Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      Eskom waives rooftop solar fees, but the registration fight isn't over

      Eskom waives rooftop solar fees, but the registration fight isn’t over

      1 October 2026
      South Africa's digital ID is here - but you can't have it yet - Leon Schreiber

      South Africa’s digital ID is here – but you can’t have it yet

      1 October 2026
      Absa is moving cash out of its branches

      Absa is moving cash out of its branches

      1 October 2026
      Home affairs pulls the plug on the green ID book - Leon Schreiber

      Home affairs pulls the plug on the green ID book

      1 October 2026
      How Cell C shaped Blu Label's executive pay - Brett Levy Mark Levy

      How Cell C shaped Blu Label’s executive pay

      1 October 2026
    • World
      BMW restructuring plan bets on AI and new models

      BMW restructuring plan bets on AI and new models

      1 October 2026
      OpenAI's rogue agent problem keeps getting bigger - Sam Altman

      OpenAI’s rogue agent problem keeps getting bigger

      28 September 2026
      The new battle over the desktop

      The new battle over the desktop

      23 September 2026
      AMD is now worth a trillion dollars - Lisa Su

      AMD is now worth a trillion dollars

      22 September 2026
      Anthropic weighs new model launch to blunt OpenAI's Astra surge - Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman

      Anthropic weighs new model launch to blunt OpenAI’s Astra surge

      21 September 2026
    • In-depth

      10 days that changed the course of AI

      21 September 2026
      Meta to the AI industry: slow down without us - Mark Zuckerberg

      Meta to the AI industry: slow down without us

      16 September 2026
      Google DeepMind CEO Demis Hassabis. Image: John Sears

      The plan to stop AI from breaking the world

      16 July 2026
      The internet has a Strait of Hormuz problem

      The internet has a Strait of Hormuz problem

      15 July 2026
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
    • TCS
      TCS | Dominic White and Adam Ely on AI agents going rogue

      TCS | Dominic White and Adam Ely on AI agents going rogue

      29 September 2026
      TCS | Octotel's Trevor van Zyl on the fibre merger question

      TCS | Octotel’s Trevor van Zyl on the MetroFibre merger question

      16 September 2026
      Meet the CIO | Shoprite's Chris Shortt on what a supermarket becomes

      Meet the CIO | Shoprite’s Chris Shortt on what a supermarket becomes

      9 September 2026
      Rubicon's EV charging network is profitable - and growing fast - Watts & Wheels

      W&W | Rubicon’s EV charging network is profitable – and growing fast

      8 September 2026
      Winstone Jordaan on building a national EV charging network

      Winstone Jordaan on building a national EV charging network

      2 September 2026
    • Opinion
      South Africa's next energy crisis is in the accounts department - Craig Holmes

      South Africa’s next energy crisis is in the accounts department

      29 September 2026
      The steam engine lesson AI doomsayers keep missing - Sam Clarke

      The steam engine lesson AI doomsayers keep missing

      28 September 2026
      Regulating AI: apply the laws we have first - Dirk de Vos

      Regulating AI: apply the laws we have first

      21 September 2026
      What Revolut can and cannot take from South Africa's banks - Pambos Soteriades

      What Revolut can and cannot take from South Africa’s banks

      15 September 2026
      The end is nigh, and the shares go on sale in October - Duncan McLeod

      The end is nigh, and the shares go on sale in October

      14 September 2026
    • Company Hubs
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM.com
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Publishared
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Vox
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
      • Watts & Wheels
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Opinion » Tim Parle » Icasa’s new service obligations half-baked

    Icasa’s new service obligations half-baked

    By Tim Parle9 June 2014
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    Get breaking news on WhatsApp

    Tim-Parle-180In The Tipping Point, Malcolm Gladwell demonstrated how fines that are set too low create the wrong behaviour. Only if they are set right does the required modification occur. I suspect we have a case of this here in South Africa, with the recent universal service obligations imposed on our leading national telecommunications carriers.

    On 4 June, communications regulator Icasa published four general notices amending the universal service obligations of Vodacom, MTN, Cell C and Neotel. Any similar notice for Telkom, or any other service provider, was notable by its absence. The notices recognise that some of the previous obligations have been discharged while others remain in force. Some new obligations have been added, centred on the provision of Internet access to public schools. The notices are effective from 1 April 2014, so are retrospective.

    The notices require Vodacom, MTN and Cell C to each implement “full Internet access” to 1 500 public schools and 140 institutions of people with disabilities. The note is vague on whether these 140 institutions are part of the 1 500 public schools – for simplicity’s sake we will assume so. Neotel is compelled to address 750 schools only. To reiterate, so far there are no such obligations on Telkom or Telkom Mobile.

    An appendix to the schedule details the standards and specification of what is required at each school. This list is quite extensive and includes:

    • Servers for use for proxy service, mail services, Web caching and software distribution. This is to be procured per the Sita 153 contract. For simplicity, we will assume that a single server can do all this using virtualisation. Ideally a backup server would be required.
    • A desktop or laptop PC for administration and other functions. This must include a multifunction printer and a lock. The laptop is to be secured per the Sita 285/1 contract.
    • A total of 26 laptops, notebooks or tablet computers for learning and teaching. The Sita 284/1 standard applies.
    • A further multifunction laser printer.
    • An interactive whiteboard (detailed as being optional). These are “big ticket” items.
    • A data projector (presumably mandatory). Again, a Sita specification applies.
    • A local-area network with Wi-Fi connectivity.
    • Software for the above, including an open-source or proprietary operating system, plus antivirus and Web browser.
    • Office suite specified as “Word, Excel, Outlook, PowerPoint and Access”, so presumably that means it can’t be open source. Any equivalence is implied but not stated.
    • To house the above, a storage and security trolley is needed allowing “ultra-safe recharging for multiple laptops”. This trolley is to be pimped with built-in speakers.
    • Oh yes … and remembering that telco service providers are the ones coughing up for this, the Internet connection needs to be a minimum of 1Mbit/s. No data cap or requirement is specified.

    So, this all sounds like a good, well-rounded specification, but what is this going to cost? Using some data based on an e-education project BMI-T conducted for a provincial government in 2013, we see the capital cost per school at around R328 500. This is based on prevailing, commercial prices with a reasonable discount assumed. This means that we haven’t cross-checked against the Sita specifications or used the prices in the teacher laptop programme. The latter includes prices at over R12 000 for the “Teacher 101” laptop, albeit complete with software, support and 150MB of mobile data per month.

    As for the operating cost, let’s budget for around R1 000 per month per school, with the only prerequisite being the specified minimum 1Mbit/s. For this, based on market prices, you’d get a 20GB Cell C or Vodacom HSPA+ service, or a 200GB 2Mbit/s Web Africa ADSL service (including line rental). Yes, you’ll get some after-hours data for free, so it is plausible to double the gigabytes to get a more realistic view. As they say on the television, other quality services are also available.

    The notices don’t appear to have any defined period and probably expect support in perpetuity, but to be pragmatic let’s assume a five-year period for these obligations. The value of the bandwidth alone then would be R60 000/school over the lifetime, so less than 20% of the hardware and software. Remember that the operators are also obliged by the e-rate regulations to provide this at half price, but we will stick with the advertised price as the e-rate is really problematic.

    Did anyone mention support or training? I didn’t see this. Do we assume that it’s all part of the deal? For the sake of simplicity, we’ll leave it out of the equation for now but really hope that someone remembers to pick it up. Support, or lack thereof, has proven to be the Achilles heel of the Khanya project in the Western Cape.

    But back to the overall calculations. We have 1 500 schools with capital expenditure of R328 500 each plus operational expenditure of R60 000 each, giving a five-year total of a cool R583m. That figure applies to Vodacom, MTN and Cell C, and half that to Neotel. This results in a grand total of a smidgen over R2bn. And this excludes procurement, project management, deployment and any support costs which we can reasonably expect to add another few hundred million to the overall price tag. Spread over three years, this is around 2,5% of the total annual capex bill of these operators. The effect will be much more significant on Cell C and Neotel than on Vodacom and MTN.

    School-computers-640
    Icasa’s new universal service obligations have not been properly thought through

    Now, if we look back to the notices, we see that Icasa has specified a penalty of R1m (note: to be said in a Dr Evil voice complete with pinkie in the side of the mouth) and another R1m/month until such time as the licensee complies (script: Dr Evil throws back head and laughs wildly). So, if we go back to the five-year plan, that is one “bar” upfront and one a month thereafter, a total of R61m. Throw in some legal fees — another few bar or so — and we’re all-in for, say, R65m. That’s around 11% of doing the project. If we consider the teacher laptop programme rates and support, that figure is even less, perhaps as little as 8%.

    Sadly, this move is well intentioned but has this been thought through? Just last week the World Economic Forum, in its Global Information Technology Report 2014, ranked us in 146th place, behind the likes of Haiti, Lesotho, Chad, Zimbabwe, Nigeria, and Kenya. Something needs to be done, and there is a demonstrable correlation between e-education and education outcomes, but is this the right way to go about it? I cannot see our litigation-ready telcos taking this lying down. Icasa, the department of communications and/or the department of telecoms & postal services really need to think this one through. Are there perhaps some other gravy train benefits expected from such a deal? Come to think of this, do the PC suppliers and tablet distributors have universal service obligations enforced on them?

    So, back to Gladwell’s The Tipping Point. Are the fines set too low to create the right behaviour? I suspect we have a case of this here, where the telcos will fight, resist or otherwise delay the enforcement of the service obligations, or simply choose to pay the fines rather than take the new obligations lying down. The losers, again, will be the learners and youth of South Africa.

    • Tim Parle is senior telecoms consultant at BMI-TechKnowledge
    Add TechCentral as a preferred source on GoogleFollow TechCentral on Google NewsGet breaking news on WhatsApp


    BMI-T BMI-TechKnowledge Cell C Icasa MTN Neotel Telkom Telkom Mobile Vodacom
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleNo ‘killer app’ will drive smart watch sales
    Next Article You say tomato, they say tom-auto

    Related Posts

    How Cell C shaped Blu Label's executive pay - Brett Levy Mark Levy

    How Cell C shaped Blu Label’s executive pay

    1 October 2026
    Capitec's non-bank bet is paying off, big time

    Capitec’s non-bank bet is paying off, big time

    30 September 2026
    MTN loses bid to halt US Anti-Terrorism Act claims

    MTN loses bid to halt US Anti-Terrorism Act claims

    29 September 2026
    Company News
    What Smollan learnt moving 9 000 users to Google Workspace - Digicloud Africa

    What Smollan learnt moving 9 000 users to Google Workspace

    1 October 2026
    Dell Technologies Forum 2026: what to expect in Johannesburg

    Dell Technologies Forum 2026: what to expect in Johannesburg

    1 October 2026
    B2B buyers pick a winner long before the pitch - Publishared, Michelle Losco

    B2B buyers pick a winner long before the pitch

    1 October 2026
    Opinion
    South Africa's next energy crisis is in the accounts department - Craig Holmes

    South Africa’s next energy crisis is in the accounts department

    29 September 2026
    The steam engine lesson AI doomsayers keep missing - Sam Clarke

    The steam engine lesson AI doomsayers keep missing

    28 September 2026
    Regulating AI: apply the laws we have first - Dirk de Vos

    Regulating AI: apply the laws we have first

    21 September 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    What Smollan learnt moving 9 000 users to Google Workspace - Digicloud Africa

    What Smollan learnt moving 9 000 users to Google Workspace

    1 October 2026
    Eskom waives rooftop solar fees, but the registration fight isn't over

    Eskom waives rooftop solar fees, but the registration fight isn’t over

    1 October 2026
    Dell Technologies Forum 2026: what to expect in Johannesburg

    Dell Technologies Forum 2026: what to expect in Johannesburg

    1 October 2026
    South Africa's digital ID is here - but you can't have it yet - Leon Schreiber

    South Africa’s digital ID is here – but you can’t have it yet

    1 October 2026
    © 2009 - 2026 NewsCentral Media
    Built and maintained by Chronon
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}
    🇿🇦 Sign up to the TechCentral newsletter