SA regulations 'difficult to grasp`

The South African regulatory environment is difficult to grasp and the country has missed out on a big development opportunity by not liberalising the telecommunications sector earlier, says Gateway Communications CEO Peter Gbedemah.

Speaking to ITWeb after his presentation at the Africom/3GSM conference, in Cape Town yesterday, Gbedemah pointed out that companies tend to do what they have to do, with or without official licences.

"Naturally, we prefer a light touch regulatory regime that is consistent and allows for the reduction of risk and certainty. This allows companies to build businesses that are profitable and sustainable," he said.

Gateway is considering applying for pay-TV and electronic communications network service licences, in terms of the Electronic Communications Act. However, Gbedemah said the preference is to continue to build its businesses in countries where it can be a market leader, rather than in markets that are already highly competitive.

"It would be great to have the licences, but a lot depends on the underlying economic cost of those licences. However, we could continue to operate without them."

The company was founded over seven years ago. Its headquarters are in London, with a technical and operating office in Johannesburg and points of presence in 17 African countries. The unlisted company, which has issued publicly traded bonds, has grown 30% year-on-year.

Gbedemah said the three legs on which Gateway has built its business are pay-TV, the corporate network business, and being a carrier for cellular and other telecoms operators.

"Pay-TV is really doing well. We are broadcasting to almost every African country except SA and Nigeria, because of licensing conditions. However, with an estimated 40 million TV sets in operation, there is a growing and definite market."

Gbedemah noted that pay-TV and satellite TV had always been seen as the preserve of wealthy expatriate communities living in African countries. However, new technology and distribution methods are bringing the costs down for the ordinary person, he added.

He said the local pay-TV market is different from the rest of Africa`s, as some big players already dominate the market. However, other African countries are relative newcomers to pay-TV and those markets are where Gateway would prefer to concentrate.