“…broadband thrives on a mix of competition and active regulation, to ensure an open context.” This succinct summation comes from an Economist article from a couple of weeks ago entitled “Open up those highways“.
Contrast this with news yesterday that ICASA are apparently deliberately privileging incumbent telcos (Telkom, Vodacom, and MTN) by creating a two stage process in granting licenses for self-provisioning (the deployment of one’s own telecom infrastructure). Incumbent telcos are being granted electronic communications network services (ECNS) licenses while existing VANs (Value Added Networks) were only granted the right to purchase access from the incumbents. The bureaucratic-speak and legal waffling used to explain this decision are evidence that there is little sense of urgency at ICASA around the need for more competition and consumer choice in the telecom sector in South Africa.
By coincidence this is in stark contrast with with the Consultative Paper on the Implementation of a Unified Licensing Framework and New Market Structure released for comment earlier this week by the Communications Commission of Kenya. The document is a model of clarity and straightforwardness. Here are a few excerpts, a clear Open Access layer separation:
“The Commission further adopted in principle a unified licensing and regulatory model with the following as the main segments of the future market structure:
-
- Network Facilities Provider (NFP) – who shall own and operate any form of communications infrastructure (based on satellite, terrestrial, mobile or fixed)
- Applications Service Provider (ASP) – to provide all forms of services to end users using the network services of a facilities provider
- Contents Services Provider (CSP) – to provide contents services such as broadcast (TV& Radio) material, and other information services and data processing services etc.“
and
Cross-subsidization between the various license categories shall not be allowed. Firms with multiple licenses shall be required to structure their operations and submit distinct operational accounting returns to the Commission as part of their quarterly and annual compliance returns for auditing purposes.
and finally
With the exception of areas where there exist natural limitations say in spectrum availability, the number of licensee in all other areas will be determined by the market.
Reading this paper and the feedback included from the operators, you get a sense the Kenyan digerati have really got their act together.
Apparently ICASA has also ‘priveleged’ the incumbents (Telkom, Neotel, Sentech and the mobile operators) by allocating them all of the available WiMax radio spectrum, leaving none for any potential new entrants. Interestingly this may have the side-effect of stimulating the use of WiFi!
Mike
I understand that the motivation for the two phase process was largely in response to interventions from Sentech and Neotel who have recently paid large license fees to become telecom operators. If ICASA convert all the VANs licenses to ECNS licenses, then they will have paid those sums essentially for nothing.
My response to this may be a little naive but I say Give the license fees back! and let competition flourish. The opportunity cost of not allowing competition is guaranteed to be far more expensive than those fees. Experience from elsewhere in the world tells us that 3 operators is not enough to ensure competition.
Yes. Telkom is problematic at best. However alternative options are coming forward. The problem with Telkom is to date there was no one to compare them to. You might actually realize later that their service is not that bad (as we realized with BT’s service in London, when we stayed there for a while). New companies are Neotel and the value added service providers (or non fix line providers) like Vox Telecom which has recently released the ADSL phone ( view product on http://www.adslphone.co.za ) . Product like these can significantly reduce phone bills and actually earn people some income. The problems with non fixed line providers like Vox telecom are that you still required a fixed line from either Telkom or Neotel. This in the end will boost Telkom over all profits. I think Telkom will in the end score all the way with handing out licences to VAN’s. But the rates of these VAN’s are SIGNIFICALY cheaper and in many cases your phone bill can disappear completely with the FREE call service for both home and small businesses users. Then there is the added benefit of basic PABX functionality and free cordless phones. Most of the Value added providers uses VoIP (or voice over the Internet) to reduce costs with least cost routing options. I still think though that the ADSL data service from Telkom is good and would recommend it. Then simply add on your ADSL phone and you will have the best of both worlds.
@Gerrard. That borders on shameless self-promotion 🙂 but I’ll let it go because I think it is exactly the sort of competition that South Africa desperately needs.
You’re right that there will never be real competition until we have decent regulation on local-loop unbundling.
I wish I could agree with you about the quality or value-for-money from Telkom’s ADSL service but I suppose mileage varies and it depends what you are you comparing it to.