Press release: SA Telecoms Industry Hurt by ‘Mangled’ Liberalisation

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Communications minister Ivy Matsepe-Casaburri is basing her grounds for an appeal against the recent Pretoria High Court judgment that found in favour of telecommunications group Altech on deeply flawed reasoning.

That’s according to Mike Silber, regulatory advisor for the Internet Service Providers’ Association of South Africa (ISPA). He says that the Minister’s decision to appeal against this High Court decision forces continued high prices and a lack of competition on South Africa’s economy and citizens. “It is certainly not in the best interests of the country,” he said.

The judgment potentially opened South Africa’s telecoms market to much greater competition by allowing value-added network service licensees to build their own networks in competition with the incumbent operators.

The Minister states that she appealed against the court’s judgment because she claims that under the Electronic Communications Act (ECA), ICASA (The Independent Communications Authority of SA) may only accept and consider applications for Individual Electronic Communications Network Service (I-ECNS) licences following a policy directive issued by her. An I-ECNS licence is required to build a telecoms network of national scope.

This claim is erroneous for a number of reasons, says Silber. Firstly, an I-ECNS licence doesn’t apply only to licences to build national networks, but also to licences to build provincial networks. Secondly, the judge in the Altech case did not rule about the issuing of new licences, but rather about the conversion of existing VANS licences into I-ECNS licences, says Silber.

“VANS licensees have had the right to ‘self provide’ their own infrastructure since 1 February 2005, according to the 1996 Telecommunications Act read in conjunction with the Ministerial determination of 3 September 2004. This right has been carried over in terms of the ECA. This is despite the Minister’s attempt to ‘clarify’ the Act and nullify the self-provisioning clause by issuing an extra-legal press statement two days before it took effect,” Silber adds.

Section 93(4) (a) of the Act should also not be ignored since it clearly contemplates licensees who have the right to provide services and facilities should receive two licences i.e. ECNS and ECS, whether individual or class.

Says Silber: “The term ‘managed liberalisation’ has been much abused over the past decade. However, the only published policy discussions we are aware of that mentions this term date back to the Green and White Papers in 1996.
The authors of those papers clearly envisioned that we would be in a state of complete liberalisation by 2002.”

Silber questions why the Minister continues to use ‘managed liberalisation’ as an excuse for her actions and asks which vested interests she is protecting in the telecoms industry by delaying the introduction of more competition to the market.

The policy confusion stems from the failure of the DoC to update the policy framework when drafting the ECA. If the Minister wishes to continue relying on “managed liberalisation,” then ISPA believes that this policy should be clearly defined and the end-point of the policy should be clearly stated.

“The Minister is not acting in the interests of the telecoms industry as a whole, nor the SA economy, nor South African citizens,” concludes Silber.

“To date, twelve years of the failed policy of ‘mangled liberalisation’ has resulted in a lack of choice and competition as well as high prices for South African consumers and businesses.”

Further Information

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