Enough of govt's 'special interventions'

Last week, president Thabo Mbeki referred to ICT, in particular the issue of telecommunications and its cost, during his State of the Nation address. The ministers of trade and industry and public enterprises then delivered their strategies, with particular regard to developing the business process outsourcing (BPO) industry and increasing broadband capacity, while bringing down connectivity costs.

ICT is the underlying grease for a large number of projects Mbeki touched on. From increasing the effectiveness of the criminal justice system and developmental call centres, to improving government service delivery and increasing economic prosperity and creating a caring and safe society - ICT plays an increasingly important, if not the central, role.

Unfortunately, Mbeki's address did not mention this or the important role played by a regulator, such as the Independent Communications Authority of SA (ICASA).

Instead, he mentioned several steps, under the auspices of the macro-economic policy of the Accelerated Shared Growth Initiative for SA, which circumvent the regulatory steps put in place. The message is clear: if government approves it, it will happen, irrespective of the legal and competitive issues.

On Monday, trade and industry minister Mandisi Mpahlwa elaborated on the BPO initiative driven by his department. He, along with Mbeki, seem pleased Telkom has agreed to give preferential rates to 10 development call centres that will employ around 1 000 people each. No details have been given on the rates.

The BPO initiative has been driven by the private sector for many years already. In a relatively short period, over 11 000 call centre jobs have been created in the Western Cape alone. Despite continuous lobbying by companies, they have received little in terms of relief to encourage this investment. The reason behind the industry's success is that it made pure economic sense to locate a call centre in Cape Town rather than in the UK.

Despite government's sudden taste for the BPO industry, the window of opportunity is rapidly closing. Never mind competition from India and the Philippines, SA is now facing increased competition on the continent. Nigeria has developed its own outsourcing strategy and is about to begin actively marketing it. Having seen that country's ability to rapidly implement a new plan, it quickly deregulated its telecoms sector and it will soon be a real competitor in this space.

The message is clear: if government approves it, it will happen, irrespective of the legal and competitive issues.

Paul Vecchiatto, Cape Town Correspondent

Broadband availability and high connectivity costs have been big issues for years. Fingers have been pointed in almost every direction as to why this is the case. However, the fact of the matter is that only recently has Cabinet realised how important this is. A senior Department of Communications official once told me his biggest problem was how to convince Cabinet that by tackling these two issues, another two percentage points could be added to the economic growth rate.

Minister of public enterprises Alec Erwin's briefing on Infraco and the role it will play goes some way in the right direction. However, the fact is that a similar strategy was put forward five years ago in a market report compiled by US consultancy The Yankee Group. Erwin seems to be determined to ensure Infraco goes ahead and to push through the necessary legislation and funding requirements. However, we have seen on numerous occasions that such grand plans often come unstuck due to technical and legal difficulties.

Transparency will be vital to Infraco's success. It will be a public entity and will have an impact on connectivity costs. However, it cannot become another Telkom and it cannot become some kind of white elephant. Questions, such as how it will set its pricing, will it have to comply with ICASA's cost of accounting regulations, who will be allowed access to the network, and how will it interact with various municipal initiatives, have to be addressed soon.

While there seems to be a greater sense of urgency from government concerning ICT and an increased realisation of its potential contribution to the economy, there still appears to be some muddled thinking about its own role.

Rather than "special interventions", government should set the field and play the role of the umpire, because being a player and watchdog never leads to a satisfactory game.