Unbundling delay trips up telecoms

Johannesburg, 25 May 2007

The Independent Communications Authority of SA (ICASA) has a legal duty, under section 43 of the Electronic Communications Act, to unbundle the local loop and it must get on with the job, says Democratic Alliance communications spokesperson Dene Smuts.

"[Communications minister] Ivy Matsepe-Casaburri has been holding things up by appointing unnecessary committees to advise her. How ICASA implements the unbundling is their problem," she says.

Smuts was commenting after Matsepe-Casaburri, in her budget vote yesterday, set 1 November 2011 as the date by which unbundling should be completed.

While the minister gave the unbundling "priority" in last year's budget speech, she did not set a deadline. The Electronic Communications Act prescribes the process begin two years after the second national operator is licensed, which occurred in December 2005.

"I have also taken the policy decision that, given the complexity of the local loop unbundling process on the one hand, and the urgency for SA to enable all operators appropriately licensed to have access to the local loop on the other, the unbundling process in SA should be urgently implemented," the minister said in her address.

"The experience learned from other countries in the implementation of the LLU [local loop unbundling] is that most issues were resolved through bilateral negotiations between the regulator, incumbent and the new entrants."

Unbundling models

Matsepe-Casaburri also said ICASA should "as appropriate", take advantage of the report of her local loop unbundling committee and its recommendations on the proposed unbundling models.

Smuts disputed the view that Matsepe-Casaburri's target date effectively handed Telkom another four years of monopoly in the landline telephony market, as suggested by a morning newspaper. "I think they called it wrong."

The DA spokesperson says the date set by Matsepe-Casaburri was "neither here nor there" and unbundling should happen much sooner. "We wrote the law and the law we wrote says they must unbundle the local loop. They do not need the minister's permission to do it; they are under a duty to do so."

She adds the greater availability of wireless services also impacts the debate. "We are no longer so dependent on copper in the home as before," she says, implying that further procrastination may leave the issue moot.

BMI-TechKnowledge senior analyst Richard Hurst says it would be advisable to give Neotel mutual exclusivity with Telkom to the local loop. "It would only be fair and will allow them to gain traction in the market. It will also send the right signal to investors that SA takes their investment seriously."

Hurst adds the process of unbundling the local loop needs to begin within the next six to 18 months.

The Telecoms Action Group expresses disappointment at the "continued failure of the South African department of communications and the minister of communications, to speed up the pace of telecoms reform in the country.

"In her budget speech last year the process of unbundling the local-loop was given priority status and yet that has had no effect," it notes.