Operators cautiously welcome policy

Johannesburg, 27 Jul 2001

Telecommunications operators have welcomed the final release of government`s policy directions, which are to shape the future of the industry in SA.

However, Cell C, Vodacom and Telkom have all been cautious in their praise and have asked for more clarity and regulations to implement the policy.

Cell C expressed the strongest concern, saying it notes with concern "that the legitimate expectations of the bidders for the third cellular licence appear not to have been taken into consideration, specifically with regard to the proposed timeframes for the introduction of what may effectively be three additional cellular licences.

"Further clarity is required on fixed-mobile and a clear definition of the location and type of service to be provided as well as any obligations that may be attached to a fixed-mobile licence," the company said in a statement.

Cell C also believes the policy may break promises made to it. "Our investment was made following the understanding that nobody, including Telkom nor any fixed-line operator, be allowed to offer mobile services for at least two years after the launch of the third cellular licence," spokesman and director Zwelakhe Mankazana is quoted as saying.

Department of Communications director-general Andile Ngcaba yesterday said the "fixed-mobile" clause in the policy was not designed to allow Telkom and the second and third operators to become cellular players, but to prevent duplication of last-mile infrastructure, as government has no plans to immediately unbundle the local loop.

Cell C has said that it plans a "Homezone" package, which would encourage subscribers to replace their fixed-line home telephone with a mobile handset by offering cheaper rates to subscribers within a predetermined number of cells.

Instead the fixed-mobile policy could mean the opposite, with fixed-line operators encroaching on the cellular market by offering mobile phones that only function within a certain geographic area.

Telkom says it is still studying the policy in detail. "The fact that there will be two competitors from May next year has not altered our position or the potential for real competition," COO Tom Barry is quoted as saying in a statement. Telkom says, however, that there are many questions still requiring clarification.

Vodacom especially welcomed the allocations of 1800MHz frequency spectrum that would be made within six months. The company has long fought for access to the spectrum, without which, it says, its service in urban areas will deteriorate significantly.

DA still calls for new Act

The Democratic Alliance (DA), which roundly criticised the draft regulations, says it remains convinced that a completely new Telecommunications Act needs to be written, instead of just making amendments to existing legislation.

Noting that the devil will be in the detail, Vincent Gore, deputy spokesman on Communications for the DA, says it is too early to comment on any legislative amendments that might be proposed.

Referring to the announcement of a third fixed-line licence, he says his party is encouraged by the change from the draft policy directions issued in March.

"The DA has been making repeated calls for more competition since the release of the draft. [There has also been] international pressure, culminating in pressure from minister Alec Erwin and the Department of Trade and Industry, and intense lobbying from the industry at large," he says.

"Although the policy framework is now in place, there are still many questions that remain unanswered. We will have to wait for a Bill to be presented as well as necessary regulations, before these questions are answered."

Should the DA object to proposed legislative amendments contained in the long-awaited Bill, Gore does not believe this will introduce undue delay and uncertainty with respect to the granting of licences by the Independent Communications Authority of South Africa, and says that such objections will have "an insignificant effect on the timing on the granting of the licences".