The Internet Service Providers’ Association (Ispa), which represents many of South Africa’s ISPs, has slammed comments made by Telkom CEO Sipho Maseko over local-loop unbundling (LLU), saying they “cannot remain unchallenged”.
The association’s criticism of Maseko are based on questions on unbundling asked by TechCentral at Telkom’s recent annual general meeting of shareholders at which he vowed that the company would fight LLU as it shouldn’t be “prejudiced unfairly” by “subsidising” competitors that don’t want to invest in their own infrastructure.
Maseko warned against Telkom being “trampled on” by competitors.
LLU is a regulatory intervention, imposed in markets in North America, Western Europe and elsewhere, that gives fixed-line incumbents’ rivals access to the local-loop of copper wires into homes and businesses in an effort to boost competition.
“While Ispa has great respect for the turnaround work Maseko is doing at Telkom, [his] statements are not correct and cannot remain unchallenged,” says Ispa regulatory adviser Dominic Cull in a statement.
Telkom is not a member of Ispa.
“Nobody is looking for an ‘easy ride’ on Telkom’s network through LLU — the provisions of the draft LLU regulations issued by Icasa are quite clear as to compensation payable to Telkom by those seeking access to the local loop,” Cull says. “It has never been Ispa’s contention that anything other than fair and non-discriminatory pricing should be applied.”
Ispa believes that Telkom would be “better served by viewing LLU as a wholesale opportunity to recover its investment and a co-investment opportunity to ensure that fixed-line broadband remains relevant at a time where substitution for mobile broadband is already widespread and growing”.
But Maseko warned at the AGM that Telkom doesn’t believe its shareholders should be “prejudiced unfairly”.
“Our shareholders expect us to represent the company as best we can … and give them a return from their investment,” he said at the time.
Telkom has since sent a written submission to telecommunications regulator Icasa warning that it will cut back on investment in its network and could raise prices for consumers if LLU is forced onto it.
Cull says that Telkom’s view that it has been “trampled on” is “extremely hard to sustain given its historical relationship with the ISP sector”.
“This is evidenced by the substantial fines imposed on it on two separate occasions by the competition authorities in respect of anticompetitive conduct over the past decade,” said Cull.
“Telkom’s position regarding LLU would make its control over the fixed last mile increasingly irrelevant. The failure to complete unbundling along with the failure to license radio frequency spectrum suitable for wireless last-mile services is having the unintended consequence of an explosion in last-mile fibre deployments which are displacing the copper local loop.
“This will intensify in the next two years as further national long-distance fibre networks dramatically reduce the cost of this connectivity, leaving the local loop as the only major short-term infrastructure bottleneck. A failure to shift from a ‘threat’ to an ‘opportunity’ mind-set regarding LLU to ensure the continued relevance and competitiveness of the local loop also appears to ignore clear government policy regarding infrastructure sharing and the reduction of the cost to communicate,” Cull said. — (c) 2013 NewsCentral Media
