Two steps forward
The country’s bigger Internet service providers (ISPs) are optimistic that they will soon be able to build their own networks and end their reliance on Telkom in providing broadband and voice services to consumers. Their optimism stems from the budget vote speech by communications minister Ivy Matsepe-Casaburri in parliament last week in which she promised to accelerate the liberalization of the sector.
The minister’s speech represents a significant break from government’s tip-toe approach to liberalization and should pave the way for cut-throat competition. Already, Dimension Data subsidiary Internet Solutions (IS) has said it will take advantage of the changes to build a full-service telecommunications company that will compete head-on with Telkom and other network operators.
Matsepe-Casaburri has directed industry regulator Icasa to consider whether “none, or only certain, of the existing Vans licensees [value-added network service licensees, mainly ISPs] can … provide and operate electronic communications facilities”.
The industry has taken this to mean that Matsepe-Casaburri is willing to allow some ISPs to build their own networks of provincial or even national scope. A number of companies, including IS, MWeb and Verizon Business, have been issued with radio frequency spectrum to test WiMax, a wireless broadband technology that can be used for telecoms and, more importantly, Internet and telephony services.
IS CEO Angus MacRobert is confident the proposed regulatory changes will allow this company to build a “new-age telco”. He wants IS to have access to undersea cables so it can get cheap international bandwidth. Until now, it has been forced to buy access from Telkom.
In wireless, IS wants access to the radio frequency spectrum to build an alternative access network to Telkom’s local loop using WiMax. MacRobert says IS could also lay high-speed fibre-optic infrastructure.
IS rival Verizon is less forthright about its infrastructure plans. “We are not going to build infrastructure aggressively until we have regulatory clarity,” says legal, regulatory & operations executive Edwin Thompson. He is critical of Matsepe-Casaburri for sending mixed messages on the issue. “Not long ago she stated categorically that Vans may not build their own networks. The minister has put it back in Icasa’s hands after two years of confusion.”
DataPro chairman Tony Van Marken also slams Matsepe-Casaburri for again being vague in her speech. “This is a classic example of ambiguity. Her job is to bring clarity, not add fog.”
Other aspects of the speech have had a better reception. The industry has welcomed the announcement that the local loop, the so-called “last mile” of copper cables that connect consumers to Telkom’s telephone exchanges, will be fully unbundled by November 2011, though some have asked why it will take more than four years to complete.
Local-loop unbundling will afford other service providers the opportunity to use Telkom’s last-mile infrastructure to deliver services directly to consumers. In other markets, such as the UK and France, local-loop unbundling has put significant downward pressure on telecom costs.
Other policy decisions are likely to cause some consternation. Matsepe-Casaburri has indicated that under-serviced licensees (Usals), which were licensed to provide telecoms services to rural areas, should be merged into single provincial operators by Icasa.
Merging the Usals could prove difficult and it’s still not certain whether the merged entities will be any more sustainable than the Usals have been.
The other policy directive that could provoke a backlash is the decision to license only one operator to build a network to provide television on mobile devices. The minister, who says the network must be built using a technology known as DVB-H, doesn’t say which operator will get the license but industry executives say it may be given to state-owned Sentech.
Loading ...