Johannesburg | Thursday
SOUTH Africa’s tortuous trek to telecoms liberalisation took another bad turn on Thursday with reports that President Thabo Mbeki has had to intervene in a battle between the regulator and the government.
The Business Day newspaper reported that Mbeki had to step into a standoff between the Department of Communications and the Independent Communications Authority of South Africa over how to select a competitor to state-controlled utility Telkom.
The opening up of the telecoms sector, and the partial listing of Telkom by next March market conditions permitting is a cornerstone of South African economic policy.
Presidential representative Bheki Khumalo confirmed that Mbeki had held a meeting with ICASA and the communications department last week. But he did not give details.
Senior Icasa and communications department officials were locked in separate meetings until later in the day, and were not available to comment.
The path to competition in South Africa’s fixed-line phone market has been troubled. Last year new telecoms policy went through a series of U-turns, as industry players fought over whether to allow one or two new Telkom rivals.
Telkom is due to be listed by next March in the country’s biggest privatisation effort. A rival is due to be licensed later this year, with a delayed invitation to foreign operators wanting to participate in the new player due out this month.
Last week Icasa accepted bids from seven black businesses for a 19 percent stake in an operator to rival Telkom.
The newspaper also reported that Icasa’s chairman said the regulator did not have legal authority to decide on an application for an equity stake in a licence. It only had authority to decide on an application for a licence.
The communications department has split the bid for the second operator into two: one for black-run business (19%) and one for a big probably foreign operator (51%).
Thirty percent of the new licence is being set aside for the telecoms arms of state transport and power utilities Transnet and Eskom.
Business Day said the adjudication process for the 19% stake has ground to a halt while legal experts examine legal provisions. ”Pending a resolution, Icasa is not even looking at the…applications.”
Although some analysts have queried the wisdom of splitting the bid, the government has said it decided on that procedure after express requests from potential foreign participants that a black partner be selected by the authorities first.
In an economy still dominated by whites eight years after the end of apartheid, government policies aim to give the black majority a bigger role. That is behind the decision to set aside part of the licence to black-run groups. – Reuters