Mbeki pushes for fatal blow to Telkom monopoly
Telkom currently has exclusive ownership of the local loop, which is the final link between the former monopoly and customers. Its grip on the loop has enabled it to charge high telecoms prices. Unbundling it would let other operators make use of it and a reduction in telecoms prices would follow.
"Icasa [the Independent Communications Authority of SA] must intervene to speed up the progress of unbundling," Mbeki said after a three-day meeting on communications with an advisory group of business leaders and industry experts.
On several occasions, Mbeki has singled out the country's telecoms charges – regarded as among the highest globally – as a key challenge to the economy. In an interview with the Financial Times earlier this year, he criticised Telkom for "profiteering" and described the company's charges as "absolutely phenomenal".
A local loop unbundling committee was appointed more than a year ago to investigate the legal, economic and technical implications of forcing Telkom to make infrastructure available to other operators. Its recommendations were given to communications minister Ivy Matsepe-Casaburri.
Her department said earlier this year that the unbundling process should be completed by November 2011.
Icasa chairman Paris Mashile said 2011 was the latest unbundling would be done but that the regulator was trying to make it earlier. Telkom "has got to play ball because we need that access", Mashile said.
A lack of capacity and competition means broadband costs about 10 times as much in South Africa as in Europe, so few ordinary people can afford it.
The advisory group includes internet entrepreneur Mark Shuttleworth and executives from IBM and Hewlett-Packard. Shuttleworth said the panel had also called for the unbundling to speed up: "Local loop unbundling is key to restructuring a market with a strong local player like Telkom."
He said the advisory panel, which consists of people who had experienced a similar process in their own countries, would warn the government of methods used by incumbents to delay the process.
Unbundling would have to be done in major cities before it could be extended to rural areas, said Shuttleworth.
Mbeki also said a lack of skills had to be urgently addressed in order to improve the information technology sector. The government has earmarked the sector as a key driver of economic growth.
"We may succeed in building up the necessary infrastructure, but if there are no skills, we will not make the progress we want," Mbeki said.
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