Home Africa and the Middle EastAfrica and the Middle East 1999 Levelling the Playing Fields Towards a Prosperous Telecoms Industry

Levelling the Playing Fields Towards a Prosperous Telecoms Industry

by david.nunes
Nape MaepaIssue:Africa and the Middle East 1999
Article no.:5
Topic:Levelling the Playing Fields Towards a Prosperous Telecoms Industry
Author:Nape Maepa
PDF size:24KB

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Article abstract

The South African Telecommunications Regulatory Authority (SATRA) established under the Telecommunications Act of 1996 is the leading authority on telecommunications development and regulation, and is responsible for the implementation of appropriate legislation in the public interest. The Telecommunications Act was the first of its kind created since the advent of our democracy. The Act embodies certain key principles designed to use telecommunications as one of the catalysts to bring about a better quality of life for all South Africans. SATRA views telecommunications as a basic need and lifeline that is as important as access to water and electricity. It is therefore the organisations vision to bring about universal service by increasing quality telephone connections and making access affordable.

Full Article

There is currently a great disparity in access to telephones between Whites and Africans. More than 85% of White households had telephone lines in 1998, compared with 2% of rural and 29% of urban African households. According to a study commissioned by SATRA between October 1997 and February 1998, it was established that of the 8.7 million households in South Africa only 2.8 million had telephones. Of the 5.9 million households without telephones, 36% could not access a telephone within 5 km of their homes. Realising the seriousness of the telecommunications access backlog, SATRA has implemented a variety of initiatives to ensure a faster and more effective rollout of telephony connections, thereby ensuring access for many in previously disadvantaged communities and for people in far-off rural areas. Anyone making use of South Africas frequency spectrum requires a licence, including Telkom, MTN and Vodacom. As part of the licence conditions the licensees make a contribution towards the Universal Service Fund, administered by the Universal Service Agency (USA). The Agency was established to ensure universal service rollout, and has since its inception initiated a variety of projects aimed at providing telecommunications access to the neediest communities. “They encourage ways and means of providing access through the implementation of among others, Telecentre projects and Small Telephone Cooperatives, (Community Owned Networks). Though the primary work was undertaken by the USA, they consult extensively with us,” says SATRAs Chairman, Mr. Nape Maepa. Some 12 Telecentres have already been erected in 6 provinces with another estimated 200 to be established during the course of 1999. Telecentres not only enable access to people who previously had to walk miles to the nearest telephone, but also introduces the communities to new technologies such as the Internet, personal computers, and more basic facilities such as faxes and telephones. Most of these Telecentres are owned by either an individual or communities, thus encouraging entrepreneurship. SATRA also made a concerted effort to determine what could be done to enable access to telecommunications for people with disabilities. “We have created a special advisory group, consisting of designated members from individual organisations representing people with disabilities. It is the task of the committee to encourage the three main telecommunications operators, Telkom, MTN and Vodacom, to introduce services which cater for the special needs of people with disabilities – including those of the visually impaired, ensuring services such as subsidised access to special telephone directories, telephones with a dot-mark on the number 5 digit, and voice-dialling services made available by cellular operators,” Maepa said. The physically handicapped are aided with public telephones of which at least two telephones in a row should be installed at reachable levels. Public pay telephones equipped with an inductive coupling and volume control are installed for the deaf and hard-of-hearing, as well as Telkom-supplied TELDEM equipment, and a short-message service to send text messages and vibrating batteries on handsets supplied by the cellular telephone industry. As some 7.5 million South Africans over the age of 15 are illiterate, Telkom displays symbols and pictures on public telephones and in telephone directories facilitating their use. The three main telecommunications service providers are also, over and above their contribution to the USA, bound by their licence agreements to play an important and direct role in ensuring telephony access for all citizens. Telkom was granted a five-year period of exclusivity to operate PublicSwitched Telecommunications Services (PSTS), with the prospect of a sixth year if it meets the line role-out and service quality targets in its PSTS licence. These targets included the installation of 2.8 million new telephone lines including 120, 000 pay telephones, and the replacement of 1.25 million analogue lines, by 2001/02.The licence conditions of the two cellular telephone service providers also ensures a substantial amount of activities aimed at redressing past imbalances. Not only does SATRA ensure access, but affordable access. SATRA has a mandate to ensure that telecommunications remains affordable for all South Africans, monitoring the three main service providers rates to ensure that they remain within the regulated Consumer Price Index (CPI), as set by the Minister for Posts, Telecommunications and Broadcasting. SATRA also keeps the competition rules fair and just, to firstly ensure that all consumers of telecommunications services benefit from the more customer friendly approach, competitive rates and the diversity of service provision likely to emanate from a more competitive environment, and to secondly ensure a place in the sun for all business people whose skills deserve that they be able to become players in the industry. It was with fair competition in mind that SATRA announced at the end of July 1997 that there was indeed room for more than two cellular operators in South Africa. A review of various countries telecommunications markets and cellular developments worldwide confirmed that South Africa can sustain more than two cellular operators. SATRA has an obligation and mandate to encourage ownership and control of telecommunications services by persons from previously disadvantaged communities. The awarding of a third cellular licence will be one of the largest empowerment initiatives to be undertaken by the regulator this year, with more to come. “We received eight valid applications for the third cellular licence just days ago, on 14th July , 1999, and we are more than interested to see how the applicants for the third licence envisage addressing past imbalances in the industry”, adds Mr. Maepa. He also said that, “both current cellular network operators have indicated their willingness to share their networks with the newcomer, and SATRA is already burning the midnight oil to implement regulations aimed at, among others, fairly assisting the new operator. Interconnection and facilities leasing guidelines are nearly finalised.” “At SATRA we recognise the rapid development of telecommunications technology, and want the new operator to consider existing and even new generation technologies as they begin operations. The new operator will be permitted to consider all cellular technologies in order to ensure financial viability and to roll out affordable services to all parts of South Africa,” explains Mr. Maepa. The Telecommunications Act has correctly recognised that cellular technology represents the fastest method of telephony delivery. SATRA realises that the vast majority of the historically disadvantaged do not necessarily require the high mobility currently available via cellphones. Mr. Maepa said, “The growth of cellular telephony during the past four years had not improved the Black/White disparity in respect of telecommunications access. Based on the current tariffs of the incumbent mobile operators, the potential market for high mobility cellphones still remains limited to the upper market segment. Low mobility cellphone tariffs could therefore be the viable option, obtained through a service which need not include expensive features such as high speed hand-off, and could be structured to offer relatively low tariffs when used in localised zones. SATRA has pronounced and confirmed that the Internet is a Value Added Network Service (VANS). This has resulted in an environment that is conducive for the telecommunications industry to grow and generate employment. The Internet industry has gone from strength to strength during the past few years and South Africa is currently ranked 14th with regard to the number of Internet users per country in the world. We are also rated first in Africa. Maybe its not surprising having the highest number of mainline connections per 1000 persons in Africa.” “However, as shown by the worlds highly developed nations, telecommunications enhance a countrys ability to deliver a better quality of life, among others through electronic health care and learning services to previously disadvantaged areas,” says Mr. Maepa. Mr. Maepa adds that there is a direct relationship between foreign direct investment and communications infrastructure – the greater an areas teledensity, the higher the investment. In an increasingly information-driven world, South Africas competitive ability will to a larger degree depend upon its ability to access and exchange information globally. Furthermore we are committed to the Governments offer to the World Trade Organisation objectives to open the South African telecommunications market to international competition. The advent of digital satellite telecommunications is bringing South Africa closer to this goal. Africa has come to realise that telecommunications play a significant role in nation building and economic development, especially in the rural areas. Some technologies that have been found to provide a viable solution to improving the lack or inadequacy of telecommunications infrastructure by offering a dedicated satellite system for Africa. Digital satellite telephony service provider Iridium is already in its test phase and Globalstar is expected to soon follow suit. SATRA is currently preparing to issue temporary authorisation for Global Mobile Personal Communications by Satellite (GMPCS) services. SATRA is charged with the licensing of all telecommunications services and the process of compiling guidelines pertaining to licensing GMPCSs is well underway. This process, which has already been completed, involves the Minister of Posts, Telecommunications and Broadcasting issuing a GMPCS Policy Framework. SATRA then prescribes the licence conditions including, establishing which kind of services may be rendered, and the manner in which those service will be rendered. SATRA will also establish who will have ownership and control of this service prior to it becoming fully operational. SATRA will also determine the licence and application fees due by the operator, their contribution to the Universal Service Fund (USF), as well as their contribution towards the Human Resources Development Fund (HRDF). A licence will be granted to GMPCS operators once the final licence conditions have been established and the operator complies. With new telecommunications service providers entering the market, and with current telecommunications services continuously expanding, it has become necessary for SATRA to review the South African Numbering Plan as well as the Radio Frequency Spectrum. A discussion paper on the future numbering plan was published at the beginning of March 1999, and the final public hearings have also taken place, with the Numbering Plan expected to be ready for implementation towards the end of this year. “The way in which telecommunications services are numbered has a direct influence upon the effectiveness of competition in the industry and the provision of telecommunications services to the consumer. The existing numbering plan has generally served South Africa well, but with increasing services it will be important to ensure that future allocations of numbers takes place equitably,” says Mr. Maepa. A second and possibly third fixed line operator is to be licensed to construct their network in the near future, to provide this service towards 2002/03. A third cellular telecommunications service licence is expected to be issued in the course of this year, and with the expected resale of telecommunications capacity, revision of the numbering plan has become unavoidable. Implementing a new numbering plan is not unique to South Africa. Over the last 10 years countries such as the United Kingdom, Hong Kong and Japan have undertaken reviews. Many found their existing numbering plan would not provide sufficient capacity for the future and they would literally run out of numbers if a new plan were not developed. The fact that developed countries, all of which have moved towards increased industry competition, saw the necessity to have a well developed numbering plan for telecommunications services, is evidence that it is critical for South Africa to ensure that it has a plan which will be able to accommodate the provision of telecommunications services for at least the next 30 years. SATRA, and specifically the Frequency Planning department, also bear the responsibility for South Africas radio frequency band plans. Although not formally classed as a regulation, a radio frequency band plan is an important regulatory tool, and forms part of the regulatory process carried out by SATRA-whose responsibility it is to define how the radio frequency spectrum is to be used. This we do by means of publishing a band plan following an in-depth inquiry involving representations by all concerned, as well as public hearings. Our process ensures effective frequency spectrum usage because it allows for orderly frequency management; it reduces congestion of the airwaves through improved efficiency; it encourages the introduction of new technologies, and it increases the scope for new services. In creating a telecommunications regulatory framework, SATRA has to answer questions such as: What employment opportunities will be created? What opportunities are being created for entrepreneurs that will give them the return they deserve from their risk taking? How will local consumers and businesses benefit from our rules, regulations and regulatory policies? What happens to South Africas existing telecommunications infrastructure, no matter how inadequate it may be-how will we optimise this in the future? What will we do to ensure that new investments in telecommunications infrastructure result in real benefits to the people of South Africa? Conclusion “World Bank studies have established a clear correlation between high telephone access and national economic growth. It is therefore imperative for South Africa to speed up the provision of services to the 68% of households that still do not have access to telephony,” concludes Mr. Maepa.

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