The new licences to allocate scarce wireless spectrum to the internet industry seem an example of how over-emphasising black empowerment can harm, not help, social and economic development. <\/p>\n
The Independent Communications Authority of SA (Icasa) believes it can uplift black businesses by reserving WiMax licences for companies that are at least 51% black owned. But building a WiMax network from scratch will cost hundreds of millions of rands, and no black-owned players in this industry spring to mind as potential licence buyers.<\/p>\n
Raising cash from loans will be difficult, since not many financiers are likely to fund a new entrant trying to challenge well-entrenched players such as Internet Solutions, MWEB and MTN. <\/p>\n
Black entrepreneurs could win a licence and try to negotiate a joint venture with existing players who see WiMax as a way to expand their coverage relatively quickly and cheaply. <\/p>\n
Many telecoms companies have black equity of about 30%. Perhaps Icasa hopes they will strike deals boosting that to 51%. But is WiMax worth the time and money these deals absorb? Icasa should relent.<\/p>\n