Icasa Still Dragging its Heels

[ Johannesburg, 12 September 2008 ] - The Electronic Communications Act (ECA) was supposed to herald the liberalisation of the local telecommunications sector, lowering costs and increasing competition. However, two years after the ECA process kicked off, the industry is still waiting for the new Electronic Communications Network Service licences (IECNS) to be issued, allowing value-added network service (VANS) providers to become truly competitive against the incumbent telcos.

This has led to a "ludicrous situation" in South Africa, according to John Holdsworth, ECN CEO. "Without the new licences, the industry is being governed from the grave and is being forced to use the old vocabulary with the old limitations," he stresses.

With the situation as it is, only the major players have met regulator Icasa’s requirements and been awarded the I-ECNS licence conversion. Some of the smaller VANS have so far only been awarded electronic communications services (ECS) licences.

Icasa's silence is deafening.

- John Holdsworth (CEO of ECN)

The resultant market infighting is muddying the waters still further. The biggest talking point recently has been the VANS’ right to build their own networks, with Altech Autopage Cellular choosing to go to court to challenge adjudication of the issuing of individual I-ECNS licences.

Icasa originally had until 18 July to finalise the licence conversion process. Marcia Socikwa, the Icasa councillor tasked with the licence conversion process, has gone on the record at a recent industry meeting to say matters would be finalised in the June to August timeframe. Socikwa has confirmed that Icasa is still maintaining a deadline of August for ECS licences, despite the fact that no further progress had been made at the time of going to print (mid August). However, the brakes have been enforced on the issuing of I-ECNS licences. "For now, we are waiting for the outcome of the [Altech] court case," she says.

With the spotlight placed on the networks’ rights to self-provide, little has been said of the other provisions mandated in the ECA. Local loop unbundling and carrier pre-select make the issue of self-provisioning a moot point. Many operators currently feel that they can only be truly competitive if they can determine their own network costs, and building their own networks is the way to do that. However, local loop unbundling is a faster way to lower costs, as is carrier preselect because it allows other operators to use Telkom’s infrastructure. But while these have been mandated in the ECA, Icasa has done little to make them a reality.

Vodacom CEO Alan Knott- Craig was recently quoted by Business Day as saying the telecoms sector would "fare better if the industry regulators stayed at home and relaxed rather than went to work each day".

ECN’s Holdsworth says Icasa has shown no sense of urgency in furthering the regulations and issuing licences. "Icasa seems to be getting increasingly ineffectual. Their silence is deafening."