Double strike for telecom freedom
Last Friday was a particularly bad day at the office for communications minister Ivy Matsepe-Casaburri. In the morning, she learnt she would not be allowed to appeal a groundbreaking high court judgment. By the afternoon, there was further bad news: her director-general, Lyndall Shope-Mafole, had quit the ANC, putting her job and therefore their department’s policy agenda at risk.
Matsepe-Casaburri’s woes began in the high court, when acting judge Norman Davis denied her leave to appeal telecommunications group Altech’s court victory against her. The judge had ruled in September that companies licensed as value-added network service (Vans) providers could build their own networks in competition with licensed operators such as Telkom, Neotel and the mobile operators.
Because there are more than 600 Vans licensees — most of them small Internet service providers — Davis’s judgment has finally thrown open SA’s telecom industry to full-scale competition. It has also effectively stripped Matsepe-Casaburri of one of the few remaining powers the minister had over the telecom sector. The industry, fired up at Altech’s court victory, has promised to fight her all the way to the constitutional court if she attempts to deprive Vans of rights the judge says they have enjoyed since February 2005.
Shope-Mafole appears to have tied her political future to the new party being formed by former ANC heavyweights Mosiuoa Lekota and Mbhazima Shilowa. She has said she is keen to stay on as communications director-general until her contract expires in 2010 but this may be untenable for the ruling party — which means that Matsepe-Casaburri could lose a long-standing ally who knows her way around the sector.
Shope-Mafole agrees with Matsepe-Casaburri about fighting Altech in court — in fact, she recommended the appeal against the Altech judgment. She rightly says the judgment flies in the face of government’s policy of managed liberalisation of the sector — a policy that once seemed reasonable, but has been coming under increasing fire. The original green and white papers on telecoms, produced in the mid-1990s, envisaged the industry being fully liberalised by 2005. Instead, three years later, only one new direct competitor to Telkom has been licensed.
There now seems to be little chance that any other court will rule in the minister’s favour. And with Shope-Mafole’s position arguably weakened, there will be less administrative energy to pursue the “managed liberalisation” agenda. It is therefore increasingly unlikely that government will be able to prevent the market from being opened. It remains to be seen whether it has the will to even attempt that.
That in turn raises a bigger question: do we need a department of telecommunications at all? There will always be a need for policy formulation, of course, but this function could easily be exercised by a division within the department of trade & industry. The reality is that, under Matsepe-Casaburri’s stumbling leadership, government has failed to keep up with change in a dynamic sector. Its policies failed abysmally to bring down the cost of doing business. Liberalisation has come about despite those policies.
There is also the matter of government’s 39% holding in Telkom. The purpose of this was always hard to discern. The state does not need to be a shareholder in listed companies to generate revenue — for that, it is in the unique position of being able to impose taxes. And if the “strategic” justification — protecting the country’s telecom sector from the vagaries of the market — ever held water, it no longer does. There is nothing that cannot be done by regulation or law, and nobody disputes the right and, indeed, duty of government to perform that oversight function.
Matsepe-Casaburri has been shambling about for too long at great cost to the country. President Kgalema Motlanthe should either read her the riot act or sack her.
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