Ammar Khalid is a first-year MA student concentrating in International Development. He is from Pakistan and tweets @paharibakra

How do we regulate markets that are constantly in flux, where technological innovations are continuously changing the dynamics? How do we ensure that the benefits of being included in the internet economy outweigh the risks?

These were some of the questions posited and answered by Pierre Guislain, Senior Director for the Transport and Information & Communication Technologies (ICT) Global Practice at the World Bank, during a talk he gave recently at the SAIS DC campus.

Change – the constantly evolving technological landscape, and the subsequent need for regulation to keep up – was a recurring theme of his presentation.

Mr. Guislain initially spoke about how some of the communication technologies used most commonly today did not exist twenty, or even fifteen, years ago. The digitization caused by such a transformation has sprouted several new markets. Digital money transfer services, for instance, have gained immense popularity in East Africa. India’s digitized ID system, Aadhaar, now has over a billion subscribers, making it the world’s largest national identification number project only seven years into its operation.

This digitization has increased disintermediation, allowing consumers to access markets more directly. Corporations have thus had to change the way they operate and Mr. Guislain asserted that governments need to follow suit.

He cited the case of Morocco at the turn of this century, where the government quickly warmed up to the idea of encouraging competition in the telecom sector. Previously, its telecom sector used to be a state-run monopoly – as was often the case in the era of fixed line communications. However, as cell phone usage in Morocco increased in the late 1990s, and these devices no longer remained luxury items, Morocco set up a new regulator and revamped legislation before opening up its telecom sector to private investment. A measure of the efficacy of the new regulatory environment can be gleaned from the fact that the second GSM license that the government awarded, generated US$1.1 billion in revenue. Mr. Guislain highlighted that due to its success in attracting financing in a country not normally on the radars of telecom investors, this liberalization model was then adopted across the region.

Emphasizing the role that regulators must play in encouraging further investment to broaden the telecom sector’s reach, Mr. Guislain spoke about how governments need to promote legislation which ensures supply in underserved areas. This can be done, he proffered, by providing subsidies, obligating providers through licenses or spreading the cost of investing in telecommunications infrastructure across multiple sectors.

Mr. Guislain went on to illustrate how this last point is particularly crucial in a milieu where the “markets are converging” and “players are overlapping.” He mentioned the example of how over-the-top providers use the infrastructure set up by cellular companies, but do not wholly compensate the cellular companies for their initial investments. Public sector regulators’ narrow and out-of-date frameworks do not address such scenarios.

Concluding, Mr. Guislain contemplated how government regulators could prepare for changes in the telecom sector - an inherently “reactive” and thus “ad hoc” exercise. To address this, he suggested that regulatory frameworks need to firstly “go beyond the telecom sector”, given how telecom is so interconnected with myriad other sectors of the industry, and secondly become regional, or even global, in their focus.

The private sector has a very crucial role to play in the context of developing countries, especially the telecom sector, given how it can impact the efficacy of various other sectors in the economy. Here, the role of regulators is critical. Thus, regulatory frameworks will need to become less “linear” and much more “organic”, to become “enablers of change.”

PHOTO CREDIT: Pexels from Pixabay licensed under CC0 1.0