Wednesday, 18 February 2009

Icasa mulls South Africa's Electronic Communications Act - South Africa

The Independent Communications Authority (Icasa) will conduct hearings on a major decision based on South Africa's new Electronic Communications Act (ECA). The proposed regulations will allow carrier pre-select (CPS) for South Africa's telecommunications networks, such as Vodacom and MTN. The proposed regulation, if implemented, would force established operators to carry network traffic on behalf of smaller, third-party operators, enabling MVNOs to compete directly with mobile operators.

One of the companies that might benefit from such regulation is ECN, a leading provider of converged voice and data solutions. The company claims in its representation that the South African mobile market is a duopoly and mobile calls in the region are among the highest in the world.

Commenting on the issue, John Holdsworth, Chief Executive Officer of ECN, said: “In SA, it would be pointless implementing it if not for mobile, because of the dominance of cellular telephony. It's highly negative for the competitive environment if the incumbent operators are able to use their networks as a lever to prevent competition … MVNOs are simply unable to compete if they must build networks that match the scale and capacity of the incumbents. The only way to introduce competition and drive prices down is if CPS is properly introduced, enabling the MVNO market."

However, both Vodacom and MTN have made representations against the proposed regulation and plan to present their cases before Icasa. Graham de Vries, MTN's Head of Regulatory Affairs, commented that the company (MTN) will support any decision by Icasa which is backed with market analysis and offers CPS regulations as the most efficient solution. With MTN being a large player across Africa, a successful SA MVNO on their network could lead to them opening up their networks in other countries too.