Telecoms duopoly speculation ignites

By Phillip de Wet for Telkom
Johannesburg, 18 Jul 2001

Speculation on possible changes in government`s approach to telecoms liberalisation has started early after being galvanised by a report that more than one competitor to Telkom may be on the cards.

Business Day reported today that the draft policy currently before communications minister Ivy Matsepe-Casaburri may call for the licensing of two, not one, new fixed-line telecommunications providers. The paper cites no sources for the information.

The Department of Communications and the Communications Ministry have been tight-lipped on the issue and would not comment on the possibility. Drafts of the new policy also seem to be closely guarded, and no leaked information has yet come to light.

The final policy directions are to be released next week after the initial document was opened to public comment in late March. There is a tight deadline for its release, as both the proposed public listing of Telkom later this year and the licensing of any competitors by May next year depend on the policy framework being in place.

The first draft called for a single competitor to Telkom, which itself campaigned for a duopoly, in contrast to the majority of other stakeholders who called for at least two new entrants.

Any change may be due to sustained industry pressure, as those most influenced by telecoms pricing fought to have the decision reversed. Internet businesses and communication user associations were among the more vocal objectors to a duopoly.

Apart from Telkom, M-Cell is the player most likely to frown on the possibility of a policy change. M-Cell is to date the only company to publicly state that it may be interested in the new licence, although it has made no final decision on the matter yet.

M-Cell has made it clear that many factors could influence its decision on bidding for the licence as it does not believe the potential market to be overwhelmingly lucrative.

M-Cell executives were still studying the report this morning and were not available for comment.