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The exclusivity blame game

Telkom`s exclusivity is over. Its monopoly isn`t. It`s time to thank the honourable Dr Ivy Matsepe-Casaburri, give her the golden watch and gently prise the keys of office out of her hands.
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Ivy Matsepe-Casaburri must go. It is that simple.

She has achieved some remarkable things in the rest of her portfolio (apparently physical mail actually gets delivered these days), but for what has and is happening in the telecommunications field, she and she alone, must take responsibility. For that she owes us her resignation. And if she has any sense of occasion, she will offer it this week.

The Sentech licence is a classic case of the means defeating the end.

Phillip de Wet, news editor, ITWeb

This week marks the end of Telkom`s five-year exclusivity, although its monopoly drags on. This week the invitation for foreign operators to apply for a part in the second national operator (SNO) consortium is one year overdue. This week the Sentech telecommunications licences were issued. The time has never been better for a government official to declare mea culpa and exit with some dignity intact.

It could also be the best thing for her political career, considering that the long-term consequences of these blunders could potentially be worse.

Monopoly motives

The Telkom monopoly and SNO delays are no-brainers. The five-year deal, which exchanged keeping up with the world for rural roll-outs, is over. The rural roll-outs happened and just about everybody concedes the exclusivity was a mistake. Telkom even voluntarily denied itself the sixth year it could have been entitled to, and whatever its motives may have been, there is now nothing to stop competition on a level consumers can see on their telephone bills. The delays in licensing the SNO can be attributed only to government; first the late start in getting the policy process started, then the three contradictory sets of policies and finally the late Telecommunications Amendment Act.

The long-term result: an SNO that faces an incumbent ever more ready to take it on, a regulator under siege as it tries to artificially control prices the market should keep down, and telecommunications and Internet industries that can only gaze longingly at the facilities available in the North.

The Sentech licence is a classic case of the means defeating the end. Sentech was part of the broader government privatisation plan from the start. During the search for a strategic equity partner to sell a stake to the Department of Public Enterprises, most heard the same comment I did from many players: Sentech is of the canine persuasion. Industry players said it was a business with only negligible growth opportunity and a questionable future in a world where it has competition in broadcast signal distribution, and simply would not be worth the effort of investment.

Matsepe-Casaburri was talked into at least turning it into a pedigree hound with a wave of her licensing wand. Suddenly it was to be a telecommunications player offering international services to consumers. A policy convulsion took care of that, turning it into a carrier-of-carriers.

Now it may earn the government a slight premium on its sale. And that premium will be nicely countered by the loss of value for Telkom and the SNO (in which government still has a stake through Eskom and Transtel). The long-term consequences: the real chance that Sentech could fail as it competes with Telkom for a limited pool of business, and a likely net devaluation of the three sets of assets.

Blame where blame is due

The delays and the indecision have been blamed on many parties. Telkom, for its delaying tactics; its foreign partner Thintana for holding a gun to government`s head; Eskom Enterprises, Transtel and Sentech, all pleading and cajoling for a piece of the pie.

Each carries a part of the blame, but only for what should be the downfall of Matsepe-Casaburri. As minister she should have provided the vision and leadership to create a plan and stick to it, without being swayed by partisan lobbying. In trying to balance all the requirements, she has satisfied none and done wrong to all, especially to the electorate.

What we need, and what can still undo a little of the damage, is a benign dictator. Even a not-so-benign dictator will be an improvement. Bring on Terror Lekota, and if Matsepe-Casaburri must stay, pack her off to a safe portfolio. Housing should suit a self-confessed technophobe nicely.

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