HILARY GUSH, Cape Town | Thursday
THE government plans to license only one full-service telecoms operator as a rival to monopoly Telkom when its exclusivity expires in the next two years, but foresees a third licence within five years.
Outlining telecoms policy ahead of Telkom’s initial public offering in the fourth quarter, Communications Minister Ivy Matsepe-Casaburri said the second national operator (SNO) could use Telkom’s infrastructure for up to three years while it develops its own.
“The final policy positions must be clear for when the IPO takes place,” she told a news briefing on Wednesday.
Invitations to bid for the SNO licence would be issued “long” before the IPO, which foreign investors are watching closely for signs on the government’s commitment to privatisation. The minister repeated that the IPO was on track for late this year.
“We are on track for the IPO to be in the last quarter,” she said. Matsepe-Casaburri said at least one more licence would be introduced within five years of Telkom’s exclusivity ending.
This would either be in May 2002 or May 2003 depending on whether the state firm applies for an extension of its monopoly.
Telkom can apply for the extra year if it meets a series of targets. But that year would come with more social rollout obligations, which Telkom may consider too onerous.
Matsepe-Casaburri said state-owned satellite broadcaster Sentech’s current mandate would be expanded to include international long-distance phone services. No time frame had yet been decided on this.
“After four years, the market should be assessed to determine the viability of licensing additional operators,” the minister said.
South Africa will limit foreign ownership of phone licences to 49% and aims for black ownership of up to 30%.
Matsepe-Casaburri said the government would not insist on the new operator partnering either the telecoms arms of state power firm Eskom or transport utility Transnet, both of which have large telecoms infrastructure capability, but said they were free to participate.
Besides Telkom, South Africa has two mobile phone operators – Vodacom and M-Cell. A third licence was issued to Saudi-backed Cell-C last month and should be up and running by year-end.
She said the 1800MHz spectrum – a bone of contention among operators who say their 900 MHz spectrum is crammed – should be allocated fairly among all licence holders for a fee.
The government plans to offer third generation licences to all operators for what the minister said would be “an appropriate fee”.
Matsepe-Casaburri said in rural areas where phone penetration is low, she would be able to grant so-called “local loop” licences to small and medium enterprises.
She said the telecoms policy direction would appear in the Government Gazette by March 23 and would then be open to public comment. – Reuters
ZA*BUSINESS:
Telecoms sector wants gates opened February 6, 2000
Auction may decide Telkom’s rival May 3, 2000
Eskom looks to take on Telkom February 18, 2000
BACKGROUND:
Government recommits to Telkom IPO February 24, 2000
SA wont put Telkom IPO on hold January 18, 2001
Labour vows to block Telkom IPO September 21, 2000
Govt faces massive showdown with Cosatu July 27, 2000
Privatisation on track, but protests loom May 16, 2000