Broadband Infraco was issued an I-ECNS license, but refused an I-ECS license, meaning they’re permitted to provide wholesale, but not retail services. Dominic Cull commented on an earlier post of mine:
The whole IECS debate now seems pretty irrelevant given that the Minister of Comms has decided they will not get one ..
To allow ~500 licensed operators (including Telkom, which is also partially state-owned) to be vertically integrated, and to deny this to Broadband Infraco seems inconsistent (and unfair?).
Then I read this in an ITWeb article:
ITWeb is in possession of an advance copy of the department’s new draft broadband policy, which is expected to be gazetted in the next few days.
The new draft policy has realigned the state’s role in the provision of broadband. It specifically states that “government should not operate directly in retail service provision, but leave these markets to the private sector players”.
Does that mean the state will dispose of their Telkom shares?
Perhaps the future holds something even more interesting. To quote Gartner analyst Will Hahn commenting on the Competition Commission’s recommended R3.6 billion Telkom fine:
In most mature telecom regimes, the company in Telkom’s shoes has had to undergo either rigorous functional separation between network ops/wholesale on the one hand and retail on the other, or it has gone further, approaching structural separation (where these functions would be vested in completely separate companies).
Although highly unlikely, if there is a coherent government plan to put an end to the turf war between the DPE and the DOC and get their telecoms house in order, it might be in the form of what Hahn is talking about.
{ 2 } Comments
Hi Simeon
>>Does that mean the state will dispose of their Telkom shares?
Not going to happen :). Cabinet’s decision is to the effect that no state-owned enterprise will be involved in the retail market. Telkom – rightly or wrongly – is not viewed as an SoE
>>Although highly unlikely, if there is a coherent government plan to put an end to the turf war between the DPE and the DOC and get their telecoms house in order, it might be in the form of what Hahn is talking about.
I am a firm supporter of functional separation and believe that this is in fact what the ECA requires when providing for IECNS and IECS licences. I believe that ICASA are ignoring how to distinguish between Telkom the IECS and Telkom the IECNS licensee and that this is going to have some pretty fundamental implications in the future.
interesting times, as ever
dominic
Hi Dominic
I would definitely go with wrongly here. If their reasoning is that Telkom is not an SoE because it is not entirely state owned, then Broadband Infraco isn’t an SoE either, because they also have private investment.
From my non-lawyer perspective this boundary between ICASA and CC’s role seems a bit fuzzy… If ICASA awards two licenses to one company, isn’t it’s job done? Isn’t it then someone else’s responsibility to ensure that competitors are protected from vertical integration in a powerful quasi-SoE, regardless of the industry?
Anyway, thanks for the (regular) valuable insight. I agree that whatever comes next is interesting :-)
Regards,
Simeon.
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