/ 6 September 2005

Icasa finalises SNO process

The Independent Communications Authority of South Africa (Icasa) hopes that the long-awaited second national operator (SNO) will be licensed as speedily as possible, Icasa councillor Lumko Mtimde said on Tuesday.

Mtimde — who chairs the SNO committee — acknowledged that the regulator had received all signed documents, including the business plan, and added that the authority was now conducting the regulatory analysis ahead of the issuing of the licence.

He declined to say when the regulator expected to issue the public switched telecommunications services (PSTS) to the SNO.

“We are busy analysing the information they have sent to us and hope to finalise the process quite speedily,” Mtimde continued.

The SNO has already been granted a PSTS licence but it will only be awarded once the operator has satisfied certain conditions as stipulated or agrees to certain terms and conditions which remain undisclosed.

If the licensing of Telkom’s rival happens this year, after several hurdles and postponements since the incumbent’s monopoly expired in 2002, it would put the newcomer in good stead according to a report by research house, BMI-TechKnowledge.

The research house said in a report that about 50% of South Africa’s top 350 companies would consider switching over to the SNO if it gets off the ground soon and offers competitive prices.

While the arrival of Telkom’s competitor is expected to yield lower tariffs, the Organisation for Economic Co-operation and Development (OECD) believes that fixed-line duopolies, including those in the UK and Australia, do not necessarily bring about cheaper prices or a competitive environment.

Head of telecommunication at directorate for technology Dimitri Ypsilanti said: “From the OECD experience, the most efficient and rapid way to build-up the infrastructure is through full competition — attempts at partial competition such as through having a duopoly have been shown not to work.”

In developing countries — the majority of which are characterised by monopolies and duopolies — telephony prices are much higher relative to income, Ypsilanti argued.

The SNO is controlled by Tata Group of India which holds 26%. Its shareholder base includes Nexus Connexion, Two Consortium, CommuniTel and state-held entities Transtel and Esitel which are Transtel’s and Eskom’s telecommunications arms. – I-Net Bridge