Vodafone 2016 Annual Report Download - page 188

Vodafone Group Plc
Annual Report 2016
186
Regulation (continued)
Unaudited information
Vodacom: Tanzania
In February 2016 further to the gazetted nal regulations which set
out voluntary requirements for all telecommunications licensees
to list a minimum of 20% of their ordinary share capital on the Dar
Stock Exchange to be held by Tanzanian investors, or make a one-
off payment of 0.6% of gross revenues into an ICT development
fund within 12 months of effective date of regulation, the Ministry
of Communications commenced consultations with the industry
onthegovernance, structure and payments into this fund.
In February 2016 the national regulatory authority (‘TCRA’) approved
Vodacom Tanzania’s acquisition of Shared Networks Tanzania which
holds 2x5 900MHz spectrum which will be used to support provision
of rural services. The national competition authority’s (‘FCC’) approval
is still pending.
In March 2016 TCRA commenced a Request for Proposal for
spectrum auction consultants which is required ahead of the planned
700MHz auction.
Vodacom: Mozambique
In August 2015 following an announcement from the Minister
of Communications that unregistered customers must be disconnected,
a new registration regulation was introduced, which approved electronic
registration. Subsequently, the operators and regulator agreed on a joint
campaign and phased disconnection process to achieve complete
registration by November 2016.
A new communications bill is being reviewed by the Parliament. The bill
introduces inter alia, a new electronic communications licence regime,
price regulation approval process, a competition law-based regulatory
regime, and new law enforcement powers.
Vodacom: Lesotho
In September 2015 the national regulatory authority (‘LCA’) conrmed
in writing to Vodacom Lesotho that its service licence will be renewed
when it expires on 31 May 2016 at a cost of ZAR5 million.
In February 2016 Vodacom Lesotho was awarded 2 x 20 1800MHz
spectrum to be used for Long-Term Evolution (‘LTE’).
International roaming in Africa
In November 2014 East Africa Community (‘EAC’) Ministers
of Communications met and set the national regulation authorities
(‘NRAs’) the task to implement “Phase 1” price caps for wholesale
(US7cents) and retail (US10cents). It was agreed that Phase1
would be interim until “Phase 2” Single Area Network regulation
is issued following a study to be conducted by the regulators for the
region. In November 2015, the Tanzania Ministry of Communications
commenced a consultation on the Phase 1 price caps for EAC countries.
In September 2015 further to Southern African Development
Community (‘SADC’) Ministers of Communications requirements
that the NRAs implement international roaming wholesale and retail
ve-year glide-paths, the Communications Regulators’ Association
of Southern Africa (‘CRASA’) issued Regulatory Guidance and
accompanying Policy. The CRASA requested that NRAs implement
the glide-paths from 1 October 2015 and transparency measures
in accordance with their applicable national law. The policy recognised
that the glide-paths should not take prices below underlying cost
and that member countries should take steps to reduce issues
which increase costs, notably taxes on international incoming calls.
Vodacom is participating in the processes conducted by NRAs in SADC
member states.
Turkey
In March 2015 further to Vodafone’s letter of appeal in the administrative
court to the announcement by the national regulatory authority (‘ICTA’)
in August 2014 that the scope of the 3G coverage must be broadened
to include new metropolitan areas, the Council of State adopted
a motion suspending the ICTA’s action and the lawsuit is pending.
In May 2015 after the Electronic Trade Law came into force, secondary
legislation was nalised by both the Ministry of Customs and Trade
(‘MoCT’) and the ICTA. Under the new regulations, operators will only
be permitted to use their marketing database for operator related
marketing reasons. Third parties were permitted to send one time SMSs
to mobile operators’ databases asking their customers to opt into their
database, up to and including 15 September 2015.
In August 2015 the 4.5G (IMT Advanced) auction was completed
grossing total revenue of €3.36 billion excluding taxes, compared
to reserve prices of €2.3 billion. Only three mobile operators bid for the
spectrum bands and there were no bids for the 2.6GHz block reserved
for a fourth operator. Vodafone Turkey paid a total of €778 million
for 82.8MHz (2x10MHz in the 800MHz band, 2x1.4MHz in 900MHz
band, 2x10MHz in 1800MHz band, 2x15MHz FDD in the 2.6GHz band
and 1x10MHz TDD in the 2.6GHz band). The operators launched 4.5G
services as of 1 April 2016.
Australia
The national regulatory authority (‘ACMA’) has completed an auction
of up to 60MHz of regional 1800MHz spectrum to be made available
in two to three years’ time (currently allocated for xed link wireless
services). Vodafone Australia acquired spectrum in many regional areas,
including Canberra.
After extensive lobbying by the industry, the Government is looking
to undertake the most comprehensive overhaul of spectrum
management in 15 years. Vodafone Australia is advocating for
a framework that better considers the competition effects of spectrum
policy (60% of regional spectrum is held by Telstra) and the
establishment of more market-orientated spectrum licences and
a better renewal process and more exible payment terms.
Egypt
The Administrative Court ruling in favour of Vodafone Egypt in the
case led against Telecom Egypt and the national regulatory authority
(‘NTRA’), regarding the NTRA’s authority to set MTRs between operators
has been partially implemented with Orange Egypt (formerly Mobinil)
and Telecom Egypt, however, an arbitration case is pending with
Etisalat Misr.
The implementation of the Unied License remains on hold. The 4G
and xed licence proposals are being developed by the NTRA and will
be presented for approval to the Egyptian Cabinet.
For information on litigation in Egypt, see note 30 “Contingent liabilities
and legal proceedings” to the consolidated nancial statements.
Ghana
In December 2015 the national regulatory authority (‘NCA’) conducted
a spectrum auction in the 800MHz band. Vodafone Ghana as well as the
other four mobile network operators and three mobile broadband
wireless access operators declined to participate in the auction on the
basis of the high reserve price.
Scancom Ghana (trading as MTN Ghana) was the only entity
to participate and submit bids in the auction. MTN was therefore
awarded one of the blocks in the two lots of 2x10MHz at a reserve price
of US$67.5 million.
New Zealand
In March 2015 the New Zealand Government announced the
expansion of the existing Ultra-fast Broadband bre to the premises
(‘FTTP’) initiative from 75% to 80% of premises passed at a projected
cost of between NZ$152 million and NZ$210 million. In addition,
the Government announced a further NZ$150 million of funding
to improve broadband coverage in rural areas and address mobile
blackspots. Competitive tenders for these initiatives are expected
to be completed in 2016.