Fixed-line rivalry from next year
The local loop unbundling committee established by Communications Minister Ivy Matsepe-Casaburri to make recommendations on the unbundling process handed over its report to her on Friday.
Matsepe-Casaburri announced in her budget vote speech last week that the unbundling process should be implemented urgently by the Independent Communications Authority of SA and completed by 2011.
Local loop unbundling means that multiple competitors to Telkom will be able to use its infrastructure linking the end of a subscriber’s telephone to the local exchange for broadband or voice services. Consumers will be able to choose their own service provider for one or both of these services.
The aim would be to encourage competition to lower the cost of telecommunications and increase the number and quality of services.
“It is our view that the process should happen as soon as possible,” Tshilidzi Marwala, chairman of the local loop unbundling committee, said. “We believe that by the end of this year all the mechanisms will be in place.”
Marwala conceded that the Independent Communications Authority of SA (Icasa), which has to create the regulatory framework for the unbundling, considered a four-year time frame as “overly optimistic”. But Marwala said SA would be able to learn from the experience and mistakes of other countries to achieve the unbundling in record time.
SA was not far behind the rest of the world and was one of the few countries in the southern hemisphere to undergo the process, he said.
Matsepe-Casaburri has directed Icasa to undertake the unbundling process on an urgent basis to ensure that it is implemented by 2011.
It is estimated the unbundling will increase the R80bn fixed-line telecommunications market about 25% to 50% and reduce telecommunication costs 30%- 70%.
Marwala said that before the unbundling could proceed, Icasa would have to establish the regulatory environment within which it could take place to ensure the new licensed entrants gained competitive access to Telkom’s infrastructure.
The authority would have to regulate the price charged by Telkom for access to the infrastructure, and implement carrier preselection so customers can choose their service providers. It would also have to regulate access by outside operators to the exchanges and the maintenance of the local loop.
Guidelines for how the authority should proceed with the unbundling process were published in the Government Gazette on Friday. Calls were also made for public comment on the committee’s recommendations.
The committee has recommended a hybrid mix of unbundling models depending on socioeconomic context, for example rural or urban environments. The options would range from full unbundling, where Telkom owned the infrastructure used by multiple operators; line sharing, where Telkom only provided voice services; and bitstream or wholesale access.
The committee’s report — available on the communication department’s website today — also recommends that Telkom establish a new facilities and services management entity on the basis of Icasa guidelines should the full unbundling model be adopted.
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