Press release: ISPA welcomes licensing of Broadband Infraco, but promises vigilance around its role in the market

Published on: 2009-12-24

Return to press release index

The Internet Service Providers Association of South Africa (ISPA) congratulates Broadband Infraco (“Infraco”), the new State-owned telecommunications infrastructure provider, on the receipt of its individual-electronic communications network services (I-ECNS) licence from ICASA.

The award of this licence, together with the extensive fibre cable assets which Infraco inherited from Transnet and Eskom, places this new organisation in an excellent position to begin realising its mandate of broadening the availability of network services and lowering the cost of communications in South Africa.

ICASA, the communications regulator, is to be congratulated for crafting a licence document with a clear set of network rollout requirements for Broadband Infraco. The provision that Broadband Infraco is required to establish Points of Presence (PoPs) in a large number of rural areas over the next seven years promises to help bring affordable communications to marginalised communities.

The licence also obliges the new operator to provide electronic communications network services of national scope on an open-access and non-discriminatory basis. There is also provision that Broadband Infraco must provide its network services and rates below prevailing market rates and ISPA looks forward to the publication of Infraco’s pricing model in the near future.

ISPA has had a number of meetings with Infraco to explore ways that new entrants and smaller operators can help it meet its mission as well as to uncover opportunities for our members to use its network services to address pricing bottlenecks in national long-distance links.

The principal potential benefit of Infraco will be breaking the stranglehold Telkom still has on long-distance national links, which is, along with the same company’s monopoly over the Local Loop, the single biggest contributor towards South Africa’s punishingly high voice and data tariffs. Broadband Infraco, provided it sticks to its mandate as a supplier of wholesale infrastructure to other operators and service providers, could redress this problem and help to spur greater competition in the market.

At the same time, given the history of State-owned enterprises in the telecom industry, ISPA will keep a vigilant eye on Broadband Infraco’s activities to make sure that South Africa derives the maximum benefit from its activities.

We believe that it is of great importance to ensure that this promising new venture does not eventually evolve into a partially privatised company with a profit motive and unfair advantages that competes against the private sector. Given the challenges facing the South African telecommunications industry, we simply cannot afford to get this wrong.

Further Information

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