Time to Stop Being Afraid of Competition

1 December 2017

The recently-published Electronic Communications Amendment Bill proposes that mobile network operators and other vertically-integrated telecoms firms allow Internet Service Providers (ISPs) and others to compete for subscribers over their networks.

“Legislation requiring telecoms networks to open up to competition should be welcomed,” says Dominic Cull, regulatory advisor to South Africa’s Internet Service Providers’ Association (ISPA) who adds that the benefits of healthy competition for consumers need no further debate.

“Consumers on open-access fibre networks enjoy the highest speeds at the lowest per GB pricing available. This is because they benefit from hundreds of packages offering monthly and fixed terms across capped and uncapped packages. It is time for this kind of choice to be extended to all Internet consumers,” says Cull.

“The exaggerated and destructive reactions to the Bill from lobbyists and some industry players reflects fear at being forced to compete in providing services and resultant revenue loss.

“Companies which have been protected from competition since they were created essentially want government to continue protecting their advantage at the expense of South African consumers,”, continued Cull.

Industry concerns regarding high-demand spectrum should not overshadow the fact that the Bill proposes changes which go to the very heart of the cost to communicate in South Africa.

There is a particular line of argument raised by one operator, that – in the absence of getting more spectrum – the mobile networks will not be able to reduce the cost of broadband and will not be able to roll out in rural areas. This is duplicitous: densification of networks is an element of 5G strategy and there is absolutely no shortage of spectrum in rural areas or anywhere else outside of the metropolitan areas (and then only in certain parts of them).

It should also not overshadow the fact that the cost of mobile data in South Africa – particularly lower-end bundles – is high in comparison to neighbouring countries and has reduced very little if at all over the last three years.

“Going beyond paying lip-service to bridging the digital divide and reducing the cost to communicate requires a commitment to addressing vertical integration and enforcing open access. The MNOs should recognise progress for South Africa means opening up their networks and look to the example of Telkom, which has already shown how this can be done,” concludes Cull.