Altech Blamed For Net Providers' Licence Delay in South Africa

Internet

Efforts to create a more competitive Internet market have been thwarted purely because legal action by Altech has halted efforts to liberate the industry, says the Independent Communications Authority of SA (Icasa).

Blame for a delay in progress has been heaped squarely on Altech, with Icasa councillor Marcia Socikwa saying its legal challenge was preventing numerous hi-tech companies from winning a licence to construct their own national voice and data networks.

Socikwa blamed Altech in defence of Icasa's failure to grant the coveted licences to about 20 companies that want to build their own wireless networks to compete more effectively with Telkom and the cellular operators. They include Altech itself, MWeb, Internet Solutions, Gateway and several smaller players.

Instead, they are being offered less valuable licences that let them supply voice and data services, but only if they use the infrastructure owned by far larger operators including Telkom, Sentech and Neotel.

The court case meant Icasa could not carry out its plan to grant an unlimited number of the more powerful licences to any hi-tech company that met some not-too-onerous criteria, Socikwa said. Instead, Icasa is just converting their existing licences into the weaker version to meet the new format required by the Electronic Communications Act.

"If the court case wasn't going ahead we would have issued these licences to Internet service providers. Effectively, Altech has stopped all other ISPs (internet service providers) from getting one, " Socikwa said.

The dominant operators would remain the sole providers of network infrastructure and other players would still be forced to lease bandwidth from them.

Altech's objection has rankled rivals including Vox Telecom and Internet Solutions, which say it is an unnecessary delay to liberalisation.

Icasa planned to grant a network-building licence to any company that was at least 30% black-owned, had the cash to construct a national network, the skill to operate it properly and a sound business plan to make it sustainable. "If they met these criteria we'd give them a licence. It wasn't going to be competitive. We sought to introduce competition as soon as possible but Altech has diminished that opportunity," Socikwa said.

Altech CEO Craig Venter has described the legal challenge as a matter of principle, saying the licence conversion process is flawed. Fuzzy issues about which companies were entitled to do what, and who would be awarded a licence, needed to be clarified before any were granted, he said. The high court hearing is set down for July 29.

Business Day