'Infraco needs ECS licence'

The lack of an electronic communications services (ECS) licence compromises its ability to meet its mandate, says Broadband Infraco.

At a communications portfolio meeting held this month, the entity said this is because it is not able to extend broadband access services to end-users, particularly in remote, under-serviced areas.

Without the ECS licence, Infraco is forced to engage with other licensed service providers to fully meet its mandate.

Infraco was established in 2007 with the aim of providing broadband infrastructure at a wholesale rate to other operators, with the intention of ultimately reducing the cost of broadband access to consumers. In addition, Infraco had to provide broadband infrastructure to under-serviced and remote, rural areas of the country.

A policy direction on the licensing framework of BI was gazetted in February 2009. Subsequently, it submitted applications for an electronic communications network service (ECNS) licence and an ECS licence to the Independent Communications Authority of SA (ICASA).

The authority received written advice from the ministry of communications that the policy direction would be amended. The departments of communications and public enterprises obtained legal opinion from two firms of attorneys.

It was concluded that Infraco only requires an ECNS licence to carry out its mandate. This licence was issued on 17 November 2009. Reasons for not issuing the ECS licence were provided by ICASA on 7 April 2010.

ICASA councillor Fungai Sibanda said a rollout plan had not been provided for the ECS licence and ICASA was not convinced that Infraco would meet the universal access criteria. ICASA only considered the legal and regulatory provisions and the licensing criteria in the issuing of licences. It will only be able to issue an ECS licence after the minister issues a policy directive.

The Department of Communications (DOC) felt the original intention of government for establishing Infraco should be the overriding factor. This was to provide international connectivity on a wholesale basis to other licensees. The intention was not to create another competitor in the communications sector.

The DOC says it has embarked on a comprehensive process to review the ICT environment, which will culminate in a national ICT policy. This will ultimately result in the issuing of a Green Paper later in the year and a White Paper in 2013. The role of state-owned entities in the ICT sector is included in the review.

Portfolio committee members questioned why an ECS licence is necessary and if it will allow for increased competition and a reduction in broadband costs to end-users.

The members further said the main reason preventing the licence from being issued is a conflict between the original intention for establishing Infraco, its mandate, the legislative and regulatory provisions and the policy directives.

The committee said the matter needs to be resolved as soon as possible and it would meet to decide on how to proceed.

Rendani Musetha, director of broadband at the Department of Public Enterprises, said the original intention had been that Infraco would provide competition to Telkom. As a result, the wholesale price for broadband infrastructure access had been reduced by 75%.

He added that in this respect, Infraco is meeting its mandate. A similar cost-reduction on the retail side did not occur as Infraco did not have an ECS licence. There was no business case that would encourage other players to enter this market. Infraco provides the infrastructure, but no other service provider is interested in taking the services from the site to the end-user.

As a result, Infraco is unable to fully deliver on its mandate to make broadband services available to the under-serviced sector. It needs the ECS licence in order to provide a bundle of services and to meet both aspects of its mandate.

Klaas Motlhabane, part of ICASA's legal counsel, said there is a need for intervention to connect the remote regions to broadband services. Besides Infraco, other players are entering the sector. The undersea cables to SA did not address the issue of providing access in under-serviced areas.