Telkom wants liberalisation clarity

By Rodney Weidemann for Telkom

Johannesburg, 15 Sep 2004

Telkom has welcomed the communications minister`s recent steps to liberalise the market, although the monopoly still wants clarity on a number of issues.

According to CEO Sizwe Nxasana, Telkom was not surprised by Ivy Matsepe-Casaburri`s announcements, as the minister had already created the expectation of liberalisation during her budget speech earlier this year.

"The announcement has re-energised Telkom in its quest to become a more customer-centric group, and although it is a challenging situation, we are confident we are ready to compete," he says.

"We have been positioning Telkom for competition for some time, but this will give us a greater impetus to work on further improving our service and offerings and strengthen areas where we are vulnerable."

Nxasana points out that the areas where Telkom wants further clarity from the minister include the extent of self-provision allowed by the mobile operators and their ability to resell capacity, whether value-added network service (VANS) providers are permitted to self-provide and whether VANS are permitted to interconnect with public switched telephone networks and mobile operators.

Other issues include whether Telkom will still be subject to tariff regulations and whether cost-based pricing will be applicable in a competitive marketplace.

"We do want to find out whether Telkom will be the only one subject to tariff regulations, particularly as we have to file our new tariffs as of 1 January. With the liberalisation taking effect on 1 February, we need to know how we may be affected," he says.

Despite the uncertainty this creates, Nxasana claims Telkom will not ask for an extension on the deadline for its 2005 tariffs.

He anticipates that the most keenly felt effects of liberalisation will be increased competition in voice traffic, as well as head-on competition from a handful of the larger VANS providers.

"Nonetheless, we feel this is the chance for us to prove that we are ready for competition and we will continue to implement planned strategies in a focused and accelerated manner, offer direct competing services through our own VANS licence and begin to derive the benefits of our investments in Telkom`s digitised network."

Asked whether he felt that, considering the bad blood that exists between Telkom and many of the VANS providers, these players would choose to pay a premium to switch to a second national operator, Nxasana said he felt it was unlikely.

"Telkom and the VANS providers are all businesses. If we can provide a service that can help them to service their customers better, I believe the personal issues involved will not be relevant - they will do what is best for their clients."