Alan Knott-Craig defends Ivy Matsepe-Casaburri
IN OUR robust democracy, we are quick to criticise members of the government for failures or weak leadership, but the opposite should also be true. For instance, the telecommunications industry has been fortunate to benefit from the light but firm touch of Communications Minister Ivy Matsepe-Casaburri and her team.
Elsewhere in Africa, governments have often not been able to resist get-rich-quick tactics when legislating the telecoms environment, an approach that does not attract capital investment. A climate that nurtures economic growth encourages the healthy cycle of investment, network expansion, higher telephone penetration and an affordable service.
In SA, a predictable and stable legislative environment has made the South African industry very attractive to foreign investors. Proof of this is that one month after the biggest financial crisis in decades, Vodacom’s UK shareholder, Vodafone, said that it would invest R22,5bn in SA to increase its share in Vodacom by 15%. This shows confidence in the future of our information and communications technology (ICT) industry.
Matsepe-Casaburri’s major task has been overseeing the promulgation of the Electronic Communications Act, effectively liberalising the ICT industry and introducing more competition. In this more liberalised environment, regulations have to be light-touch and the act facilitates that.
She has also championed managed liberalisation in infrastructure provisioning, as provided for by the act, especially because spectrum is a scarce resource that has to be managed very carefully. Her decision to take up battle with value added network service providers (VANS) should be seen in this light. It is not in SA’s strategic interest to dilute a scarce resource by giving it to operators who do not have the resources or the intention to roll out infrastructure.
One of the reasons SA has such a strong and successful ICT industry, is because managed liberalisation has resulted in strong players such as Vodacom, MTN, Telkom and even Cell C, that have created a backbone that makes it possible for smaller players to enter the market. We compete on quality, but even as we build our latest super-fast data highway, we open the door for operators to run services on our infrastructure.
And it’s a simple truth that because we compete on quality, SA has quality networks. Although our basket of costs is in the midrange worldwide, our quality is among the best.
On Matsepe-Casaburri’s watch, the South African telecommunications and larger ICT industry have benefited from an enlightened and enabling legislation, which has produced a number of benefits:
–“Only the final mile is wireless” is a well-known saying among mobile network operators. Previously we were handcuffed to Telkom for all our network requirements beyond that “final mile”; we could not build our own networks and had to pay whatever Telkom charged us for fixed lines and for connecting calls to its network. The legislation has now changed to allow us build our own fixed-line networks and we are rolling out high-speed fibre-optic lines in all the main business centres.
–Eight years ago, only Telkom and the three licensed mobile network operators were allowed to carry voice traffic on their networks. Thanks to enabling legislation and developments in technology, the barrier to entry has all but vanished and about 600 VANS operators can carry voice and provide a variety of value added network services.
–Ending Telkom’s monopoly by unbundling the local loop will be completed by 2011. This will increase broadband penetration and competition.
–The government has recognised the need for investment in ICT infrastructure and through Infraco is collaborating with the industry via a consortium known as West African Cable System to lay an undersea cable on the west coast of Africa. The government has also endorsed the Seacom private initiative, which is laying an undersea cable on Africa’s eastern seabed. All these cable systems aim to become operational from next year to 2010 and will offer South Africans and the continent faster and cheaper broadband connections to the world.
–Licensing the mobile network operators with 1800MHz and 3G spectrum at no cost was a shrewd move that resulted in the full investment being directed towards the building of 3G networks. This has made SA on par with the best mobile networks in the world, opening up cellphones to a whole new level of connectivity.
–One of the great achievements has been the progress in increasing penetration in the poorer sections of society, where 20% of the poorest group (LSM 1 category) have cellphones and 40% of the middle level (LSM 4) have cellphones.
–To a large extent, this increased penetration has been facilitated by the obligation to roll out community service telephones in underserviced areas. This process was kick-started by the mobile operators’ licence obligations in 1993, but has now created thousands of entrepreneurs in townships and rural areas, providing highly affordable access to cellular telephony in previously unimagined ways. The three mobile operators now have more than 200000 community service telephones deployed.
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