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
      Big Microsoft 365 price increases coming next year

      Big Microsoft price increases coming next year

      5 December 2025
      Vodacom to take control of Safaricom in R36-billion deal - Shameel Joosub

      Vodacom to take control of Safaricom in R36-billion deal

      4 December 2025
      Black Friday goes digital in South Africa as online spending surges to record high

      Black Friday goes digital in South Africa as online spending surges to record high

      4 December 2025
      BYD takes direct aim at Toyota with launch of sub-R500 000 Sealion 5 PHEV

      BYD takes direct aim at Toyota with launch of sub-R500 000 Sealion 5 PHEV

      4 December 2025
      'Get it now': Takealot in new instant deliveries pilot

      ‘Get it now’: Takealot in new instant deliveries pilot

      4 December 2025
    • World
      Amazon and Google launch multi-cloud service for faster connectivity

      Amazon and Google launch multi-cloud service for faster connectivity

      1 December 2025
      Google makes final court plea to stop US breakup

      Google makes final court plea to stop US breakup

      21 November 2025
      Bezos unveils monster rocket: New Glenn 9x4 set to dwarf Saturn V

      Bezos unveils monster rocket: New Glenn 9×4 set to dwarf Saturn V

      21 November 2025
      Tech shares turbocharged by Nvidia's stellar earnings

      Tech shares turbocharged by stellar Nvidia earnings

      20 November 2025
      Config file blamed for Cloudflare meltdown that disrupted the web

      Config file blamed for Cloudflare meltdown that disrupted the web

      19 November 2025
    • In-depth
      Jensen Huang Nvidia

      So, will China really win the AI race?

      14 November 2025
      Valve's Linux console takes aim at Microsoft's gaming empire

      Valve’s Linux console takes aim at Microsoft’s gaming empire

      13 November 2025
      iOCO's extraordinary comeback plan - Rhys Summerton

      iOCO’s extraordinary comeback plan

      28 October 2025
      Why smart glasses keep failing - no, it's not the tech - Mark Zuckerberg

      Why smart glasses keep failing – it’s not the tech

      19 October 2025
      BYD to blanket South Africa with megawatt-scale EV charging network - Stella Li

      BYD to blanket South Africa with megawatt-scale EV charging network

      16 October 2025
    • TCS
      TCS+ | How Cloud on Demand helps partners thrive in the AWS ecosystem - Odwa Ndyaluvane and Xenia Rhode

      TCS+ | How Cloud On Demand helps partners thrive in the AWS ecosystem

      4 December 2025
      TCS | MTN Group CEO Ralph Mupita on competition, AI and the future of mobile

      TCS | Ralph Mupita on competition, AI and the future of mobile

      28 November 2025
      TCS | Dominic Cull on fixing South Africa's ICT policy bottlenecks

      TCS | Dominic Cull on fixing South Africa’s ICT policy bottlenecks

      21 November 2025
      TCS | BMW CEO Peter van Binsbergen on the future of South Africa's automotive industry

      TCS | BMW CEO Peter van Binsbergen on the future of South Africa’s automotive industry

      6 November 2025
      TCS | Why Altron is building an AI factory - Bongani Andy Mabaso

      TCS | Why Altron is building an AI factory in Johannesburg

      28 October 2025
    • Opinion
      Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

      Your data, your hardware: the DIY AI revolution is coming

      20 November 2025
      Zero Carbon Charge founder Joubert Roux

      The energy revolution South Africa can’t afford to miss

      20 November 2025
      It's time for a new approach to government IT spend in South Africa - Richard Firth

      It’s time for a new approach to government IT spend in South Africa

      19 November 2025
      How South Africa's broken Rica system fuels murder and mayhem - Farhad Khan

      How South Africa’s broken Rica system fuels murder and mayhem

      10 November 2025
      South Africa's AI data centre boom risks overloading a fragile grid - Paul Colmer

      South Africa’s AI data centre boom risks overloading a fragile grid

      30 October 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • 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
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » Telecoms bill is a disaster, MTN warns

    Telecoms bill is a disaster, MTN warns

    By Duncan McLeod7 February 2018
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Government’s Electronic Communications Amendment Bill is unconstitutional, will create a new infrastructure monopoly in the form of a proposed wholesale open-access network (Woan) and will ultimately be detrimental to consumers.

    Those are some of the key arguments in MTN South Africa’s submission to the department of telecommunications & postal services over the contentious bill, which, if enacted in its current form, will likely lead to legal challenges.

    The department is set to hold a high-level meeting with the operators and other industry role players in early March to discuss the bill. Interested parties had until 31 January to make submissions to government on the bill.

    It would be as short-sighted as legislating for a monopoly bread bakery, in the hope that competition between grocery retailers would drive good quality, low prices and widespread availability of bread

    The draft legislation represents the “most aggressive telecoms legislative intervention into a developed telecoms market anywhere”, MTN warned.

    The bill, it said, proposes a “comprehensive U-turn on a model that delivered tens of billions (of rand) of investments, competitive broadband infrastructure, even in rural areas, and world-class choice and innovation, in favour of an untested and extreme regulatory model centred on re-monopolisation of infrastructure, cost-based access and expropriation of property”.

    Government is coming under growing pressure withdraw the bill as concerns mount about the potential negative impact it could have on the sector, and on the South African economy more broadly.

    The bill, MTN said, violates the property clause in the constitution, fails to meet the rationality requirement imposed by section 1(c) and section 22 of the constitution, and is “impermissibly vague”.

    “In an industry characterised by dynamism, all the economic evidence has shown that relying on what will essentially become a single solution infrastructure will undermine South Africa’s engine for economic growth and jobs,” the operator said in its submission.

    “This unique, untested and extreme regulatory model has been introduced based on an impact assessment that is entirely qualitative; focused on a list of hypothetical benefits, which appear to be unsupported by the economic literature and market research; and largely unconcerned about its impact on investment and innovation incentives.”

    ‘Serious constitutional issues’

    Even if the “serious constitutional issues” raised by the bill are addressed, the law should not be changed until an “in-depth and quantitative understanding of the balance of costs and benefits for these radical proposals are fully understood and laid out before the legislator”.

    Two of the most contentious aspects of the bill are a plan to introduce the government-backed but privately owned Woan, to which most if not all future mobile spectrum will be allocated, and a plan to force “open access” on the commercial operators. This proposed open-access regime will force operators to share their network infrastructure with the Woan and other licensed companies.

    “The proposed amendments dealing with the Woan and the open-access regime will not achieve their stated objectives,” MTN warned in its submission. “Appropriate regulation should encourage economic transformation, promote competition, encourage investment, reduce unnecessary costs and remove obstacles for firms to compete. The proposed regulatory interventions in the bill will not do so: on the contrary, they will harm incentives to invest, and will harm competition and consumers, in particular the poorest and most vulnerable consumers.”

    On open access, MTN said a reasonable and objective economic rationale (a threshold assessment) must be put in place before the proposed amendment on open access and cost-based pricing is triggered.

    “If the latter is not managed properly, unintended consequences are likely to occur, which may give rise to disputes and litigation. Much-needed investment and innovation in the ICT sector will be stifled should this bill be enacted in its current form,” it said.

    “Some of the key (objectives) of the bill, such as the promotion of investment, innovation, research and development, cannot possibly be achieved by legislation that adds massive uncertainty and permits the deprivation of property of the mobile network operators,” MTN added. “Moreover, the Woan will not have incentives to invest efficiently, or efficiently to utilise the high-demand (mobile) spectrum that will be licensed to it.

    After more than a century of monopoly in relation to fixed-line services, Telkom had only reached around four million subscribers by 1994

    “The bill will directly harm competition among operators and will thereby directly hinder the pursuit of the most important (objectives) of the bill, which are to promote the universal provision of electronic communications networks and electronic communications services and connectivity for all, and to promote the interests of consumers regarding the price, quality and the variety of electronic communications services. Harming competition will also directly harm the efficiency with which radio frequency spectrum is used.”

    The company said the planned Woan will be entitled to access commercial operators’ infrastructure based on “cost-based pricing”. This will destroy the operators’ incentives to invest in the maintenance and repair of existing infrastructure, and investment in any further infrastructure, it said.

    In addition, the commercial operators could lose their existing spectrum licences, because the bill requires communications regulator Icasa to make recommendations to the minister regarding the “return of spectrum”.

    “Investments in network infrastructure are typically made several years in advance, to ensure that network capacity grows faster than network demand. Moreover, investments in network infrastructure are cumulative, and may only be recovered over a period of several years, if ever,” MTN said.

    “This provision will severely harm a mobile network operator’s incentive to invest in further infrastructure… The ability to recover infrastructure investments in future is critically dependent on spectrum holdings in those future years. If there is uncertainty over those future spectrum holdings, then this will significantly harm incentives to invest.”

    ‘Fierce competition’

    Competition, the company said, has “served consumers well” and the bill seeks to undermine this. “Fierce competition” has led to “continuous and significant investments that have resulted in nearly universal coverage, the delivery of data volumes that have grown exponentially, network quality that has constantly improved, and pricing that has fallen dramatically year after year.

    “After more than a century of monopoly in relation to fixed-line services, Telkom had only reached around four million subscribers by 1994, and that number has not grown since. Indeed, fixed subscribers have fallen in the past few years. By contrast, in 2016, there were a total of 87m active mobile Sims or subscriptions on South Africa’s networks, and 37.5m unique mobile subscribers, a 68% population penetration rate.”

    The proposals contained in the bill will “directly harm incentives to invest (and) will harm competition … in particular incentives to compete on continuously investing in improving network infrastructure to meet exponential growth in demand for data connectivity”.

    “In the form proposed by the bill, the Woan would be antithetical to the promotion of competition. It would effectively operate as a monopolistic wholesale player and would moreover be created and operate under considerable uncertainty,” MTN said. “The Woan would have no incentives to invest and compete, given the provisions in the bill, which would not provide it with the incentives to invest in infrastructure or to use spectrum efficiently.”

    Instead of fostering infrastructure-based competition, government wants to promote competition at the services level. But MTN said this is a bad idea. It would “directly harmful to consumers if service-based competition were to be seen in a vacuum, isolated from infrastructure competition.

    “Service-based competition depends on infrastructure competition, which makes available network capacity that can then be sold to subscribers. Obviously, service-based competition can only compete prices down to the level of the available network capabilities that are the result of infrastructure competition, and service-based competition cannot affect the quality or capacity of network infrastructure.

    “A selective and restricted focus on service-based competition, while destroying incentives for infrastructure competition, would be directly harmful to consumers. It would be as short-sighted as legislating for a monopoly bread bakery, in the hope that competition between grocery retailers would drive good quality, low prices and widespread availability of bread.”  — © 2018 NewsCentral Media

    • Now read: Telecoms bill must be withdrawn, research firm says


    Icasa MTN MTN South Africa top Woan
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleGive all unassigned spectrum to the Woan: Telkom
    Next Article Snapchat finally looks like a real company

    Related Posts

    TCS | MTN Group CEO Ralph Mupita on competition, AI and the future of mobile

    TCS | Ralph Mupita on competition, AI and the future of mobile

    28 November 2025
    South Africa set for telecoms licensing reset - Icasa

    South Africa set for telecoms licensing reset

    28 November 2025
    Four years later, Vodacom and Maziv have sealed their deal

    Four years later, Vodacom and Maziv have sealed their deal

    26 November 2025
    Company News
    AI is not a technology problem - iqbusiness

    AI is not a technology problem – iqbusiness

    5 December 2025
    Telcos are sitting on a data gold mine - but few know what do with it - Phillip du Plessis

    Telcos are sitting on a data gold mine – but few know what do with it

    4 December 2025
    Unlock smarter computing with your surface Copilot+ PC

    Unlock smarter computing with your Surface Copilot+ PC

    4 December 2025
    Opinion
    Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

    Your data, your hardware: the DIY AI revolution is coming

    20 November 2025
    Zero Carbon Charge founder Joubert Roux

    The energy revolution South Africa can’t afford to miss

    20 November 2025
    It's time for a new approach to government IT spend in South Africa - Richard Firth

    It’s time for a new approach to government IT spend in South Africa

    19 November 2025

    Subscribe to Updates

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

    Latest Posts
    Big Microsoft 365 price increases coming next year

    Big Microsoft price increases coming next year

    5 December 2025
    AI is not a technology problem - iqbusiness

    AI is not a technology problem – iqbusiness

    5 December 2025
    Vodacom to take control of Safaricom in R36-billion deal - Shameel Joosub

    Vodacom to take control of Safaricom in R36-billion deal

    4 December 2025
    Black Friday goes digital in South Africa as online spending surges to record high

    Black Friday goes digital in South Africa as online spending surges to record high

    4 December 2025
    © 2009 - 2025 NewsCentral Media
    • 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}