Protracted delays in issuing licensed radio frequency spectrum to new operators cost the country hundreds of millions of rand in new investment from JSE-listed Altech.

That’s the word from the technology group’s CEO, Craig Venter, who says he’d have invested that money into SA’s telecommunications sector if industry regulator, the Independent Communications Authority of SA (Icasa), had moved quicker to provide new licensees with access to spectrum.

Venter says SA has taken too long to liberalise telecoms and open the market to competition.

The market was only opened up partially in 2008 after Altech won a high court challenge against former communications minister Ivy Matsepe-Casaburri. This gave it and hundreds of other companies licences allowing them to build network infrastructure in competition with incumbent operators like Telkom, MTN and Vodacom.

But instead of investing its money in SA, Altech has pumped R680m into building a telecoms network spanning six countries in East Africa, where Venter says regulators don’t pose as big a stumbling block as Icasa to new investment.

“Altech spoke in the early days of building a national network using WiMax,” Venter says. “But Icasa didn’t issue us with frequency and a licence is worth nothing without frequency. We still don’t have any frequency.”

He says Altech had to decide where to invest its cash pile to best generate a return for its shareholders in the short term. It couldn’t afford to “wait two or three years while SA dragged its feet on liberalisation”, he says.

“So, I took my R680m and invested it in East Africa.”

The group bought a controlling stake in Kenya Data Networks and has invested millions more rolling out fibre networks in the region and investing in undersea cables, including Seacom and The East Africa Submarine System.

“Kenya is a market that doesn’t have regulatory problems,” Venter says. “Things are moving and the market is growing explosively.”

Two years after making its first investments in East Africa, Venter says it still offers better opportunities than SA. Next on his radar is West Africa, though he says he first wants to “bed down” the East African operation.

Will Altech ever use its telecoms licence in SA to build a network? “As soon as the SA market becomes more liberalised, and I can see opportunities that will work, we will move here as well. Right now, though, the opportunities are far better in East Africa.” — Duncan McLeod, TechCentral