While there are vastly different views on the table when it comes to the state of competition in ICT, SA's players - big and small - have decried the lack of action when it comes to the allocation of spectrum.
This follows the Independent Communications Authority of SA's (ICASA's) inquiry into the state of competition last week, a three-day process that saw participants largely divided in the way they view the country's ICT sector.
While Cell C describes the sector as a whole as a "market failure" and Internet Solutions argues SA has dropped a few rungs on the global ladder of competitiveness, MTN and Vodacom see the level of competition in the market as effective and even "vibrant".
But despite the different goggles SA's ICT players see the market through, the terms "spectrum allocation" and "consolidation" were constants that echoed throughout the hearings last week, with Telkom, Cell C, Vodacom, MTN and Internet Solutions singling out the former as one of SA's biggest regulatory lapses.
Economic hurdle
BMI-TechKnowledge director Denis Smit says, while there will always be a drive for more competition in the market, SA faces harsh economic realities. Smit says, amid "a severely depressed economy", the sector faces a mature voice market that is seeing a bigger decline than the data market has to date been able to compensate for.
"On top of that, over-the-top players are impacting the market and the reality is that revenues and margins are under severe pressure. That is why we are seeing a wave of consolidation, which means less competitors in the short term - but then these things happen in cycles.
"Whether [consolidation] is desirable or not is another issue, but competition for the sake of competition is not good enough - it has to be effective competition, with a business case and capital, spectrum and facilities." He says the situation is paradoxical, with a desire for more competition - but the market realities force consolidation.
Sector neglect
ICT veteran Adrian Schofield says the sector is not a market failure "by any yardstick". The criteria for effective competition, he says, should be the penetration of technology and the quality of the networks, rather than the number of players on the field. "Of course, we can improve on both - but then so can every market around the world.
"The only failure is that of government and the regulator in not opening up the spectrum to enable SA to offer reasonable broadband speeds."
The main barriers to entry for new players, Schofield notes, are capital investment and spectrum. "Reaching critical mass in terms of end-users or audiences has proved almost impossible for new entrants, regardless of how they started - look at Neotel, Cell C, Top TV and Power 98.7."
Ovum analyst Richard Hurst says it appears government does not regard ICT as a serious economic enabler either for consumers, business or the country as a whole. "ICASA should look at mechanisms that will inject further competition into the market, to not only prevent the market failure but to also increase the penetration of ICT services across the population. Issues such as spectrum and the access to spectrum are likely to increase the market for the current players but also increase the uptake of mobile broadband."
Independent telecoms analyst Spiwe Chireka says, while both sides of the field - leaders and challengers - have a point in that Vodacom and MTN, for example, may be "playing fair" by adhering to certain sharing conditions, for example - Cell C lacks the scale it needs to fully take advantage.
"So when it comes to things like wholesale termination rates and reciprocal [network] sharing, smaller players are in a catch-22 - but this is where the regulator needs to get more muscle, step in and regulate."
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