Local-loop unbundling poses a “major risk” to Telkom, says its group CEO, Nombulelo Moholi. Unbundling will allow rival operators access to Telkom’s last mile of copper-cable infrastructure in businesses and homes.

Moholi says the risk from unbundling comes from “not knowing what will be unbundled. There is a vacuum in the definitions and regulations around what will be unbundled, and at what price. Also, at what cost, and from what point in the network [it will happen].”

She says the intention to unbundle the local loop has been voiced by policy makers and regulators for some time now, and although Telkom recognises the importance of the process it is important to remember that there are “many forms of unbundling”.

Telkom wants a definition of what costs it will be allowed to recover from the process. To this end, Moholi says the company “is talking to various parties so that we can quantify the impact on Telkom”.

“Telkom of today is not Telkom of the time when local-loop unbundling was first communicated to the market about five years ago,” she says. “A market study as to the benefits of this process is what we’d like to see done.”

Telkom says the process Icasa follows is likely to be done on a legal basis that is not clearly defined in the Electronic Communications Act. Telkom argues that the process will thus be open to interpretation and possibly result in litigation.

Communications minister Roy Padayachie has set a deadline of November 2011 for the local loop to be unbundled. — Craig Wilson, TechCentral