In with the new
THIS YEAR SHOULD finally see real competition breathed into the South African telecommunications market as broadcasting regulator Icasa converts old licences into new categories under South Africa’s Electronic Communications Act. As part of that process Icasa will also enable up to six so-called value added service (Vans) licensees to become fully fledged operators.
The process of licence conversion has already taken Icasa longer than it had originally hoped, though it’s still well within the deadlines set in the Act. But if in taking longer it manages to eliminate any potential legal challenges along the way then that should seemingly be better for the industry over the long term.
Key to avoiding such legal challenges is ensuring that Icasa has defined the various markets correctly before proceeding to impose any price caps or so-called “pro competitive conditions”.
Also in late December, Icasa gazetted an initial list of markets that it believes the industry can be broken down into. It stressed that not all of those would attract the imposition of pro-competitive measures. “Only those markets or market segments in which the authority finds that there exists a licensee(s) who possesses significant market power and that there exists ineffective competition will the authority consider imposing pro-competitive market conditions.”
One of the key issues for the industry with regard to the licence conversion process has been how Icasa will treat Vans. And although still waiting for key terms and conditions, that’s gradually becoming clearer. Icasa reported in a December update that it would first convert the Vans into electronic communications service (ECS) licence holders and thereafter engage in a competitive process with regard to granting some of them the right to acquire fully fledged electronic communications network (ECNS) licences – which would enable them to roll out their own networks.
The competitive process will involve issuing an invitation to apply (ITA), which is expected this month. Icasa said it would then hold public hearings on these applicants in March.
According to a licence conversion matrix published by Icasa in a Government Gazette (number 30438, for anyone wanting to look it up) in November 2007, there are six Vans that qualified to take part in the ITA: Vox (formerly DataPro), Verizon South Africa, Dimension Data’s Internet Solutions, M-Web, Global Web-intact and Fleetcall.
Icasa said being considered simply meant that those licensees had provided all the necessary information. It would take into account factors including whether the licensees could display the intention to roll out a national network and had the appropriate technical plan, five-year financial projections to support the rollout and a proper business record. Those requirements are in terms of the policy directives set by the Minister.
There are two main types of licence holders: “individual” and “class” and three categories within each of those. The categories are ECNS, ECS and broadcasting services (BS).
While class licences are essentially localised, such as municipal networks or community broadcasters, individual licences are provincial or national in scope, operate commercially and require numbers from the national numbering range. Private telephone network licensees – which many large corporates use to operate their own inter-branch networks – will be exempt from requiring a licence provided they don’t resell any spare capacity. See table for key players’ old and new licence categories.
Icasa has already drafted standard terms and conditions for both individual and class licensees but said it had yet to finalise the specific – and naturally more onerous – terms and conditions that will apply to individual licence holders.
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