A year of promise but too many ‘kinkels in die kabel’
Broadband is the issue that remained on the 2007 shopping list, followed by lots of promises of action to reduce the cost of telecommunications. Have we made any progress? Maybe a little, but almost too little to talk about.
Telkom did lower its ADSL prices in August and rationalised the number of offerings to three: 384, 512 and 1024 kbps. There have for some time been rumours in the market that the company will be upgrading all its 512 customers to 1024 and offering speeds of up to 4096 kbps at about the same price as the current 512.
A year ago Neotel’s MD Ajay Pandey told EngineerIT that the company would have phones in a box on the supermarket shelves by this time, the plug and play concept using a wireless connection. The company also said that it would not go into a price war with Telkom. It kept that promise – some companies report that in fact some of Neotel’s offerings are more expensive than Telkom’s equivalent.
The government had great plans for Infraco. The assets of Transtel and Easitel were supposed to have been passed to Neotel, but were instead given to Infraco. In a major announcement the minister of Public Enterprises said that Infraco would be up and running within months. This soon changed as government ran up against its own legislation which saw a flurry of activity to fast-track the Infraco Bill, and make changes to the EC Act through parliament.
According to a communications department statement, the objective is to amend the Act to empower communications Minister Ivy Matsepe-Casaburri to issue a policy direction and make strategic interventions on infrastructure investments whenever deemed necessary.
A week before, at the annual SATNAC conference hosted by Telkom, the minister admitted that the introduction of the second network operator had not reduced the cost of telecommunications in South Africa.
The recent World Economic Forum telecommunications readiness report recommended that government 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.
On EngineerIT’s suggestion that this would mean government involvement in virtually all telecommunication infrastructure, thus creating another Telkom scenario, she put forward the view that if government does not invest in international connectivity, the current status of high bandwidth costs would remain.
Are we heading for too much government intervention? It appears so. The minister clearly does not believe in a free market and price regulation through competition.
On the other hand maybe the minister has a point – that free enterprise has not delivered in other areas. With three cellular operators we still have some of the highest cellular rates in the developed world.
EngineerIT looks forward to an eventful 2008. There may still be lots of surprises, with Telkom and MTN contemplating a marriage. Where would that leave Vodacom? Your guess is a good as mine! May 2008 be a good year for you.
Loading ...