ICASA 'not holding back SNO, IPO`

Johannesburg, 19 Mar 2002

The Independent Communications Authority of SA (ICASA) has released three sets of draft regulations aimed at creating regulatory certainty for the public listing of Telkom and the entry of a second national operator (SNO).

Apparently stung by government comments that a lack of regulation is holding back the Telkom initial public offering (IPO), which is large enough to significantly affect the value of the rand, ICASA says it is keeping up with events and that regulations will not be a hurdle.

"We hope this dispels some of the notion that ICASA could be responsible for delaying the IPO of Telkom and the entry of the SNO," chairman Mandla Langa says.

ICASA says the SNO could be licensed as soon as October this year, but that would only be possible if government issues the invitation to apply (ITA) for the 51% stake in the company by April.

The most controversial of the three sets of regulations is likely to be new facility leasing guidelines, which would force Telkom as a dominant player to allow competitors to use its cables, exchanges and other equipment.

Among the services listed as essential, and which must be provided to the SNO, are "maintenance, repair and testing services", which the regulator confirms could mean that Telkom would have to contract out its repair crews to the SNO.

The facilities will have to be provided at fees determined by their cost according to a Chart of Accounts/Cost Allocation Manual also currently in its draft phase. The onus would be on Telkom to prove that it could not reasonably provide any facilities requested by the SNO or Sentech, which is to operate as an international carrier-of-carriers.

Also included in the facility leasing guidelines is a provision that would force major operators to sell their services at wholesale rates to the likes of value-added network services (VANS) operators. The SA VANS Association (SAVA) has long campaigned for such regulations and has cautiously welcomed the section.

Carrier pre-select

The second set of regulations deal with carrier pre-select and will have a far greater direct impact on consumers.

If implemented, it will see customers able to select which operator it wants to use for long distance and international calls as of the end of December this year. Telkom and SNO customers will be able to select either a default long distance carrier or do so on a call-by-call basis, by dialling a selection code.

Operators will be obliged to inform customers of the pre-selection service.

Of less public impact is the third set of regulations dealing with contributions to the Universal Service Fund. Under the latest ICASA proposal, major operators will pay either 0.5% or 0.4% of their annual turnover to the fund, depending on whether they have community service obligations built into their operational licences.

Smaller licences, such as those involved in satellite vehicle tracking, will pay fixed annual contributions ranging from R1 000 to R30 000.

Private telecommunications networks (PTNs) have been exempt from any universal service payments to avoid companies using such networks, including most large corporations, from having to pay a percentage of their total turnover. Previous draft regulations were criticised for allowing such a scenario.

All three sets of regulations are still in their draft phase and public comment can be made on them until 19 April, after which they have to be approved by communications minister Ivy Matsepe-Casaburri.