Telecommunications Policy Directions: Hearings

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
3 April 2001
TELECOMMUNICATIONS POLICY DIRECTIONS: HEARINGS
 

Department of Communications Briefing
Telkom
Sentech
Vodacom
MTN
Cell-C
Transtel
Eskom
Communication Workers Union
Independent Communications Authority of South Africa (ICASA)

SUMMARY
The Minister of Communications and the Director General spoke on the new telecommunications policy.

The Minister cautioned against moving too fast and devaluing the country’s existing assets. She emphasised there is a lot of interest in telecommunications development in Africa. The key is to empower people. Skills, infrastructure and services must be developed and this development must be sustainable.

The Director-General of Communications, Mr Andile Ngcaba, gave a presentation on the Department’s new policy directions and timelines for their implementation. Highlights of the new policy include a second national operator that will use the infrastructure of Telkom while it is building its own infrastucture. The Department is also looking to implement a system whereby users can have the same telephone number for life, called number portability. There will also be an emergency number, 112.

The following groups gave preliminary submissions on the new telecommunications policy: Telkom, Sentech, Vodacom, MTN, Cell-C, Transtel, Eskom, Universal Service Agency, Communications Workers Union and Icasa.

MINUTES
Minister of Communications Address
The Minister of Communications, Ivy Matsepe-Casaburri, opened the meeting. She said the task today is to take the policy drafted at the recent communications colloquium and translate it into regulatory directives. The key now is to find a balance between national objectives and sector-specific objectives. At the same time, these objectives must be "aligned". She emphasised an awareness of being part of the African continent; therefore, there are also continental-specific issues, such as overcoming the "digital divide".

The Minister identified national objectives as including the stimulation of economic development. She said another question is what part of the economy should be stimulated. The policy also thinks of regional and continental development, although the development of South Africa has the first priority.

Minister Matsepe-Casaburi said they had chosen to avoid the negative impact of fast policy development, or "big bang liberalisation", so that the country’s assets will be used effectively. She cautioned against moving too fast and devaluing assets. Although the market conditions are not ideal, she emphasised there is a lot of interest in telecommunications development in Africa. The key is to empower people. Skills, infrastructure and services must be developed and this development must be sustainable.

The Minister said the intellectual property of Africa is "freely used by the global community" without a corresponding benefit to Africa. She called for the empowerment of those who have been traditionally left out, such as black people, women, youth and people with disabilities. She called for human resource development in general. Market conditions have to be conducive for this to happen.

The Minister said when Telkom got its exclusive monopoly, it was clear the people of South Africa needed access. Telkom has very technologically-specific ways of doing things which, in hindsight, she said, is bad, but there are no regrets at the infrastructure that was laid out. She emphasised very strongly that African countries need to develop their own infrastructures and that they cannot allow others to run free services using the infrastructures of others.

Department’s new policy directions: briefing by Director General
The Director-General of Communications, Mr Andile Ngcaba, gave a presentation on the Department’s new policy directions and timelines for its implementation. Highlights of the new policy include a second national operator that will use the infrastructure of Telkom while it is building its own infrastucture. The Department is also looking to implement a system whereby users can have the same telephone number for life, called number portability.

There will be an emergency number, 112. This service has two parts. First, the call is received by a call centre that deploys an immediate response. Second, all emergency service providers need radio communication to co-ordinate their services. Sentech will provide one single network for both these services.

DG Ngcaba emphasised the main goals of the new policy are lower costs and increased access. It will also create employment and a new dynamism in the marketplace.

Discussion
Ms Smuts (DP) asked why there would be a second national operator. She suggested this would only replace the existing monopoly with a duopoly. She also asked why Transtel has been chosen since it has only 1 000 kms of fibre optic. With so little physical infrastructure, a lot of investment will be required. She wondered how this would work. She also said, in terms of VANS (Value Added Network Services), she found the protectionist stance disappointing. She asserted the existing infrastructure belongs to taxpayers and consumers, not the state.

The Director General responded a second national operator will give the spirit of competition a "kick-start". He said the second operator’s use of existing infrastructure will not be permanent. It must make a contribution by building its own infrastructure. He disagreed that a duopoly is being created, saying it would liberalise various parts of the market and introduce competition, but in a managed way. He said the Transtel infrastructure of only 1 000 kms goes a long way. The participants are well-matured telecommunications companies. 30 % of licenses have been set aside for black economic empowerment. As for VANS and the "protectionist" stance toward them, the DG said he hoped taxpayers can feel the state is their representative.

Ms Vos (IFP) asked how the new policy will accomplish the empowerment of women, both rural and urban. She said she is aware than women who are well-connected are being empowered by this deal, but she asked how other women will also be empowered.

Chairperson Kekana declared Ms Vos’ question out of order and suggested she raise it in Parliament. Nevertheless, the DG chose to respond that women will own and participate in SMMEs.

Dr Cwele (ANC) asked why the new second operator is being given the added advantage of being able to "piggyback" on the existing infrastructure until it builds its own.

DG Ngcaba said it is important the country’s infrastructure be used. In addition, the advantage Transtel gets from using the infrastructure for a brief period of time is not a significant one. To deny this advantage would be the wrong approach from an investment and efficiency point of view.

Mr Pieterse (ANC) asked what are the responsibilities of the Independent Communications Authority of South Africa (ICASA), given it is understaffed and under-resourced.

The DG said they will resource ICASA and are in the process of doing so now.

Submissions
For the remainder of the meeting, the Committee heard presentations from telecommunications service providers and other stakeholders and took the opportunity to ask questions.

Telkom said although it seemed to be contrary to fundamental business sense to allow the second national operator to piggyback on its infrastructure, it believes it makes sense to do so. Telkom emphasised, however, this relationship would only last between six and twelve months. It asked for clarity on what Sentech will be licensed to provide. Telkom did assert that the government’s approach to VANS means it is in fact selling what it gets from Telkom. This is tantamount to the "big bang" approach to liberalisation the government claims to have decided against since it amounts to a service-based competition. Telkom also cautioned that number portability has only ever become available after extensive evaluations of its costs and benefits. This service required billions of dollars. It asked the Department to study what number portability will cost and who will benefit from it. Telkom added only the wealthiest countries have number portability.

Sentech said the new policy is long overdue and they are currently developing an analysis. Sentech said it supports the approach to people who are disadvantaged but added women have to be mentioned specifically. Government must also look at enabling and monitoring mechanisms. Sentech said it should be one of the companies who carry the Internet, allowed for by section 9.1 of policy.

See attached presentations of MTN, Cell-C, Transtel, Eskom and ICASA.

Universal Service Agency (USA) said South Africa must achieve universal access that is affordable and of a high standard.

The Communications Workers Union said since South Africa is a developing country, the government should take a central role. Profit-motivated private sector involvement in telecommunications will entrench the inequalities that exist in South Africa. Therefore, the private sector will not provide infrastructure. The period of "piggyback" on Telkom’s infrastructure should be shortened. 17 000 Telkom jobs have already been lost. The state should increase control over telecommunications. Even co-operatives are not a solution since they keep power within a certain section of the community.

Final Discussion
Ms Vos commented the success of the new policy all depends on proper resources and the involvement of a strong regulator.

Mr Mongwaketsi (ANC) said he had "mixed feelings" about the Communications Workers Union’s presentation. People are being retrenched while government is trying to privatise. He wondered if roll-out is really reaching people in the rural areas.

Mr Pieterse drew attention to the disadvantages of people with disabilities.

Director General Ngcaba made the closing comments in saying they would make it a priority to beef up ICASA in terms of resources. He added they had never heard from ICASA during the entire consultative process. He suggested ICASA needs to understand its own, as well as government’s, responsibilities.

The meeting was adjourned.