Unbundle Telkom, but leave us alone: Cellular operators
Summary: Vodacom, MTN, Cell C and Neotel all support the unbundling of Telkom’s copper local loop, but they do not support the unbundling of their own ‘wireless local loops’.
Local Loop Unbundling (LLU) is on everyone’s lips after numerous telecommunications players and other interested parties submitted their feedback on ICASA’s LLU discussion document.
Most LLU submissions call for Telkom’s copper local loop to be unbundled as an intervention to bring more competition to the ADSL market and reduce fixed line telecoms pricing in South Africa.
ICASA has taken the route of bypassing many of the challenges related to drafting new LLU regulations by using the existing facilities leasing regulations as a foundation for local loop unbundling.
The Electronic Communications Facilities (ECF) Leasing Regulations essentially state that any company which controls an electronic communications facility must lease such a facility to an electronic communications network service (ECNS) licensee should they request it – unless the request is unreasonable.
Telkom’s copper local loop is seen as an Electronic Communications Facility – which means that other licensees should be allowed to lease this facility. These regulations however also apply to wireless networks.
Cellular operators and LLU
Vodacom, MTN and Cell C supported the unbundling of Telkom’s copper local loop, but their enthusiasm about the unbundling process did not extend to their own wireless local loops.
Neotel, which operates a wireless CDMA network, shared the view of the mobile operators that they should not be subjected to any unbundling process.
Here is what the country’s wireless operators had to say about LLU:
- Vodacom: The fixed line and mobile environments have fundamental differences and therefore it would be difficult to apply the same model. ICASA’s discussion document presents four options for unbundling the fixed line local loop. Vodacom’s comments were limited to the options presented by ICASA, which cannot be used in the mobile or wireless “last mile” environment.
- MTN: LLU should relate to the unbundling of an essential facility offered by an SMP [Significant Market Power] operator i.e. Telkom unbundling their copper infrastructure.
- Neotel: ICASA should at this stage focus on the unbundling of Telkom’s copper local loop rather than wireless or fibre local loops. Neotel based this request on arguments that there is already stiff competition in the wireless telecoms market, that wireless LLU is very complicated and that there should be a balance between competition and investment incentives.
- Cell C: “We have responded to the LLU discussion document in which we have raised an objection to the inclusion of unbundling the wireless. This aspect was not included in the official document.”
It is clear that the wireless (mobile) operators are not in favour of wireless LLU.
Companies such as MWEB feel that wireless last mile access should be made subject to the local loop unbundling process.
The LLU battle may therefore not only be between Telkom and the rest of the telecoms industry, but also between the wireless operators and service providers who would like to use the cellular networks to offer services directly to consumers.
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