Ozymandias
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04 March 2007
Sunday Times Business Opinion
President Thabo Mbeki renewed his promise to address the cost of telecommunications in South Africa — among the highest in the world — during his State of the Nation address last month.
It was a familiar refrain; he made this promise for the past five years. But Mbeki continues to stick with communications minister Ivy Matsepe-Casaburri, who has failed to achieve what should be her two main tasks — reducing the cost of telecommunications and liberalising the local market — since she became minister in 1999.
She has succeeded in licensing the second fixed- line network operator, Neotel, but that took her five years. And most commentators agree that it will be a while yet before competition forces Telkom to cut its prices.
Another claimed success has been the long-awaited Electronic Communications Act, which was gazetted last year. Implementation is still awaited, though.
The Act is aimed at partial liberalisation of the telecommunications industry. But while the foundations have been laid , the industry’s troubled regulator — the Independent Communications Authority of SA (Icasa) — is not in a position to effectively oversee the implementation.
And, far from liberalising the industry, the government seems to have its fingers in every pie through direct or indirect ownership of Telkom, Vodacom and Sentech. Now, there is Infraco, a new company set up by the Department of Public Enterprises to provide broadband services.
The government has also said it will look at the high cost of interconnection fees — the charges that cellphone companies levy for calls between networks, which are inexplicably high and significantly drive up the cost of telecommunications in SA.
But government moves slowly, and in telecommunications -— through its interests in telecommunications companies and Icasa — it is both a player and a referee.
And even though information technology and telecommunications are a priority of the Accelerated and Shared Growth Initiative for South Africa, much of the political will to drive necessary reforms — at speed — seems to be missing.
Whatever the merits of Cell C’s complaint to the Competition Commission about interconnection charges, it does underline the urgency of government increasing competition in the sector. When companies take on each other for market share the winners are consumers, who should be able to get better prices and services.
Sunday Times Business Opinion
President Thabo Mbeki renewed his promise to address the cost of telecommunications in South Africa — among the highest in the world — during his State of the Nation address last month.
It was a familiar refrain; he made this promise for the past five years. But Mbeki continues to stick with communications minister Ivy Matsepe-Casaburri, who has failed to achieve what should be her two main tasks — reducing the cost of telecommunications and liberalising the local market — since she became minister in 1999.
She has succeeded in licensing the second fixed- line network operator, Neotel, but that took her five years. And most commentators agree that it will be a while yet before competition forces Telkom to cut its prices.
Another claimed success has been the long-awaited Electronic Communications Act, which was gazetted last year. Implementation is still awaited, though.
The Act is aimed at partial liberalisation of the telecommunications industry. But while the foundations have been laid , the industry’s troubled regulator — the Independent Communications Authority of SA (Icasa) — is not in a position to effectively oversee the implementation.
And, far from liberalising the industry, the government seems to have its fingers in every pie through direct or indirect ownership of Telkom, Vodacom and Sentech. Now, there is Infraco, a new company set up by the Department of Public Enterprises to provide broadband services.
The government has also said it will look at the high cost of interconnection fees — the charges that cellphone companies levy for calls between networks, which are inexplicably high and significantly drive up the cost of telecommunications in SA.
But government moves slowly, and in telecommunications -— through its interests in telecommunications companies and Icasa — it is both a player and a referee.
And even though information technology and telecommunications are a priority of the Accelerated and Shared Growth Initiative for South Africa, much of the political will to drive necessary reforms — at speed — seems to be missing.
Whatever the merits of Cell C’s complaint to the Competition Commission about interconnection charges, it does underline the urgency of government increasing competition in the sector. When companies take on each other for market share the winners are consumers, who should be able to get better prices and services.
