ISPA disconcerted by lack of Infraco clarity

While ISPA members believe that the emergence of Infraco on the local telecoms landscape could be a positive development, they are disconcerted that Government could end up having a stake in another telecommunications operator. Government already owns 100% of Sentech, a 38% stake in Telkom and a 30% stake in Neotel through Eskom and Transtel.

The association is hoping that Infraco will potentially open up new opportunities for its members because the adjusted estimates of national expenditure released last year stated that “The intervention in national long-distance and international connectivity infrastructure should significantly reduce SA’s broadband costs.”

Direct capacity purchasing

This, according to ISPA, appears to suggest that Infraco will break Telkom’s stranglehold on the market by allowing Internet service providers (ISPs) to purchase capacity directly from it.

Says Massel, “Specifics that need to be ironed out before ISPA can wholeheartedly lend its support to the establishment of Infraco relate to licensing issues, shareholders, last mile access and particularly the relationship between Infraco and other state-owned enterprises.”

Trade & Industry Minister Alec Erwin said last year he planned to set up Infraco using the long-distance fibre optic networks of Eskom and Transnet. Minister of communications Ivy Matsepe-Casaburri had earlier stated that Sentech would be used by her department to roll out wireless broadband services in rural areas.

Most urgent issue

Possibly the most urgent Infraco issue to be addressed is the fact that the license conditions for Neotel would have to be changed. Neotel’s license conditions had assumed that Eskom and Transtel’s transmission assets would be owned by Neotel.

“While it’s encouraging that private players could be brought on board as shareholders and that Government is serious about boosting SA’s global broadband standing, a R627 million state intervention would make any industry nervous,” explains Massel.

Massel also points out that Government had created the legislative framework for liberalisation followed soon after by the creation of a massive state-owned infrastructure company.