1 INTRODUCTION The telecommunications market is structured around four vertically-integrated operators, including fixed-line incumbent, Telecomunicações de Moçambique (TDM). Mozambique’s situation is rare in Africa in that it has inter-platform competition in most of the provincial capitals, and TV Cabo offers an alternative to mobile broadband. With no voice services, its telecommunications services are licensed as an Internet service provider. Internet packages offered by TV Cabo are priced higher than mobile operators, but they offer much higher bandwidth and data caps1. Depending on the contention ratios between mobile operators, the speed offered is likely to be much higher than the effective mobile data bandwidth offering with a cap that is six times the size. Despite Mozambique being one of the first countries in the region to liberalise its telecommunication sector, the market did not take off initially with negative monopoly effects in the fixed market and, until the entry of Movitel into the market seven years ago, persistent duopoly effects in the mobile market. This resulted in a highly concentrated market without effective competition or the associated consumer welfare benefits. Although the market is considered open, the fixed telecommunication market has remained uncompetitive, with the incumbent operator, Telecomunicações de Moçambique (TDM), being the only player in the fixedline market. Due to poor infrastructure, the country has an extremely low fixed-line penetration rate of less than one percent (RIA After Access survey data, 2017). Competition in the mobile market increased following the launch of the third player Movitel, a joint venture between the Viettel Group of Vietnam and Mozambique’s SPI (Management and Investment), a holding company of Mozambique’s ruling Frelimo Party, in 2011. This ended the duopoly of Vodacom Mozambique and mCel, the incumbent mobile subsidiary of the national operator, TDM. Having won the licence bid on the basis of its focus on the underserved rural areas and particularly the war-ravaged northern provinces, Movitel launched in 2012, focusing on its rural supply chain by rolling out 153 shops, 12 600 agents and points of sales, and nearly 4 000 direct sales staff in the rural villages. The entry of the third player put pricing pressure on the entrenched duopoly, initiating price wars and significant price decreases in 2012 and 2015. The first market entrants came under such pressure and prices dropped so dramatically that the regulator, Instituto Nacional das Comunicações de Moçambique (INCM) introduced a price floor to stabilise the market. ICT policy, regulation and implementation are spread across multiple government departments and organisations. The Ministry of Transport and Communications is responsible for telecommunications policy. Responsibility for ‘ICT policy’, which more conventionally includes the converging telecommunications and broadcasting or content sectors, but in this case refers to information technology (IT) and public sector use thereof, resides within the National Institute of Information Communication Technology (INTIC) – housed in the Ministry of Science and Technology. A review of the Telecommunications Act of 2004 was launched in 2012 by the Ministry of Transport and Communications (MTC) with a series of public consultations. However, there was a delay in promulgating the new telecommunications law, which meant that sector developments have not been able to optimise global technology and service innovation. The Mozambican Government is, however, aware of the limits to coordination in the sector. Although the change in administration following the 2015 elections created some disjuncture, there appears to be renewed momentum with the latest telecommunications bill being passed by Parliament in June 2016 and the Electronic Transaction Law also going before Parliament after approval by the Council of Ministers on 5 April 2016. 1 The lowest-priced package costs USD22.69 and offers equal upload and download speeds – 512kbps – with a 6GB cap. Introduction 1