Press release: ISPA calls on ICASA to make a firm commitment to LLU

Published on: 2010-02-23

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The Internet Service Providers’ Association of South Africa (ISPA) is calling on the telecoms regulator, ICASA, to confirm that it is on track to meet the November 2011 deadline for the unbundling of the local loop.

“We are deeply concerned that we have yet to see draft regulations about local loop unbundling (LLU) from ICASA,” said Ant Brooks, General Manager at ISPA. “Many industry commentators are expressing doubts that the regulator will be able to meet the deadline for this vital regulatory intervention. We therefore appeal to ICASA to provide telecoms users and service providers with an update about the status of the LLU process.”

Brooks said that with the arrival of more competition in the international submarine cable arena as well as infrastructure sharing and continued investment in national links and metro-reticulation by the country’s major operators as well as infrastructure providers such as Broadband Infraco and Dark Fibre Africa, the local loop is now perhaps the single most significant contributor to high communications costs in South Africa.

Most of the country’s local loop infrastructure is still under the control of one company, namely Telkom, which built its network using public funds.

The upfront, sunk costs involved in rolling out fibre or copper to the customer’s door are prohibitive for most operators and service providers, who are also facing an uphill battle to obtain rights of way and other permissions. This is exacerbated by the failure of ICASA to issue out new radio frequency spectrum licences in frequencies which are suitable for the provision of local access networks.

“The local loop is an essential facility which cannot reasonably be duplicated – this has been accepted around the world. LLU allows competition in this area which in turn will result in lower pricing and better service for SA consumers,” Brooks said.

Unbundling of the local loop is a regulatory process which allows multiple telecom providers to use connections from within the Telkom core network to the customer’s premises. It is also critical to ensure that the pricing which is charged for these connections is fair and transparent, allowing new entrants to compete while still providing a reasonable return to the local loop provider.

If this issue is quickly resolved, ISPs will have greater scope to provide a wider range of value added services to customers and to bring competition into the local loop for the first time.

Brooks said that ICASA will need to be firm in the face of delaying tactics from incumbent operators who will not be keen to share their infrastructure with their competitors. However, this regulatory intervention is essential if South Africans are to gain access to real broadband at the speeds and tariffs they deserve.

“Many of our members stand ready to transform the market so as to make it more open and competitive to the benefit of consumers and businesses, but they will struggle to do so without equitable access to local loop infrastructure,” Brooks concluded.

Further Information

For further information, please contact the ISPA secretariat on the Contact ISPA page.