Telkom CEO asks for more competition to improve broadband in South Africa

Telkom is not holding back improved broadband access through its legal challenge of the spectrum auction but is, in fact, trying to make broadband more pervasive in South Africa.

This is feedback from Telkom CEO Sipho Maseko who commented on their decision to get an interdict against the planned spectrum auction.

The Independent Communications Authority of South Africa (ICASA) was planning to hold its long-awaited auction of high-demand spectrum by 31 March 2021.

Telkom delayed these plans by obtaining an interdict against ICASA which stops the auction from taking place until Telkom’s case is heard by the High Court in Pretoria.

“We are not holding back the South African economy from having more broadband. We just want it to be available as pervasively as possible and to ensure that the competitive landscape is evened out,” Maseko said.

He said once the competitive landscape is evened out, broadband access will be democratised.

“It will not just be for the people in the big cities, but it will also for people in the rural areas,” he said.

“You’ll be able to get [higher] download speeds and you will have choice both in terms of quality and price.”

Maseko said at the moment there isn’t much choice.

He added that one of the biggest things holding back South Africa’s economy is the lack of competition.

“We have a few companies that dominate the economy, and once you have fewer companies that dominate the economy you will not have innovation, you will not have competition, prices won’t come down, and the economy will not grow.”

The Telkom CEO’s comments regarding competition are surprising as the company enjoyed a legally protected monopoly for decades.

Telkom also has more spectrum than its competitors, it has the country’s largest fibre network, and has an extensive network of telecoms infrastructure across South Africa.

To complain about choice, when Telkom was the only game in town until fairly recently, seems disingenuous.

The talk of competition should, however, be seen in relation to the planned spectrum auction and what Telkom wants to achieve.

Maseko explained that it basically comes down to low frequency spectrum. He said this spectrum makes it possible to roll out a mobile broadband network more efficiently.

He said Telkom is fighting against the spectrum auction in its current format because they will bid and pay for sub-1GHz spectrum which they cannot use.

Vodacom and MTN, in comparison, will be able to use the additional spectrum they get through the auction. This, Maseko said, will create an “uneven and unequal playing field”.

As for their dominance in the fixed-line market, he said Telkom has an open access fibre infrastructure company — Openserve.

“Openserve is not just for the exclusive use of Telkom. It is available to the totality of the market,” he said.

“Openserve has all the other operators as its customers. The pricing is very transparent. Telkom does not get a preferential price relative to anybody else — and that’s how the market has to be.”

Sipho Maseko interview

Now read: Real reason Telkom is fighting against the spectrum auction — and it is not surprising

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Telkom CEO asks for more competition to improve broadband in South Africa