'Hands off our fund' - TechCentral

‘Hands off our fund’

Telecommunications operators say the Universal Service Fund should be used exclusively for telecommunications services in underserviced areas and should not be tapped by broadcasters for digital set-top box subsidies.

The operators this week presented their views to the Independent Communications Authority of SA (Icasa) on universal service and how the fund, which they contribute towards, should be managed and distributed.

Companies such as Vodacom, Telkom and MTN have together contributed billions of rand to the fund in terms of their operating licences.

The fund is believed to contain between R2,7bn and R3,5bn, according to deputy communications minister Obed Bapela.

But operators don’t want the money used for anything other than telecoms. They argue it’s not fair if the money is used to subsidise set-top boxes needed for digital terrestrial television, as proposed last year by former communications minister Siphiwe Nyanda.

Broadcasters do not contribute to the fund, and should therefore not benefit from it, say the telecoms providers.

Neotel, Vodacom and MTN have now called on the authority to make sure the fund will be used for telecoms in rural areas, as was originally intended.

According to Vodacom, accesss to the fund should be restricted to licensed operators because they have the ability and skills to bring the services to underserviced markets.

The group says the regulator needs to implement a proper framework to govern the fund, one that will allow the fund’s administrator, the Universal Service & Access Agency of SA, to define what needs to be done to bring communications services to rural areas.

Like every other industry player, Vodacom wants to know what money has been accumulated by the fund, and compare it to what has been spent by the fund for these services.

MTN agrees saying the fund should only be used for infrastructure as part of a public-private partnership scheme.

The operators all argue that Icasa needs to ensure the fund doesn’t simply accumulate money for the state.

They are concerned the fund has never been used to assist operators to bring access to rural areas.

They also say the money should be used to roll out broadband Internet access rather than voice telephony.  — Candice Jones, TechCentral

  • Image: Heather Dowd


  1. This is real silo-thinking. What they should be saying is: stick a sim-card capability in every set-top box. A giant leap for bridging the digital divide, and mega traffic for the operators.

  2. Network operators are justified over misapplication of levies, otherwise this levy will be seen as a punitive tax on the operators. What’s with the agency reduced to funding containerised internet acess sites (at year end) and the bulk of the time is spent on ‘research’, surely this requires less funding than the contributions by operators.?

  3. Peter Hart-Davis on

    Would this be the same fund Rudi Jansen of MWEB suggested giving to Telkom to upgrade their infrastucture?

  4. In general terms, I agree with the sentiment – TV does not contribute, so why should broadcasters get the benefit. But there is a way to close the circle on this one in a way that works for all sectors (but not necessarily the large contributing networks (after all the fund is not their property): Digital migration is eventually underway. Based on the premise that the fund’s mandate is to extend connectivity (bridge the digital divide) to underserviced regions, have a look at what the US’s FCC has done – after full digital TV migration, the unused spectrum in the 700MHz band (formerly known as White Spaces), suddenly is open for telcos. This low frequency is ideal for low cost, rural telephony. Indeed, after auctioning some of this spectrum to the telco’s, huge swathes of spectrum becomes available (a la WiFi/ISM/unlicensed bands). Given what WiFi operators have done with 2.4GHz and 5.8GHz, the objectives of the Fund could be well served – seen not so much to “subsidise” set-top boxes but to pay them to go away and leave the 700MHz band for telcos in rural/underserved markets. See http://www.economist.com/node/17647517?story_id=17647517

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