Telkom vs Neotel vs Vodacom vs MTN
Competition in the first-tier ISP market is increasing and Vodacom Business’ entrance into the arena has made the current corporate telecoms leaders like Telkom and Internet Solutions take note.
MTN’s acquisition of Verizon Business also promises to shake up the market by making MTN Network Solutions an immediate large player in the corporate space.
The fact that both Vodacom and MTN are rolling out their own fixed line networks – and their ability to bundle cellular services with other ISP offerings – means that the two cellular providers may have a near unbeatable value proposition when compared with traditional first tier ISPs such as IS and Vox Telecom which rely mainly on Telkom for their infrastructure needs.
One of the issues which has been problematic to date is the long waiting time for fixed links to be provided to Vodacom and MTN by Telkom. It has even been suggested that there is conflict between the mobile providers and Telkom about the provisioning of these fixed links.
Telkom, however, said that it views both Vodacom and Vodacom Business [and MTN] as valuable wholesale customers and will always endeavour to deliver services ordered within the shortest possible timeframe.
Telkom has said that it is important to remember that South Africa is not unique globally which means that the demand for transmission capacity usually outstrips supply.
Dispute on licensing?
Pieter Uys, chief operating officer of Vodacom Group, said that there was no dispute between Telkom and Vodacom in terms of Vodacom Business offering fixed line services.
“Under the Electronic Communications Act, Act 36 of 2005, Vodacom has a deemed individual Electronic Communications Network Service (ECNS) licence and another deemed individual Electronic Communications Service licence which gives us authority to operate and provide services on a fixed line network,” said Uys.
Telkom said that it was aware that Vodacom and Vodacom Business were operating under two separate licences, and thus provide different categories of licensed services to end users. Telkom, however, made it clear that Vodacom Business may not provide its own facilities.
“Telkom understands that fixed links required for the provision of the Vodacom mobile cellular service may be provisioned under the mobile cellular operator licence held by Vodacom, but since VANS licensees are not permitted to provide their own infrastructure, Vodacom Business may not provide its own facilities,” said Nabintu Petsana, Telkom’s acting group executive for corporate communication.
Vodacom was not clear on what license/s gave it the right to build its own fixed line network and provide services over this network. MTN also did not provide any feedback on the same matter by the time of publication.
This raises questions as to whether Vodacom/Vodacom Business and MTN are currently building and operating its fixed line networks illegally, hoping that their imminent individual ECNS licences will give them the legal right to build this network and avoid action from ICASA.
Expert opinion
Dominic Cull, a telecoms regulatory specialist from Ellipsis Regulatory Solutions, says: “It is not clear whether Vodacom [and MTN] are relying on their NMCTS (National Mobile Cellular Telecommunications Service) licence or their VANS to provide fixed infrastructure to their clients. Either way this seems to be one of the anomalies thrown up by the transition from the Telecommunications Act and the Electronic Communications Act as well as lingering confusion caused by the minister’s September 2004 policy announcements."
Cull says that if Vodacom was relying on its VANS this would fly in the face of the position adopted by ICASA and the minister, who explicitly stated in court papers in the Altech matter that she did not believe that VANS can self-provide. “No matter that this is now before the courts, this would be a risky position for a mobile operator to adopt.”
“If, however, Vodacom [and MTN] is sourcing the authority for this roll-out from the ECA then the arguments as to whether or not it is justified in doing so are extremely complex. While the deeming provisions of section 93(10) of the ECA create the impression that Vodacom currently enjoys a full individual ECNS licence (allowing it to deploy a network based on the technology of its choice) it is still the holder of a NMCTS licence authorising it to operate its GSM network. Any non-GSM deployment is accordingly not regulated by its licence (or any other regulatory document other than the ECA).”
“Generally where a licensee claims that it is the beneficiary of a significant bundle of new rights one would expect to see the introduction of corresponding obligations relating to these additional rights. This has not happened in this scenario and there are some who believe that this indicates that Vodacom has perhaps jumped the gun with its Vodacom Business deployments,” Cull concluded.
VANS case pending
The pending legal case in which the High Court will decide on whether VANS have the right to self provide may however make any argument of this nature redundant.
If the court rules in favour of the self provisioning of VANS it will effectively mean that any VANS licensee will be allowed to roll out a national network and qualify for the much treasured Individual ECNS license.
This will mean an immediate mass liberalisation of the industry paving the way for even small players to roll out their own networks and provision services over these networks.
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