The country’s mobile operators should also be subjected to local-loop unbundling and not only Telkom and its “last-mile” copper access network, MWeb CEO Rudi Jansen told public hearings on the process at the Independent Communications Authority SA (Icasa) in Sandton on Wednesday.
“Dominant forms of broadband should attract regulation [and] for us the most dominant players are the mobile operators,” Jansen said. “They have far more broadband subscribers [than Telkom]. You almost get the sense that local-loop unbundling is only set for Telkom [but] we strongly believe it [shouldn’t be].”
Icasa is formulating regulations for unbundling in an effort to increase competition and in the process bring down prices, especially for broadband services.
“We know there are differences between fixed lines and mobile, but if you look at it critically there’s no reason mobile should be treated any differently,” Jansen told Icasa. “We recognise for Telkom and the mobile operators it will be difficult to determine pricing but we need to start taking that road.”
He argued for “more effective” wholesale pricing from the mobile operators to allow Internet service providers to compete against “the might of the mobile operators”, leading to lower prices and job creation.
Jansen warned the unbundling process was complex and advocated a phased approach, implementing what he described as “quick wins” as soon as possible.
He said “naked” broadband digital subscriber lines would be one such quick win, where broadband and telephone line rentals were separated. Another proposal was the introduction of “bitstream” technology, one of the unbundling proposals put forward by Icasa in its discussion document on the subject.
Jansen added that if wholesale prices from Telkom for access to its access network were reduced, it would push up demand from consumers and not hurt Telkom’s revenues.
“By reducing prices, Telkom wouldn’t lose a cent of revenue and would probably gain revenue,” he said.
Jansen said a phased approach to unbundling would ensure smaller Internet service providers were not punished because of the capital costs associated with gaining access to the local loop. If there was a “big-bang approach” to the process, smaller players could be driven out of business, he said.
“The same goes for Telkom. You need to give Telkom time to change its business model and adapt to the changes. If you change overnight, there will be job losses. My biggest fear is you’ll end up with two or three big players that dominate the market and prices remain high and we don’t get the penetration we need.” — Duncan McLeod, TechCentral
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