The Department of Communications (DoC) continues to punt their “100% broadband penetration by 2020” plans, but details about how this will be achieved remain sketchy.
The National Treasury is now getting involved, and is trying to establish the best approaches for achieving the targeted 100% broadband coverage by 2020, and the associated fiscal support that may be required to help with the roll-out.
These initiatives may sound laudable, but when looking at the track record of the DoC it is highly unlikely that they will meet this target.
Some may argue that these initiatives, and government’s involvement in telecommunications, is not harmful and can actually assist where the market fails (like getting broadband access into rural areas). This argument is flawed.
Government’s involvement in South Africa’s telecoms market, and its previous “managed liberalization” policy, is to blame for many problems we are currently experiencing. The DoC essentially stifled competition and protected Telkom’s monopoly to try to achieve goals (similar to the “broadband for all” plan) which never materialized.
Let us not forget that the DoC previously outlawed voice over IP (VoIP), prohibited companies from building telecommunications networks and even tried to block SEACOM and EASSy from landing in South Africa.
It was only because of numerous battles – including the landmark legal case from Altech against the minister of communications – which liberated the local telecommunications market. The market therefore became competitive despite the DoC rather than because of it.
Talk, talk, talk
Cosatu General Secretary Zwelinzima Vavi recently said that one of the biggest problems in South Africa is “talk, talk, talk, conference, conference, conference, summit, summit, summit, resolution, resolution, resolution, declaration, declaration, declaration. No action whatsoever”.
Nowhere are Vavi’s words more applicable than at the Department of Communications. The new communications minister kicked off her tenure with two talk shops (one of which is shrouded in controversy because of the potential misappropriation of funds).
Again there can be an argument that these talks shops do not do much harm (apart from the money blown on them). It can even be argued that these events give the industry a chance to interact with the DoC and have their opinions heard.
However, history has taught us that the DoC is great at talking and holding events, but is poor at action and implementation. We are, for example, still waiting for the DoC to implement the findings from two previous DoC colloquiums held in 2005.
The DoC problem
The consequences of the DoC’s involvement in telecoms can be clearly seen when listening to South African telecommunications players. Let us look at frequency spectrum as an example.
LTE is gaining momentum globally, but despite the fact that Vodacom and MTN are ready to launch commercial LTE services, it is not possible without suitable spectrum.
However, spectrum cannot be given to these companies because the DoC has big plans to build a national broadband network which will need some of this spectrum (using Sentech for this part of its plans).
Sentech has been sitting on a tremendous amount of valuable spectrum, and doing nothing with it. This is while other operators have been begging for this spectrum to provide faster, cheaper broadband to South Africans.
The mobile operators have the skills and resources to build networks and provide broadband services to South Africans, but the DoC is snubbing them because of its own plans.
A further problem is that tax money may be wasted on things which are unlikely to materialize (such as a national broadband network).
Assist industry rather than trying to do it yourself
Many people are calling for the DoC to sell its shares in telecoms companies (notably in Telkom), and focus on creating an environment which will boost telecoms in South Africa.
This argument goes far beyond potential conflicts of interest. If the DoC shelves its plans to build its own broadband network and removes its direct involvement in telecoms, it will have no choice other than to support the industry in rolling out affordable broadband services.
If there is no (pie in the sky) dream of having a DoC controlled national network to provide citizens with affordable broadband, the department can look at how it can make it easier for the telecoms industry to bring broadband services to citizens.
If these services are not affordable enough, or if service levels are lacking, the DoC can use ICASA to ensure that this is rectified. This is how it is supposed to work.
It is interesting to note that the mobile operators have indicated that they are in favour of a shared LTE network in rural areas to drive down costs – clearly showing that industry players are keen to work together to get people connected at affordable rates.
The DoC can even partner with a company such as Vox Telecom, which recently unveiled their affordable Ka-band satellite broadband services, to cover areas where it does not make financial sense to roll out a wireless network.
It is high time that government sheds its financial interests in the telecommunications industry, and focus on creating a vibrant and competitive telecoms environment.
To sit on valuable spectrum, trying to stifle competition and engaging in endless talk shops has proven extremely ineffective at boosting broadband in SA.
It is time to make it as easy as possible for privately owned telecoms operators to roll out networks and compete. It is, after all, what is behind the cheaper and faster broadband services globally.