Telecom regulator, lawmakers have opportunity to accelerate SA growth

The telecommunications industry has the potential to be one of the engines driving South Africa’s GDP growth past six percent per year

May 15, 2012

The telecommunications industry has the potential to be one of the engines driving South Africa’s GDP growth past six percent per year, but only if strong competition is nurtured in the sector.

That’s according to Chris Radley, Managing Director at Nashua Mobile, commenting on the health of the country’s telecommunications industry ahead of World Telecoms Day, May 17. He says that telecommunications is a levelling, democratising technology that empowers people to participate in the economy by giving them access to information and markets they did not have before.

However, telecommunications tariffs in South Africa are still somewhat high as a result of a lack of competition, he adds. This excludes many people from access to basic voice and Internet services that many countries are beginning to regard as a basic human right.

The result is that the economy is less productive and globally competitive than it could be and that many people are denied the opportunities that fast Internet connectivity offers them to improve their lives, says Radley. For example, more affordable Internet services could help micro and small businesses to operate more efficiently and bring e-health, e-learning and other services to poor communities.

Says Radley: “Large businesses in South Africa are held back by high telecommunications costs. A number of studies place our cellular costs as among the highest in Africa, while one report says that we have the lowest minutes of telecommunications usage among the Brics countries. Stronger regulation, coupled with policies that encourage more infrastructure level competition, could help to change that picture,”

Radley says that it is pleasing to see that Icasa has taken some concrete steps to tackle high telecommunications costs in South Africa, for example, by standing firm on mobile termination rates.

Nashua Mobile would like to see certain important regulatory decisions and processes concluded as soon as possible, says Radley. The process around licensing the precious spectrum operators need for commercial deployments of LTE (more contentiously called 4G) networks is particularly urgent.

This technology is key to bringing faster and more affordable mobile broadband to market. “Digital dividend spectrum is also up in the air,” adds Radley. “South African regulators and legislators have an opportunity to position South Africa at the forefront of global telecoms if they move as quickly as the technology does.”

However, despite these remaining challenges, South Africa also has much to celebrate on World Telecoms Day, says Radley. The county has benefitted from a flood of international bandwidth as a result of new submarine cables landing on the coast, and operators are clinking up the metros with fibre.

Prices are falling as result, even as quality improves. This is largely thanks to the work that the regulator and policymakers have done to accelerate competition in recent years, says Radley.

Where a gigabyte of mobile data cost R1050 five years ago, it costs just R150 today, and costs of fixed-line broadband have also tumbled. Telkom’s recent moves to reduce IPC costs are also to be welcomed. And the explosion of tablets and smartphones means that access devices are becoming more accessible to more people as well.