Busting the telco big-bang theory

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While it doesn't look as though there will be a telecommunications big bang, local value-added network service providers (VANS) are not sitting on their thumbs.

The Independent Communications Authority of SA (ICASA) on Friday began handing out the newly-converted and extremely desirable electronic communications network services (ECNS) licence.

The licence will essentially allow the smaller telecoms players to go head-to-head with the likes of Telkom and MTN.

There are few industry watchers that expect VANS to immediately start building networks that will rival those provided by the incumbents. However, several players are grabbing the opportunity.

Bit by bit

First in line at ICASA last week was new player ECN Telecoms. Operations manager Jeremy Macdonald says: “We are not planning to replicate Telkom's network.”

While the company will still lease most of its capacity from the incumbents, it now has the option to install its own infrastructure. “We will be laying our own infrastructure where it makes economic sense. And in certain places it will make sense to implement our own infrastructure,” he adds.

The company believes the conversion has and will have a definite impact on the industry. However, Macdonald says there is still room for improvement. “We would like to see other regulatory issues mandated in the Electronic Communications Act implemented in industry.”

Macdonald points to local-loop unbundling (LLU) and carrier pre-select (CPS) regulations. ICASA was expecting to hold CPS hearings this month; however, these have been postponed until 18 and 19 February. LLU was expected to start early this year, but ICASA says it may well only start the process in the authority's next financial year.

Another cable

Deutsche Telecom subsidiary T-Systems was another company in line last Friday to collect its new converted licence. GM for telecoms at the company Andrew Hutchison says T-Systems is naturally “delighted” to finally have the licence in hand.

Hutchison says T-Systems also has plans to make the best of the conversion. “In line with our corporate strategy, we will now have the opportunity to place infrastructure where we need it. Particularly in the rural areas, where the incumbents may not have placed their own.”

He says the company has had to face long turnaround times in some areas where infrastructure has not been placed. The new licence will change that, since it can now dictate its own deployment timeframes.

However, Hutchison says the backing of German telecom giant Deutsche Telecom gives the company other opportunities. “The group is discussing the possibility of investing in landing a cable in SA.”

Cost concerns

Vox Telecom is hesitant to comment on its plans for the converted licence. The company is concerned, because ICASA has not yet stipulated the new licence regulations.

If it is expected to pay 5% of its annual turnover, gaining the licence may well not be worthwhile for the company.

ICASA spokesman Sekgoela Sekgoela says the authority held hearings last week on the licence fee regulations. There has yet to be an outcome of the discussions. All telcos applying for new licences will be bound to those regulations.

However, those that have been converted will not yet have to worry about the cost. “The licence fee will only really come up at renewal. For now, they have what they have and will not have to worry about the regulation.”

Allied Technologies, Internet Solutions and MWeb were not available to comment this morning; however, all have indicated they will discuss possible plans.

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