Communications regulator the Independent Communications Authority of SA (ICASA) appears to have woken up and is taking a more proactive role in regulating the market this year, with the finalisation of several retail and wholesale regulations, says UK-based research company Ovum.
Comments from such international research organisations are important, as foreign investors use them as guides to the South African ICT sector.
Over the past two years, ICASA has come in for heavy criticism from both industry and Parliament for its slow response times to queries and its lack of financial controls.
Parliamentary communications committee chairman Eric Kholwane said yesterday that the oversight committee would keep an eye on ICASA to ensure it sorts out its internal problems.
According to a report issued by Ovum, after taking a relatively laid back approach for several years, ICASA has now become quite proactive in finalising and implementing regulations, which should help in encouraging healthy competition in the industry.
It says that in 2009/10, ICASA finalised several regulations, including framework guidelines on interconnection and carrier pre-selection and quality of service regulation. These decisions have helped in reducing the ambiguity in the market. It has also initiated the implementation of a second phase of fixed-number portability in the country.
Prime focus
ICASA has also proposed many measures, like reducing the interconnection rates and introducing LLU (local loop unbundling) in 2011, which - when implemented - are expected to have a positive impact on the market.
Communications minister Roy Padayachie has stated that LLU will continue to be a prime focus of the government's strategy to reduce the cost of connection, by increasing competition in this part of the sector.
Sravan Koka, Ovum analyst and report author, says: “The ICASA's new positive approach is expected to create a more level playing field for alternative operators. With the implementation of new measures, alternative operators will find it easier to enter and operate in the South African telecoms market, which may help in pulling down the retail prices, benefiting the end-users.”
He says SA has one of the largest mobile markets in Africa, with a subscriber base of 47.3 million, and a penetration rate of 91%, as of June 2010. All the major operators already offer 3G services in the country. ICASA has also proposed the auction of additional spectrum in 2.6GHz and 3.5GHz frequency bands that will enable the operators to offer LTE and mobile broadband services.
However, the auction process currently stands suspended, after government raised concerns. ICASA is now in the process of launching fresh consultation on allocation of the spectrum and hopes to complete the auctioning of the spectrum as soon as possible.
Koka added: “It should be an interesting year ahead for the South African telecoms market, considering ICASA's now more proactive approach. The South African telecoms market has a lot of potential for growth and the proposed measures, like the auction of the spectrum, are expected to enhance this further. However, the key here is how quickly the ICASA is able to implement all these proposed decisions.”
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