Wednesday, January 18, 2006

Somalia calling

A colleague brought my attention to this item in The Economist.It is a story that claims that calls from mobiles in Somalia are cheaper and clearer than elsewhere in Africa, and attributes this to an absence of regulation.

This story may give comfort to anti-regulationists everywhere, were it not for the fact that at least part of the success seems to be due to the complete lack of the first tenet of anti-regulationists - that is property rights. If the telcos are not paying to put up towers they are not paying land rents.

The article also mentions that Somalia has had no government since 1991 and was "cut off for a while" before the mobile companies arrived. The CIA World Fact Book describes it as "the public telecommunications system was almost completely destroyed or dismantled by the civil war factions". So in those countries where regulation exists to deal with the market power of formerly government owned monopolies now have a different model to follow. Don't regulate - just have a civil war to destroy the incumbent's infrastructure.

You might think me strange - but I'll stick with the regulatory path.

1 comment:

Anonymous said...

we should add a new part XID to the Trade Practices Act - Explosive Enforcement!