Altech Wins Battle to Build Own Network in South Africa


Business and consumers can look forward to cheaper telecommunications services after technology company Altech won a legal battle for the right to build its own network.

Altech's victory in the Pretoria High Court will affect roughly 300 other voice and data carriers, allowing each of them to build its own network instead of buying their backbone from Telkom or the handful of other large carriers licensed to provide infrastructure.

The build-it-yourself spree will be tempered by the high cost of actually creating a national network, at around R1bn. But at least a dozen companies have that financial clout, promising a level of competition never seen before.

The legal verdict handed down on Friday vindicated Altech's claim that Communications Minister Ivy Matsepe-Casaburri and the Independent Communications Authority of SA (Icasa) had turned the implementation of a new licence regime into a flawed and muddy mess.

Altech's challenge was on three counts: that companies with existing Value Added Network Services (Vans) licences had the right to build their own network; that the minister overstepped her power; and that the entire process was flawed. "On all three of those we were successful in court," said Altech CEO Craig Venter. "For the industry as a whole this is a dramatic change in the landscape."

Altech argued that in 2004 the minister had given Vans licence holders the right to self-provide. Icasa originally agreed, but changed its mind later when the minister backtracked on her statement.

Venter claimed that Icasa was planning to reserve the licences for a few favoured players that it had negotiated with "behind closed doors". On Friday, the court agreed that Vans licence holders do have the right to a built-it-yourself licence. "Significant financial muscle is required to build a national network, but about 200 companies contacted us in full support of what we were doing," Venter said.

Venter would not say how much Altech would invest in its own network, nor what services it planned to offer, but it has long had ambitions to be a telecoms provider in its own right rather than a reseller of airtime for existing operators.

Internet Solutions' director Hillel Schrock said little would change in the short term, as Icasa still had to resolve issues around scare spectrum allocation. But an instant benefit should be lower fees, as voice and data carriers had been forced to partner with the telecoms giants to access their licences to provide some services.

"Players have been doing regulatory gymnastics by partnering with telcos that didn't add much value but added a licence. There are benefits for our corporate customers because now we can self-provide without paying a premium just to access a licence," he said.

The Internet Service Providers' Association (Ispa) welcomed the news that its members can build their own networks. . Icasa said it would study the judgment and "chart the way forward".

Business Day