Why Deregulate?

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kobie

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South africa has:

- Cheapest electricity in the world
- Third Cleanest Water in the world
- A cell phone network thats the envy of many developed countries for quality coverage

These industries are all run by monopoly's (cell phone oligopoly so uncompetitive that its roughly the same thing)
Why can't we have a cheap highly regulated Telecoms industry then? Couldn't more regulations backed by a more powerful regulator (ICASA is not a real regulator[:(!]) get Telkom to do what ever we want them to?
Or have I missed the point entirely?
 
You make an interesting point - however I do not agree with you.

Eskom - is a prower generation company - granted they are the only one in SA but they act a provider to MLC's if I am not mistaken. End users do not connect to the grid directly anymore - last mile connection from the grid to end user is a MLC repsonsiblity.

Same for water I think.
 
<b>Cheapest electricity in the world</b>
Your currency is also worthless, which is why it is so cheap in US$. Take it as a percentage of your GDP per capita please.

Canada's GDP per capita is $29,400. I pay 3¢ per kWh of power. That is $0.03. Divide:

29,400 / 0.03 = 980,000

So, the average person can buy 980,000 kWh of power a year based on the GDP per capita.


Now, South Africa has a GDP per capita of $10,000. For you to be able to buy the same amount of power, your power will need to cost:

$10,000 / 980,000 kWh = $0.01 / kWh.

That comes to what, R0.075 per kWh? Now please, what do you pay for electricity?

You may pay next to nothing in terms of US$, but it is because everything is quoted in American dollars and your currency is worthless. Compare it with what the people make in your own country and then come back and brag about cheap electricity.



A second point which you ignored is that a *lot* of developed countries use natural gas instead of electricity. We heat our homes with natural gas throughout the winter because it is cheaper than electricity. Just comparing the raw price of electricity with the rest of the world is foolish. It needs to be taken in perspective.


<b>Third Cleanest Water in the world</b>
Would you mind providing some citations? Because quite frankly, I don't believe it.


<b>- A cell phone network thats the envy of many developed countries for quality coverage</b>
I will give you that, although you have to look at in perspective. That might be true of Europe where countries are match boxes, but the United States is 9 million square kilometers and Canada is slightly bigger. That is *a lot* of ground, and we are *not* densely populated as South Africa.


<b>These industries are all run by monopoly's (cell phone oligopoly so uncompetitive that its roughly the same thing)
Why can't we have a cheap highly regulated Telecoms industry then? Couldn't more regulations backed by a more powerful regulator (ICASA is not a real regulator) get Telkom to do what ever we want them to?
Or have I missed the point entirely?</b>
By all means. lol. Europe was run by telco monopolies, and to some extend they still are, and their telecom system is a mess. A mess. So by all means, advocate more monopolies.

Meanwhile, with the free market competition here, I can call South Africa from Canada for R0.70 a minute. Cheaper than what it costs you to call around in South Africa.

No thanks buddy, I think free market competition is important.
 
Please be a bit careful when you talk about "Europe".
It is not nearly as homogenous as the US and there are massive differences between say Switerland and Romania....
I can speak from a experience regarding Swisscom. They are officially not a monopoly anymore but the problem is of course that the last mile is still theirs, for the simple reason that from a capital expenditure point of view, it doesn't make sense to put in more cables.
Anyway, they are regulated in various ways, not least by consumer organisations. And so the service is very good.
Bottom line, however, ever since competitors came to the market, international call charges have just come tumbling down. You might almost say there is a price war, which can become a problem too.

But it proves the point that nothing regulates better than a free market.

As for cell networks. Well, the little matchboxes thing is not really relavant (you guys over in North America need to get out of your mode that size is everything).
From what I understand, having a common standard in GSM is what makes the networks good - which is why North America lags. I don't think the issue is whether you get reception in Death Valley.
 
Okay i'll give on the electricity point...i did not take buying power into account. But that is beside the point...my point was that eskom is a highly <b>efficient monopoly</b>. Why? because the government forces it to be! And for all those who argue over SA's huge cheap coal supplies being the reason...just look over the hill to our nuke station puffing away efficiently as any coal one.

Most South Africans use parrafin and/or cow dung for heating which is way more efficient than natrual gas but once again thats totaly beside the point[:D] and kinda disgusting to.

Look the WTO will push for deregulating the telecoms sector anyway after all the improvemnet in communication is the main reason for third wave globalization!! I just hate South Africa being pushed whichever way when maybe its not the best way for us!!
 
<b>Most South Africans use parrafin and/or cow dung for heating which is way more efficient than natrual gas but once again thats totaly beside the point and kinda disgusting to.</b>
Well kobie, I'm going to have to disagree with you there too. How do you go about to get cow dung? I'm going to ignore this because I don't believe you. However, as to the paraffin part: do you mean kerosene?

It is true that kerosene is more efficient. Kerosene has what, 140,000 BTUs per gallon and gas has but 100,000 BTUs per therm? However, you need to take a look at the bigger picture.

To obtain one million BTUs, you need 10 therms of natural gas or 7.1 gallons of kerosene. Over here, that the price difference between the two is about 15%. Natural gas is 15% cheaper than keroscene to get the same BTUs.

A second point is how do you get kerosene? Kerosene is hard to bring to homes in large quantities. Natural gas is pretty safe. If a pipe breaks, a computer detects the drop in pressure and cuts the gas supply off. The rest dissappears into the atmosphere, asuming it is outside. However, I've never heard of kerosene pipelines to homes. That would mean you have to go out and buy kerosene each day to heat your home. That will take time, and time spent on heating your house is time wasted when it can be done easier and cheaper with natural gas.

(BTW, comparing it with electricity: natural gas is about 70% cheaper than electricity to get the same BTUs.)

Now coming back to your question as to why Eskom is such an efficient monopoly. To be honest with you, my knowledge of your power industry is next to nothing and I can't talk about it. All I know is that over here in Ontario I can buy my power from several companies. The prices are pretty much the same from company to company, but some aims at specific markets such as heavy industry, manufacturing, offices, or residential users. I get mine from Ontario Hydro.



paf: I have worked for a few years in the telecommunications industry. My boss was the Vice President of AT&T. He has taught me a few things, and one thing I can guarantee you is that the Europeans have a mess on their hands with their telecommunications industry. For example, lets take numbering plans.

A numbering plan of a country is a document which describes how telephone numbers are assigned in that country. In the United States, Canada, and the Caribbean (and soon Mexico), the responsibility fell with Bell Labs in the 1950s. They came up with a system where every telephone number in the North American Numbering Plan (http://www.nanpa.com/) has 10 digits. 3 for area code, 3 for exchange code, and 4 for line number.

However, in Europe, things were a little more confusing. Germans didn't want to do what the Italians wanted to do, and the French were sure they had a better system than those Brits. The Swiss didn't care, and the Spanish didn't know what a telephone was.

Today, it is a nightmare. Europe has 50 or more country codes, which can be one digit long (Russia is country code 7), or as long as 3. Different countries divided up their numbers differently. Some have area codes, some have exchange codes, some have city codes, some have all or more. Some have 3 digit city codes, some have 5, some have 4, some have variable sizes of city or area or whatever codes.

Can you imagine the nightmare it is just to keep the routing tables in telecom switches up to date? They are now trying to fix this up by giving Europe a new country code... 371 I think. They want to combine all the EU member states' numbering plans and manage it. Noble idea, but err... I'll wait and see.


The fact is, in the deregulated North American system I have free local calls and can call Britain for 3 cents a minute. In Europe they all pay for local calls and calling costs a fortune.

A deregulated telecom industry has caused that broadband users in Canada outnumber dialup users. There is healthy competition between telephone companies, between cable companies, and between technologies of telecommunications (cable, land line, cellular, dsl, Tx lines, fiber, etc.)
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Germans didn't want to do what the Italians wanted to do, and the French were sure they had a better system than those Brits. The Swiss didn't care, and the Spanish didn't know what a telephone was.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

LoL - really enjoyed that.... very apt
 
Ah jerrek
about 70% of population are rural farmers (may have changed fairly old figure) Most of those farmers are really poor and do actually use cow dung for fuel...as to where it comes from, well use your imagination.

Your figures on electricity vs gas prices seem really convincing but err whose electricity and gas prices are you comparing exactly??[^]

The european problems don't really relate to us. I mean how many neighbours must we coordinate with, being that we are at the end of the world and all.

The main point still stands unchallenged...nonbody has said anything that convices me that we could not achieve our goals swifter and with greater certainty through futher regulation of the telecoms industry.
 
Kobie, Tighter regulation of telcomms in SA? You are joking aren't you?
ICASA will tell you straight off they are helpless. Telkom is self regulating - full stop. Someone with a whole lot of clout in Government needs to upset the apple cart and approve any bastard competitor just to give Telkom the fright they need - Telkom are so complascent at every level. Tighter control means more government spending and we have so many other more dire issues in SA that could use those funds - prophylaxis for AIDS mothers for example.

Bless you Jerrek, when last were you actually in South Africa? The vast majority of our countrymen live below the breadline so piped water is a luxury let alone piped parrafin. Parrafin is bought from local Spaza shops (go on, ask what a spaza is) in bottles but more commonly in 20 litre gogoks (a square tin container) and carried for sodding miles back to the homestead on a dirt track on the poor unfortunate persons head (a gogok is called a gogok because that's the sound the tin makes as the liquid moves with each footfall). The tins are later used for fetching water from whichever water source is nearest the homestead which is why so many of our kids have digestive disorders not to mention respiritory disorders from breathing parrafin smoke and cholera breaks out so regularly. You know a hell of a lot about our worthless currency. Pity you know fanny adams about our people and the daily battle here at every level to get by. And cow dung comes from a cows butthole - want the stats?
 
<b>Bless you Jerrek, when last were you actually in South Africa?</b>
1999
 
1999.
Jerrek: Alot has changed since then

I must say guys, at least Jerrke doesnt think we have lions walking around in the streets, well not usually any way.[}:)]
 
....erm wasn't this about de-regulation?
anyway --- I don't care if telkom is a monopoly or not -- as long as they provide a good service. they dont. so I'll support de-regulation
 
I on the hand care deeply about a dergulated telco industry - it is the only way that we are going to get a reduction in price for services. Even if Telkom provided a quality professional service (which isn't bloody likely to happen in the next few years) I would still agressively campaign for de-regulation.

A deregulated telco industry = competition = lower costs = more users = more Internet awareness = greater productivity gains = you get the idea - the list goes on and on...

Oh yeah guys - please don't flame Jerrek - has been an active member for some time now and his input is valued as we get an international perspective although he may not have a clear understanding of some of the local issues....
 
And will 'deregulation'(in the south african sense of the word) actuallly improve service so dramtically. Is there something in place to stop telkom from cutting its prices to levels that will undermine and ultimately destroy their rival (apart from the joke labeled the 'competition act'...no way in hell you can trust an act with so many exceptions floating about). Look the only way I could see this ever working is through highly regulated total deregulation. These south african half measures may be more damaging than good.
 
You are 100% correct. We need a systematic and total deregulation of the industry based on a defined process and timetable.

But 1st we need a Minister of Communication who is / has:
1. Not a self-confessed technophobe! - Go figure - how can this individual have a passion for a technical industry?
2. The backbone to stand up to Telkom when they urinate on ICASA rulings.
3. A true understanding of communications issues - mabey Ministers should actually be qualified for the posts they hold - no hang on that won't work - no office except the Ministry of Corruption would have suitable candidates....
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
Today, it is a nightmare. Europe has 50 or more country codes, which can be one digit long (Russia is country code 7), or as long as 3. Different countries divided up their numbers differently. Some have area codes, some have exchange codes, some have city codes, some have all or more. Some have 3 digit city codes, some have 5, some have 4, some have variable sizes of city or area or whatever codes.

Can you imagine the nightmare it is just to keep the routing tables in telecom switches up to date? They are now trying to fix this up by giving Europe a new country code... 371 I think. They want to combine all the EU member states' numbering plans and manage it. Noble idea, but err... I'll wait and see.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

I see you suddenly change the topic. I believe we were talking about cellular networks.

Anyway, regarding this, that may be so, but as a consumer I never noticed a problem. I lived in Europe for 14 years, worked in Switzerland, Germany, Netherlands, Belgium, France and the UK.
I did not once come across this supposed nightmare you describe. They may be struggling internally, but it's not affecting me as a consumer. So what do I care.

Your description of what Germans and Frenchmen do is very quaint but simplifies in a way that tells me you don't know the first thing about politics in Europe. Are you aware that we are dealing with sovereign states here that were shooting at eachother only 60 years ago? Today they are trying to build up something new, and of course it's hugely complex. Luckily they won't allow some elephant state to just dictate what everyone else must do (not as long as the US stays out of the EU anyway [;)]). There are much bigger issue than routing tables in telephone switches.
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Anyway, regarding this, that may be so, but as a consumer I never noticed a problem. I lived in Europe for 14 years, worked in Switzerland, Germany, Netherlands, Belgium, France and the UK.
I did not once come across this supposed nightmare you describe.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
Gee. I suppose that is because I'm in the telecom industry and notice these things. Last time I was in Europe it took me all of 2 hours to figure out that things aren't quite as cool as it is back home.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">They may be struggling internally, but it's not affecting me as a consumer. So what do I care.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
Expensive phone calls?

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Your description of what Germans and Frenchmen do is very quaint but simplifies in a way that tells me you don't know the first thing about politics in Europe.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
It is meant to be simplified. I wasn't talking about politics either. Get it straight.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Are you aware that we are dealing with sovereign states here that were shooting at eachother only 60 years ago?<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote"> The United States has 50 sovereign states and Canada is another sovereign state. Now admittedly the last time these states shot at each other was in 1864, but that didn't prevent them from coming up with a solution together. The point you're making is irrelevant.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">There are much bigger issue than routing tables in telephone switches.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
What does this have to do with the price of tea in China? We were talking about the telecom industry, not the "bigger issues" of the European Union.
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
Gee. I suppose that is because I'm in the telecom industry and notice these things. Last time I was in Europe it took me all of 2 hours to figure out that things aren't quite as cool as it is back home.
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
Yes, you did mention your boss was a hot-shot at AT&T. Frankly, I don't give a toss if you're the great-grandson of Alexander Bell. What I'm saying is that you are wrong in painting a picture as if the Telecommunications in Europe was dysfunctional. Yes, it may be more expensive than it should be, a lot of things are, and the reasons again are varied. But bottom line is, it works well enough for most people. And the prices are affordable.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
I wasn't talking about politics either. Get it straight. The United States has 50 sovereign states and Canada is another sovereign state. Now admittedly the last time these states shot at each other was in 1864, but that didn't prevent them from coming up with a solution together. The point you're making is irrelevant.
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
No, I think you need to get it straight. Politics matters a great deal. First of all, you cannot compare the sovereignty of the states in the US to that of Europe. And Canada is being pragmatic, which is just as well, because when it comes to the crunch, the US would just piss all over you anyway. Take the blackout you had. Didn't the Americans first try and blame it on Ontario, when the problem probably originated somewhere in Ohio? Secondly, there wasn't much of a Telco industry back in 1864, was there? So they could start out in the green, and get it right. Good for you. Unfortunately, Europe is not quite as simple. That's the point I'm making. Every little thing they want to standardise on takes a lot of negotiation. That's why a state is called sovereign.
And another thing: If you are all so great over there, how come you have all the interoperability problems on your cellular network? You want to tell me Europe lags North America in that regard? GSM is the standard in Europe, and it worked very well everywhere I was.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
What does this have to do with the price of tea in China? We were talking about the telecom industry, not the "bigger issues" of the European Union
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
Don't even start with agriculture. In case you haven't noticed, those bigger issues affect the telecomms industry in a big way.
 
<b>Yes, it may be more expensive than it should be, a lot of things are, and the reasons again are varied. But bottom line is, it works well enough for most people. And the prices are affordable.</b>
You just don't get it, do you? Yes, that is true, but that is not the point I was making. I'm saying that it is a mess there compared with North America and that things are not as well developed and designed as it could have been.

And, put South Africa into that paragraph: <i>But bottom line is, it works well enough for most people. And the prices are affordable.</i>


<b>Politics matters a great deal.</b>
Did I ever say it does not matter?? NO. Go read what I posted six times again. I did not say that. It wasn't even the point I was making. I have no idea why you suddenly wanted to drag politics into this.


<b>First of all, you cannot compare the sovereignty of the states in the US to that of Europe.</b>
Why not?? They are sovereign states by themselves. Republic of Texas. Commonwealth of Massachusettes.



<b>Take the blackout you had. Didn't the Americans first try and blame it on Ontario, when the problem probably originated somewhere in Ohio?</b>
Oh for crying out loud. You're talking about things you don't know again. In 1975, when the blackout originated in <i>Canada</i>, Canada blamed the U.S. and the U.S. blamed Canada. JUST like the blackout this year. Canada blamed the U.S., and the U.S. blamed Canada.

What does this have to do with the price of tea in China??



<b>Unfortunately, Europe is not quite as simple.</b>
Exactly, and why not? Because (1) telecom companies were state-owned monopolies, and still are in a lot of countries, and (2) because it is <i>state-owned</i>, politics came into play and they couldn't agree on anything.

In the United States and Canada the telecom industry was never state-owned or operated and THAT is what caused growth and expansion. You seem to miss the point.



<b>If you are all so great over there, how come you have all the interoperability problems on your cellular network?</b>
Please elaborate on this.



<b>You want to tell me</b>
I want to tell you nothing that I didn't say. Quit putting words in my mouth.



PAF, have you ever been in North America? Have you ever lived here? I have lived in North America, Africa, Europe, AND Asia. I am basing my statements on first-hand experience and from knowledge that I obtained from <i>working in the telecom</i> industry. What do you base your opinions on?
 
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