Ticktock, minister Pule

Communications minister Dina Pule needs to deal with the policy vacuum in the telecommunications sector. By Tim Wyatt-Gunning.

Tim Wyatt-Gunning

Once again, communications minister Dina Pule has made all the right political statements when she announced that providing connectivity to impoverished rural communities is a key priority for the department of communications.

Suggesting, as she did yesterday, that it would cost as much as R90bn to achieve this, she has also hit the nail on the head when she said that it would take a combined public and private effort to ensure the goal of reaching 100% broadband access by 2020.

The latest investment number seems fairly accurate when compared to MTN’s 2011 estimate of R100bn to achieve broadband for everyone, but certainly up from the R75bn suggested by the minister in January.

That’s a lot of money in anyone’s book. The goals are also clearly ambitious. Achieving 100% penetration in seven years is no small task and it is obvious that a large part of that challenge rest squarely on the shoulders of the private sector.

What the minister fails to address, however, is how she intends to incentivise the private sector to work with her.

Quite simply, business hates a policy and regulatory vacuum. It creates uncertainty and raises risk, making any investment unattractive to shareholders and investors alike.

There is currently no certainty around any number of issues. Industry is still waiting on local-loop unbundling. We were assured in 2007 that it would be complete by 2011. We were also told that by 2008 we would have access to Telkom’s copper infrastructure.

The murky waters of the delayed and further delayed spectrum allocation continues to frustrate many companies who are ready and waiting to deliver connectivity to our rural areas.

In fact, our entire national ICT policy is in stasis after the minister announced in April that a full review of national policy including legislation was to take place. We are still waiting for a document to review and make comments on.

The department of communications’ ambitious target of 100% broadband access also fundamentally falls short by not adequately defining what broadband access is. What does access constitute? If someone has to walk 5km or 10km to a public library to access the Internet, does that count as access? Similarly, if a family earns less than R3 000/month and is expected to pay R300 for a 1Mbit/s line with some data, is that access?

Any meaningful shift in bringing access to our people has to start by allowing market forces to take hold. This is the way business works.

The earlier wholesale cuts in Telkom’s fees to Internet service providers to access its broadband digital subscriber line network showed how reactive the market is to cheaper access to the backbone. A price war erupted and the consumer was the winner. There is more than enough room for more fat to be trimmed on these wholesale costs and if we see further cuts, access will become more affordable still.

Bundling telephone lines with ADSL lines is a further problem which needs to be addressed. Real prepaid options are attractive to the lower-income families as our mobile network operators around the world have proved. Fixed line providers would be no different.

Telkom’s continued cry of “access-line deficit” is simply not good enough and any regulator worth its salt would address this.

While our international capacity continues to grow and prices drop as we add more undersea cables, the country is in a position to capitalise on economies of scale — in an ideal world. This simply is not the reality we are dealing with when we consider our local dependency on an incumbent that retains its monopoly on the last mile and local termination costs.

Finally, when looking to bring access to the underserviced areas, we must ask the minister what has happened to the Universal Service & Access Agency of SA and the Universal Service & Access Fund? If we are looking to bring access to the underserviced areas, surely this should be overseen by the agency set up by law to do this? What has happened to the licence revenue in the fund? The notion that this money (whatever the magical figure is) will be used to fund set-top boxes flies in the face of government’s noble objectives.

If the minister and her department are serious about broadband access for all and the 160 000 jobs this will create, she will absolutely need the private sector’s support. What business will first require is an inkling of what kind of risk they will face and how their investment will be protected. The current policy vacuum is certainly not going to attract foreign direct investment and a toothless regulator, unable to control a ruthless incumbent, serves as an ongoing obstacle to further investment by local players.

In short, what we need is some clarity, some political will and some bold and assertive moves by our leaders. Endless reviews and talk shops will just not cut it. 2020 is fast approaching. Ticktock, minister, ticktock.

  • Tim Wyatt-Gunning is CEO of Web Africa

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