In a bid to introduce much-needed competition into the telecommunications sector, South Africa’s smaller wireless telecoms players have taken the regulator and the minister of communications to court.
This move can be viewed as a direct challenge to government’s failed policy of managed liberalisation, which is responsible for the exorbitant telecoms pricing that consumers and businesses have to contend with in the country.
If the court application is successful, 50 to 100 smaller telecoms players could enter the market offering voice and data services that will challenge fixed-line incumbents Telkom and Neotel and mobile incumbents MTN, Vodacom and Cell C.
The Wireless Access Providers Association (Wapa) filed papers in the Witwatersrand High Court this week requesting a declaratory order that would allow its members to roll out their own telecoms networks.
Rolling out telecoms networks, which involves laying cables and setting up wireless bay stations, is a key step in allowing the Value Added Network Service (Vans) industry to compete in the telecoms sector.
Since 2005 the Vans industry has been stuck in a legal quagmire caused by conflicting policy statements made by the Independent Communications Authority of South Africa (Icasa) and Minister of Communications Ivy Matsepe-Casaburri about Vans’s right to self-provide telecoms infrastructure.
“Despite repeated attempts by industry players to obtain certainty as to the rights of Vans, neither Icasa nor the minister has, until recently, made any statement in this regard, despite the passing of more than three years,” says Wapa.
Wapa argues that if the Vans are given the right to self-provide infrastructure we could see a “big bang” liberalisation of the market.
“In other words, South African consumers, after many years of having to rely on a monopoly facilities provider, will have a far greater degree of choice,” says Wapa.
Although the issue of self-providing telecoms networks has remained a legal grey area, some Vans have chosen to roll out their own networks regardless.
But with Icasa’s recent statement that Vans will not be allowed to self-provide their own networks, these companies are facing serious financial risks and are appealing to the court to get some clarity on this.
It is a damning indictment of both Icasa and the department that Vans have to go to court to get clarification on this issue.
Vans operators feel pushed to take legal action because they can no longer afford to sit back and wait while the established players roll out substantial networks of their own.
“Many of our members have been building their own networks since 2005,” says David Jarvis, chairperson of Wapa. “Our concern is that existing operators will be denied the right to continue operating.”
Jarvis says the lack of clarity on the issue is confusing because it is not clear if Icasa’s silence is because of vested interests or a lack of capacity at the regulator. He says that allowing Vans the right to self-provide would introduce a potential 50 to 100 new telcos into the market which could offer services like Telkom.
He says the bigger operators argue that this is an untenable situation, but Jarvis says that in America 200 new telcos were introduced after deregulation, which were whittled down to six after consolidation in the market.
Storm Telecom’s Dave Gale says there is a need for transparency in Icasa’s licence conversion process and it is clear that the Vans are no longer going to sit and wait for the regulator.
“Frustration levels have reached boiling point,” says Gale. “Now they are going to force Icasa’s hand.”
Gale says Icasa is still under-resourced and is battling under the massive workload that comes with the licence conversion process required by the Electronic Communications Act.
“There is so much happening at the moment,” says Gale. “Icasa has too many irons in the fire and everyone is looking at it to pull a rabbit out of the hat.
“They (Vans) are here and they are keen to get into the market and provide the competition that can get things moving ahead,” says Gale.
One analyst who did not want to be named says allowing Vans to self-provide would be the difference between having 40 rather than 12 players in the market at an infrastructural level, which would drive down pricing. Icasa says it has not seen the court papers yet and therefore cannot comment.
Attempts by the Mail & Guardian to contact the spokesperson for the minister of communication were unsuccessful.
Can we? Can’t we?
l September 2 2004 — Minister of Communication Ivy Matsepe-Casaburri publishes ministerial determinations that would come into effect on February 1 2005, one of which allowed Vans to self-provide infrastructure.
l November 22 2004 — Icasa releases a press release with its interpretations of the ministerial determinations, reiterating that Vans can self-provide infrastructure.
l January 30 2005 — Matsepe-Casaburri releases a press statement to clarify her determinations, in which she does an about-turn and says Vans cannot self-provide infrastructure. Matsepe-Casaburri also refuses to sign off on draft Vans regulations and insists they be redrafted so they fall in line with her clarification.
l May 20 2005 — The new set of draft Vans regulations are published, which make no mention of Vans being able to self-provide infrastructure.
l March 17 2008 — Icasa councillor Macia Socikwa announces at the commencement of hearings into the conversion of Vans licences, where she makes it clear that Icasa’s position is that there are no infra-structure rights attached to Vans licences.
— Lloyd Gedye
This move can be viewed as a direct challenge to government’s failed policy of managed liberalisation, which is responsible for the exorbitant telecoms pricing that consumers and businesses have to contend with in the country.
If the court application is successful, 50 to 100 smaller telecoms players could enter the market offering voice and data services that will challenge fixed-line incumbents Telkom and Neotel and mobile incumbents MTN, Vodacom and Cell C.
The Wireless Access Providers Association (Wapa) filed papers in the Witwatersrand High Court this week requesting a declaratory order that would allow its members to roll out their own telecoms networks.
Rolling out telecoms networks, which involves laying cables and setting up wireless bay stations, is a key step in allowing the Value Added Network Service (Vans) industry to compete in the telecoms sector.
Since 2005 the Vans industry has been stuck in a legal quagmire caused by conflicting policy statements made by the Independent Communications Authority of South Africa (Icasa) and Minister of Communications Ivy Matsepe-Casaburri about Vans’s right to self-provide telecoms infrastructure.
“Despite repeated attempts by industry players to obtain certainty as to the rights of Vans, neither Icasa nor the minister has, until recently, made any statement in this regard, despite the passing of more than three years,” says Wapa.
Wapa argues that if the Vans are given the right to self-provide infrastructure we could see a “big bang” liberalisation of the market.
“In other words, South African consumers, after many years of having to rely on a monopoly facilities provider, will have a far greater degree of choice,” says Wapa.
Although the issue of self-providing telecoms networks has remained a legal grey area, some Vans have chosen to roll out their own networks regardless.
But with Icasa’s recent statement that Vans will not be allowed to self-provide their own networks, these companies are facing serious financial risks and are appealing to the court to get some clarity on this.
It is a damning indictment of both Icasa and the department that Vans have to go to court to get clarification on this issue.
Vans operators feel pushed to take legal action because they can no longer afford to sit back and wait while the established players roll out substantial networks of their own.
“Many of our members have been building their own networks since 2005,” says David Jarvis, chairperson of Wapa. “Our concern is that existing operators will be denied the right to continue operating.”
Jarvis says the lack of clarity on the issue is confusing because it is not clear if Icasa’s silence is because of vested interests or a lack of capacity at the regulator. He says that allowing Vans the right to self-provide would introduce a potential 50 to 100 new telcos into the market which could offer services like Telkom.
He says the bigger operators argue that this is an untenable situation, but Jarvis says that in America 200 new telcos were introduced after deregulation, which were whittled down to six after consolidation in the market.
Storm Telecom’s Dave Gale says there is a need for transparency in Icasa’s licence conversion process and it is clear that the Vans are no longer going to sit and wait for the regulator.
“Frustration levels have reached boiling point,” says Gale. “Now they are going to force Icasa’s hand.”
Gale says Icasa is still under-resourced and is battling under the massive workload that comes with the licence conversion process required by the Electronic Communications Act.
“There is so much happening at the moment,” says Gale. “Icasa has too many irons in the fire and everyone is looking at it to pull a rabbit out of the hat.
“They (Vans) are here and they are keen to get into the market and provide the competition that can get things moving ahead,” says Gale.
One analyst who did not want to be named says allowing Vans to self-provide would be the difference between having 40 rather than 12 players in the market at an infrastructural level, which would drive down pricing. Icasa says it has not seen the court papers yet and therefore cannot comment.
Attempts by the Mail & Guardian to contact the spokesperson for the minister of communication were unsuccessful.
Can we? Can’t we?
l September 2 2004 — Minister of Communication Ivy Matsepe-Casaburri publishes ministerial determinations that would come into effect on February 1 2005, one of which allowed Vans to self-provide infrastructure.
l November 22 2004 — Icasa releases a press release with its interpretations of the ministerial determinations, reiterating that Vans can self-provide infrastructure.
l January 30 2005 — Matsepe-Casaburri releases a press statement to clarify her determinations, in which she does an about-turn and says Vans cannot self-provide infrastructure. Matsepe-Casaburri also refuses to sign off on draft Vans regulations and insists they be redrafted so they fall in line with her clarification.
l May 20 2005 — The new set of draft Vans regulations are published, which make no mention of Vans being able to self-provide infrastructure.
l March 17 2008 — Icasa councillor Macia Socikwa announces at the commencement of hearings into the conversion of Vans licences, where she makes it clear that Icasa’s position is that there are no infra-structure rights attached to Vans licences.
— Lloyd Gedye