[By Duncan McLeod]
The department of communications is working on a number of long overdue projects that could have a profound impact on the technology sector. If it delivers on its new approach, SA has a good chance of building a more competitive industry.
There is palpable excitement among private sector players because, after years of dithering and inaction, the department of communications is finally engaging actively with business and starting to make the crucial and long-needed decisions that could change the sector for the better.
At long last, the department seems to have a leadership team that understands it is principally the private sector and not government that will deliver jobs and growth and that the state’s role is not to set up competing state-owned businesses but to create a stable policy and regulatory environment and maximise competition.
Robert Nkuna, special adviser to communications minister Roy Padayachie, promised last week that the upcoming sale of radio frequency in key spectrum bands would be used to license new operators. Incumbent mobile operators Vodacom and MTN have both argued the spectrum must go to companies that have the financial and technical wherewithal to build national networks — in other words, them — but government is right to license new players.
Sure, the incumbents must be given access to new spectrum so they can continue to build broadband networks, but at least two other companies have already expressed interest in spending the billions of rand that are needed to construct national networks. MWeb, a subsidiary of media giant Naspers, said this week that it is keen to build a national wireless broadband network and Dimension Data’s Internet Solutions also wants to build infrastructure. They must be encouraged to do that: competition drives down prices, facilitates adoption and leads to innovation.
Government’s change of approach is particularly refreshing after a decade in which it clearly didn’t believe the private sector could be trusted to grow the sector, create jobs and deliver services. Padayachie’s predecessor but one, Ivy Matsepe-Casaburri, held back liberalisation of the market and, instead of encouraging market forces, gave telecoms licences and valuable spectrum to state-owned Sentech, a company that was incapable of competing with private-sector operators.
The good news is Sentech now looks likely to lose its generous allocation of spectrum in the 2,6GHz band — it’s lying fallow after its wireless Internet business failed — in return for a slice of frequency currently used by television broadcasters. This “digital dividend” spectrum will be freed up when broadcasters switch to digital technologies in a couple of years from now and is much more suited to building networks in rural areas than the 2,6GHz band.
It’s in rural areas, where commercial operators are still struggling to find a model for delivering broadband, that government arguably has a role to play, at least in the short term. In urban areas, the focus must be on maximising competition between private sector players. Sentech is not only ill equipped to play in that space, it simply doesn’t make sense for the state to engage directly in a market that’s working. But it could play a valuable role if it builds open-access infrastructure in rural areas that makes it more feasible for operators to take services into remoter parts of the country.
Deputy communications minister Obed Bapela says it’s important to ensure state intervention and investments by the private sector “always complement each other”. That’s a great change in attitude by government. If this new business-friendly approach is maintained it will reward SA.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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