Cape Town, 05 Sep 2006
Telkom CEO Papi Molotsane has called for a strong regulatory environment in order to "manage liberalisation properly for the good of the economy and consumers".
During an interview with ITWeb yesterday, following his keynote address at the South African Telecommunication Network and Application Conference, he elaborated on three aspects of his speech: regulation, the East African undersea cable system (Eassy), and Telkom`s WiMax plans.
Molotsane said the newly promulgated Electronic Communications Act was "catapulting the country into the area of managed liberalisation, which means a myriad of competing companies would be making their mark on the local scene".
He said because of this there was a real need to have a strong regulator, in the form of the Independent Communications Authority of SA, and that its regulations must be clear and unambiguous.
"We must develop our market on a step-by-step basis and not destroy the confidence in it or the country will lose a massive opportunity to become part of the global economy," Molotsane said.
Telkom is also beginning to step up its interaction with the struggling underserviced area licensees (USALs) as part of its revised strategy of bringing services to mainly rural areas.
"We are saying to the USALs that we are here and let`s find a way to work together," he said.
No bribery
During his speech, Molotsane commented that bribery of African officials is still a widespread practice on the continent.
"Telkom has to keep itself distant from such practices. For instance, if we are involved in such allegations, I personally could face jail, and the company could lose its listing on the New York Stock Exchange," he said.
Molotsane acknowledges that Telkom finds itself in the uneasy situation of being a commercial entity whose most powerful shareholder is the South African government, with its 38.5% stake. This means Telkom has to balance shareholder responsibility with the implementation of government policy.
Eassy does it
It also means Telkom will assume a lead position in the development of Eassy, which is central to government`s New Partnership for Africa`s Development. The Eassy structure is to be an "open access" model, unlike the SAT-3 Atlantic cable, which is owned by a consortium including Telkom.
"We will have to look for a reasonable rate of return on Eassy, but we are definitely part of it. Our participation is hinged on pricing and what the return to our shareholders will be, and these are details that still have to be worked out," Molotsane said.
Telkom is also planning to hang its local access (the last mile connection) in certain areas on WiMax technology, and Molotsane said he hopes the first services will be offered in the first half of 2007.
"WiMax could definitely help us with the roll-out of broadband services as fixed-line DSL means the end-user must be within a 3km to 5km range of an enabled exchange," he said.
Molotsane described WiMax as "the fixed-line operators` revenge, as its use in Germany during the 2006 World Cup showed a fixed-line operator taking minutes away from the cellular operators there".
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