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Rhetoric won’t deliver on ambitious plans

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Web Africa CEO, Tim Wyatt-Gunning responds to Minister Pule’s call for public, private collaboration in broadband challenge.

Once again the Minister of Communications has made all the right political statements when she announced that providing connectivity to impoverished rural communities is a key priority for the Department of Communications (DOC).

Recently suggesting that it would cost as much as R90-billion to achieve this, she has also hit the nail on the head when she said that it would take a combined public and private effort to ensure the goal of reaching 100% broadband access by 2020.

The latest investment number seems fairly accurate when compared to MTN’s 2011 estimate of R100 billion to achieve broadband for everyone, but certainly up from the R75-billion suggested by the Minister in January.

That’s a lot of money in anyone’s book. The goals are also clearly ambitious. Achieving 100 percent penetration in seven years is no small ask and it is obvious that a large part of that challenge rests squarely on the shoulders of the private sector.

What the Minister fails to address however, is how she intends to incentivise the private sector to work with her.

Quite simply, business hates a policy and regulatory vacuum. It creates uncertainty and raises risk, making any investment unattractive to shareholders and investors alike.

There is currently no certainty around any number of issues. Industry is still waiting on Local Loop Unbundling (LLU). We were assured in 2007 that it would be complete by 2011. We were also told that by 2008 we would have access to Telkom’s copper infrastructure.

The murky waters of the delayed and further delayed spectrum allocation continues to frustrate many companies who are ready and waiting to deliver connectivity to our rural areas.

In fact, our entire national ICT policy is in stasis after the Minister announced in April that a full review of national policy including legislation was to take place. We are still waiting for a document to review and make comments on.

The DOC’s ambitious target of 100 percent broadband access also fundamentally falls short by not adequately defining what broadband access is. What does access constitute? If someone has to walk five or ten kilometres to a public library to access the Internet, does that count as access? Similarly, if a family earns less than R3000 per month and is expected to pay R300 for a 1Mbps line with some data, is that access?

Any meaningful shift in bringing access to our people has to start by allowing market forces to take hold. This is the way business works.

The earlier IPC cuts showed how reactive the market is to cheaper access to the backbone. A price war erupted and the consumer was the winner. There is more than enough room for more fat to be trimmed on IPC costs and if we see further cuts, access will become more affordable still.

Bundling telephone lines with ADSL lines is a further problem which needs to be addressed. Real pre-paid options are attractive to the lower income families as our mobile network operators around the world have proved. Fixed line providers would be no different.

Telkom’s continued cry of ‘access line deficit’ is simply not good enough and any regulator worth its salt would address this.

While our international capacity continues to grow and prices drop as we add more undersea cables, the country is in a position to capitalise on economies of scale – in an ideal world. This simply is not the reality we are dealing with when we consider our local dependency on an incumbent who retains its monopoly on the last mile and local termination costs.

Finally, when looking to bring access to the underserviced areas, we must ask the Minister what has happened to the Universal Service and Access Agency of South (USAASA) Africa and the Universal Service and Access Fund (USAF)? If we are looking to bring access to the underserviced areas, surely this should be overseen by the agency set up by law to do this? What has happened to the licence revenue in the fund? The notion that this money (whatever the magical figure is) will be used to fund set-top boxes flies in the face of the noble objectives of the DOC.

If the Minister and her department are serious about broadband access for all and the 160 000 jobs this will create, she will absolutely need the private sector’s support. What business will first require is an inkling of what kind of risk they will face and how their investment will be protected. The current policy vacuum is certainly not going to attract foreign direct investment and a toothless regulator, unable to control a ruthless incumbent, serves as an ongoing obstacle to further investment by local players.

In short, what we need is some clarity, some political will and some bold and assertive moves by our leaders. Endless reviews and talkshops will just not cut it. 2020 is fast approaching. Tic- tock, Minister, tick-tock.