SA`s second national operator (SNO) has entered into an agreement with the Department of Public Enterprises (DPE) that will allow it access to a nationwide inter-city network.
The agreement, signed on Friday, will allow the operator to access Eskom and Transnet`s full service networks, said a statement. "This network was originally created by state-owned enterprises Eskom and Transnet, who are also shareholders in the SNO," the operator said.
Last week saw Transnet hand over its metro fibre-optic network to the operator amid reports that Eskom would no longer sell its telecommunications assets to the SNO. The new operator says it is "on track" to switch on international wholesale services at the end of August and enterprise services by the end of this year.
Last month, Transtel - a division of Transnet - agreed to sell the SNO its telecommunications assets for R256 million. In the same month, Eskom indicated it would divest of its R748 million telecommunications network. These deals would save the SNO around R2 billion, according to media reports.
However, government, which has an indirect 30% equity interest in the SNO, is reported to be setting up its own competitor to Telkom. Sources indicate the DPE is planning to launch a third telecommunications operator, which will be majority-owned by government.
Indian conglomerate Tata, which owns 26.1% of the SNO, will also own a share in the third operator, a source said. However, minister of public enterprises Alec Erwin lambasted the initial press report, in the Business Day, as being inaccurate. Last Monday, the paper quoted an anonymous source as saying the DPE had decided Eskom would no longer sell its network to the SNO, rather housing it in a state entity, which would lease the network to the operator.
"As the DPE, we wish to place on record that the information in the story is inaccurate. An announcement will be made once the negotiations have been concluded," it said.
No comment
However, requests for clarification on the network and its location within government were not successful. Stakeholders were asked whether the network would be rented to the SNO, and whether it would remain with the state-owned entities, or be transferred to another entity.
Eskom responded with "no comment", referring enquiries to the SNO. The SNO was able to confirm that the network was nationwide, but was not in a position to provide further specifics. MD Ajay Pandey said: "The two network/asset transactions will go a long way in allowing the SNO to deploy a high-capacity national telecommunications network based on leading-edge convergent technologies."
Transnet did not respond to requests for comment, and the DPE stated: "Any comment at this stage would be premature and would jeopardise negotiations." It added that it would make a "detailed announcement at the appropriate time".
What competition?
At least one analyst has raised doubts over government`s commitments to liberalisation, after the initial reports appeared. The analyst - who spoke on condition of anonymity - said such a move would set back liberalisation in the sector. "The potential for conflict is massive." He also questioned why government would retain a portion of the network, and not the entire network.
Gartner principal analyst of carrier operations and strategies, Bill Hahn, has also questioned government`s motives. He said "government`s steadfast commitment to the `mixed state` philosophy in telecoms development is especially noteworthy, even brave, in the face of this latest proof that the middle course often sounds like the worst of both worlds".
Examining the reports from an international perspective, Hahn commented that most developed countries have privatised and liberalised their networks. "How can the government have confidence that by retaining ownership of the SNO infrastructure, costs will be lower than they would be under market forces?"
He also questioned government`s ability to intervene to ensure there is no abuse in the telecommunications sector. "How would being entangled in facilities ownership assist the Independent Communications Authority of SA and the Department of Communications in passing judgement?"
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