DXL - Submission to DOC
In September the DoC released its draft South African Broadband Policy aimed at increasing the accessibility and affordability of broadband throughout South Africa.
Affordability & Accesibility will never happen in SA with Telkom , MTN & Vodacom. They are the established operators without debt and rake in Billions each year for their investors. They will only invest in infrastructure in areas that will make them money and not cover the rural and outlying areas. Neotel Charges 8c per megabyte for Data and the mobile Operators charge R2 a megabyte. This is a serious problem. Which shows our market is dominated by incumbents who can charge as they PLEASE. This must be stopped.
“facilitate the provisioning of affordable access to Broadband infrastructure to citizens, business and government.
More Operators providing this service will encourage affordable access. However the market is being allowed to be saturated by Telkom, MTN & Vodacom. However since Basic broadband will only be achieved through wireless devices and since the UMTS system is established and all vendors are manufacturing USB modems capable of high speeds, the prices for these devices are starting to come down rapidly. One can get a USB HSDPA modem for something like R700. This price will plummet when other Vendors start realizing the value in it. Neotel Charges 8c per megabyte for Data and the mobile Operators charge R2 a megabyte. This is a serious problem.
“stimulate the usage of Broadband services at national, provincial and municipal levels.”
If it’s affordable everyone will use it. Right now it’s too dam expensive and it is a luxury. Black people must not be kept out of the Internet age. If we don’t use this suggestion we most likely will keep the poor blacks out of reach of the internet for a very long time.
The DoC added that its key objectives are: ‘to build the information society’, ‘to increase affordability’and ‘to increase uptake and usage’.
Major International Telecom Operators will not consider investing in South Africa due to the stranglehold the dominant Operators have in the Country.
Large Capital investment to the tune of R10 Billion or more will be needed. Not many companies will invest that much and wait for returns. However a small investment with big returns will entice them.
However there is an answer if we were to divide our Country up into 3 Zones and embrace Regional Licencing. We might have the answer. Companies like Infraco , Dark Fibre & Neotel can Prosper by leasing National Fibre to these new Operators.
Going Forward ,
We need to look into Regional Licencing.
3G UMTS is becoming the Standard of Tomorrow , GSM has less than 10 years of life before it becomes obsolete.
It is of this view that we as a country take decisions that brighten up tomorrow and not shine for the day.
With Digital Broadcasting coming into effect towards the end of 2010. Spectrum will be freed up in the 850mhz band. Many Networks overseas are rolling out dual Band 3G umts networks in the 850mhz, with 2100mhz allocation for the high traffic areas.
My proposal to you is that we issue an ITA for regional 3G umts networks within South Africa.
Regional as we will know it in South Africa will mean Provincial networks.
Eg a Licence be issued for the Operations in a particular province only.
Roll-out will be faster and quicker as each bidding company will seek their own infrastructure supplier.
Coverage will be mandated to 100% per province within 3 Years failing which hefty fines will be issued.
Rural coverage will be boosted by these new networks. Every single rural town in the country will have high speed wireless Coverage. Schools , Libraries and Clinics will have a set allocation of Free data per month for social upliftment of rural people. Meaning ordinary poor people can access the internet from the schools and libraries for free or a very low cost.
Just to elaborate a little of the way it is to be done.
Lets say for arguments sake we make available
10mhz ( 5mhz Uplink + 5mhz Downlink ) in 850mhz band – This Spectrum must be guaranteed in the LICENCE
30mhz ( 15mhz Uplink + 15mhz Downlink ) in 2100mhz Band.
With the Above allocation 1 Provincial Licence can be issued.
To run a successful 3G Network one needs ( 5mhz Uplink + 5mhz Downlink =
850 / 900mhz Band ) + ( 15mhz Uplink + 15mhz Downlink =
2100mhz Band ).
However this process needs to be handled properly because companies must only be able to Tender for one provincial group.
The provinces need to grouped.
The ideal scenraio would be :
Gauteng – Limpopo – North-West = 1 Umts 3G Licence be issued to Cover these 3 Provinces only eg. ZAIN
Kwa-Zulu Natal – Mpumalanga – Free State = 1 Umts 3G Licence be issued to Cover these 3 Provinces only eg. ETISALAT
Western Cape – Eastern Cape – Northern Cape = 1 Umts 3G Licence be issued to Cover these 3 Provinces only eg. ORANGE
The above groupings are as per equal Balanced GDP Order.
Whole three regional Operators must be mandated to roam on each others networks.
30% BEE status to be achieved within 3 Years.
What this means is that Zains customers can Roam on ORANGE & Etisalat network when not in their province and vice Versa.
We need to solicit these Big International companies to South Africa like what was done in Nigeria, Uganda, Benin, Tanzania & Kenya. It will take a Capital Injection of R2 Billion to get their Network Up and running Quickly. This is a small sum for them to Invest. They will compete aggressively on price and Value for Voice & Data to attract Customers. This will force the incumbent Operators to roll out infrastructure in the remotest parts of SA.
The draft policy is clear that all citizens have a right to basic broadband while Government and Non-Government Organizations must have access to broadband.
Basic broadband will only come from wireless 3G networks. If we ensure sufficient competition in the market. Prices will be low and affordable.
Average Black people will be able to afford to have the internet at home. Government and Non-Government Organizations in rural areas will be able to have access to these high speed networks. We need to create a good set of infrastructure for the Information Technology services in this country. We are lacking infrastructure in this Country. Nigeria, Uganda, Benin, Tanzania & Kenya have surpassed South Africa in Terms of Infrastructure Development. These countries were miles behind us and now they are ahead of us. They have competitive pricing as well. The South African Government has held the country back. They have allowed MTN & Vodacom to prosper at the people’s expense. We need to encourage Zain, Etisalat and Orange to come invest in SA with TAX holiday benefits for 3 years. This will force the operators to Roll-out quicker.
If the Doc issues the Directive to ICASA to get this off the ground quickly. We might see some results by the end of 2010. Everthing has to have a tight timeline. It can be done. Lets get some action going and let the poor reap the benefits.
Why we need ZAIN – Zain offers Borderless roaming on voice & Data throughout all their networks with no additional charges. This will bring in more Business Tourists Business to the new Networks. It will also force the current Operators to drop high roaming charges. Creating an environment when South Africans go abroad they don’t have hefty bills to come home to.
Why we need Etisalat – Etisalat is a venture capital mobile company that’s looking to invest everywhere. From what they have demonstrated in Nigeria. They can really shake the market up with their fantastic consumer offerings. They are a consumer Champion.
Why we need Orange – Orange has many 3G networks worldwide and have a better bargaining power to negotiate lower Terminal costs such as USB modems and data cards and even 3G mobile Phones with manufacturers.
Governments in Africa have invited these companies to come set up shop in their countries to benefit their Citizens.
We must do the same.
This is a working model and we must adopt it with minor changes.
DXL - Team
Battling to communicate in simple english to DOC & ICASA
