Talk is cheap, unless you’re using Telkom

Although most industry players expected this week’s colloquium on telecommunications costs would be no more than a talk fest, some hard- hitting proposals were made by government officials and regulators.

One key suggestion was for Telkom to unbundle the local loop, which is the connection from the telephone exchange to a home or office, and allow other operators to sell services directly to the public, according to a report presented by the working group set up after the first colloquium on telecommunications prices in July.

”Permitting licensees to use the local loop will reduce the costs of entry for new entrants and promote the more economic use of infrastructure. This restructuring will enable a competitive environment,” the report suggests.

It also found that South Africa’s broadband penetration of 0,2%, or 100 000 asymmetrical digital subscriber line subscribers, is ”an alarming fact” and the low uptake is due to ”Telkom’s high charges”.

This week’s colloquium was another opportunity for the government to be reminded that Telkom’s monopoly was ”a disaster” — this time from no less a figure than Dr Tim Kelly, the head of policy for the International Telecommunication Union (ITU). The United Nations’s ITU is effectively the world governing body for telecoms.

Kelly slammed the lack of fixed-line competition and said the planned privatisation was well below expectations, citing that South Africa’s economy was ranked last out of 30 Organisation for Economic Cooperation and Development (OECD) countries for the cost of its residential fixed-line calls.

He proposed a big-bang approach to telecoms by opening up the market and licensing more fixed-line and cellular operators — instead of the current method of slowly changing regulations and policies.

Both Minister of Communications Ivy Matsepe-Casaburri and her deputy, Roy Padayachie, stressed the need to act on the outcomes of this colloquium.

”We are convinced that further competition will intensify services competition, drive up broadband penetration, Internet connections, remove access constraints and eventually bridge the digital divide. This will also enhance international market competitiveness,” Matsepe- Casaburri told the conference.

”Now is the time to commit and act,” said Padayachie. Let’s hope so. Talk, after all, is cheap. Except if you use Telkom.

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Toby Shapshak
Guest Author

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