The South Africa Foundation on Tuesday launched a new report that focuses on 12 specific proposals for ways to lower telecommunications costs and widen access.
The report comes a week ahead of the telecommunication-pricing indaba. The second round of the government-hosted two-day colloquium will take place on October 11 and 12 in Midrand, Gauteng.
The Reforming Telecommunications in South Africa: Twelve Proposals that Will Lower Costs and Increase Access report follows the study that led to the release of the first report, entitled Cost of Telecommunications in South Africa, in April.
According to the foundation, April’s report “convincingly demonstrated” that South Africa’s telecommunications costs were significantly out of line with international standards. The costs were constraining economic growth across the board, including high employment-potential sectors such as business processing and outsourcing (BPO) — or the call-centre industry.
However, the report was not specific on the actions required to address the problem rapidly. Given the considerable progress made this year in catalysing growth in the BPO sector and the evident political will in the government to address high telecommunications costs, the foundation believed that it would be timely to provide specific action steps now.
Researched and written by James Hodge of Genesis Analytics, the new report focuses on 12 specific action proposals to lower costs and widen access.
If these are adopted, the foundation believes that consumers will benefit from lower costs; that the economy will grow at a higher rate across all sectors, resulting in job creation; and that the government will achieve both its economic and social objectives.
The organisation is also of the view that telecom firms active in the market at present — as well as future participants — will gain from an expanded customer base.
According to the foundation, steps that the authorities should take in bringing about lower costs comprise policy directives, regulatory action and legislative changes, which include the review of the licence and spectrum fees; permitting value-added network service (VANS) operators to self-provide; and increasing funding for the Independent Communications Authority of South Africa (Icasa).
In the light of the Icasa legislation seen as giving the minister of communications regulatory powers, the foundation also suggests independence and greater accountability for Icasa.
Other proposals include the unbundling of the local loop to allow other operators access the incumbent’s exchanges and the regulation of the international bandwidth. These aspects of telecommunications are at present controlled by fixed-line monopoly Telkom.
The reviewing of universal service policy, regulating mandatory price-comparison tools, dealing with anti-competitive behaviour, simplified tariff structure and the issue of facilities-leasing at cost-based prices are also cited as part of the steps towards lowering of costs and increasing access.
Lastly, the foundation is of the view that there needs to be changes in relation to interconnection agreements, which should be at cost-based prices.
In terms of the prevailing agreements, Telkom pays cell operators R1,40 per minute in interconnection fees. In return, the mobile networks pay the fixed-line incumbent only 29 cents.
Deputy Minister of Communications Roy Padayachie in July said Icasa should pay attention to the interconnection agreements and conceded that the unbundling of the local loop was central to a competitive environment.
These issues — coupled with the debate on self-provisioning by VANS entities, universal access and mobile pricing — are expected to dominate next week’s colloquium, which seeks to find solutions towards affordable services. — I-Net Bridge