Deregulation promises boost to corporate e-business

The major benefit of South Africa`s impending telecommunications deregulation won`t be lower costs - although limited price declines of between 10 and 30% are likely on some services.

More important for the entire SA economy will be the greater ability of value-add network providers (VANs) and ISPs to launch new services which will spur the adoption of e-business by the SA corporate sector.

So says Derek Wilcocks, joint-MD of IS (The Internet Solution), Dimension Data`s e-business infrastructure provider subsidiary who points out that with the global telecommunications industry converging on IP (Internet Protocol) technology, the service offerings and skills base of today`s ISPs will be key to the success of SA`s telco providers in the future.

"We will see close relationships developing between the country`s telco licence holders, including Telkom, and those ISPs which manage their own backbones on the telco`s basic infrastructure - a contrast to the often adversarial position which exists today between VANs, ISPs and Telkom.

"One of the greatest problems facing VANs and ISPs is the current lack of clarity surrounding the provisions of the Telecommunications Act which gives Telkom its monopoly. It`s not unusual for Telkom to suspend or withhold services from a value-added provider it suspects of infringing its mandate in terms of the Act. The onus then rests on the provider to prove in court that it has not transgressed the law.

"When Telkom`s period of exclusivity expires and there`s a second - possibly third - telco operating in SA, value-added service providers will no longer be inhibited from rolling out new services because the chances of their facing expensive litigation will be significantly reduced.

"And these value-added services, coupled with a greater availability of bandwidth, will make it easier and less expensive for corporates to implement e-business strategies on par with their counterparts globally," he explains.

Wilcocks believes deregulation will also increase the likelihood of existing and future communications technologies which are ideally suited to the SA environment, and which offer huge benefits to consumers and business alike, being introduced to the country sooner rather than later.

One of these is satellite technology which provides a cost-effective way to make significantly more bandwidth available without having to lay more fibre or copper cables. Utilisation of satellite is currently strictly controlled by Telkom.

Then there`s wireless line-of-sight technology which provides for high bandwidth point-to-point connections; and DSL (digital subscriber loop) which allows for high bandwidth utilisation over an existing copper wire infrastructure.

"The introduction of all these technologies will make a significant contribution to the cost-effective provision of world-class business communications services in SA," Wilcocks concludes.