Let’s avoid the same mis­take

Lower voice call rates and a po­ten­tially dis­rup­tive spec­trum al­lo­ca­tion in tele­coms keep the in­dus­try on ten­ter­hooks

Financial Mail - - PATTERN RECOGNITION - @shap­shak

Two an­nounce­ments made last week set the pulses rac­ing at tele­coms op­er­a­tors in SA, and could have a longterm ef­fect on con­sumers and their use of net­works. The first was from the In­de­pen­dent Com­mu­ni­ca­tions Au­thor­ity of SA (Icasa), which has slashed mo­bile call ter­mi­na­tion rates — the fees op­er­a­tors charge each other to re­ceive a voice call — and the sec­ond was cabi­net’s ap­proval of its lat­est ver­sion of what is known as a whole­sale open-ac­cess net­work (Woan).

The Woan plan, which has been mooted for years, is con­tained in the Elec­tronic Com­mu­ni­ca­tions Amend­ment Bill. The lat­est changes haven’t been pub­lished yet, but should come out this week or next. They will be based on a re­search study by the Coun­cil for Sci­en­tific & In­dus­trial Re­search that has been kept se­cret since it was given to telecom­mu­ni­ca­tions & postal ser­vices min­is­ter Siyabonga Cwele late last year.

The most con­tro­ver­sial as­pect is that the govern­ment plans to take back and man­age all the spec­trum it has al­ready li­censed. The draft leg­is­la­tion still con­tains the clause about re­claim­ing this spec­trum — but some com­men­ta­tors think it may have been re­con­sid­ered and that an al­lo­ca­tion will be kept for Woan, with the rest likely to be auc­tioned to op­er­a­tors.

I could re­gur­gi­tate all the ar­gu­ments about the fool­ish Woan, but it’s a di­ver­sion of valu­able re­sources for an idea that seems good on pa­per but just isn’t prac­ti­cal.

Cell­phone op­er­a­tors have built their busi­nesses on ac­cess to the spe­cific spec­trum our phones use to com­mu­ni­cate — now mostly with data. Part of the think­ing is to take that spec­trum away from the op­er­a­tors and put it in a big pool where a govern­ment-ap­pointed body will over­see its use and im­ple­men­ta­tion.

Sen­tech at­tempted the same with a ser­vice called My­wire­less in about 2004 that cost hun­dreds of mil­lions. It was even­tu­ally canned. This kind of thing is just not what the govern­ment is good at; it can barely man­age all the other ma­jor so­ci­etal projects of pro­vid­ing wa­ter, main­tain­ing roads or just keep­ing Eskom from drag­ging the whole econ­omy down.

Leg­is­la­tion should en­able the tele­coms mar­ket, not try to com­pete with it. Op­er­a­tors have been pro­vid­ing our com­mu­ni­ca­tions net­works for years; they know how to do it. As for new en­trants, look at how a pri­vately funded op­er­a­tor such as Rain is al­ready mak­ing waves in pro­vid­ing data-only ser­vices, of­fer­ing a gi­ga­byte for R50 that never ex­pires.

The Icasa mo­bile ter­mi­na­tion an­nounce­ment is im­por­tant, but these fees have al­ready been cut ag­gres­sively, and voice rev­enue is fast de­clin­ing. What we need is such strong ac­tion on the data costs, about which Icasa is un­der­tak­ing a years-long process — in no small part to avoid in­evitable court case delays from liti­gious op­er­a­tors.

Let’s hope, be­cause it’s an elec­tion year, there will be good news for the con­sumer.

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