CST - 6c per Minute Interconnection Rate
This is an article i am writing to the DOC and Parlimentary Portfolio Committee on Commnunications :
This article is not yet finished !
This is to inform the people of South Africa an all those senior parlimentarians what the Dept of Communications does in relation to the ICT sector with no regard for the benefit of the people. How WAR torn Countries like Rwanda and Angola have surpassed South Africa in the ICT fields. A country like Kenya is moving forward in leaps and Bounds and it will take no more than 2 years to become the ICT hub of Africa. We here in South Africa have been held back by our Dear Communications Minister and her slow pace of getting things done. In South Africa things never get done. South Africa is a country where we Talk yet without Action. Thankfully the ANC’s Polokwane Summit left COMMUNICATIONS Minister Ivy Matsepe-Casaburri out of the Executive list. That is a welcome relief for someone who has handled the Communications sector so poorly.
In Terms of Competition lets see what has been done.
Mobile Sector :
GSM Licences issued to MTN & Vodacom with Spectrum in the 900mhz band and 1800mhz band. Lets make a case in point to note that so much of the 900mhz Spectrum was handed out to the 2 operators that we are not in a position to issue further licences to new operators in the 900mhz band. MTN & Vodacom enjoyed a duopoly and charge execessively high call rates for their services. 14 years on and no reduction in call charges have been noticed. Their financial reports speak Volumes. Thankfully Telkom owns 50% of Vodacom so they are obligated to disclose their Financials because Telkom is a listed entity on the JSE. MTN has listed itself on the JSE so it to is obligated to declare financials. The 900mhz band Supports 5 mobile operators according to EU Frequency planning. Blocks of 10 mhz of spectrum is issued to operators in the 1800mhz band to ensure capacity in CDB areas are well taken care of. Thus creating Dual Band Networks and efficient use of the Radio Frequency Spectrum. Vodacom & MTN have abused the market positions in terms of regulation and have always threatened the regulator with legal action if they did not get their way. Cell-C was licenced as the 3rd mobile operator and has been abused by the incumbents increase of the Interconnection Rates to current levels of R1.25 per minute. Cell-C has failed to provide effective competition in Terms of lowering of Call rates. Call rates in South Africa is astronomically high as compared to the Likes of the United States and India. Our sms rates rank as part of the highest sms rates in the world. With a population of 50 million and climbing. We could sustain 5 mobile operators in the market. With each fighting for a share of 10 million customers of the 50 million users available. The poor management of spectrum handout and the low charges for the spectrum should have carried some Service obligation to the established freehold incumbent networks. African countries with population sizes of less than 10 million have 3 or 4 mobile networks. Kenya will have 5 mobile networks by 2011. They already have 4 Licences there. Rwanda has just issued their 3rd licence and has confirmed they will be issuing the 4th mobile licence in 2009. Angola also has 3 mobile operators and has confirmed it to will be issuing their 4th mobile licence in 2009. Considering our population size we should have adopted the Indian model of issuing 5 licences in the 900mhz band and 5 licences in the 1800 mhz band all to different operators. ICASA has commenced with the review into mobile termination rates. Its gone over 2 years. We the public have no idea when they plan to introduce cost based interconnection. ( This requires priority from ICASA ) They are dragging their feet about it. MTN & Vodacom don’t adjust prices in competition to each other they adjust prices to equal one another.
Solution : moving forward
Icasa recall some of the 900mhz spectrum allocated to MTN & Vodacom and re-issue it to new operators. Preferably 2 new operators be given 5 mhz of 900mhz spectrum with 10 mhz of 1800mhz spectrum. 2 new 3G licences be issued on a national level.
Cost based interconnection be mandated as law based on international trends and norms. ( The mobile operators will have a lot of excuses for their high cost, However this is a load of Bull**** ) Our electricity supply is very stable as compared to most African Countries. Our National backbone is very good and Telkom & Neotel can provide this service at good rates. No security is required at Base Stations like in Nigeria , Kenya and Angola.
Passive infrastructure sharing be mandated as law. i.e masts , Ducts and cabinet space.
Rural roaming be allowed for a period of 10 years.
Operators be instructed to share rural infrastructure. Eg 3 or 4 operators pool together and set up rural masts where they all share those towers.
Incumbent networks allow new operators to utilize their infrastructure in remote, rural areas where less than 1000 people live. Where these towers will provide coverage to new operators for their customers who are passing through the area.
Fixed line :
Kenya opens door to foreign telecoms investors
By: Reuters
Published: 6 Oct 08 - 17:32
Kenya will scrap a law requiring foreign telecoms investors to have local partners because it has choked funding for the fast-growing sector, the government said on Monday.
Previously, foreign firms that wanted to invest in telecoms projects in east Africa's biggest economy needed to find Kenyan partners who would own between 20-30 percent of any venture.
"This rule is messing us up in terms of investments. There are large companies which want to invest in this country without partnering with other individuals," Bitange Ndemo, permanent secretary at the Information Ministry, said in an interview.
"We must do everything to bring more foreign direct investment to this country," he told Reuters. He did not give a date when the change would come into effect.
Ndemo said the government was considering issuing another mobile operator licence in about 18 months time.
"We want those who are in place to recoup their investments, and at the same time we will study the market and see whether it is working efficiently," he said.
Kenya's Safaricom is the market leader followed by Kuwait's Zain. The only fixed-line operator, Telkom Kenya, which is majority owned by France Telecom, launched mobile operations last month under the Orange brand.
A fourth licensee, Econet Kenya, is expected to launch its service in November.
Ndemo said competition was driving down prices for consumers and encouraging providers to expand coverage quickly.
"That is why we predicted that in the next three years we would have more than 60 percent penetration rate, and that would be the highest in Africa," he said.
He said there were now 14 million subscribers in Kenya, out of a total population of about 36 million.
CST – Interconnection Rates are regulated by ICASA and the DOC and is currently at 6c per minute. This is the official figure and NOT 50c per minute. MTN , Vodacom and Cell-C charge R1 per minute on CST Phoneshops. What is the profit margin ? The answer is 1560% per Calling minute. Now heres something interesting to note. Only Cell-C declared that the CST was a huge revenue earner for them.
DXL - Mobile
