The courts are the last place South Africans should be negotiating the future of the information and communications technology (ICT) sector, yet that is exactly what is happening, a prominent businessman warned on Thursday.
Romeo Kumalo, who until last year headed up Vodacom’s international operations — and who has now struck out on his own with a new venture capital business called Washirika — has bemoaned the fact that communications regulator Icasa and telecommunications & postal services minister Siyabonga Cwele are headed to court over the allocation of broadband spectrum.
As a result of this – and other policy failures – South Africa is being left behind other African countries, such as Kenya and Rwanda, Kumalo said.
Cwele is suing Icasa after the regulator decided to push ahead with an auction of the spectrum before government has finalised a white paper that will provide clarity on how it wants it allocated. Government is understood to want to create a single, open-access wholesale network in which all industry players invest; Icasa want to make the spectrum available exclusively to the highest bidders.
“We need a solution that works for the industry, a solution that supports black economic empowerment, a solution that supports black entrepreneurs to enter the sector. We need to sit around a table and find a solution by negotiating. The courts are the last place to negotiate the future of our sector,” Kumalo said in an exclusive interview with TechCentral.
He warned that getting new players involved in the sector cannot be done at the expense of established industry participants such as Vodacom and MTN. He said that together, the three largest mobile network operators will this year invest almost R30bn/year in their networks. Trying to set up direct competitors to them does not make sense, he said.
“I agree with the principle of allowing black entrepreneurs into this space. You have to have a conducive space to have black companies come in. But you can’t kill an industry to do that,” Kumalo said.
“Do you want to kill Vodacom and MTN to create a Romeo Kumalo Holdings that will compete with Vodacom and MTN? No! There’s space for both. It’s about the approach and how we do it.”
He said there is already an excellent document that government can and should draw on in creating the right environment for the sector’s growth, namely the National Development Plan (NDP). South Africa’s ICT sector would have already made good progress if government had simply implemented the recommendations contained in the NDP, he said.
“Take the section [on ICT] in the NDP and execute on it. The NDP allows for the creation of black entrepreneurs in this space, but is also clear on what needs to happen with a valuable asset like spectrum,” he added.
“If we just followed what’s in the NDP, we’d be far ahead as a country. Instead, we are getting left behind by countries like Rwanda. There is enough empirical evidence of what happens if you grow the ICT sector – there is an incremental impact on GDP.”
He said he is concerned that government is driving spectrum policy more through a lens of idealism than what makes practical sense.
“There is a desire to create space for new black entrepreneurs to enter this space. There is also a belief by government that the sector hasn’t done enough to create successful black entrepreneurs. This is the last lever they have, to say we will use this power we have to … force the industry to transform. We are going to create an open-access network. That’s the idealism that is driving this.”
Kumalo said he is “fully supportive” of BEE and transformation in the sector, but said this has to be done with the right approach, ensuring the sustainability of all industry players.
Writing for TechCentral last week, Kumalo warned that if Cwele and Icasa continue to “pursue their respective strategies in this regard, they’ll likely find they’re playing a zero-sum game, both in terms of the South African economy and the ICT industry”. — © 2016 NewsCentral Media
