Telecoms woes
WHILE the global financial markets are in a frenzied state, SA’s telecommunication industry is plodding along in the same torpid state as usual. How depressing.
The sector didn’t benefit from the recent political shake-up that saw various government departments gain new and, hopefully, more dynamic leaders. The communications department is still at the mercy of Communications Minister Ivy Matsepe-Casaburri, whose heavy-handed policies have stifled the sector for years.
In theory, things are poised to change, with Telkom expected to shed its 50% stake in Vodacom, freeing the cellular operator from the unhappy menage-a-trois that sees it answering to both Telkom and the UK’s Vodafone.
A decision on whether Telkom will sell part of its stake to Vodafone moved closer last night and now looks like a done deal. The government has agreed to let Vodacom go to foreign ownership.
The sector was also celebrating a great victory that promised to raise the level of competition. The court declared that hundreds of internet service providers have a right to build their own networks, instead of leasing expensive lines from Telkom. As companies prepared to invest millions of rands in infrastructure, Matsepe Casaburri cancelled the party.
She is appealing against the verdict, arguing that allowing operators to build their own networks undermines her policy of “managed liberalisation.”
In case anyone needs reminding, that’s the policy hampering economic development by keeping the cost of communications artificially inflated. The sensible thing would have been for the minister to accede to the court, and let the telecoms industry enjoy much-needed competition.
Instead, she has brought progress to a halt with yet another blunder. The minister said undermining managed liberalisation would be detrimental to consumers, although nobody else can see how consumers would suffer if operators could control their own cost structures.
Another infamous blunder threatened to scupper SA’s chance of enjoying vast amounts of cheaper bandwidth once undersea cables arrive. The minister bizarrely declared that any cable landing here must be locally owned — despite local companies having insufficient cash. Fortunately the cable operators have worked around that and bandwidth is on its way, no thanks to the government.
This week a fresh event highlighted the dearth of cheap telecoms services that can largely be blamed on the department’s poor decisions and senseless interference. MTN and Cell C are clashing over the location of community service telephones, which provide discounted calls in poor or under served areas. The operators are fighting over the fees they pay to switch calls between their networks. Two interesting observation were made as the regulator heard their complaints.
First was a comment that 81% of SA classifies as underserved according to the teledensity criteria used by Cell C. A second salient point was that these phones are “the only game in town” for taking telecoms services to poor or rural areas. Numerous other badly executed plans by the government have sunk, in a further indictment of managed liberalisation. SA needs a telecoms free-for-all, which it will not get while Matsepe-Casaburri remains.
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