SA\u2019s telecommunications industry is on tenterhooks as its awaits a judgment from the Pretoria high court, expected within weeks, which could throw the sector open to full-scale competition. Many of the bigger players are already manoeuvring to take advantage of the liberalisation of the sector, irrespective of what the court decides.<\/p>\n
Last week, the court heard legal argument from Altech, which brought the application, about why it believes value-added network service (Vans) licensees \u2014 historically these were smaller, service-based players \u2014 have the right to compete head-on with incumbent operators such as Telkom, Vodacom and MTN in providing infrastructure.<\/p>\n
But the Independent Communications Authority of SA (Icasa) and the minister of communications, Ivy Matsepe-Casaburri, opposed the application, arguing in court that allowing the more than 600 Vans licensees to \u201cself-provide\u201d would lead to extensive disruption of roads and other infrastructure. But those in favour of big-bang liberalisation dismiss that argument, saying few Vans players have access to the capital needed to provide this sort of infrastructure.<\/p>\n
Matsepe-Casaburri says it was never her intention to allow Vans licensees to build their own networks. Icasa flip-flopped on the issue, first siding with industry, then with the minister.<\/p>\n
Legal experts say it is Icasa\u2019s job to interpret the law, not the minister\u2019s \u2014 that the old Telecommunications Act entitled Matsepe-Casaburri to set dates for the further liberalisation of the sector but not to interpret its meaning.<\/p>\n
Whatever the outcome of the case, the liberalisation of the sector under the new Electronic Communications Act has set off a chain reaction of deals. MTN is in the process of swallowing corporate Internet service provider (ISP) Verizon Business and Naspers is disposing of MWeb, a more consumer-focused ISP.<\/p>\n
MWeb, which is being courted by a number of companies, including AltX-listed Vox Telecom and Dimension Data SA division Internet Solutions, is implementing big changes to its strategy.<\/p>\n
Products head Nathier Kasu says MWeb is repositioning itself as an alternative telecom company \u2014 and attempting to shed the ISP tag. It has formed an alliance with Vodacom and will offer customers a single bill for their Internet and mobile accounts. \u201cWe really want to become a one-stop shop,\u201d says Kasu. \u201cWe have put together bundles for people interested in 3G and voice contracts, with one support infrastructure and one bill.\u201d<\/p>\n
MWeb will offer all Vodacom voice contracts and try to get people to use mobile Internet services. \u201cAll the phones we market to our customers provide Internet access.\u201d<\/p>\n
The company, which has 320 000 Internet customers, resells 3G data packages for MTN and Vodacom, but the alliance with Vodacom marks MWeb\u2019s first move into the cellular voice market.<\/p>\n
It is also planning to relaunch its voice over broadband product soon. This is after it signed interconnect agreements with the big operators.<\/p>\n
\u201cWe want to be seen as an alternative telecom player,\u201d Kasu says. \u201cWe want to be seen as another Neotel or Telkom.\u201d<\/p>\n
MWeb is holding out for an electronic communications network service (ECNS) licence that will allow it to build its own network. It has been running a pilot network using WiMax, the wireless broadband technology, but this has been partially shut down by Icasa (it\u2019s still running in Soweto and Cape Town).<\/p>\n
If the company is allowed to build a network, it will invest hundreds of millions of rand, Kasu says. \u201cThere is space for more competitors, at least another two or three, depending on how spectrum allocation is done,\u201d he says. If the high court finds in Altech\u2019s favour, this hypothesis could soon be tested.<\/p>\n
But John Holdsworth, CEO of corporate-focused telecom service provider ECN, says Icasa\u2019s licence conversion and the Altech court case are sideshows. \u201cWe already have four or five organisations digging up the roads,\u201d he says. \u201cTwo or three more won\u2019t make any big impact.\u201d<\/p>\n
Holdsworth is critical of Icasa, which he says is becoming \u201cincreasingly inconsequential\u201d. \u201cThe war that is taking place will happen with or without Icasa. The industry is not waiting for the regulator to cast pearls of wisdom anymore. They\u2019re just getting on with it.\u201d<\/p>\n
He wants Icasa to focus its attention on producing regulations allowing fixed-line number portability and carrier preselect. The former would allow Telkom customers to switch to other providers while retaining their telephone numbers. The latter would allow a consumer with a telephone line maintained by Telkom to choose to have calls automatically routed across a different company\u2019s network.<\/p>\n
Holdsworth says these regulations, and reduced interconnection rates \u2014 the prices operators charge each other to terminate calls on their networks \u2014 will have a much bigger effect on the industry, and on prices, than simply allowing Vans licensees the right to build their own networks.<\/p>\n