Rural licences closer to being awarded

Johannesburg, 01 Oct 2003

Whether it is good news remains a matter of debate, but the application process for the underserviced area licences (USALs) will follow a similar procedure to that of the second national operator (SNO) process.

The USALs form part of government`s ongoing liberalisation of the telecommunications market, and will see small operators being established to serve a total of 27 areas with a very low penetration of telephones.

Applications for the first 10 licences closed a month ago, with the Independent Communications Authority of SA (ICASA) receiving a total of 16 applications, two of which the regulator chose to reject.

According to ICASA`s Michelle Hajari, the names of the 14 bidders have been published in the Government Gazette and the regulator is now studying the bids.

"We have received requests from some of the bidders to keep segments of their bids confidential, so we will consider these requests before placing the bid documents in the public forum," she says.

"The process itself works much the same as the SNO bid process. Once the bids are placed in the public forum there will be a chance for the public and the other bidders to inspect them and query aspects of the bids.

"There will then be a period set aside for the bidders to respond to these queries, before public hearings are held," says Hajari.

She says the only difference between the SNO hearings and the USAL hearings is that with the USAL bids, the hearings will take place in the specific region that the licence is intended for.

"This is to ensure that the public who will be served by the licences also gets a chance to participate in the process."

Hajari says ICASA is considering the possibility of using consultants to do an independent report - in much the same way as Next Generation did with the SNO bids - but that nothing had been decided yet.

She adds that in terms of the Universal Services Fund, the consortiums that are awarded the licences will receive an initial subsidy of R5 million upon being given the licence, with up to a further R10 million over a period of three years, provided they meet their roll-out targets.

This is a substantial increase on the initial R5 million loan that the agency was offering the USALs, with the proviso that half of that be paid back over time. Now, as long as the money is used to build infrastructure, it will come with no strings attached.

The bids that have been received are as follows:

In Limpopo Province (Capricorn District) - Bokone Telecoms, Capricorn Fixed Mobile Telecommunications and Limpopo Ya Rena Development Services.

In KwaZulu-Natal (Ugu District Municipality) - Thinta Thinta Telecoms and Ugu Wavetel; (Zululand District) - Kingdom Communications.

In the Eastern Cape (OR Tambo Municipality) - Ilizwi Telecommunications; (Amatole District) - Amatole Telecommunications Services and Thethani Telecoms.

In the Free State (Northern Free State) - Mamela Communications; (Lejweleputswa) - Bokamoso Consortium.

In the North West Province (Central) - Karabotel and Ledimo Communication; (Bophirima) - Karabotel and Lonaka Communications.

Asked when the applicants could reasonably expect the licences to be awarded, Hajari notes that it is difficult to say with any degree of accuracy, considering the processes still to be followed, but, she says "hopefully sometime early next year".