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

      South Africa loosens media ownership rules – but keeps one hand on the remote

      16 July 2025

      The real cost of a cashless economy

      16 July 2025

      Larry Ellison, 80, is now world’s second richest person

      16 July 2025

      Solly Malatsi seeks out-of-court deal in TV migration fight

      15 July 2025

      South Africa’s telcos battle to monetise 5G as 4G suffices for most

      15 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

      16 July 2025

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 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
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • 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
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Duncan McLeod » Too late for local-loop unbundling in South Africa

    Too late for local-loop unbundling in South Africa

    By Duncan McLeod28 August 2019
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    In a policy paper published this week, national treasury devoted considerable space to the telecommunications sector and the role it could play in getting South Africa’s economy onto a stronger growth footing.

    Though many of the proposals make sense, including fast-tracking the auctioning off of broadband spectrum, an anachronism stuck out: treasury wants communications regulator Icasa to implement local-loop unbundling.

    Specifically, the discussion document says: “Immediate enforcement of local-loop unbundling, as per the ICT policy, would enable multiple providers to have access to the local loop, enhance competition and reduce unnecessary infrastructure duplication.”

    The market should be left to determine when to share and when not to share infrastructure on pure economic grounds

    The document’s executive summary says: “Competition should be allowed in Telkom’s infrastructure that connects the local exchange to residential homes and businesses.”

    LLU is a specific regulatory intervention, introduced in some developed markets, to break the monopoly choke-hold of the former monopoly fixed-line telecoms incumbent. Typically, it involves opening up the local loop of copper cables between customers’ premises and the local telephone exchange to other licensed operators, including Internet service providers.

    LLU does not typically extend to fibre infrastructure; in fact, doing so could threaten investment by Telkom and its rivals in building alternative infrastructure.

    Not a bad thing

    I have argued in this column many times that infrastructure competition and even duplication is not a necessarily bad thing — rather than leaving it up to the regulator to decide, the market should be left to determine when to share and when not to share infrastructure on pure economic grounds.

    The irony of treasury’s call for immediate implementation of LLU is that Telkom has announced it is in the process of decommissioning its legacy copper network. Copper-based digital subscriber lines will be phased out in the coming years in favour of home fibre and fixed-LTE connections. Not only does the company oppose the idea of LLU, but there may soon be no network left on which to impose such regulations.

    And LLU should not be extended to new fibre networks, including Telkom’s. Vibrant competition has emerged between fibre network operators (FNOs), with companies such as Telkom’s Openserve, Vumatel, Octotel and Frogfoot racing to wire up cities and even smaller towns to modern, high-speed fixed broadband.

    The author, Duncan McLeod, argues that it’s too late to be considering local-loop unbundling

    Allowing all-comers access to that infrastructure through some sort of unbundling runs the very real risk of disincentivising FNOs from continuing with this roll-out. LLU has always been meant as a regulatory intervention to deal with the market power of an incumbent. Ironically, the fact that LLU has never been implemented in South Africa is probably the very reason Telkom’s competitors rushed to build alternative last-mile infrastructure as quickly as they did. They saw a market gap and they took it.

    So, while national treasury makes some good proposals in its policy document — including limiting the amount of spectrum to be allocated to a planned wholesale open-access network and agitating for the publication of regulations dealing with the rapid deployment of infrastructure — in the case of LLU, the horse has already bolted. Frankly, it’s no longer needed — if, indeed, it ever was.  — (c) 2019 NewsCentral Media

    • Duncan McLeod is editor of TechCentral


    Duncan McLeod Frogfoot Icasa Octotel Openserve Telkom top Vumatel
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleSABC is ‘technically insolvent’
    Next Article Cell C pulls plug on fixed LTE, leaving ISPs, consumers in the lurch

    Related Posts

    South Africa’s telcos battle to monetise 5G as 4G suffices for most

    15 July 2025

    EFF vows to stop Starlink from launching in South Africa

    11 July 2025

    Vodacom, Maziv deal now looks likely after CompCom U-turn

    8 July 2025
    Company News

    Ransomware in South Africa: the human factor behind the growing crisis

    16 July 2025

    Mental wellness at scale: how Mac fuels October Health’s mission

    15 July 2025

    Banking on LEO: Q-KON transforms financial services connectivity

    14 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    Subscribe to Updates

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

    © 2009 - 2025 NewsCentral Media

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