Despite an initial outpouring of criticism, the final version of the Telecommunications Amendment Act, which is now likely to become law, has gained approval from many quarters.
Much of the change is due to last-minute alterations to the definition of the controversial fixed-mobile clause, which had cellular providers fearing that Telkom and the second national operator (SNO) would be able to encroach on their territory.
While Telkom and the SNO will be able to use GSM technology, they will not be allowed call handover between cellular base stations. The cellular providers say this effectively limits the use of the technology to its original intention to be an alternative to fixed-line last-mile access.
"We feel we have really achieved our objective in this," says Joan Joffe, Vodacom group executive of corporate affairs. Vodacom is also pleased that the fees operators will have to pay for access to the 1800MHz frequency spectrum they have long lusted after will be payable over a period of time instead of once-off.
Cell C says the resolution of fixed-mobile has left no major issues outstanding as far as it is concerned, but that some adjustments could be made to enable more effective competition.
"There could have been more flexibility around number portability for both fixed and mobile operators," says Cell C director Zwelakhe Mankazana. "Mobile operators could implement it sooner."
Cell C will also lobby communications minister Ivy Matsepe-Casaburri for the right to use fixed-line infrastructure in areas where it must supply community telephones in terms of its social obligations. Mankazana says as in the case with fixed-mobile, it would make economic sense for Cell C to use fixed-lines in some cases.
However, like Vodacom, the company has welcomed the final Bill.
The challengers
Value-added network service providers (VANS) also won some concessions in the legislation, but have enough remaining major issues to make a legal challenge possible.
Mike van den Bergh, chairman of the SA VANS Association (SAVA), says a change in the definition of VANS is a big step forward. The term "VANS" was originally discarded in favour of "electronic transaction service providers", a generic term SAVA saw as potentially dangerous.
However, the substituted term was dropped, as were limitations on the use of virtual private network (VPN) technology.
Another resolved question is that of multimedia services. SAVA feared that the granting of a multimedia licence to State-owned signal distributor Sentech would make it illegal for other operators to offer such services. Now, Van den Bergh says, any other licensee that needs to use multimedia in the normal course of its business would still be allowed to do so.
What could potentially see SAVA challenge the Bill before the Constitutional Court, the Competition Commission or even the World Trade Organisation, is voice.
"The real issue is if VANS can provide converged voice and data services," Van den Bergh says. "At the moment the answer is no."
But Telkom and the SNO will be able to use voice over Internet protocol (VOIP) technology for such services and will be able to do so under their VANS licences. SAVA argues that this is an explicit case of commercial discrimination. The consequences could be crippling.
"There is real chance that within two years it would be impossible for VANS to compete with Telkom and the SNO," say Van den Bergh.
SAVA is examining its options at the moment and using the legislative route would be regrettable, he says, not only because of the financial resources such a battle would consume but also because it would sour relationships. Yet it may be inevitable if normal negotiations fail.
"The position of having two licensed VANS operators able to provide different services to everybody else is clearly unsustainable," he says.
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