The Department of Communications has invited applications for licences to operate telecommunications services in 10 rural areas where Telkom does not penetrate effectively. Applications close on April 30.
Business Day reports that the non-refundable fee for submitting a bid has been set at R30 000 instead of the expected R15 000.
As part of the ongoing liberalisation of the telecommunications market, small operators are to be established to serve certain areas with a very low penetration of telephones. Government has already identified 29 such areas although Telkom has questioned the statistics in some.
Regulations by the Independent Communications Authority of SA (ICASA) bar current players Telkom, Vodacom, MTN and Cell C from holding the licences. No entity is allowed to hold a controlling stake in more than one such licence, although cross-ownership will be allowed for minority interests.
Telkom has expressed concern that the rural licences may create another de facto competitor to it should the various areas be combined under the control of one company.
While many have questioned the viability of businesses restricted to low-income areas, despite the special privileges expected to be granted to the small operators, there are reported to be many interested parties.
It is estimated that each licence will require anything from R15 million to R500 million.
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