Govt announces two Telkom competitors, broadband licences

Johannesburg, 26 Jul 2001

Communications minister Ivy Matsepe-Casaburri and her department today announced that the government intends licensing both a second national operator (SNO) and a third national operator (TNO) to compete with Telkom from May next year.

While it was originally planned that Eskom`s Esi-Tel and Transnet`s Transtel would be merged to form part of a single new operator, the two parastatals are now to form part of competing consortiums.

"This approach will ensure the maximum utilisation of the available infrastructure to enhance economic growth and social development," the ministry says.

Both the new operators will share Telkom`s existing infrastructure for a two-year period, with an agreement on the terms of sharing to be concluded within 60 days of the new licences being issued.

The controversial Sentech plan, which will give the government-owned signal distributor the right to operate a lucrative international gateway service, is also to go ahead, with a change in its licence terms also expected by May next year.

Although the communications department says the SNO and TNO will not in effect be allowed to operate in competition with MTN, Vodacom and Cell C, the new operators will be allowed to provide mobile services.

"Fixed mobile means a service that will be provided by the PSTN [public switched telecommunications network] licensees by means of a communication device in a static or mobile environment, using fixed or mobile infrastructure or a combination, or any technology enabling such service to be provided," reads a ministry statement.

Communications department director-general Andile Ngcaba says the fixed-mobile provision is intended to prevent the needless duplication of last-mile infrastructure, and that the department is confident the final legislative amendments will prevent fixed operators from encroaching on the mobile market.

The intention to introduce number portability, which would allow consumers to change operators but retain their telephone numbers, has not changed, and the department says portability will be introduced from April 2003. ICASA, the Independent Communications Authority of SA, is to take over maintenance of a central number database by May 2002.

The proposed E-rate, which would give schools cheap Internet access, has also been retained. According to the final policy directions, schools will receive a 50% discount on all telephone calls made to an Internet service provider (ISP), and ISPs will have to give a similar discount on "any connection of similar fees or charges" normally charged for Internet access.

The controversial restriction on the use of voice over Internet protocol (VOIP) technology has likewise remained. No operator or business will be allowed to provide VOIP outside geographic areas with a teledensity of more than 5%. In such areas, originally defined as having a 1% teledensity, small enterprises and all three fixed operators will be allowed to use VOIP technologies without restriction in order to lower telephone costs.

The department also announced that broadband licences are to be introduced, with invitations to apply for such licences to be issued before the end of this year. "The licensing of the broadband will enhance the capacity, efficiency and speed of the South African services, particularly the data services," the department says.