Why SA’s new ICT policy could break the industry

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Why SA’s new ICT policy could break the industry

Johannesburg – The Free Market Foundation (FMF) has slammed government’s National Integrated ICT Policy White Paper saying it is flawed and could make or break the industry.

FMF executive director, Leon Louw said during a media briefing that the white pape that the ICT policy may easily be corrupted, as it sees expanded government oversight and involvement, with sections of the policy violating the constitution with no public participation.

All policies must be reasonable and fair. What we need in South Africa is a policy that makes entry easy for smaller members and doesn’t discriminate but makes competition vigorous, he said.

Louw said that it is a worldwide phenomenon that the ICT industry is competitive and that there are incentives for staying ahead and having cutting edge technology.

You cannot mess up a data policy, it is one thing you need to get right above everything else, he said.

Telecoms analyst at Africa Analysis Dobek Pater said that the research company had analysed the ICT white paper after it had been released and highlighted concerns of the policy.

Elements of the policy are not necessarily bad but many are of concern. Sections of the policy were divided in to positive, negative and ambiguous aspects in our report, he said.

A document tabled by the company on the white paper divides the policy into sections: Good for the ICT sector, Warning for the ICT Sector and Negative for the ICT Sector.

Key findings of the report were that there was a significant expansion of government oversight and involvement, fundamental wholesale market impact, development of wholesale operator and spectrum licence implications.

Pater said that through the ICT policy government departments would wield more power from regulatory and oversight point of view.

ICT bodies that government intends to restructure are supposed to be independent to avoid undue political influence. The policy tries to bring more power to government, he added.

Subsequently, Africa Analysis has these 5 warnings for the ICT sector regarding the white paper which the research company covers in its assessment of the policy.

Statuary bodies and role of government

The policy states that all statutory bodies will either be dissolved or replaced with an Economic Regulator. Government’s scope of oversight and its role are expected to be significantly expanded through the establishment of the regulator.

Open access principle

The open access principle will be applied to telecoms infrastructure. This will lead to a fundamental restructuring of the telecoms wholesale market, and the introduction of new products and services to give effect to this principle. This could have wide ranging impacts on the large fixed and mobile network operators such as MTN, Telkom and Vodacom.

Wireless open access network

A single Wireless Open Access Network (WOAN) is envisaged to be created that will offer broadband access using high demand spectrum. It is proposed that all high demand spectrum will be transferred to this operator. This development can lead to the ultimate contraction in the number of ECNS (Electronic Communications Network Service) licence holders participating in the wireless market.

Spectrum policy

Essentially, this is the “nationalisation” of spectrum in South Africa as it is part of a proposal to take back high demand spectrum from current spectrum licence holders. There are significant negative implications for current spectrum licence holders. However, the policy will open up access to spectrum for the smaller operators.

In September, Cabinet approved South Africa’s national ICT policy which sought to establish a single public-private-partnership WOAN and provide high demand spectrum to the network in a bid to shift away from networks having exclusive rights over this resource.

Government, though, hopes the WOAN will allow a more level playing field and boost internet access across the country for all South Africans.

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