South Africa Connect

The curious approach to the telecommunications sector of the Mbeki era has finally collapsed under its own contradictions. As president, Mbeki regularly complained of the high cost of telecommunications as a drag on the economy. But he failed to see that his own government’s policy of ‘managed liberalisation’ was at the root of the problem. The government was simply unable to introduce competition into the sector to bring down prices because it was too busy protecting its own stakes in the telecom industry – in Telkom, Vodacom, Neotel and Sentech. Altech’s successful challenge in the courts to this government cartel over policy and regulation and the Minister’s capitulation has finally created the conditions for competition in telecoms in the country.

What can the new government learn from this? First, trying to manage the introduction of competition to push down prices in an industry in which you are a major player is over. The government should now take the opportunity to divest its shares in the telecom industry in favour of broad-based black economic empowerment. One simple step could be to transfer its shares in Telkom, Vodacom and Neotel from the Departments of Communication and Public Enterprises to the Public Investment Corporation. The government can return Sentech to the SABC – the experiment of trying to move Sentech beyond its core business as a signal distributor to wireless broadband operator had demonstrably failed. There may be value in retaining Infraco as a public wholesale broadband supplier but its grand plans of building submarine cables to London and Brazil should be scrapped. Seacom and EASSy will shortly be landing their cables in South Africa in 2009/10 and bringing down the cost of international bandwidth dramatically. Initiatives such as Infraco or the development of municipal broadband networks are appropriate ways government can participate in the sector, provided they are structured on open access principles and don’t discriminate against market players.

Second, the new government should develop a simple set of principles for a national broadband strategy and use them to amend the Electronic Communications Act to reflect a fully competitive telecom environment. The government should encourage ICASA to complete the competition regulations in chapter 10 of the ECA as soon as possible. Within a national broadband strategy there are a range of important functions which the government should focus on:

• promoting effective competition in infrastructure, services and applications across different technological platforms
• developing policies to encourage investment in new technological infrastructure, content and applications to stimulate demand for broadband
• developing policies that promote access on fair terms and at competitive prices to all communities
• regulatory frameworks that balance the interests of suppliers and users with regard to access to knowledge and intellectual property rights
• encouraging a holistic approach to broadband availability and diffusion in terms of supply, demand and development
• encouraging research and development in the field of ICT for the development of broadband and enhancing its economic, social and cultural effectiveness.

To do this government should appoint a Chief Technology Officer as a junior minister in a two-tier cabinet who can interface effectively with the planning commission in the Presidency. There is no need for any grand policies – a coherent national broadband strategy will suffice – and government can concentrate on enabling the emergence of a fully competitive sector to expand affordable broadband access for all citizens.

Willie Currie is the Communications and Information Policy Programme Manager of the Association for Progressive Communications