Altech court victory

It was a big week for JSE- listed technology group Altech. On Friday it won an important high court ruling, and two days earlier its telecommunications subsidiary, Altech Autopage Cellular (AAC), signed a distribution agreement with second network operator Neotel.

In addition to Postnet, AAC will be a distributor of Neotel’s consumer offering of fixed mobile voice, data and Internet services, the company announced on Wednesday.

Then the Pretoria High Court ruled in favour of AAC having its existing value added network services (VANS) licence converted to an individual electronic communications network service (I-ECNS) licence.

The I-ECNS licence will enable the company to develop and operate its own telecommunications network.

“This is an undisputed victory not only for Altech, but for the whole of the South African telecommunications industry, and we are proud to have been pioneers in breaking competitive ground in what has been a long closed playing field,” said Altech CEO Craig Venter.

The Independent Communication Authority of SA (Icasa) had previously allowed only five VANS licences to be converted in this way.

Altech’s court victory could set a precedent that will allow hundreds of VANS to have their licences converted.

However, Icasa might appeal against the court decision.

“Even if there is an appeal, I think the issue has been thoroughly debated and the decision will come out in our favour. The previous process included a limited number of operators and was detrimental to the industry,” Venter said.

The regulator said it would study the judgment to “chart the way forward”, giving no indication of its immediate response to the court decision.

Lindsey McDonald, ICT analyst at Frost and Sullivan, said that while there might be an added workload for Icasa, the opening up of the sector and subsequent lowering of prices was a higher priority.

“We are seeing a very limited number of players in the industry, but there is increasing demand for broadband services. When the Seacom undersea cable goes online, prices will decrease but not as dramatically as previously expected,” McDonald said.

She said that while a huge number of VANS would have the opportunity to apply for converged licences (encompassing a wider range of services), not all of them would start rolling out their networks.

That only a handful of companies in South Africa have the finances and the know-how to roll out a R1-billion network was Altech’s argument in court. It said the chances of overcapacity were low.

“A lot of VANS are not even national players,” McDonald explained. “If you can provide a network regionally, I don’t see why more operators shouldn’t be awarded licences.”

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Altech court victory