SOUTH AFRICA'S DEPARTMENT OF COMMUNICATIONS UNDERGOES A COMPETITIVE MIND-SHIFT BUT...

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Last Thursday South Africa's specialist ICT mail-lists suddenly sparked with the news "VOiP is legal" following an announcement from the Department of Communications. There was an almost audible whoop of pleasure and excitement at the news followed by a steady stream of messages picking over the detail of the statement. This headline news concealed other good news and some bad news... Russell Southwood makes an early attempt to unwrap the package.

The Department's statement conceded that "there is no longer any difference in the transmission of voice, video and data therefore it is no longer necessary to prohibit the provision of voice by VANS. This provision will allow growth of the VANS sector and promote SMMEs". So instead of trying to restrict the use of technologies, the Government has moved using services as the defining point of policy and regulation. A further announcement is promised in October and will almost certainly mirror the "technology-neutral" framework of this statement.

So VOiP is to be legal for Value Added Network Service Providers (VANS) from 1 February 2005 but this actually means that it is only really legal at a domestic level. The Government has not chosen to challenge the strategic heights of Telkom's international monopoly except through opening the door to the SNO. The one place where VoIP would have its strongest impact on prices - through international services - has not been opened to competition. Unlike Mauritius which has opened several international VoIP services, South Africa has chosen to keep those services in the hands of a duopoly. Telkom will continue to have a monopoly on the one significant piece of international fibre on the continent. Therefore this move will not have the decisive impact on international calling rates that will keep South Africa an internationally competitive economy. For example, a healthy call centre sector (which will bring much needed jobs) has to have competive calling rates.

But other parts of the statement show a competitive mind-shift that can only be helpful for the SNO when it emerges. These include:
* "a person who provides a value added network service shall be entitled to cede or assign the right to use, or to sublet or part with control or otherwise dispose of the telecommunications facilities used for the provision of the value added network service.
* "private telecommunications network operators shall be entitled to resell spare capacity and facilities or to cede or assign his or her rights to use such facilities or to sublet or otherwise part with control thereof".
* "mobile operators may utilise any fixed lines that may be required for the provision of the service including fixed lines made available by Telkom or any other person providing a public switched telecommunication service.

Out of these provisions will grow the opportunity for the development of an "independent" sector that is not in shadow of Government and will be to give the continent's best prepared and most powerful incumbent a run for its money in a range of markets. It will also encourage further private sector investment in the development of overall infrastructure.

The statement includes a number of universal access commitments that include:
* "As of 1 February 2005 persons may apply for a licence to provide public pay phone services in any area of the Republic.The Department is considering the removal of licensing requirements to provide these services".
* As of 18 January 2005 public schools and public further education training institutions will be entitled to a 50% discount on all telecommunications calls to an Internet service provider and any connection or similar fees or charges levied by an Internet service provider for accessing the internet or transmitting and receiving any signals via the internet or for such access and transmission and reception

Future announcements in October this year will address the issue of service-based licences to be operational by May 2005; the remaining Under-serviced Area Licences, the Second National Operator, the Convergence Bill and the ICT BEE Charter.

For all the cheering from the ICT sector, there has been little comment on the fact the process of opening up competition still remains in the hands of Government. The regulator picks up its instructions from Government. It does not lead the discussion. Perhaps for there to be a permanent competitive mind-shift, the Government at some stage needs to stop wanting to control everything and allow an independent institution to flourish that it will occasionally disagree with. And what would be the harm in that.

Below is the full statement from South Africa's Department of Communications: