Interconnection costs should be at the top of the Independent Communication Authority of SA's (ICASA's) things to do, says Gartner.
The legislative should also appoint courageous people to direct it on a consistent and energetic course, adds the international research firm.
Principal analyst Will Hahn, who keeps an eye on the South African sector, says having telecommunications regulation on a generally unchallenged footing creates confidence for investors - not only in telecoms companies, but in all types of businesses that can be created or expanded utilising communications technologies.
“I doubt if it's ever been likely that communications players could get along independent of outside regulation, but in a convergent market where fixed meets wireless, and AT&T meets Google, it's out of the question,” he says.
Investor uncertainty
Hahn adds: “Someone needs to arbitrate and it's widely considered much better when judgments are made according to general rules and published as precedent than case-by-case and behind closed doors. In SA, where the telecoms market is in the vital transitional stage between emerging and developed [markets], this importance probably triples.”
He says it is difficult to gauge international investors' attitudes towards the local market, but Hahn feels they don't think much about the regulator and treat it more like an outside factor.
“I believe that the image the South African communications market creates for investors is now uncertain and in flux. I don't see how you can easily back a comms player with a business plan based on a series of bilateral agreements that have not yet been signed, with the significant chance those agreements could change at any time.”
The bilateral agreements Hahn refers to are those where carriers negotiate interconnection fees bilaterally and ICASA steps in when they have a disagreement and need an arbitrator.
ICASA is still gathering study data to make significant market player determinations and the other usual preparations for setting an interconnection regime, such as standard rules and the level and increases that can be charged.
Give ICASA space
Hahn also believes ICASA's “independence“ should be honoured.
“When Telkom took ICASA to court over the cap increase issue it won, which was a setback, but not unheard of. But when the ministry of communications intervened on more than one occasion to countermand a regulation or licence issue that ICASA had announced or attempted, that was more dispiriting.”
Hahn is referring to the press statement issued by former communications minister Ivy Matsepe-Casaburri in January 2005, which effectively halted the liberalisation of the market for four years until Altech won its court case. There was also the instance when the former minister intervened in the licensing of the second national operator.
He says bringing down price levels is important, and it could spur many of the smaller companies to enter the market. But replacing the patchwork of bilateral agreements with a cost basis, even an imperfect one, is just as important because it would go a long way towards establishing a basis and a structure around which investors could rally and plan.
“Bearing in mind that virtually any system will be challenged in court, the sooner this process is begun the better.”
Related stories:
ICASA a 'lazy horse', 'dead duck'
Share