[ Johannesburg, 25 September 2008 ] – Communications minister Ivy Matsepe-Casaburri’s appeal against the August 29 Altech judgement is merely a thinly disguised attempt to protect the incumbent operators from competition. Even worse, it means that Icasa now has an excuse not to issue the new electronic communication licenses that would finally have leveled the playing field for value added network service (VANS) providers.
“This is outrageous and unacceptable,” says John Holdsworth, CEO of Electronic Communications Networks (ECN), who describes the both the Communications Minister and the Department of Communications (DOC) as being out of touch with the mood of the ICT industry and consumer frustrations in general.
The industry was celebrating the landmark Altech judgment as it removed the regulatory roadblock that had been such a stumbling block to progress for so many years. Even the incumbent operators appeared to initially welcome the ruling. Vodacom CEO-designate Pieter Uys speaking on talk Radio 702 World at Six programme, said “We aren’t afraid of competition.” Neotel CEO Ajay Pandey holds a similar view. Speaking as part of a CNBC Africa panel discussion called “Telco Talk”, he said “competition was good for the market and Neotel welcomed that”.
“In a well-functioning market, competing suppliers are incentivised to reduce costs, pass reductions to consumers and innovate with new products and services,” says Holdsworth. “The regulatory roadblock we’ve been living with has prevented this from happening in South Africa – and the ultimate loser is the long-suffering consumer who has to put up with dysfunctional suppliers and unacceptably high prices.”
Referring to Matsepe-Casaburri’s announcement that she will commence a process to issue a policy direction to Icasa, and that her department will expedite an amendment of the ECA, Holdsworth comments that it is exceedingly worrying that the government can seek to change regulations when it loses a court case.
“We believe Altech may appeal the appeal, but if that fails, and the minister’s appeal is successful, ECN will call for an industry-wide class action which we’ll take right up to the Constitutional Court if necessary,” says Holdsworth. “We will back Altech all the way should they choose to fight this appeal.”
According to Holdsworth, the major benefit of the court judgment on August 29 was the fact that it leveled the playing field for all operators, who for the first time had the opportunity to obtain the same set of licenses and conditions as the incumbent operators.
“The fact that the judgment enabled VANS to self-provide was not the main benefit as far as we’re concerned, ” he says. “The biggest plus was that it removed the regulatory risk with which VANS have had to contend with for years.”
Holdsworth is disgusted that the minister’s appeal has yet again delayed the issuing of licenses to VANS, which was meant to happen from today.
“Icasa has simply not lived up to its independent status,” he says. “If it was unable, as a result of the appeal, to issue the I-ECNS licenses, there was no reason why it shouldn’t have issued us with I-ECS (services) licenses. Even though these do not allow for self-provisioning, at least they grant VANS significantly more rights than our current licenses, such as geographic numbers, access to fixed line number portability and carrier pre-select regulations.”
The net effect of the appeal, according to Holdsworth, is that more than two years after the Electronic Communications Act (ECA) came into effect; no new electronic communications licenses have been issued. Nor has the regulator introduced the regulations mandated in the ECA, meaning that VANS will continue to operate in a climate of uncertainly that protects the incumbents and hampers competition.
“We were hoping that this week would finally free us of the crippling restrictions under which we have been operating,” says Holdsworth. “The minister’s actions have ruthlessly dashed this hope. Yet again we face unacceptable delays which are bad for everyone – the ICT industry and the consumer. The only winners are the incumbent operators, and their shareholders.”