Let’s avoid the same mistake

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

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.