The high cost of legal representation has led Internet Solutions (IS) and Vox Telecom to step back from Altech's urgent application against communications minister Ivy Matsepe-Casaburri and ICASA.
IS and Vox objected strongly to Altech Autopage's application to have ICASA's licence conversion process halted. The companies stated it would delay their opportunity to build their own networks, while established competitors such as Telkom, Neotel and the mobile operators could take advantage of the halt.
However, ICASA acceded to Altech's request to stop the conversion process of determining if any VANS could be awarded individual-electronic network service (I-ECNS) licences, which allows the holder to build its own infrastructure. Telkom, Neotel and the mobile operators are all but guaranteed that these will be granted to them.
Smile Communications was the only one of 28 VANS cited as respondents in Altech's application to actually respond. In her affidavit, Smile CEO Irene Charnley hinted at the regulatory cost of doing business.
Charnley states that since its inception in April last year, Smile Communications had spent R20 million in putting together its various submissions, and ensuring and demonstrating that its business plan was viable. This did not include another R8 million investment in fixed assets.
"It has no prospect of any return on this investment until it is awarded an I-ECNS licence," she states.
Siyabonga Madiyibi, IS's director of regulatory affairs, says those costs stated by Smile include a number of operational costs, and not all are directly related to legal fees.
"But those legal fees are heavy. We estimate that IS's participation in the various regulatory events and meetings have cost us between R5 million and R6 million. We also saw that it would have cost us at least another R1 million to participate in the Altech application," he says.
Vox Telecom CEO Doug Reed says the reason for his company not participating was: "The f..... legal fees, the f..... legal fees."
He says the application could help the industry, but could also be potentially very dangerous.
"Depending on how the court rules, it could set back the industry four years, if not more," Reed says.
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