IS there a ‘kinkel in die kabel?’
South Africans have been told so many times that the cost of broadband is related directly to the limited connectivity out of South Africa. Telkom still owns the monopoly on the SAT3 cable and the land rights that we were promised would end in April this year.
We are now in November and still nothing more than talk. Neotel said last year that they would reduce the cost of overseas connection once the Telkom landing rights had been relinquished but in the same breath they said that they would not start a price war!
The news of two more cable projects increased our hopes of cheap access to the world where most of the Internet content resides. But our hopes were short lived and crashed by the Minister of Communication’s announcement that Government would make new regulations that ensures that no landing or exit rights would be granted to a foreign operator that did not meet the Nepad network requirements.
Talking at SATNAC in early September Dr. Ivy Matsepe-Casaburri said that despite initiatives to reduce the monopoly of Telkom by introducing a second network operator, the cost of telecommunications had not come down sufficiently as expected and government would need to take some new drastic action.
She said that studying the World Economic Forum Network readiness report it became clear that despite good regulation it was the high cost of international connectivity that was keeping the costs high. It was recommended to government to invest in international broadband capacity and take more control of the landing rights of sub-marine cables by international consortiums whose obvious business objective would be to maximise return on investment.
One wonders what insight the persons who wrote the report have in marketing and free enterprise?
“We strongly support the NEDPAD objective of taking individual and collective responsibility for the development of our continent and we recommended to Cabinet that as much as possible, and as a matter of policy, every major submarine cable landing on or leaving South African shores should have incorporated in it the NEPAD Network”, Dr Matsepe-Casaburri said.
On my suggestion that this would mean government involvement in virtually all telecommunication infrastructure companies and thus creating another Telkom scenario she put forward the point of view that if Government does not invest in international connectivity, the current status of high bandwidth cost would remain.
The Department of Communications is currently working on regulations setting out the conditions under which foreign companies can land sub-marine cables in South Africa. It will be based on the Cabinet’s accepted principle that every major submarine cable should have incorporated in it the NEPAD Network.
One can only but wonders how foreign investors in the proposed cable projects will react.
It is laudable that the Minister wants to reduce the cost of broadband but it is very doubtful if under government control and interference in free enterprise that this can be achieved, well at least not the kind of cost reduction we were hoping for.
Perhaps we should be pleased that the Minister has at last accepted the fact that the price of broadband is too high and that for South Africa to play in the world economy it has to come down. It is just a pity that market forces will not be given an opportunity to show that competition is a better alternative to regulation to bring prices down.
Hope I will be proved wrong!
Feature Editor, EngineerIT
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