Govt determined to cut telecoms costs

By Damaria Senne, ITWeb senior journalist

Johannesburg, 28 Sept 2005

Now that it has been firmly established that the price of telecommunications in SA is too high, the next step is to seek consensus from stakeholders to develop definitive policy options, says Department of Communications deputy minister Roy Padayachie.

He was briefing the media yesterday with regard to the telecoms pricing colloquium scheduled to take place on 11 and 12 October at Gallagher Estate in Midrand.

Padayachie said the working group had "interrogated" recommendations put forth by the July colloquium and is ready to present a report on options and considerations to lower telecoms costs.

Padayachie made it clear that while government would use the colloquium to seek as much consensus as possible, it is committed to implementing the strategies that would allow for the lowering of telecoms prices and encourage economic growth.

"It must be borne in mind that the central thrust to reducing telecoms costs is to encourage and intensify competition."

While acknowledging the importance of the second national operator, Padayachie also emphasised government`s commitment to introducing interventions that will liberalise the market further. He said immediate interventions would include ministerial declarations while regulatory issues would be addressed in the medium-term.

Long-term interventions would look at systemic issues that impact on telecoms in the longer term, and these are likely to mean further refining of the legal framework, he noted.

With the participation of operators, strategies can be implemented that will allow SA to drive its economic growth rate from 3% to 6%, he added.

Padayachie reiterated the government`s position that high telecoms prices raise the cost of doing business in SA and undermine the nation`s competitive position.

He also spoke about the impact that legislative reform will have on the telecoms sector.

"We have to recognise that we are moving into a new dispensation and that convergence will usher in a new regime."

He pointed out that the ICASA Bill would address some of the issues that had been raised by the colloquium to ensure a stronger, more assertive regulator.

He commended mobile network operators for the initiative they have shown in lowering tariffs following the July colloquium. "It is a responsible approach, which we must respect. However, we must await ICASA`s considered report from their investigation."