Mail & Guardian reporter
This week Telkom went to court to try to win control over the provision of infrastructure for the Internet, a move that could put some Internet service providers out of business.
Telkom currently rents bandwidth to service providers, who – in terms of Telkom’s claimed monopoly of Internet service provision – must then add value such as content and other services before selling to clients. Telkom now wants to sell directly to clients and cut out the middleman
Telkom claims that if it loses the case it will forfeit R1-billion in future earnings. Internet service providers scoff at this, saying Telkom already earns R400-million from them and this figure will escalate in years to come.
Service providers claim that Telkom, after opening up the telecommunications environment to wide private-sector participation, is now trying to “nationalise it”.
In the Internet battle, Telkom is pitting itself against a state regulatory body – the South African Telecommunications Regulatory Authority (Satra), which disputes Telkom’s assertion that it has a five-year licence that gives it control of the frequencies occupied by Internet service providers and has ordered it to relinquish some monopolistic practices.
Telkom representative Pinky Moholi says: “Telkom is not interested in being an exclusive provider of content. We provide the backbone transport infrastructure which enables service providers, who are the people offering content, to do business with their customers on a world-class Internet-specific network.
“By providing a backbone for the service providers to offer their services, we also hope to stimulate growth and competition in the industry, which will be to the economic advantage of our country and its people.”
Telkom is known to fear losing earnings through companies and individuals making international calls via the Internet and therefore paying only local telephone rates. This is already happening in Europe and has led to worldwide losses for telecommunications authorities.
An adviser to the industry, who did not want to be named, said Telkom’s challenge was “to respond creatively, not in a way that echoes apartheid authoritarianism”.
Internet service providers say the Telkom decision flies in the face of international competitiveness – and the international norm of deregulation of the airwaves. They say it is already dissuading international telecommunications companies from entering the country, and could put many small or medium service providers out of business, or severely curtail their trade.
Internet usage has exploded in South Africa. David Frankel of the Internet Service Providers Association says there are presently about 250 000 people using dialup only, a further 4 000 people who have e-mail through universities, and approximately 700 000 people who have e- mail via company networks.
Frankel believes one of Telkom’s international partners in its million lines deal is pushing Telkom to harness the Internet industry to try and protect its investment from competition and any Telkom cash-flow problems that could hamper the mega-lines project.