[ Johannesburg, 11 September 2008 ] - SINCE ALTECH AUTOPAGE Cellular went to court to challenge the adjudication of new individual Electronic Communications Network licences (i-ECNS), the telecoms industry has been focused on the issue of the right of operators to build their own networks. Altech and many of its contemporaries feel that the only way to ensure a truly competitive market is if operators can determine their own network costs, and the easiest way to achieve this is to build and run their own networks.
Under the Electronic Communications Act (ECA), only operators issued the i-ECNS licence by the Independent Communications Authority of SA (Icasa) are allowed to self-provide and/ or apply for WiMax spectrum. Before Altech's successful legal action, only the larger operators were awarded the i-ECNS licences, but the court's ruling in Altech's favour has given even the smaller telcos the opportunity to develop their own networks.
However, the value-added network service providers (Vans) say they still have a quagmire of legalities to navigate. And self-provisioning isn't necessarily the route to a competitive telecoms market in South Africa, argues John Holdsworth, CEO of ECN. "Icasa still
"Icasa still hasn't promulgated most of the critical regulations mandated in the ECA that are required to liberate the industry from the crippling conditions under which we are currently operating," he says. "Competition in the SA telecoms market is almost non-existent and is exacerbated by the lack of clarity and progress in the licensing as well as the regulatory regime."
PRIORITIES
Holdsworth isn't alone in this opinion, and Altech's decision to go to court was greeted by mixed responses in the market. Internet Solutions (IS), Vox Telecom and Smile Communications, in fact, went as far as to initiate counter-litigation against Altech. While the market may be divided on the question of self-provisioning and the wisdom of the Altech court case, the telcos operating under the current circumstances agree on one thing: they are currently caught in no man's land and the provisions of the ECA must be promulgated in order to drive the industry forward.
"New pro-competitive regulations which align with the principles of the ECA are desperately needed," says Holdsworth. Douglas Reed, CEO of Vox Telecom agrees, adding that as soon as you free up an industry, prices come down.
Holdsworth adds that all the media focus lately has been around self-providing, but "it will provide zero impact on telecoms costs and the cost of doing business. Vans should be allowed to selfprovide, but in terms of priorities, it's way down the pecking order," he says.
However, while Tony Walsh, CIO at IS, agrees that the industry needs to pursue aggressive progress in the conversion of licences and the necessary regulatory changes, he feels that the issue of self-provision depends on the individual companies.
"If you are a virtual provider, it's not necessarily that important," he says. "But IS, for example, has a signifi cant investment in the ground, with multiple points of entry, so self-providing is important to us - particularly in terms of our strategy to play in the voice space."
COMPETITIVE REGULATIONS
Holdsworth points to the liberalisation of the telecoms industries in the UK and the US as a good example of how implementing the correct regulations can be effective. "In Europe and the US, when competition was introduced into a telecoms space where there was a monopoly, the regulations made the incumbent compete on competitive terms. This is not happening in South Africa," he says, "despite the fact that the regulations exist in the ECA - they just haven't been promulgated."
He points to the following areas as vital: non-discriminatory numbering, fi xed-line number portability, cost-based interconnection, facilities leasing, carrier pre-selection and local loop unbundling. What this boils down to is that the Vans want the same rights as Telkom and Neotel.
As the situation stands, the smaller operators are being elbowed out of the market through their inability to use these services. Millions of rands are being spent on interconnects, and while Neotel is already using number portability to let Telkom customers retain their existing numbers, but have them running on top of Neotel's networks, number portability doesn't apply to Vans.
Reed would also love to see parity on interconnects and number portability. However he points out that local loop unbundling and carrier pre-select are not imperative to Vox as the company already has a pre-select in place and uses the current infrastructure for geographic services.
Despite the minor differences evidenced by individual company needs - whether in terms of network self-provision or carrier pre-select, or any of the other issues - the industry is united in its desire to see Icasa do what needs to be done to open up the market. "If Icasa can level the playing fi elds, it will give all of the telcos the chance to compete," Reed says.
According to Icasa, the regulator is in the process of ensuring that regulations that deal with fi xed-line portability and carrier pre-select are published. "The main regulations have long been fi nalised at the same time with mobile number portability," says Icasa's spokesperson,
