Lower telecoms prices coming
HOPES for a revolution in the telecoms industry triggering lower prices for consumers have been revived, with Communications Minister Ivy Matsepe Casaburri losing her legal bid to quash that progress.
The minister has lost her application for leave to appeal a high court verdict that grants about 300 voice and data carriers the right to build their own networks.
Her loss is the industry’s gain, and business users and consumers should enjoy lower prices once more companies roll out their own infrastructure. That will prevent them having to pay high prices to rent their lines from the dominant players Telkom, Neotel or the cellular operators.
The court case was initially brought by the hi-tech company Altech.
“This is a powerful affirmation of our original court victory,” says CEO Craig Venter.
“This brings Altech, the industry and the consumer within touching distance of a level playing field and fair market competition.”
Altech had accused the minister and the Independent Communications Authority of SA (Icasa) of making serious flaws in issuing new licences under the Electronic Communications Act. Altech said its existing licence to supply value-added network services (Vans) should automatically be converted into a new format giving it the right to build its own network.
The minister was following a different process by inviting companies to apply for those valuable licences with no guarantee of success.
Venter feared only a handful of favoured players would be granted a licence, so the minister could protect the dominant players.
The court agreed with Altech, and its ruling in August meant hundreds of companies including internet service providers were entitled to the licences. The verdict was hailed as a long-awaited breakthrough for liberalisation, and Icasa promptly invited companies to collect the valuable documents.
But Matsepe-Casaburri belatedly chose to appeal. She claimed the judge had erred by venturing into policy making, and said letting numerous companies build their own facilities would harm her policy of “managed liberalisation” to consumers’ detriment.
That was ridiculed by the industry, the Democratic Alliance and the Inkatha Freedom Party, which said the appeal was merely a bid to protect Telkom and Neotel, partly because the government holds a stake in both.
After hearing the minister’s application and opposing arguments from Altech, the judge rejected Matsepe-Casaburri’s move and awarded costs against her .
Only about a dozen companies have the financial muscle to roll out their own national network, which would cost about R1bn.
Even so, that promises a level of competition never seen before. Simply having a right to build their own facilities will give voice and data carriers more clout in negotiating discounts with the backbone suppliers, leading to lower fees .
Telecoms lawyer Mike Silber says he is very relieved that the minister’s attempt to have the verdict overthrown was scotched. Hopefully Icasa will now move quickly to issue the licences before the minister decides whether to take her battle even further by petitioning the chief justice or the judge president, he says .
“If Icasa takes its usual sweet time she can bring that application and we’ll get another strange hiatus where the judgment hasn’t been overturned but can’t be implemented because we are waiting for another decision on the leave to appeal.”
If the minister finally desists, the industry could enjoy real competition, says Silber .
Altech has already written Icasa a letter of demand for its new licence, saying it will be in contempt of court if it fails to issue one.
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