Dear Minister Pule

Telecoms operators and Internet service providers are urging the Department of Communications (DoC) and the Independent Communications Authority of South Africa (ICASA) to make it easier for them to improve their telecoms offerings and lower prices.

Most Internet Service Providers (ISPs) asked for lower ADSL access fees, a naked ADSL service, and better wholesale pricing. The regulator was also urged to push local loop unbundling to boost competition in the ADSL market.

Vodacom spokesperson Richard Boorman said that access to additional spectrum is the main thing government and ICASA should focus on. Vodacom also asked the DoC and ICASA to make it easier for operators to roll out networks.

“Access to spectrum is the main thing, followed by help to make it easier to secure sites for base stations. We also struggled somewhat with planning issues in terms of the long-distance fibre project but that’s more past tense now,” said Boorman.

Robert Madzonga
Robert Madzonga

Robert Madzonga, Chief Corporate Services Officer at MTN SA, said that they support the minister’s “green paper white paper” process which will culminate in a policy on a variety of issues, including broadband.

“We believe that the policy will need to address issues such as the effective and efficient use of the countries resources such a frequency spectrum, digital dividend, e-skills, rights of way, and support for local content,” said Madzonga.

“The DoC could, as an example, facilitate the roll-out of rural infrastructure by utilizing the Universal Service and Access Fund and finalise and publish the much awaited rapid roll-out guidelines.”

Alan Knott-Craig
Alan Knott-Craig

Cell C CEO Alan Knott-Craig suggests a few interventions, including asymmetric interconnect rates, roaming fee regulations, rapid deployment guidelines, sharing infrastructure, stopping anti-competitive behaviour and the allocation of spectrum.

Extending benefits of asymmetry and Regulation of roaming fees: “Currently our highest input costs are mobile terminating rates and punitive national roaming rates. These account for more than half the cost of making a call, and in many cases are actually higher than the price we charge for a call. Both these rates are within the control domain of ICASA. Roaming fees should be regulated so as not to exceed regulated MTRs. Continuing asymmetrical MTR will enable Cell C to establish itself, much like Vodacom and MTN did with asymmetrical rates to Telkom in their first 17 years. Cell C and 8ta need the same leg up if they are to compete effectively,” said Knott-Craig.

Finalisation of rapid deployment guidelines (section 21 of the EC Act): “There is push back from local government to build new sites to expand coverage and capacity which would reduce Cell C’s national roaming costs which in turn would enable reduced retail tariffs,” said Knott-Craig.

Regulatory intervention: “Another major challenge is a lack of ready and pro-active co-operation from the incumbents to share infrastructure and by so doing lowering costs. ICASA has never engaged the industry to see what could be prohibiting industry growth; e.g. Are there negative or positive impacts on facility leasing, co-location principles, sharing, etc,” said Knott-Craig.

Pro-active engagement by ICASA on observed anti-competitive behaviors: “The practises of some of the incumbents have the effect of closing certain markets and raising costs, which negatively affects Cell C’s ability to compete fairly and to acquire market share which would allow Cell C to lower prices even further,” said Knott-Craig.

Spectrum allocation: “Government needs to move faster on issuing access to spectrum and must ensure it goes to those best suited to use it whilst fostering more competition,” said Knott-Craig.

Murray Steyn
Murray Steyn

Murray Steyn, Chief Commercial Officer at Vox Telecom, said that the most important issue is for the DoC to stick to its timelines and ensure that after a number of false starts and delays, that Bitstream is a reality by the end of 2012.

“Bitstream itself is only one step in the local loop unbundling process and whilst it doesn’t allow ISPs the ability to offer last mile services on the existing copper infrastructure directly (which is when we will have true competition), it is an important part of the Local Loop Unbundling process,” said Steyn.

“A separate issue that needs to be addressed is the Access Line Deficit which is the loss that Telkom claims it is incurring from providing the “last mile” services. Until that issue is resolved, Telkom is not incentivised to roll out any further last mile infrastructure which is also critical to the expansion of the footprint of fixed broadband services,” said Steyn.

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Dear Minister Pule