[By Craig Wilson]
Communications minister Roy Padayachie has said in no uncertain terms that he wants to see Telkom’s local loop of copper cables unbundled by November. But it appears the operator intends doing everything in its not inconsiderable power to impede the process. Is it risking the minister’s wrath?
At a discussion workshop on local-loop unbundling (LLU) last week, Telkom made it clear that fast-tracking the process, which will give rival operators more direct access to consumers over its copper-cable infrastructure, isn’t something it supports. In fact, it says LLU may not only be counterproductive but also detrimental to achieving higher levels of Internet access in SA.
Of course, as Telkom built the copper network — albeit with taxpayers’ money — and is tasked with maintaining and extending it, its reluctance to open it to competitors is understandable. After all, it has the most to lose — or at least so it says.
Other industry players have argued that if Telkom continues to delay LLU, by the time it actually happens there may be less need for it. With the growth of mobile as a means of Internet connectivity and an increasing number of consumers abandoning Telkom’s fixed-line voice services, could unbundling come too late to help consumers?
Already, Telkom has entered the mobile voice and broadband business itself, thanks to last year’s launch of 8ta. SA’s newest mobile operator recently announced the most competitively priced 3G offering ever seen in SA. The prices — admittedly, they’re part of a special offer — are so competitive that it is now the cheapest data option for many users, cheaper even than Telkom’s own fixed-line products.
Some suggest Telkom should shift its focus from maintaining the ageing copper network and instead invest in a national consumer fibre network. This would require enormous investment over a number of years, but with a number of rivals already eyeing this space, Telkom could find itself on the back foot if it doesn’t move now to own it.
Whether or not Telkom decides to enter the fibre market, helping government meet the November deadline for LLU would be a good start if it wants to prove to SA consumers that it has their best interests at heart.
Not only should LLU help drive down prices and increase competition, but in doing so it could force Telkom to become more competitive and encourage it to better meet the evolving demands of its consumers. Yes, it may suffer in the short term. But ultimately the innovation required of it may be as good for it as for its customers.
And, if it continues to fight the process, it could find itself on the wrong side of a government that seems determined to press ahead with unbundling in the interests of consumers.
- Craig Wilson is a senior journalist at TechCentral
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