SOUTH AFRICA'S DoC PROMISES ACTION ON TELKOM'S HIGH RATES

Telecoms

Consumers should not fear that another workshop to discuss the high price of telecommunications will be a pointless exercise, as government is determined to impose some changes, the communications department says."Telecommunications costs in SA are exceptionally and unacceptably high," says Deputy Communications Minister Radhakrishna Padayachie. "We have to put in place a series of effective strategies to reduce the costs and contribute to providing universal services to our people." Padayachie was speaking ahead of a workshop on October 11 and 12, where a working group formed at a similar colloquium in July will present firm proposals to crack down on profiteering.

The department will listen and it will act, Padayachie promises. He acknowledges a lot is at stake as the proposals could make a major contribution to cutting the cost of doing business in SA, boosting economic growth, and eventually reducing poverty and halving unemployment. He expects the working group to call for the Sat3 undersea cable to be declared a national asset. The Independent Communications Authority of SA could then cap how much Telkom charges other operators for access to it. Padayachie also expects a call for internet service providers to be allowed to build their own networks, instead of being forced to lease their lines from Telkom.

The working group will demand an end to Telkom's monopoly over the local loop. That is crucial for others to compete without duplicating lines to users' premises. Policy directives will be presented to Communications Minister Ivy Matsepe-Casaburri. "There is a tendency to think there is too much talk and not enough action," Padayachie says. But this thorough consultation was needed to reach consensus.Asked if the department had the will to end Telkom's monopoly over Sat3 and the local loop, he said: "There is almost a deafening noise in the sector that we need some serious action, and unbundling the local loop has been identified as one of the most important suggestions."

But he did not give a clear answer, saying the working group's research had raised other issues and other possible solutions. This week the South Africa Foundation issued firm proposals that could quickly cut telecoms costs by up to 50%. They include obligatory per-second billing, no minimum call fees and a reworking of the interconnection fees operators charge each other. The report also supports unbundling the local loop and declaring Sat3 a national asset. And the foundation is calling for a reduction in the hefty licence fees paid by operators.

"Most of these measures are not dramatic and are well-aligned with international practices," said executive director Michael Spicer. Slashing the costs by 50% was a "stretch target" but it was probably achievable given costs in comparable countries, he said.

Mark Shuttleworth, a member of President Thabo Mbeki's international technology advisory task force, believes the colloquium could finally result in real action. The task force has been telling government for years that the cost of voice and data services is hampering growth, he says. Now the trade and industry department is demanding an end to high prices, as they are hurting foreign investment and competitiveness. That added clout could help speed up regulatory changes, Shuttleworth believes.

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