Andile Ngcaba, director general of the government`s Department of Communications, says the Telecommunications Act has to be updated, but he does not know how to do it.
"The law of 1996 needs an almost complete revamp," he told a conference on value-added corporate networks organised by the International Communications for Management Group in Midrand yesterday.
However, that does not mean the Telkom exclusivity period can be ignored or changed. "When you sign agreements you have to honour them," Ngcaba said, referring to the exclusivity period. "Sometimes we wish we could move a bit faster."
Despite recent speculation to the contrary, Ngcaba and Gabriel Celli, Telkom`s GM of regulatory affairs, said the decision on whether the exclusive period will expire in 2002 or 2003 has not yet been made.
Under the Act, Telkom has the option to apply for a year`s extension before competition is allowed, if it meets certain requirements. "Triggering the sixth year is based on Telkom achieving 80% to 90% of its targets for the fifth year (2002) in year four already," Celli noted. The roll-out target for the number of lines to be installed will also be upped.
"There is a debate around [the extension] right now," Ngcaba said. "There is not a conclusive decision about it."
But Ngcaba supports other radical change in the structure of telecommunications regulation and operation in SA. He said a law that will bring about the merger of the South African Telecommunications Regulatory Authority and the Independent Broadcast Authority should be signed before May. His department is also in favour of listing Sentech, the government-controlled broadcasting equipment company, in the same timeframe as the listing of Telkom. "We are looking at a more market-driven approach to these companies," he explained.
Ngcaba also believes the post-exclusivity debate should start now, regardless of when the period comes to an end. He said the nature of competition and the future of the industry must be planned now to be effective when the time comes.
Speaking to an audience consisting largely of value-added network operators, almost all in favour of open competition in the telecommunications sector, Ngcaba defended the 1995 decision to give Telkom exclusivity in the Act in exchange for assurances that providing telephone services to rural villages would be one of its priorities.
"There is an argument that says we should just have opened up, that those rural areas would have been connected through competition. But connecting a village is a big expense and you need some kind of incentive to make it happen. Exclusivity gave us a more certain method of getting those lines to those villages." Not that he appreciates the legacy it left him with. "We recognise that market conditions are different today, but agreements were signed."
Emmanuel Olekambainei, chairman of the International Telecommunications Union GMPCS-MOU group and a former regulator in Tanzania, said that connecting rural areas in SA is an approach that will bear fruit later. "The underdeveloped area of today is the market of tomorrow," he noted.
"What SA did was not philanthropism, it makes good market sense. What happens when your urban areas become saturated [with telecommunications services]? The money moves to unserviced areas. But you need a basic infrastructure there first."
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