Lower voice call rates, potentially disruptive spectrum allocation in telecoms keep the industry on tenterhooks

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Last week there were announcements that set the pulses racing at telecoms operators in South Africa, which could have a long-term impact on consumers and their use of mobile networks.

The first was from the Independent Communications Authority of South Africa (Icasa) which slashed mobile call termination rates – the fees that operators charge each other to receive a voice call – and the second was Cabinet approving its latest version of what is known as a wholesale open-access network (Woan).

The Woan plan, which has been mooted for years, is contained in the Electronic Communications Amendment Bill but hasn’t been promulgated into law yet. The latest changes haven’t been published yet but should come out this week or next. They will be based on a CSIR research study, which has been kept secret since it was given to Telecommunications & Postal Services Minister Siyabonga Cwele late last year.

The most controversial aspect is that the government plans to take back all the spectrum it has already licensed and manage it. The draft legislation still has the clause in about reclaiming this spectrum – but some commentators think that it may have been rethought and an allocation of it kept for the Woan with the rest likely to be auctioned to operators.

I could waste your time and mine regurgitating all the arguments about this foolish Woan, but it’s a diversion of valuable resources on an idea that seems good on paper but just isn’t practical as it has previously been mooted. It’s kinda like the land expropriation without compensation debate, except for cellular spectrum.

Cellphone operators have built their businesses on access to specific spectrum that our phones use to communicate – now mostly with data. Part of the thinking around the Woan is to take that spectrum away from the operators and put it in some big pool where some government-appointed body will oversee its use and implementation. We know how well government is suited to doing that with land…

And there’s precedent of such failure: Sentech launched an ill-fated service called MyWireless around 2004 that cost hundreds of millions attempting the same and was eventually canned.

This kind of thing is just not what government is good at and it can barely manage all of the other major societal projects it should be: providing water, maintaining roads, or just keeping Eskom from dragging the whole economy down the toilet with it. The extraordinary waste of money by Sentech should be enough proof.

Instead legislation should enable the telecoms market, not try and compete with it. Operators have been providing our comms networks this for years, they know how to do it. As for new entrants they keep insisting on, look at how a privately-funded operator like Rain is already making waves in providing data-only services, offering a gigabyte for R50 which never expires.

The Icasa mobile termination announcement is important but Icasa has already been aggressive in reducing these fees and voice revenue is rapidly declining, following global trends. What we need is similarly aggressive action on the data costs, which Icasa is doing through a years-long process – in no small part to avoid the inevitable court case delays from litigious operators. Hopefully, because it’s an election year, there will be good news for the consumer.

This column first appeared in Financial Mail

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About Author

Toby Shapshak is editor-in-chief and publisher of Stuff, a Forbes contributor and a Financial Mail columnist. He has been writing about technology and the internet for 20 years and his TED Global talk on innovation in Africa has over 1,5-million views. He has written about Africa's tech and start-up ecosystem for Forbes, CNN and The Guardian in London. He was named in GQ's top 30 men in media and the Mail & Guardian newspaper's influential young South Africans. He has been featured in the New York Times. GQ said he "has become the most high-profile technology journalist in the country" while the M&G wrote: "Toby Shapshak is all things tech... he reigns supreme as the major talking head for everything and anything tech."

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