The national integrated ICT policy white paper, approved last month by cabinet, is a threat to the telecommunications industry and must be revisited urgently because it will chase away those investing billions of rand a year into network infrastructure.
That’s the blunt warning from MTN South Africa CEO Mteto Nyati, who said in an interview this week that if government goes ahead with a plan, contained in the white paper, to create a single national wireless open-access network, it will result in a new monopoly to the detriment of consumers.
The white paper has been widely panned by industry players and analysts for requiring that all unallocated mobile spectrum be made available to the new national network, and for raising the prospect of operators’ existing spectrum allocations — which they’ve used to build their 2G, 3G and 4G networks — being nationalised.
“The white paper introduces uncertainty in the industry … and will make the current players question whether they should be making investments in this country,” Nyati said.
He said as South Africa fights off a credit-rating downgrade, the last thing government should be doing is introducing untested policies that affect growth industries like ICT. “How can something like this even happen?”
He said the policy paper threatens to disrupt an industry that is “an enabler for all other industries”.
“Without the ICT industry, banks wouldn’t function. We are attacking an industry that underpins everything else, whether we are talking about healthcare or financial services.”
He said government celebrates when a big car maker decides to build a R2bn plant in South Africa. Yet the mobile operators together invest more than R20bn in network infrastructure every year. “It’s been taken too much for granted that this money will continue to come. The structure that is being proposed, this single open-access network, threatens that.”
If there is only one infrastructure provider, Nyati said, customers won’t be able to switch networks if they are unhappy with pricing, or if the network is unavailable. “If this single network goes down, what happens to the economy? These are the things that need to be thought through. We are concerned about the lack of any socioeconomic impact assessment. Our constitution demands that for any new policy, we need to do that.”
Let’s not destroy what we have in order to build something new. Let us try and build on what we have
He also slammed the proposal that operators be forced to hand back existing spectrum allocations. “How can you do that under the constitution? It is not possible, but the white paper is saying that is what is going to happen. I am very concerned for our country.”
The main objective of the white paper, to give smaller players access to spectrum and allow them a foothold in the industry, could be achieved within the current market construct, Nyati said.
He suggested that new MVNOs — these are virtual operators like Virgin Mobile and FNB Connect — could piggyback on the networks of the incumbent players. He said MTN is building a platform to facilitate such entrants into the market.
“Let’s not destroy what we have in order to build something new. Let us try and build on what we have… We have signed up for inclusive growth. Let’s find ways of bringing new players [into the industry] within that [framework].”
Though the white paper has drawn widespread criticism, it does enjoy the support of one important industry bloc: the Internet service provider (ISP) community. The ISP Association, which represents 178 mostly smaller service providers, has described the document as “forward-looking” and “long overdue”.
“In general, the white paper is broadly positive and forward-looking, and it reflects a much better understanding of contemporary electronic communications and related markets,” said the association’s regulatory advisor, Dominic Cull.
“While we understand that some of the proposed interventions will not be universally welcomed, we now need to get a move on.”
Though Cull welcomed the publication of the white paper and its content, he said the association is worried about its implementation. The main concern is that the white paper “does not convincingly outline how the capacity and expertise shortcomings of the regulator, or policy maker, will be addressed”.
- This article was also published in the Sunday Times of 20 November 2016