Breaking the duopoly
Tiisetso Motsoeneng alleges that the impending auction for high-demand spectrum is a “frightening prospect” for Telkom, which he argues benefits from the absence of spectrum because it allows the company to compete on a more equal footing with the mobile sector duopoly of Vodacom and MTN (“Spectrum auction a threat to Telkom”, February 19).
I don’t know how or why he has reached this conclusion, since there is no evidence in the article that he has read Telkom’s comprehensive submission to the Independent Communications Authority of SA (Icasa) in response to the regulatory authority’s information memorandum on licensing spectrum.
Let me state an obvious and uncontroversial fact, borne out in our submission for anyone who read it: Telkom supports the release of spectrum. Where our opinion may differ is how it is released and to what end.
We argue that the licensing of spectrum must be done in a way that encourages effective competition in the mobile sector that enables all South Africans to benefit from developments in the emerging digital economy.
All of these require the cheap, fast, accessible broadband that will hopefully become available if we handle spectrum licensing right.
Telkom’s stance on spectrum is a pragmatic one that looks beyond the industry’s self-interest. Icasa has received about 50 submissions from various sectors of the economy and multinational corporations, reflecting the vast impact of spectrum on the economy outside the mobile sector. A look through these shows there are areas of agreement but also disagreement between mobile operators and others.
We don’t believe it makes sense to sell the 700MHz/800MHz frequency bands through an auction, noting also the irrational rollout obligations attached to these bands when this spectrum is not available for immediate national use. There is no clear plan about how and when this critical spectrum will be made available.
The Competition Commission’s finding that SA’s high data prices result from a highly concentrated market and effective duopoly should give Motsoeneng pause for thought. It seems naive in the extreme to believe that giving more resources to this duopoly, which already enjoys a disproportionate advantage — and thus entrenching the status quo — would result in change.
As the youngest and smallest entrant in the sector, we have been able to compete with a powerful duopoly not because of the current environment, but despite it.
With the release of spectrum we can either break the stranglehold of the duopoly or we can strengthen it. We are arguing that SA needs effective competition in the mobile sector, which can only come from smaller disrupters such as Telkom. Sipho Maseko
Group CEO Telkom