The lack of action from the Department of Communications after two telecommunications pricing colloquia is tragic for the local IT industry and the economy as a whole, says Rudolph Muller, founder of MyADSL.
Muller has called for immediate tangible results. He says unless the IT industry and consumers see true action from the department and a subsequent reduction in telecoms pricing soon, the department will further damage its already tarnished reputation.
"One has to question their ability to govern the telecoms sector while being a majority shareholder in the monopoly they protect," he says.
Muller was commenting on the fact that the department has not made pronouncements regarding telecoms reforms following the October colloquium. In his closing address at the colloquium, deputy minister Roy Padayachie expressed government`s strong sense of immediacy, determination and conviction to take action. He said six to eight weeks would give a realistic time frame for the sector to see the first steps taking place.
Stakeholders were invited to present written reports to the department within two weeks following the colloquium to ensure lingering concerns were addressed. This input, together with the recommendations from the colloquia and a report from the working group, formed at the July colloquium, were to be used to develop a comprehensive report that would provide guidance on the telecoms reform process.
Albi Modise, acting chief director of media and communications at the department, says the director-general is evaluating the final report to determine what policy decisions need to be taken in order to advise the minister. It is still unclear when the report will be released, he says.
Complex processes
Prof Alison Gillwald from the Wits Link Centre notes that the working group`s recommendations included providing the Independent Communications Authority of South Africa with capacity to meaningfully regulate prices and enable fair competition.
More specific actions such as unbundling of the local loop and declaring aspects of the undersea cable an essential facility to reduce international bandwidth costs were also recommended, she says.
Gillwald says if these recommendations were to be implemented, prices would likely fall. However, the recommendations involve complex processes that have taken years to formulate policy positions on and even longer to implement in other countries, she adds.
Gillwald notes that such policy decisions are also difficult to implement piecemeal as the problems they seek to solve are caused by structural flaws in institutional arrangements, particularly the market design of the sector. Implemented in haste, the policy decisions may compound these problems rather than improve the sector, she says.
Clumsy intervention
Dave Gale, business development manager at Storm, notes that regulatory intervention can be clumsy at best and dangerous at worst.
"It`s very easy to talk about lowering prices, but difficult to do it in a manner that does not damage the market."
Gale also stresses that competition is the most effective way forward, with market forces being fluid enough to allow as little disruption as possible.
He says while lack of clarity with respect to policy direction obviously affects any ICT business trying to plan for the future, Storm has learnt to adapt to quickly changing circumstances. He says delays of this nature are nothing new.
"We`re sceptical when promises are made with tight deadlines as they are seldom met," he says.
Ray Webber, spokesperson for the Communications Users Association of SA, says users are getting despondent after waiting so long for pricing reforms to be implemented. He says the Department of Communications had good intentions and has the support of the ICT sector.
"However, he [Padayachie] probably found that it`s more difficult than he expected to gain the cooperation of the telecoms providers to lower prices," he says.
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