Let a thousand telcos bloom

The South African telecommunications market is all but fully liberalised, with at least two of the three tiers now open to competition. Only international connectivity and interconnection needs to be sorted out.

Now that value-added network services are allowed to build their own networks, competition has, at last, been opened up on a national level.

Competition has already arrived at the local level as wireless application providers have found a way to get around the embedded constraints. For instance, when was the last time you heard anyone shout out about unbundling the local loop, the proposal to get Telkom to allow competitors to use its local exchanges to install their equipment? Not for at least 18 months, as the point is all but moot.

The national issue of a local operator finding a telecommunications operator with a full public switched telecommunications network licence, as stipulated under the old Telecommunications Act, and being held hostages to its arbitrary pricing, is no more.

Rather, that local operator can now find any number of alternatives from companies that have the financial muscle to build their own national networks and effectively compete against the incumbents for business.

So, exactly four years after the ministerial policy directives of 2004, we have at last seen their true spirit being realised.

Paul Vecchiatto, Cape Town correspondent

Now that companies can build their own networks, and the new individual electronic communications network services (I-ECNS) licences also allow them to build up their own international connectivity, whether it is via undersea, land cables or satellite links, hopefully we will see those charges really begin to tumble.

So, exactly four years after the ministerial policy directives of 2004, we have at last seen their true spirit being realised. Those who drafted those directives (communications minister Ivy Matsepe-Casaburri) are the ones who can really feel vindicated and should be hailed as the true liberators of the telecoms sector.

The fact that the minister changed her stance in January 2005 is a result of powerful lobby groups gaining access and persuading her to change it. It is a lesson that openness and transparency in all spheres of government is essential. Because without those behind-the-scenes machinations, the sector would be far more advanced than it is and our preparations for the 2010 World Cup Soccer and the digital TV migration issue would be better handled.

There was a collective sigh of relief that the Independent Communications Authority of SA (ICASA) has decided not to appeal the Altech ruling and, because of this, it is highly unlikely that the Department of Communications and the minister will do so.

It is really disappointing that neither the minister nor her department or the presidency has welcomed the liberalisation of the sector. Rather, they seem to be trying to ignore it altogether and this entrenches the notion that it is the government against the country, rather than for the nation. It is no wonder all the other issues have boiled over and the question of lack of service delivery is so high on political agendas.

Possibly, their lack of enthusiasm is due to a notion, although incorrect, that I-ECNS licences have now lost their value. For instance, Neotel is paying about R20 million for its licence; and now there is a question about how to mollify them.

But, these types of licences were artificial barriers to entry. During the build-up of the creation of the second national operator, there were precious few real takers for the big international stake. Tata, which now has 56% of Neotel, had to be cajoled into it and even its participation is at odds with parent group VSNL's normal international strategy.

Now that those barriers have been removed, the market is far simpler, which is good for ICASA's workload, and it can get on with the real tasks of a regulator, which is keeping the big incumbents under a tight rein.

If they do that without fear or favour, then we will see a thousand telcos bloom. Many of which will offer niche services that, believe it or not, will include delivering cost-effective solutions to rural areas. This means the stalled universal service and access licences will at least have a fighting chance to get off the ground.