The Independent Communications Authority of South Africa (Icasa) has rejected both bids for the 51% foreign equity stake in the second national operator (SNO) to rival partially privatised telephone fixed-line monopoly Telkom, saying that they both fall short of the criteria.
The body has also recommended to Minister of Communications Ivy Matsepe-Casaburri that the government formally close the 51% application process into the SNO.
Icasa said that after evaluating all of the evidence before it, and notwithstanding the individual strengths of the two bidders — Communitel and the Scandinavian-based Two Consortium — they still fell short of the envisaged rival position to Telkom, which would own a 25-year licence and control a 51% equity stake.
It added it could place no reliance on the two applicants.
”Icasa therefore has recommended to the minister that the government formally closes the 51% application process into the SNO under the present circumstances. It could channel its collective energies towards creating real and sustainable competition to the incumbent. Icasa’s recommendation is before the minister for her consideration,” chairperson Mandla Langa said.
Langa said Icasa had taken cognisance of the need for competition in the South African telecommunications market and specifically in the public switched telecommunications sector, to encourage innovation, reduce prices and iltimately benefit both business and residential consumers.
”We realise that the impact of such competition on the economy as a whole is critical. We have further taken into cognisance international commitments such as South Africa’s World Trade Organisation commitments to introduce a duopoly this year.
”However, our commitment, like that of the government, is to introduce effective, real and sustainable competition within the managed liberalisation framework set out by the government, hence the recommendation announced today,” Langa added. — I-Net Bridge