Communications will be cheaper - Zuma

President Jacob Zuma's promise to trim the cost of communications and take SA's Internet to international levels has been met with some scepticism.

His predecessor, Thabo Mbeki, previously indicated that ICT was a fundamental building block in SA's economy, and that government would do its part to bring down costs and improve connectivity.

However, many of his policy directions came to naught, with only a handful of items finally being delivered, despite ICT aspects, such as business process outsourcing, being named as instrumental sectors to grow the economy.

Last night, Zuma said in his state of the nation address that government was “working to reduce the cost to communicate” as part of its efforts to “encourage greater economic growth”.

“The South African public can look forward to an even further reduction of broadband, cellphone, landline and public phone rates. We will work to increase broadband speed and ensure a high standard of Internet service, in line with international norms,” Zuma read from his prepared speech.

SA has heard these types of statements before, says Frost & Sullivan ICT industry analyst Spiwe Chireka.

Chireka says South Africans have been hearing about government wanting to lower the cost of communication for at least five years, and - with a few exceptions - competition in the marketplace has been the main driver behind lower costs. “The extent to which government is directly involved... has been minimal,” she notes.

“We've seen here and there the example of how government is getting involved, but it could get involved to a greater extent.”

Chireka points out that government needs to exercise the aggression shown when getting the interconnect ball rolling, in all other areas of communication.

Among the items that need to be tackled is quality of service, tariffs and making communication more accessible to rural areas, Chireka adds. “I hope the interconnect aggression is the beginning of the department [of communications] showing some kind of backbone.”

However, there have been some changes to the regulatory landscape, which will aid in making communication more cost-effective, she comments. One of these is this week's announcement by the Independent Communications Authority of SA (ICASA) that cellular operators can cut interconnect rates by 36c from next month, which it says will benefit consumers.

Another is that the local loop is set to be unbundled next year, which would allow telecommunications companies other than Telkom access to the last mile connection between the home or office and the exchange.

Local loop unbundling has taken some time to become a firm target, and it is essential to allow competitors direct access to consumers. “It looks like it will happen,” says Chireka.

Chireka points out that, two to three years ago, ICASA started facilitating a more competitive environment. In addition, government formed Broadband Infraco, although what that entity will do and how it will add to the competitive landscape still remains to be seen.

Chris Gilmour, an analyst with Absa Investments, says the lack of cheap communication is costing the economy, although this is difficult to quantify, and government needs to be “a bit more heavy-handed” in forcing companies to trim costs.

Gilmour says this sort of rhetoric has been heard before and very little has been done to drastically trim the cost of communicating. He says Zuma's speech is “suitably vague as to be meaningless”.

Even Seacom's landing has not yet had the promised effect of drastically improving the broadband experience, Gilmour adds. “It's moving at a snail's pace.”

The lack of affordable communication and internationally competitive broadband is costing SA in dropped calls, the high cost of communication, and hours waiting for Internet pages to load, he explains.

“We are going to be the laughing stock of the world when the journalists come out here in four months' time.”

In November, Parliament's communications committee chairman, Ismail Vadi, pointed to two examples of where policy direction by Mbeki in his state of the nation addresses in 2005 and then in 2007 - about ongoing work to reduce telecommunications costs - had resulted in no action.

“From being an ICT policy trendsetter in the early years of our democracy, we have lagged behind in comparison to other developing nations. We have lived through the lacklustre performance of political and departmental leadership in the previous administration.

“In the past five years, the Department of Communications could best be described as an ICT tail that belatedly tried to wag the dog. This was a period of policy incoherence, administrative obfuscation and ineffective leadership,” Vadi said during a speech delivered at the University of the Witwatersrand.