During the second session titled ‘impact of the financial crisis on regulation’ two discussion papers were presented and the writers of these papers exposed their views of the impact of effective regulation on investments.

Ms. Lynne Dorward, CRO of Zain Group and writer of “An Investor Perspective’ is of the view that capital is not likely to have a dramatic effect on the basic methodology for assessing regulatory risk; however, what is more likely to be affected is the degree to which the regulatory risks are factored into the overall investment process in terms of prioritizing investments and the overall valuation and discount factors to be applied. In fact, realizing that financial risk is generally the foremost priority in any potential investment assessment, it is likely that regulatory risk is not far behind in the list of critical considerations.

On the other hand, Ms Mandla Msimang, Managing Director of Pygma Consulting and writer of ‘the stimulus plan for the ICT sector” pinpointed the crisis to be a crisis of funding and not of opportunity nor of regulation. She is also of the view that NRAs and governments can attract and facilitate investment and reduce regulatory risk by putting in place policy, regulatory and institutional measures to, amongst others: strengthen the credibility and capacity (i.e., competency, objectivity, transparency, and accountability) of the regulator; improve efficiency of the regulatory process; increase competition through the licensing of new entrants and reducing barriers to market entry, specifically in network deployment, encourage infrastructure sharing (passive and active), encouraging innovative use of spectrum to reduce costs is key (WiMAX, WiFi); and clarify regulatory rules where ambiguity and uncertainty exists.

Following the presentations, Mr. J. Genachowski, Chairman of the Federal Communications Commission (FCC) of the United States, requested from each panelist to comment on the main ideas raised by the presenters. The discussion can be summarized as follows:

• The telecom sector is not facing a crisis per se rather it is only indirectly affected by the financial crisis. In fact, the absence of regulation is the origin of the financial crisis. In the telecommunications sector, consumer behavior shapes the extent to which the financial crisis is affecting the development of the sector; in fact people are more and more using new telecommunications services.
  
  
• The question is not whether we need regulation or not, but it is rather the need for a focused, effective and targeted regulation based on best practices (regulatory tools are not universal they are specific to the circumstances of each country however regulators should share experiences and recommend best practices regulations).
  
  
• Competition is the main driver of investment, and in areas where there is no incentives for investment, public money should be interjected and made available as such as in stimulus packages.
  
  
• While issuing regulations, regulators should consider that the time span of the financial crisis is usually one to two years whereas as licenses are for long terms (15 to 20 years), therefore regulations should not be based on specific conditions. Regulators could consider alternative solutions for delayed payments for example.
  

In conclusion, the telecommunications sector could contribute to the recovery from the financial crisis by facing some challenges: the role of the telecommunications as part of the ICT world, the promotion of new services, the implementation of next generation networks, the social responsibility of this sector and the role of the private sector in the development of new generation networks.