Press release: LLU Statements by Telkom CEO ‘Cannot Remain Unchallenged’

Published on: 2013-11-05

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The Internet Service Providers’ Association (ISPA) takes issue with statements attributed to Telkom Group CEO Sipho Maseka regarding Local Loop Unbundling (LLU).

The Telkom CEO was reported in late September 2013 as stating that the incumbent would fight LLU as it amounted to “subsidising” competitors who wanted to “ride on Telkom’s network”. Furthermore he expressed the view that “Telkom has been trampled on for quite a while”.

“While ISPA has great respect for the turnaround work Mr Maseko is doing at Telkom, these statements are not correct and cannot remain unchallenged.

“Nobody is looking for an “easy ride” on Telkom’s network through LLU – the provisions of the draft LLU Regulations issued by ICASA are quite clear as to compensation payable to Telkom by those seeking access to the Local Loop.

“It has never been ISPA’s contention that anything other than fair and non-discriminatory pricing should be applied. We believe that Telkom would be better served by viewing LLU as a wholesale opportunity to recover its investment and a co-investment opportunity to ensure that fixed line broadband remains relevant at a time where substitution for mobile broadband is already widespread and growing,” said ISPA regulatory advisor Dominic Cull.

“Telkom’s view that it has been ‘trampled on’ is extremely hard to sustain given its historical relationship with the ISP sector. This is evidenced by the substantial fines imposed on it on two separate occasions by the Competition authorities in respect of anti-competitive conduct over the past decade,” added Cull.

Cull noted that Telkom’s position regarding LLU would make its control over the fixed last mile increasingly irrelevant.

“The failure to complete unbundling along with the failure to licence radio frequency spectrum suitable for wireless last mile services is having the unintended consequence of an explosion in last-mile fibre deployments which are displacing the copper local loop. This will intensify in the next two years as further national long distance fibre networks dramatically reduce the cost of this connectivity, leaving the local loop as the only major short-term infrastructure bottleneck. A failure to shift from a ‘threat’ to an ‘opportunity’ mind-set regarding LLU to ensure the continued relevance and competitiveness of the local loop also appears to ignore clear Government policy regarding infrastructure sharing and the reduction of the cost to communicate,” concluded Cull.

Further Information

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