South African telecoms policy is a disaster beyond repair, says Absa senior economist Chris Hart.
Speaking at ITWeb`s IT Confidence conference in Midrand this morning, Hart said there was a need to start with a clean slate and design a regulatory environment appropriate for the 21st century - one in which the playing field was levelled.
South Africa had to respond to a coming investment boom and Hart said there should be several telecoms companies operating in the country to create employment.
Hart said a strong rand, low inflation and low interest rates were likely to persist for some time and the country was moving from a consumption boom towards an investment boom. "The economy is on the verge of an investment flood," he added.
Already, investment returns in SA had outperformed world averages over the past seven years. "Investment returns have been phenomenal, boosted by the strong rand," he said.
Businesses needed to respond by adopting proactive management rather than management by wishful thinking. Management by wishful thinking involved holding onto dollars and hoping for the rand to weaken and rescue the income statement, and then petition government for protection when the rand strengthened.
Proactive management meant planning long-term survival by benchmarking against best practice and achieving it - being globally competitive despite currency strength. In a low-inflation, strong-currency environment, pricing power was weakened, and thus business strategy had to focus on driving through volumes and efficiencies.
In sectors such as IT, there was a need to focus on high value-added business, a high degree of specialisation, greater use of technology, personalised services, customisation and the development and retention of scarce skills.
Hart said the home affairs and finance departments had to play a key role in attracting skills to SA, instead of the unskilled labour coming in across the country`s borders. Regulation also had to be supportive to IT and not punitive.
Research and development was also a huge opportunity, but it was important to have patent protection.
Hart said broadband needed "to become as common as electricity".
"In ICT, it is has been more a case of regulatory failure than market failure," he commented.
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