The telecommunications sector is key for the economy in many African countries. Indeed, it plays a critical role in economic growth and development on the continent. It is therefore important for African governments to ensure its good governance, as well as compliance on the part of users and service providers alike. Technology is supporting governments in this mandate. Various telecom compliance monitoring services are now available on the market, which allow governments and telecom regulators to automate and streamline the monitoring process. As an expert in this area, GVG takes a look at the state and evolution of telecommunications compliance monitoring systems in Africa.
From early days to a maturing market
A few years ago, telecommunications compliance monitoring systems in Africa were still in their early stages of development. From a technological perspective, most African governments relied on ineffective, paper-based methods to monitor the sector. They had few tools, if any, to obtain reliable information or data directly from the sector to ensure its good governance. For instance, identifying and addressing SIM box fraud was a real challenge. And verifying the operators’ revenue for tax purposes could only be done based on the declarations the operators did themselves. Furthermore, many countries did not have a dedicated telecom regulatory authority responsible for monitoring and enforcing compliance, or even a comprehensive regulatory framework.
However, the growth of the telecoms, which accelerated at the start of the Covid-19 pandemic, prompted African governments to step up their monitoring of this sector. Today, the situation has improved significantly as a result. Technological solutions like the ones developed by GVG are helping fill the gap. These solutions are installed locally to collect telecom traffic data automatically, independently, and in real-time for analytical purposes, with a view to supporting the decision-making process. Their role is to assist governments in the fight against SIM box fraud, in verifying the revenues declared by the telecom operators, and in enhancing the regulators’ visibility over the sector.
The use of this type of technology has brought about various advantages to the countries that have implemented it. These benefits include enhanced regulatory compliance, quality of service, and revenue mobilization for governments. Indeed, by monitoring telecom networks in real-time, monitoring systems help regulatory authorities to identify non-compliant behavior more quickly, which reduces the incidence of fraud in the sector. They also enable them to identify and address quality of service issues in a more effective and timely manner. Additionally, they have the potential to increase revenue for governments by pointing out non-compliant tax behavior. This ensures ensuring that the governments obtain from the sector the tax revenue owed to them.
For example, the RegTech platform the Rwanda Utilities Regulatory Authority (RURA) installed to serve as telecoms compliance monitoring system provides the Rwandan regulator with optimal visibility over the sector, thus helping to curb both fraud and revenue leakage. As a result, a 122% increase in international traffic revenue was reported in the first year of implementation. Subsequently, through the deployment of complementary technologies, the increase in the regulator’s overall revenue reached 250% after 10 years.
Innovation drives the development of compliance monitoring technology
Technological innovation has played a significant role in the development of compliance monitoring systems in Africa. Not only because innovation can build the capacities of these systems, but also because it leads to the creation of new digital services that will also require monitoring for compliance purposes.
Telecom regulators are increasingly using new technologies such as big data analytics, machine learning, and artificial intelligence to monitor compliance in the sector. These technologies enable them to analyze large volumes of data in real-time, detect anomalies, and identify non-compliant behavior more quickly.
However, the use of compliance monitoring technology has also proved beneficial in other sectors, like digital financial services. This sector has grown in leaps and bounds since 2020 and plays a key role in the economy of Africa and other emerging countries as a result. This has made its monitoring all the more relevant. Mobile Money is a telling example. The growth in the number of mobile money transactions represents a unique opportunity for governments to increase tax income, but also for fraudsters to engage in money laundering, among other types of fraud. Compliance monitoring technologies can make a difference, by providing the relevant authorities with reliable metrics about the ecosystem, to support effective taxation and antifraud operations.
For example, in the recent past, the Tanzania Communications Regulatory Authority (TCRA) used a fintech governance platform which enabled it to effectively oversee Mobile Money services. The platform provided the TCRA with reliable sector-related data and traced the totality of transactions carried out in the country. The collected data helped better inform the decision-making processes.
Future evolution of compliance monitoring tech: our forecast
Some African countries are displaying initiative and making steady progress when it comes to the adoption of new technologies. For instance, six countries, including South Africa and Kenya, have already deployed 5G networks for commercial purposes, say IT News Africa and Reuters. Another 10 or so are currently running tests for, or planning the launch of, 5G services.
The gambling and betting sector also deserves a mention here. Gambling has been a lucrative industry in Africa for years but has remained largely unregulated. The growth of online gambling on the continent is adding to the need to ensure regulatory compliance. This may prompt the development of adapted compliance monitoring technology for use in countries where the online gambling sector is on the rise, like South Africa and Nigeria.
Therefore, looking ahead, we can expect to see continued investment in compliance monitoring systems in Africa. There is a growing recognition of the importance of effective regulatory oversight of the telecommunications sector to economic growth and development in Africa. This will likely lead to the development of more advanced monitoring systems that leverage emerging technologies like 5G, IoT, and blockchain.
We can also expect to see greater cooperation and coordination between regulatory authorities in different countries. There is indeed a trend towards regional harmonization of regulatory frameworks. This will likely lead to greater sharing of best practices and more effective cross-border monitoring of telecom operators.
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