Industry response to the communication minister`s announcement that value-added network service (VANS) players will not be able to self-provide infrastructure has been varied and divided, with some feeling it was inevitable, while others claim she is being too conservative.
According to Andy Brauer, Business Connexion`s chief technology executive: networks and strategic solutions, the minister`s statement should not come as a surprise, as this was always the case in terms of the Telecommunications Act, and this is merely a clarification and will not have much impact on the liberalisation process in the long run.
"Cost savings will still be seen in the form of less bandwidth required to make a call. Where a company, for instance, currently has 200 users making phone calls at 64K each, with voice over IP (VOIP), only 16K of bandwidth will be required per individual, offering an immediate cost saving," says Brauer.
"What needs to happen most is for Telkom to be unbundled. Just as VANS providers are not allowed to provide the services of an infrastructure service provider, so Telkom should not be allowed to play in the VANS space."
Imran Ebrahim, GM of Datatec`s Westcon division, is worried that the minister`s pronouncement will have a negative impact on previously disadvantaged areas.
"The announcement is conservative and will thus limit the provision of new services to previously disadvantaged areas which, until now, have not been addressed by the incumbent," he says.
Ebrahim claims the minister can overcome this problem by extending access to networking infrastructure to the larger VANS, which are companies that have already proven themselves in this space and are ideally positioned to rapidly deploy wireless and voice services to these areas.
No real impact on VANS
Mark Baptiste, director: service providers at Cisco Systems, does not believe the minister`s announcement will have any realistic impact on VANS providers at all.
"Neither the VANS operators nor the network operators have expressed any interest in buying networking infrastructure," says Baptiste.
"The cost of digging trenches and laying copper and fibre is simply prohibitive, and the laying of networking infrastructure will only become viable in the next couple of years, with the commercialisation of a wireless infrastructure."
He does, however, concede that some of the smaller VANS providers may have been looking into laying a metropolitan area network in new developments such as shopping complexes.
Andre Wills, telecoms analyst at Africa Analysis, says his company was always of the opinion that VANS could not self-provide infrastructure, due to the way the Telecommunications Act is worded, although there were a number of different interpretations of the minister`s determinations.
The Independent Communications Authority of SA`s (ICASA`s) interpretation, released in November last year, states as follows: VANS may self-provide facilities from 1 February 2005. Self-provision contemplates the procurement of telecommunication facilities by a VANS licensee from any telecommunication facility supplier and to use them under and in accordance with its licence to provide telecommunication services.
"Even ICASA`s statement on self-provisioning can be interpreted in more than one way, which is why any definition must be defined by the source document, which in this case is the Act," says Wills.
"Any analysis of a crucial issue like this will be interpreted by a company based on its own business objectives, which is why players like Internet Solutions have been seeking an expansive interpretation, while Telkom has been seeking a restrictive one."
He says his only problem with the announcement was the timing of it, since the minister could have said something much earlier than the day before liberalisation takes effect, but he was also happy that at least a decision had been made.
"Obviously something like this will dampen the industry spirit somewhat and it is disappointing for those players who were keen to take immediate advantage of the liberalisation process," he says.
"However, there were a number of other critical issues that were not given due attention in the hype surrounding the liberalisation announcements - such as interconnection and spectrum licensing - and these were issues that could have caused many other problems further down the line."
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