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Market and Regulatory Development

Market and Regulatory Development

LOCAL LOOP UNBUNDLING

Telkom is required, in terms of existing legislation, to provide shared access to its local loop.

Although the Telecommunications Act, 103 of 1996, provided that no general local loop unbundling subject to ICASA making the necessary regulations. The minister of communications published policy decisions that the process of unbundling the local loop in South Africa should be urgently implemented and completed by 2011.

On May 23 2007, the Local Loop Unbundling Committee set up by the minister of communications to develop appropriate policies for the unbundling of the local loop in South Africa recommended, among other things that three forms of local loop unbundling to be considered, full unbundling of the metallic loop, line sharing and wholesale bitstream access; and the regulatory process, with full industry participation, has commenced and was due to be completed in 2011.

NUMBER PORTABILITY

In April 2010, geographic number portability (GNP) finally become a reality for South African telecoms customers. The first phase of fixed-line number portability, which allows individual Telkom customers to switch networks without losing their numbers, kicked off in May 2009; the second, more important phase, which allows individual numbers to be ported, was finally introduced in May. Although the second phase of fixed-line number portability was originally due to be introduced in March 2010, implementation was delayed until April to accommodate final testing of IT systems, among other things.

The Number Portability Company, which already handles number porting for the mobile operators, will manage fixed-line number portability, also known as geographic number portability (GNP), on behalf of the operators. Vodacom, MTN and Cell C have agreed to dilute their shareholding in the company to allow Telkom and Neotel to become shareholders, too.

  • Want to know more about Geographic Number Portability? Click here.

LICENSING AND SPECTRUM

South Africa’s licensing regime is governed by the 2006 Electronic Communications Act. The 2006 Act defined new categories of licenses and set out rules and guidelines for license applications, licensee obligations and the construction of communications networks.

In January 2009, South Africa’s telecoms regulator, ICASA, granted 544 individual Electronic Communications Network Services (I-ECNS) licenses that allow telecoms companies to operate their own networks. Of the licenses 288 were issued immediately, while the remaining 256 were awarded subject to the submission of all relevant documentation. As a result of the mass licensing move, all of South Africa’s socalled ‘value-added network service providers’ had their licences converted into I-ECNS licences. This means that they are free to develop and operate their own networks. It is unlikely more than a small percentage of those issued with the new licences will go on to launch their own networks.

In March 2009, it was revealed that, after pressure from numerous South African operators, the regulator ICASA had published a revised version of the Draft General Licence Fees Regulations in the country’s Government Gazette. Interested parties were given 10 days, until March 20, to submit written comments on the revised regulations that suggest considerably lower licence fees than first mooted. ICASA said that the lower licence fee proposal would boost competition in the market and will pass savings onto telecoms customers.

INTERCONNECTION RATE CUTS

In 2010 Icasa, South Africa's telecoms regulator, announced that call termination rates - the price telcos may charge one another for carrying their calls would drop each year over the next three years.

The third and final round of these wholesale interconnect rate cuts was to take place on 1 March 2013, and will bring the price down from the R1.25 it was three years ago, to R0.40 for mobile calls. National fixed-line calls will drop to 19c and local fixed-line calls to 12c. These significant reductions are expected to stimulate competition in the local telecommunications sector by making it easier for new players to enter the market.

These rates are the tariffs that one telecoms operator charges another to terminate a call on its network. For example, if a Cell C customer calls an MTN customer, Cell C charges its customer a fee per minute (the retail charge). At the same time, MTN will charge Cell C a fee – called a mobile termination rate or MTR – for terminating the call on its network.

  • Want to know more about Interconnection Regulations and News? Click here.

CARRIER SELECT AND CARRIER PRESELECT

ICASA is yet to finalise regulations allowing consumers to preselect or select on a case-by-case basis the service provider which they wish to utilise to make calls. The finalisation of these regulations is likely to stimulate competition provided that this is accompanied by price regulation of the provision of ECNS services under Chapter 10 of the ECA.