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27.11.2008 South Africa

`Mangled liberalisation` in South Africa SA telecoms industry toasts freedom

By Stephen Odoi-Larbi - Ghanaian Chronicle

The South African telecommunications industry has celebrated the news that Communications Minister Ivy Matsepe-Casaburri will no longer contest the issue of whether Value-Added Network Services (VANS) can self provide. Following the denial of her leave to appeal by the Pretoria High Court, it was feared that Matsepe-Casaburri would persist in her opposition, petitioning the Supreme Court of Appeal. However, in a statement issued on Friday evening, she declared that this would not be the case.

The battle began in August, when Altech Autopage Cellular sought legal clarification on whether VANS like itself could build their own network infrastructure. The Transvaal division of the High Court ruled in Altech's favour, paving the way for the liberalisation of the telecommunications industry. However, it was not to be that simple. Matsepe-Casaburri applied for leave to appeal, delaying the liberalisation process. Her application was denied, and industry players then waited with bated breath to see whether she would keep fighting. The Minister had until 1pm on Friday to petition the Supreme Court of Appeal.

Matsepe-Casaburri had, reportedly, long been opposed to VANS self-providing. She supported an unpopular policy of 'managed liberalisation' for the telecommunications sector, which was dryly referred to as 'mangled liberalisation' by some VANS. In the statement issued by her spokesperson on Friday, she said that her decision not to take matter any further was in the interest of the information and communications technologies sector. She encouraged the Independent Communications Authority of South Africa (ICASA) to complete the conversion of existing individual-Electronic Communications Network Services (i-ECNS) licences by January 19, 2009.

The i-ECNS licence, regulated by ICASA and issued in terms of the Electronic Communications Act (ECA), is the documentation required to build an individual network. Licences issued to some 300 VANS in terms of old legislation will be converted in terms of the ECA, allowing the operators to build their own infrastructure.

This means that, technically, VANS now can build networks to rival big players like Neotel and Telkom and are freed from reliance on their networks.

However, the costs are restrictive and it is unlikely that 300 new national networks will be built overnight. Johann Botha, chairperson of the Internet Service Providers' Association of South Africa (ISPA), predicts that smaller regional network infrastructure is likely to be seen in the next couple of years. Mike Silber, Regulatory Advisor to the ISPA, says that they trust ICASA will start looking at the other challenges facing the industry, such as frequency spectrum allocation.

At the very least, local consumers can look forward to increased competition and the reduction in prices that goes with it.

ICASA has asked VANS wanting to convert their licences to provide details about their planned network rollout and to commit to implementing their networks within 12 months of receiving their licences. While VANS are not legally obliged to meet these requests, Silber believes that most are likely to cooperate.

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