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ICASA denies USAL shambles

By Damaria Senne and Christelle du Toit, ITWeb senior journalist
Johannesburg, 1 Oct 2007

SA's underserviced areas licensees (USALs) are in danger of shutting down if the Independent Communications Authority of SA (ICASA) does not move to license them, says a source close to the USALs.

The insider claims the regulator is taking so long that all USALs will be bankrupt by the time ICASA sorts out the structure as directed by the communications minister in recently published policy directives.

The directives propose all USALs are merged into nine provincial underserviced area network operators.

To date, only seven of the proposed 27 USALs have been licensed, with the rest in various stages along the licensing process. Some of the USALs have been waiting for more than a year to get licensed.

“The second batch of USALs is disappearing off the face of the earth and, by the time ICASA gets round to licensing them, there will be no one left to license,” says the source.

However, ICASA says its licensing of USALs is on track, despite the lack of clarity on how the planned 27 operators are to merge to form nine provincial entities.

ICASA spokesman Sekgoela Sekgoela says there are no licensing delays for the second phase of USALs. The regulator has met with the Department of Communications and the Universal Service and Access Agency of SA (USAASA) to develop a plan regarding the licensing of USALs and the process will be finalised in “due course”, he says.

However, market commentators disagree.

Clear as mud

“This process has been fraught with confusion and delays,” says BMI-TechKnowledge senior analyst Tertia Smit.

She adds that another problem is that communications minister Ivy Matsepe-Casaburri failed to provide a roadmap as to how the USAL mergers should take place. ”ICASA needs a directive on how to proceed.”

An ICASA official says the regulator has been working with the Department of Communications and USAASA on the matter, but could provide no clarity on its position.

As such, it is not yet clear how long this process will take. Also, ICASA has failed to keep the affected USALs up to date on the matter, says the USAL insider.

“The last correspondence we had from ICASA was last year, when the regulator outlined the additional documentation it needed to finalise the licensing process. We were given two weeks to supply this.”

Survival instinct

Smit says she would be surprised if the first seven USALs, which were licensed in December 2005, were doing any better than they were last year. Research conducted by Lisa Thornton Attorneys, in partnership with BMI-T, indicated USALs need urgent help to survive.

The directive by the minister for the USALs to merge means USAASA cannot help them until that process is finalised, as their business models are in limbo, says Smit.

Smit also advises against the sweeping geographic merger, as the USALs don't necessarily border each other, and may be closer to another operator in the next province.

Reaching out

ITWeb attempted to contact second-phase USALs using the contact list from ICASA as well as the White Pages, Yellow Pages, fax and the Internet, with limited success.

It was found that:

* Ukhalamba Communications had no number or Web site.
* Northcom did not answer at the number provided, and gave no alternative number, or Web site.
* NkangalaTelecoms did not answer at the number provided, gave no alternative phone number, and has no Web site.
* Nyakatho Telecoms' telephone number goes straight to fax. ITWeb did not receive a response to a fax sent to this number.
* Dinaka Telecom's number does not exist.
* Metsweding Telex did not answer at the number provided.
* Platitel calls go through to the Royal Bafokeng Administration, where the representative says the organisation knows nothing of the company or its contact people.
* Ilembe Communications was the only USAL that was contactable.

Attempts to reach second-phase USAL spokesman Mfanyedwa Ntshalintshali also failed. USAASA was unable to respond to a media enquiry by the time of publication.

Related stories:
Broadcasters, telcos share channels
ICASA researches sharing channel 65
Channel 65 hearings start next week
Hope for USALs on spectrum issue
Broadcasters can keep channel 65

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Comments (2)

Jellytot said:

Nothing more than a scam

	ITWeb’s attempts to contact the so-called "Second-phase USALs" says it all -- guess how many of these are actually front-companies. The whole thing stinks and sounds like yet another South African telco scam.
	report abuse vote down vote up October 09, 2007 Votes: +0

DM said:

Not surprising

It is not surprising to hear ICASA saying that everything is on track regarding the licensing of USALS. Ask ICASA of the copies of the reports which should be made public about the licence requirements and and roll out targets as required by law none is available. As it is now how succesful or what kind of intervention is required to assist the USALs to at least help one or two to make a succes story is not there because no information is available. Whatever solutions or intervention measures are being suggested how good they may sound the challenge is how, by who and when will they be implemented. Under ECA it is going to require the survival instinct for any USAL to succeed because all those special benefits which were making the USAL business case lucrative are no more there since the 1996 telecommunications Act has been repealled meaning that USALs will have no special treatment except the USF funding if it is still also relevant in terms of ECA. The point is time taken to reach any conclusion is a matter of concern especially if you look at the markets and the historical background of most of the applicants. It is not surprising that only one of the applicants could be traced by ITweb and the reason is a simple one it is costly to keep the Consortium alive for more than a year those who tried in the past had to even sell their own clothes to survive so I understand exactly waht akk this guys are going through. The USAL was a good idea but failure by the policy makers and the regulator to understand the USAL practically has cost every one dearly espcially the investors. I hope that this time around the policy makers and the regulator will try to put on the boots of the applicants and walk at least a mile in them and they will understand and possibly be more reasonable in some of their demands because some of them are not attainable.

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October 01, 2007 Votes: +0