Licensing Qualification Criteria

Qualification criteria are minimum requirements that all potential applicants must meet in order to be eligible to compete for the award of licence during the selection stage.  As we have discussed elsewhere in this Module, the qualification stage precedes the selection stage, and is sometimes combined with a pre-qualification stage.

There is a wide variety of requirements that may be adopted as qualification criteria.  Qualification criteria also vary considerably in how onerous it is meet the requirements.  Some of the considerations relevant to selecting appropriate qualification criteria include:  the type of service being licensed; whether the licence will include monopoly rights or other forms of exclusivity;  whether the licensing process includes a pre-qualification phase;  and the type of selection mechanism applied in the licensing process.  The table below summarizes some considerations concerning possible qualification criteria for certain licence types.

Considerations about Possible Licensing Criteria

Licence Type

Possible Qualification Criteria

Rationale

First new competitive fixed network (local or international service)

  • Applicant not currently licensed to offer a competitive service; not associated with the incumbent
  •  Applicant has a minimum number of fixed lines in service in other coun­tries/markets (an international PTO as partner)
  • Relevant experience in similar mar­kets (direct or by contract)
  • Financial comfort letter from recog­nized bank
  • Business plan, including pro forma financial statements and a market­ing plan
  • Technical plan, including details of network planning and roll out and technology selections
  • Effective competition will not develop between related entities
  • Only experienced service providers can meet the significant challenges fac­ing a start up fixed line competitor
  • Experience and contacts in local market increases prospects of successful start-up
  • Evidence of access to required financing
  • Evidence of financial viability and likelihood of success of the project; disadvantage in that it is costly to prepare plan
  • Business plan and technical plan can demonstrate detailed and viable service plans and knowledge of local economic and other conditions

Competitive cellular service (first new entrant in an emerging market)

  • Similar to, but less onerous than, above
  • Presence of competition reduces (but does not eliminate) public costs of failure
  • Significant economic and sector de­velopment objectives will be achieved by successful launch
  • Valuable and scarce spectrum will be allocated to the selected service provider on an exclusive basis

Data transmission service in highly competitive market

  • None
  • General authorization is best approach
  • No scarce resources involved
  • Existing competition makes success or failure of this service provider relatively unimportant

Broadband wireless services in highly competitive market

  • Financial comfort letter
  • Evidence of experience in successful operation of similar busi­nesses in any market
  • Spectrum is a scarce and valuable resource. Regulator has a important role to play in ensuring efficient use and avoiding warehousing

  

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