Regulating success: A new government body is set to stimulate telecoms growth and fixed-broadband expansion

In February 2016 Kuwait’s Ministry of Communications handed over key oversight and regulatory responsibilities to the country’s new ICT regulator, the Communication and Information Technology Regulatory Authority (CITRA), heralding the start of new era for the country’s ICT ecosystem. CITRA is set take on the ministry’s role as regulator for the already lively mobile segment, expand the fixed segment and implement plans to foster overall ICT development.

First Mover

Kuwait’s telecoms sector was among the first to liberalise in 1999. That year it ended the monopoly under incumbent Zain, allowing Wataniya Telecom to enter as a second player. In 2007 Wataniya became part of Qatar-based global telecoms player Ooredoo. Also in 2007 the government began making legal preparations for a third operator, VIVA, to enter the market, which it did in 2008. The prevailing competition among Zain, Ooredoo and VIVA – all three part of global telecoms groups, based in Kuwait, Qatar and Saudi Arabia, respectively – has helped turn Kuwait into one of the region’s best-served markets in terms of service penetration and mobile broadband technology. While the government opted for flexibility early on to help the sector grow quickly, a maturing telecoms and ICT market has prompted a shift in that logic. “In our region, in the mobile sector, Kuwait was the first to liberalise but the last to regulate. Introducing private players early on helped drive competition in the market, and that supported growth, but today regulation has become more important,” Waleed S Al Qallaf, executive board member at CITRA, told OBG. “More advanced technologies require more regulation. The latest mobile broadband technologies, for example, require more frequency and coordinated spectrum allocation. That is where an independent regulator can come in,” he added.

New Authority

CITRA came into being in November 2014, following the April 2014 approval in parliament of a bill to create an independent regulator. New legislation was designed to transfer responsibilities long held by the Ministry of Communications over to CITRA. Stakeholders saw the move as a way to both foster growth and eliminate potential conflicts of interest, since the Ministry of Communications both regulated and offered services on the country’s fixed-line network. CITRA’s formal launch took place in February 2016 – days after an announcement made by the new body’s chairman and CEO, Salim Al Ozainah, at the January 2016 Global Forum on Emergency Telecommunications hosted in Kuwait City. CITRA has seven board members, whose mandate is to oversee the regulation of the sector and privatisation of some of its assets.

Meeting Benchmarks 

The newly formed regulator is assuming responsibilities along a timeline of set milestones. The first of these was the transfer of responsibilities from the ministry to CITRA in February 2016. The second major milestone is set for August 2016 when CITRA aims to roll out a new licensing scheme and bring the current operators into the fold. More broadly, CITRA aims to have a more firmly established regulatory environment by the time operators are ready to introduce the next generation of mobile broadband. At that time, there will be important issues like licensing and spectrum allocation for the regulator to adjudicate. “We want to continue facilitating growth, but we want that growth to be regulated,” Al Qallaf told OBG. As for the IT side of its mandate, CITRA has indicated one of its top priorities will be the growth of fixed broadband penetration. The country had just 1.38 fixed broadband subscriptions per 100 inhabitants in 2014, according to data from the International Telecommunications Union. Furthermore, Kuwait has had the lowest fixed-broadband subscription penetration rate in the GCC since 2010, a rate that has been in steady decline since 2009, when fixed services began to be supplanted by the faster mobile broadband services on offer.