Capacitating regulators to appropriately deal with the rapid advancements and competition dynamics in the ICT space was the running theme at an industry event in Sandton last night.
The Association of Comms and Technology, Through Line Advisors and Thulamela Chambers partnered to host the inaugural discussion on the complexities of competition and regulatory issues under the banner: “A new frontier in ICT regulations”, bringing together industry players from the legal, telecoms and policy-making fraternity.
The conversation was described as prudent, with different panels discussing the ongoing transformation in the sector, convergence of competition law and sector regulation, judicial decisions on ICT sector mergers and public interest objectives, market structure changes, as well as the publication of the country’s draft National Artificial Intelligence (AI) Policy.
The discussion also focused on the challenges experienced by the regulators in the ICT sector, ranging from litigation by interested parties, resources, ethical behaviour and human error and oversight.
Economist and Through Line Advisors founder Mark Williams pointed out that the role of digital in the economy and in the delivery of public services is becoming increasingly important, resulting in policy implications.
Regulatory coordination
On the role of regulation and market consolidation, the focus was on Vodacom’s acquisition of a 30% stake in Maziv, which went through a rigorous three-year process before it was approved by the Competition Commission and Independent Communications Authority of South Africa (ICASA). Another was the MultiChoice and Canal+ deal.
Maziv is majority-owned by Community Investment Ventures Holdings, whose major fibre businesses include Dark Fibre Africa and Vumatel.
Williams pointed out that South Africa is witnessing a layering of public policy objectives being imposed on the sector. For example, spectrum licences, universal service obligations, other public service obligations, as well as merger-controlled remedies.
Given the “multi-layered” regulatory framework, Williams asked where the focus of the sector regulator should be in the ecosystem of obligations.
Moses Mashisane, group chief regulatory and compliance officer at Maziv, said it’s a difficult world for all regulators and for all operators alike.
“We need to recognise where we are. If we consider the achievements we’ve made so far, mobile has been the most phenomenal success – at 99% coverage – in the country, we are better than most countries on the continent. In terms of fixed, we’ve achieved 30% of FTTH [fibre-to-the-home]. We are ahead of the pack, but we need to move to the next level.
“We need to focus on consumers, from both the operator and regulator side. We need to look at the impact and how we service customers, that’s where the regulatory focus should be. What kind of enablement should we receive, in terms of what we’d like to achieve.
“Does it make sense for any operator to spend three or four months looking for a right of way in a world where we want faster digital economy? We need to focus on what will work best for the consumer and for us to drive the investment forward.
“We should understand consolidation is here to stay, and we can’t dictate how it should or should not go. It will go the way it’s supposed to go because of the market forces. For this to happen, we need speed. The regulatory environment should provide us with speedy resolution of issues – we know it is under-resourced and there are many other priorities being considered – but the slower we are, we slow the country and become uncompetitive against our peers.”
In addition to speed, Mashisane urged for regulatory parity. “If we have a situation where we say: ‘Maziv should look a certain way or Telkom should look a certain way’, it’ll create problems for the regulator. There won’t be enough resources to manage everything. I think the next focus for regulators should be regulatory parity, speed and consumers. If we regulate, let’s regulate for the right reasons.”
Commenting on competition in the market, Liza Zouabi, executive for group pricing compliance and regulatory economics at Telkom SA, said competition “isn’t dead in South African telecoms but is thriving”.
Chris Charter, director and head of competition practice at Cliffe Dekker Hofmeyr, shared his takeaways on the Vodacom/Maziv deal and implications for the evolution of the ICT sector.
Charter joked that one takeaway would be to “try and not do that type of merger because it will take three-and-a-half years”, highlighting the regulatory difficulties that resulted from the merger.
“One of the problems we see in these types of mergers is just how difficult it is to apply some of the standard merger analysis. When you get into tech mergers, there is a lot of time spent on market definition, understanding adjacent markets and the value chain. I think ecosystems are becoming increasingly a focus of how you analyse tech and telecoms mergers, including MultiChoice and Vodacom/Maziv. There’s a lot to analyse and a lot to understand in terms of how the one impacts the other.
“It’s not so much what the outcome will be, but it’s more that there’s a lot to think about. Overall, the dynamic nature of the market does help, but regulators who are responsible will look at all the aspects.
“If I were to pick a couple of other things from the decisions we’ve had recently in these big ICT mergers, a lot of work must be done in terms of inter-regulatory coordination. It doesn't help to have ICASA looking at it in one way, broadcasting authorities and others taking different approaches – there needs to be more coordination.
“An unavoidable spillover would be increased new legislation and policy, trying to regulate specific sectors, whether it’s the ICT sector broadly, data centres and compute, AI and certain parts of the telecoms infrastructure. We might see some more specific legislation and policy coming out.”
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