Vodacom CEO Alan Knott-Craig today trashed the Malaysian telecommunications model, saying "all is not well in Malaysia".
"I think Malaysia should be looking at our model," Knott-Craig said at the Parliamentary Portfolio Committee on Communications` public hearing into the Convergence Bill.
His attack on the Malaysian telecommunications model is the most serious yet, as many past presenters have said the Convergence Bill is in some cases a cut-and-paste from the Malaysian law.
Knott-Craig said the majority of Malaysian licensees are not profitable, the investment rate is slower than that of SA and the retail rates are not lower than those of SA.
Unlike many other presenters, Knott-Craig praised the current Telecommunications Act, describing it as "the best bit of legislation in the world".
He noted that the Telecommunications Act has provided a licensing framework that is certain and predictable, and that regulatory intervention happened only when it was necessary and that the process was transparent.
He said the Convergence Bill imposes substantial additional obligations such as the free carrying of government information service and the increase in the Universal Service Fund (USF) contributions to 1% of annual turnover from the current 0.5%.
It also gives the Independent Communications Authority of SA (ICASA) wide and arbitrary powers to impose additional obligations based on a mere opinion that access is needed, without market studies or due process, he added.
Knott-Craig said the convergence has to expressly include protection against double jeopardy by allowing licensees to deduct interconnection, facility leasing and other transfer pricing charges between the different licences when calculating licence fees and USF levies.
"Operators should be allowed to levy a reasonable charge of government information service traffic. My mother always told me it is never good to take anything for nothing.
"These companies pay taxes, so there is no reason why they should carry government information for free."
Knott-Craig added that the Convergence Bill has heavy-handed regulation that should not replace competition, especially in a market that is working well.
The Vodacom presentation noted that a Convergence Bill has to expressly provide for clarity regarding the concurrent jurisdictional problems between the competition commissions and ICASA.
The Convergence Bill could enhance the Telecommunications Act if it adequately provided for the retaining of drifting licence rights on no less favourable terms, Knott-Craig concluded.
"This has to be done in agreement with licensees after a comprehensive market review and only if such amendment will not cause undue prejudice to the licensee."
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