Services sector ‘hamstrung by telecoms costs’

http://www.businessday.co.za/articles/economy.aspx?ID=BD4A124974

Absa treasury economist Chris Hart said the local telecommunications policy was “an absolute disaster. It is beyond repair. We need to start with a clean slate and come up with a regulatory structure for the 21st century.”

He also called for rapid liberalisation of the local telecoms market.

The Independent Communications Authority of SA this week said it would announce the second national operator tomorrow.

Hart said the high telecommunication costs could also frustrate government’s accelerated economic growth objectives.

He said if SA could attract 10% of global outsourcing work from developed countries, the local economy would grow between R20bn and R30bn. “That is the potential we are losing,” Hart said.

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I hope the gov read this and wake up. If it is possible.

What frustrates me about all this is that even the Government itself (through the various departments, including the DoC) is complaining about the high telecoms costs in SA and how they are hindering our economy. And yet, the DoC is still dragging their feet and not doing anything about this. They HAVE the power to lower prices in this sector but they won't.

This whole "managed liberalisation" is just a term they thought of to excuse the fact that they are doing absolutely nothing to SERIOUSLY reduce telecoms prices.

More talk.

Absa treasury economist Chris Hart said the local telecommunications policy was “an absolute disaster. It is beyond repair. We need to start with a clean slate and come up with a regulatory structure for the 21st century.

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This guy is touching on something that I think a lot of people miss. In looking at the telecoms liberalisation experiences of other countries, I couldn't help but conclude that liberalisation (when successful) is ALWAYS embarked upon in A VERY SPECIFIC window of opportunity. That window was opened in SA in the late 1990s. That window is also fast closing. Basically, we are MISSING THE BOAT, so to speak.

Government seems to have this attitude of "Oh well, lets see how much more we can milk out of monopoly, we can always liberalise later on". NO NO NO! This is not true. The opportunity to successfully open the market is closing, it is already at the tail-end of time afforded.

Telkom is becoming more and more and more entrenched. Already consumers will not gain immediate benefits from the SNO, whereas in other countries an SNO has brought immediate benefits. The reason why SNO will not do so initially in SA is due to this ridiculous, slow 'managed liberalisation'. We are at the point now where, in order to create a future competitive telecoms market, we need to create a duopoly situation. Duopoly is now unavoidable in SA. Crap and SLOW implementation of policy has led to the situation where DUOPOLY IS NOW A NECESSARY PRECONDITION FOR LIBERALISATION. The sad thing is that this, at one stage, was avoidable. However the reality now is that duopoly is the only market structure that can lead us to true competition.

The window of opportunity is closing fast. Telkom is more and more entrenched as each day passes. Catch a wake-up government!

Debbie2 said:

Catch a wake-up government!

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Not any time soon, not while certain individuals within Gov hold large amounts of shares and ask their chummies in charge to waste time when dealing with allowing competition.

Agreed

MaD said:

Not any time soon, not while certain individuals within Gov hold large amounts of shares and ask their chummies in charge to waste time when dealing with allowing competition.

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That's exactly the problem, isn't it - the elite... My tax and your tax is not going towards developing opportunities for the poor and underprivilleged... It is going somewhere though... I've just been to DC recently and I was lamenting the high hotel prices... then I was given the job of finding accomodation in CT for my colleagues and realised the situation here is a little worse... the difference is that I got free internet and phone calls in DC. My kids will be needing to study soon... it may be time to consider other options.

as for this heading:
"Services sector ‘hamstrung by telecoms costs’"
nooo!?? Where does business day find these einstiens? (No offense to the reporter, just driving a point).

EdRobinson said:

My tax and your tax

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Sorry boet you're on your own, one needs a job to pay tax

When did the president 1st make an address about telecoms prices.. opening of parlament ? the 1 yr aniversary is coming, time to ask him what he thinks his trusted personel he put in charge have done. Of cause a bad track record does not just effect ivy, but rather him too since he put her there.

krycor said:

When did the president 1st make an address about telecoms prices.. opening of parlament ?

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February 11 2005 methinks.. may as well have been 1805, nothing would have happened.

11 February 2005 wow so its is creeping up on a yr.. so his got about 65 days left(incl holidays+weekends). I don't think they gonna deliver on this. Sure they gonna licence the SNO.. 2 or 3yrs late.. bout time so you can't really say that was completely done from scratch this yr.

"Bold steps have been taken further to liberalise the telecommunications industry. We believe that the unacceptable situation in which some of our fixed-line rates are 10 times those of developed countries will soon become a thing of the past," said Mbeki.

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how soon is soon ? imminent

btw how many of those points he brought up did he actually accomplish(besides telecoms) ? I remember after the speech everyone agreed that it was good that he pointed out what he wanted done. They(members of parlament/other political parties/ etc) also agreed that if he failed to deliver its gonna be a big blow.

Man...

MaD said:

Sorry boet you're on your own, one needs a job to pay tax

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Man I gotta find a way to not have a job...
But then Im hopelessly hooked on this forum... guess I'll have to find a way to pay for my airtime... back to the job and tax thing... lol

What a pity that our government is so short-sighted. I personally hope that the tri-partite alliance will break up, especially when Cosatu realises that the government is only using them to create crosses at election time only in order to win.

Lets send them some glasses it could help them see better.