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Communications Services

SA: Government Interventions for Sustainable Comms

The difficulty with the government’s perfectly laudable objective of overhauling South Africa’s communications legislation as comprehensively as possible – through the envisaged ICT Review process – is that the time envisaged to do this will cause South Africa to trail even further behind other emerging economies.

The World Economic Forum’s Global IT report for 2013 ranks South Africa 117th out of 140 countries globally, 28th out of 32 African countries, and 9th out of 12 SADC countries. Zimbabwe and Namibia have cheaper communications tariffs than South Africa does.

This situation has arisen because South Africa has had no meaningful intervention in its communications legislation since 2006. In the intervening seven years, the rapid evolution of communications technology has outstripped the way South African communications players are enabled by regulation to exploit it. Far from being an enabler, our existing legislation is a major impediment to growth in the industry.

If current constraints on competition are lifted only in 2016, which would be the earliest that the ICT Review process on government’s Integrated IT Policy could be converted into law, the price to communicate will have escalated even further. The negative implications for the economy are obvious.

However, there are three relatively simple but strategically critical things government could do right now, as the Parliamentary Portfolio Committee on Communications  prepares to amend the current Electronic Communications  Bill, to realign the local industry with existing international benchmarks as well as equipping it to stay abreast of future developments.

The focus of all three actions has to be the creation of a level playing field so that operators can compete effectively in the market and thereby give consumers choice and affordability.

We believe the place to start is elimination of the dominance of the sector by a minority of very large players. Their ability to influence pricing and infrastructure is unhealthy. At the moment, the intended amendments to the Electronic Communications Bill are silent on this issue. There is, therefore, no incentive for investors and new entrants to make an effort to break into the market.

A related issue is infrastructure sharing. Most South African infrastructure is in the hands of a few organisations. New entrants would be crippled by the cost of building additional infrastructure, assuming they could do so in anything like the time needed to give their shareholders a reasonable return or to reduce the cost to communicate in any significant way for consumers and business.

Because infrastructure sharing is vital to cost reduction, many countries not only encourage but pro-actively incentivise it. However, the Electronic Communications Amendment Bill shows no intention by government to force the big players, including mobile operators, to share their infrastructure.

The third issue that would help to level the industry’s playing fields, if tackled now, is spectrum trading. Additional spectrum is available and would create opportunities for new entrants as well as speeding up universal access to 4G. However, existing legislation is so vague that it is likely to paralyse ICASA in terms of allocating spectrum or managing spectrum trading. The new amendments also avoid addressing the problem.

It’s worth pointing out that government’s hands are not tied by the wait for the ICT Review Process. It has the option of using the Electronic Communications Act to make these strategic changes within the next six months. Other countries are flexible in using their existing regulatory instruments to keep in step with an industry that will never stop evolving. There’s no reason why we can’t be as flexible. And there’s every reason to expect that we should be.

 

Siyabonga Madyibi is Internet Solutions Regulatory Affairs Executive

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Siyabonga Madyibi

Siyabonga Madyibi is Internet Solutions Regulatory Affairs Executive

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