Infraco speeds up

Johannesburg, 15 Feb 2007

Government plans to fast-track the licensing of Infraco, the state-owned enterprise expected to provide national and international backhaul telecommunications infrastructure.

Department of Communications director-general Lyndall Shope-Mafole says communications minister Ivy Matsepe-Casaburri will soon issue a policy directive that will allow Infraco to exist as a licensed telecoms provider by year-end.

Conflict of interest

Public enterprises minister Alec Erwin on Monday provided some clarity on Infraco when he announced it would launch in March. The department has indicated its assets will remain housed in Eskom until then.

Infraco 'owns' Eskom's fibre optic intercity network as well as some of Transnet's communication assets. Shope-Mafole says the Independent Communications Authority of SA (ICASA) has agreed Infraco's assets should be used to provide services while the licensing of the Infraco entity is being sorted out.

However, BMI-TechKnowledge senior telecoms analyst Richard Hurst says for Infraco to operate as a telecoms entity before being awarded a licence, its assets would have to be 'held' within a licensed company.

There are only three companies locally that would meet these requirements, he says. The first, Telkom, "is definitely a no-no". Sentech and Neotel are the other options, with Neotel being the logical one. "They could run it under Neotel," he says.

This, however, would be a conflict of interest. "It seems unbalanced at the least." Hurst says such a move would create confusion in the international arena, sending the message that SA is not serious about liberalisation.

Fast forward?

Shope-Mafole says the licensing of Infraco should take place this year, and state law advisors are reviewing the ministerial directive that will set the stage for that process to take place.

Hurst says he will "believe it when I see it", alluding to the long time frames generally associated with the process of licensing an operator.

SA's long-awaited second national operator Neotel received its licence in 2005, four years behind schedule. The licensing process was initiated in December 2001 after government advertised for bidders to own shares in the operator. In August 2005, ICASA received the go ahead to proceed with the company's licensing, subsequent to the integration of the operator as an entity.

"Lack of a licence should not prevent Infraco from doing the work that it's supposed to," Shope-Mafole says. The company is expected to become operational by the end of the 2006/7 financial year, she says.

No short cuts

Erwin is expected to brief Parliament on Infraco's operations by March. His spokesman Gaynor Kast says Infraco will go through the normal regulatory and parliamentary processes for approval.

"We are not going to compromise anything and take short cuts," she says. "Once the minister briefs Parliament, we will be in a better position to give further details."

Shope-Mafole says while the Department of Public Enterprises owns Infraco, all policies related to the entity's operations will be developed within the Department of Communications.

Telkom and Neotel are licensed to provide services to individual consumers, while Infraco aims to provide backhaul services to telecoms operators.