Since the Minister of Communications removed certain statutory restrictions imposed on value added network service licensees (Vans) in September 2004, the industry eagerly anticipated 1 February 2005. This was the effective date for the removal of the restrictions and the opening of the sector to greater competition, with attendant benefits of lower telecommunications service costs and wider consumer choice.
The Ministerial Determinations which gave effect to the minister's decision removed three significant service restrictions imposed on Vans under the Telecommunications Act.
One of the most contentious restrictions was the prohibition on voice carriage. As a result of the determinations, Vans are now entitled to provide voice services by means of any protocol and are further able to originate and terminate voice calls on the networks of other operators. Vans will also be entitled to resell spare capacity on their telecommunications facilities and will no longer be required to obtain their telecommunications facilities only from Telkom or the second national operator, but will also be able to look to other telecommunication service licensees for the provision of facilities.
The removal of the restriction on the provision of telecommunications facilities was initially interpreted by the Independent Communications Authority of South Africa (Icasa) to mean the right to self-provide with the consequent right to obtain facilities directly from the manufacturers or suppliers of such facilities or from other licensees. On 31 January 2005, the minister limited the Icasa interpretation of the ministerial determinations when she announced that Vans could not self-provide but had to obtain their facilities from other licensed operators.
The effect of the more restrictive interpretation is that Vans will not be able to access alternative means of service delivery such as broadband wireless where the offerings of other licensees are not technically feasible or competitively priced for the envisaged service. The limitation will also detrimentally impact on the delivery of new technologies to under serviced areas, a factor initially identified as one of the main motivators to opening the telecommunications market to additional competition. There has also been no attempt to clarify the telecommunication service licensees who will be able to provide facilities to Vans, as currently only Telkom's public switched telecommunications service licence permits it to enter into pure facilities leasing arrangements with Vans. There may be a need for the licences of other operators to be amended in order to give effect to the new interpretation.
Although a disappointment to some sectors, Vans can participate in the public process initiated by Icasa for the review of the regulations for interconnection and facilities leasing. By doing so, they have a further opportunity to ensure that they are able to lease facilities from other operators on terms and conditions which are fair and at prices which are competitive.
These proposed regulations will set the terrain under which Vans will operate for many years to come and are thus crucial to their future viability. The closing date for submissions was 2 March 2005.
Janet MacKenzie is a Director of Cliffe Dekker. She specialises in Telecommunications, Media, Broadcasting, Advertising Law and General Commercial Law.
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