By Duncan McLeod
The ANC has proposed a sweeping overhaul of policy governing SA’s technology sector. For the most part, the proposals are reasonably business-friendly and should be welcomed. But the lingering conviction that state intervention will ensure the delivery of services to all is still a cause for concern.
The proposals, contained in one of a series of hefty discussion documents released this week ahead of the party’s national policy conference in June, generally make for pretty good reading. Clearly, a lot of thought has gone into identifying the challenges facing the sector and what needs to be done to ensure all South Africans get access to high-speed broadband and the benefits that access brings, including a faster-growing economy.
The ruling party must be commended for identifying the requirement for greater competition in the sector and the need to expand the number of players with access to scarce radio frequency spectrum to deliver next-generation broadband services. It’s a surprisingly centrist policy position paper (with a few exceptions) for a party that leans well to the left in the political spectrum.
In other respects, though, the discussion document is rather naive, in that it ignores the role that well-financed incumbent operators — such as MTN, Telkom, Vodacom and Cell C — can play in building the next-generation networks that will expand access to more South Africans.
In deference no doubt to its socialist alliance partners, it’s also silent on the pressing need to privatise Telkom fully, to free its management team from the dead hand of the state that limits its ability to restructure itself meaningfully in a competitive market. Rather, it talks about setting up a second Telkom (my choice of words) by merging two lame-duck state-owned enterprises, Sentech and Broadband Infraco. This focus on state-owned enterprises spoils what is otherwise a fairly well-argued overview of the challenges facing the sector and how to grow it.
Neither Sentech nor Infraco deserves the special attention they enjoy in the document. Both have failed to prove their raison d’être. Sentech’s previous effort at building a broadband network was so spectacularly unsuccessful that it should never be given another chance to screw it up and waste taxpayers’ money. And Infraco, the brainchild of that misguided communist and former cabinet minister Alec Erwin, admits freely that the company is struggling to remain competitive where private-sector players are undercutting its prices. Infraco’s assets should be sold off to the highest bidder.
Public enterprises minister Malusi Gigaba would do the country a favour by flogging off Infraco to a company that can make more efficient use of its infrastructure. It’s unfortunate, then, that privatisation is anathema to Gigaba, who appears more interested in building a political power base through an ever-expanding role for the state-owned enterprises in his portfolio.
The ANC’s discussion paper should be lauded for proposing that spectrum allocations — especially in the important 800MHz and 2,6GHz frequency bands that will be used for fourth-generation mobile broadband services — will be used to foster new infrastructure competition in the sector.
But the party is placing a little too much emphasis on encouraging new players into the infrastructure game without asking who will invest the billions of rand needed. Though fostering competition is laudable, the ANC should remember it’s the incumbent operators that have the financial and technical ability to build these networks. Excluding them from the process could ultimately do more damage than good. Balance is imperative.
That said, the discussion paper is an important step forward. At the very least, it deserves rigorous interrogation and debate.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
- Subscribe to our free daily newsletter
- Follow us on Twitter or on Google+ or on Facebook
- Visit our sister website, SportsCentral (still in beta)