

Access to platforms

Again and again, the mobile operators both run their own services and carry the services of others. Recently, a mobile operator decided to run its own video streaming service despite already offering at least two competitive and well-liked services. Does that MNO have access to the performance data of its competitor services? Does it charge more and make life more difficult for them? How does it allocate marketing spend? There needs to be far more critical scrutiny of monetization models. There are the sort of recurring issues about how people and organisations get access to this new digital highway.

At the platform level, African regulators are increasingly supporting standardized network APIs to accelerate digital ecosystem growth. Under initiatives like the GSMA Open Gateway, operators are providing developers with standardized access to network capabilities to prevent fraud, boost digital trust, and scale financial services. In principle, this seems like a fine idea but in practice it raises a wide range of issues that need tackling. There are a number of major hurdles in pricing competitiveness, slow technical implementation and developer adoption.

If fintechs are to help banks and MNOs produce better and more robust payment systems there are interoperability issues that regulators need to address. Because operators rely on multi-vendor environments and fragmented legacy billing/charging systems, delivering a smooth, standardized experience across hundreds of global networks remains a massive technical roadblock. Regulators can shine a light on the need to modernise both the systems themselves and access to them.

Encouraging innovation. Africa’s biggest weakness can ironically become its greatest strength. Innovation in the finance sector is being positively encouraged by many Governments, Central Banks and regulators. Just under a third of African countries have ‘sandbox’ projects in the financial sector. Telecoms regulators need to use this approach to encourage innovation in their markets that will help lower costs and open up access.

For example, existing AI tools can be used to create voice-based interfaces in first languages for those who are illiterate, helping those with basic phones make the transition to low-end smartphones.

Africa’s MNO’s are already carving out areas of their activities to give them greater financial clarity and growth potential. MTN has made Bayobab an operating division. Airtel has a separate company for its data centre operations. Mobile money operations have been separated in a variety of ways from their parent companies. If a mobile operator has a competitive advantage from its wholesale fibre dominance, it’s much easier to say that (at an agreed price) these advantages should be available to third parties.

Consumer awareness campaigns. There is an overwhelming need for cyber-safety awareness campaigns for users. Tech and financial literacy have both increased a great deal as a result of smartphones over the last decade but the understanding of digital safety has yet to catch up. Trust is a hugely important element in operating digital infrastructure and regulators are again in a unique position to convene different parties to run campaigns to raise awareness of digital safety issues.

Further resources

A useful summary of global trends

https://www.pwc.com/gx/en/industries/tmt/telecom-outlook-perspectives.html