Telkom monopoly over

Socikwa said it had taken longer than expected given that there were six different shareholders with different perspectives and give and take was part of the negotiation process. But, they had succeeded in ironing out their differences.

Telkom lost its legal monopoly in May 2002 and the plan was to launch an SNO shortly thereafter. But, two stages of trying to find a strategic shareholder failed, and the Department of Communications eventually gave smaller shares to the two final consortia in the second round, CommuniTel and Two Consortium, and warehoused the remaining share. India’s Tata, through subsidiary Videsh Sanchar Nigam Ltd (VSNL), later succeeded in taking this up.

While there are competitors to Telkom in the form of the mobile operators, as well as players like Sentech and Wireless Business Solutions on the data side, and the legalisation of voice over IP (VOIP) earlier this year means data providers can also offer voice, there has been no formal fixed line player than can compete at an infrastructure level.

With the business plan finalised and the shareholders agreement signed, the next step is for regulator Icasa to issue the SNO with its formal PSTS (Public Switched Telecommunication Service) license to compete directly with Telkom.

Icasa told Moneyweb previously that as soon as the SNO delivered the necessary documentation to it, the regulator hoped to be able to issue the license within a month, depending on the completeness of the documentation that it receives.

Socikwa says it is not waiting around in the meantime and is already putting a plan together on the way forward. He says it will start with offering wholesale type services to corporates using its already extensive network backbone. But given that it doesn’t have the last-mile infrastructure in place (from the backbone to people’s homes), its consumer offering is still some way away. It would initially have to lease this infrastructure from Telkom and said the timing of its consumer offering would depend on how accommodating it was.

The license will, however, include a fixed-mobile component, and Socikwa confirmed that it would consider using wireless for the last-mile.