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Freshfields TQ

Technology quotient - the ability of an individual, team or organization to harness the power of technology

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Africa TMT July 2018 Briefing

The Africa TMT sector continues to grow. Our recent Africa TMT Briefing highlights two main trends in the region: (i) greater and more affordable access to infrastructure, particularly digital financial services; and (ii) increased consumer and data protection measures.

Greater access to infrastructure

Access to infrastructure has drastically increased due to continuing investment and government initiatives to encourage the integration of new technologies such as fibre-optic broadband and digital (rather than analogue) broadcasting. As a result, internet penetration in Kenya was recently reported to be at 112.7 per cent when compared with the previous quarter, and the Nigerian Communications Commission (the NCC) renewed its commitment to attain 30 per cent broadband penetration by the end of 2018.

In light of this increasing access, a number of African markets have put in place national ICT policies / legislation. In Zambia, for example, the Information and Communication Technologies Act No. 15 2009 requires that any person licensed to install telecommunications facilities must, when requested in writing by another licensee, negotiate an agreement to accommodate any electronic communications equipment provided by that person on the same building or structure.

Mobile money has played a key role in increasing financial inclusion, decreasing reliance on cash, and addressing demand by telecoms operators for greater involvement in the financial services space. Both Nigeria and Zambia have seen significant memoranda of understanding between regulators, central banks and international development funds to promote the uptake of these services. In Kenya, the two leading mobile network operators (MNOs), Safaricom and Airtel, also recently made interactions between their mobile money platforms seamless.

Regulators are seeking to maintain confidence in the sector by applying pressure to MNOs to offer a seamless, high quality and affordable service. Increasingly governments are putting in place quality service parameters, which MNOs must meet (or face financial penalties). Last year both the Zambian and Kenyan regulators imposed fines (albeit relatively insubstantial ones) on all of the active MNOs in those regions for failing to attain certain quality thresholds.

Increased consumer and data protection

Regulators are clamping down on anti-competitive behaviour, with competition and consumer protection bills in both Nigeria and South Africa seeking to promote fair and competitive markets through stricter merger regulation and market enquiries and by protecting small businesses owned by historically disadvantaged persons.

This legislation has been accompanied by a number of enquiries into retail pricing, focusing upon which features of the value chain cause high prices for data and broadband services, along with efforts to strike out unfair terms in contracts for data services. In Nigeria, for example the NCC has criticised the automatic forfeit of unused data at the end of each month under certain data plans and is in the process of putting in place plans to require MNOs to offer a 14 day window to rollover any unused data as of 26 June this year.

This year is also likely to see the implementation of two comprehensive pieces of data protection legislation: (i) the Electronic Transactions Bill 2019 in Nigeria; and (ii) the operative provisions of the Protection of Personal Information Act 4 of 2013 in South Africa. Both of these countries have, until now, had little (or – in the case of Nigeria – no) comprehensive protection in place surrounding personal data. The new legislation will govern the processing of personal data, as well as the rights and liabilities of data holders.

Africa TMT July Briefing


africa, digital payment, cryptocurrency, employment, regulatory