Will the SNO be good for consumers?

“We [Icasa] think that, one, this licensing provides hope for competition in the market…that there will be increased service offerings and service quality – and also largely that the measure of universal service and access will be achieved better than before,” he said.

The SNO’s shareholders include Nexus Connexion, with 19%, SoeCo (the state-owned enterprise company), which includes Transnet and Eskom Enterprises, each of whom hold 15%, and 51% shareholder SepCo.

SepCo, which is the strategic equity partner, was initially envisaged to be a single international operator or consortium, but now consists of Tata Africa and its subsidiary Videsh Sanchar Nigam holding 26%, and Two Consortium and CommuniTel each holding 12,5%.

The Democratic Alliance (DA) says that consumers should not expect price reductions from competitors in what they call a duopoly.

“Pricing competition is more likely to come from other operators in the form of wireless and other broadband competitors,” DA MP Dene Smuts said.

The licensing of the SNO has been a big step towards squashing a Telkom monopoly, but there is still the Electronic Communications Bill that everybody is waiting for to become law, as it will create a more competitive environment.

Smuts says that the only way to conduct price and broader economic regulation is on the basis of rigorous analysis based on market definition and real cost data required by law from major operators.

“And the only body which can conduct the regulation is Icasa,” Smuts said.

There’s been a lot of talk about whether or not Icasa has the capacity to implement this.

Mtimde says that there is a commitment from government to increase Icasa’s capacity so that the organisation can be able to implement new laws.