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Deregulation and the rise of the MAN

Johannesburg, 18 Jul 2006

As high-speed wireless networks become a reality in South Africa - owing both to technological advances as well as changing regulatory conditions - they are being adopted by municipalities across South Africa to help improve service delivery, forming so-called metropolitan area networks (MANs).

That`s according to Keith Bothma of GijimaAst, which has successfully provided wireless solutions for several metropoles, including the municipality of Buffalo City.

"Service delivery is at the heart of government`s mission, particularly in the light of previous inequalities. However, extending services to the previously under- or un-serviced puts an enormous strain on resources - a strain that can be addressed in some ways by the applications of wireless technologies," says Bothma.

While the technology to provide wireless links has been available for some time - microwave links have been in use for years - the real stumbling block has been the necessary regulatory environment which would provide remove legislative barriers for the establishment of private communications networks.

However, notes Bothma, the process of deregulation is gaining pace. "Ultimately, legislation is within the control of government, although it is of course influenced by the constituencies and interest groups. In terms of the Telecommunications Act, pressure for further legislative changes is being brought to bear as there is a sense that convergence between different ICT sectors, driven by across-the board digitalisation, requires a rethink of key aspects of the current regulatory regime. This is bolstered by recognition that the South African economy will be boosted by a more competitive environment in the ICT sector, while government - as part of its commitment to bettering the lives of the people of the country - is seeking to improve access to telecommunications specifically in underserved areas," he explains.

The deregulation of the industry has resulted in the entry of more players into the communications market, especially in the field of data connectivity. It has also resulted in the awarding of licences to municipalities, enabling them to create their own high-speed metropolitan area networks.

Bothma explains the significance: "Municipalities are, in effect, large and complex organisations which need to be run like a business. Similar to businesses, they have enterprise applications which must be deployed over large areas. With high-speed data connectivity which removes the need for expensive third-party services, the municipality is able to rapidly roll out services to new areas, they can consolidate infrastructure and improve the utilisation of IT resources, and they can dramatically improve the communications between the individuals, departments and agencies which are necessary for service delivery," he says.

It also opens the door for municipalities to deliver more value-added services to the people within their jurisdiction. "It is recognised that limited availability of resources seriously hampers service delivery; with the ability to offer additional services, municipalities can potentially enable new revenue streams. These services could include Internet connectivity, voice over Internet, presence and more," says Bothma.

In fact, he says, municipalities could become the next Internet service providers - but with a far more powerful offering. "Since the wireless networks which are connecting municipalities are not limited by legacy technology, they can potentially become virtual telecoms operators," he says.

Bothma notes that municipalities already have enormous existing customer bases, should be able to merge IT and telecom services easily owing to their use of new technologies and can offer complete and wide coverage with available wireless channels. With existing billing infrastructure, they also have the ability to integrate services on to a single bill.

There are also challenges - for example, municipalities are not known for their ability to innovate or for their effectiveness in collecting revenue. However, many have demonstrated a willingness to adopt new technology and are enjoying the business benefits of high-speed wireless communications. Bothma believes it is a matter of time before additional services are introduced, either independently or in partnership with other organisations.

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