South Africa - licensing

VANs go without

The Independent Communications authority of SA (ICASA) has published its intention to convert existing telecommunications licences.

However, value-added network service providers (VANs), such as MWeb, Vox Telecoms and Internet Solutions, are no closer to being able to provide their own infrastructure.

VANs have been in an ongoing battle with the regulator to obtain electronic communications network service (ECNS) licences since the publication of the Electronic Communications Act.

Both ICASA and Government have also expressed their desire not to issue certain VANSs the licence. The regulator has also stipulated that companies wishing to apply for WiMax spectrum will have to have the ECNS conversion completed.

In a pre-emptive case, Altech Autopage launched an urgent application in April with the Transvaal High Court to interdict the licence conversion process. The gist of Autopage's submission is that it wants VANs to be allowed to self-provide, ie to build their own transmission networks, and it contends that ICASA has taken the stand that they are not.

In particular, Autopage wants the court to stop ICASA from continuing with the competitive process to grant selected VANs individual electronic communications network service (I-ECNS) licences in terms of the Electronic Communications Act. It also wants ICASA to be prevented from granting selected VANs I-ECNS licences before the mentioned process is completed.

The Wireless Access Providers' Association (WAPA) launched a similar legal action against ICASA and Matsepe-Casaburri.

Altech Group legal manager Tyrone Reis says the company is just keeping its head down and concentrating on the litigation. It will submit its affidavit to the High Court tomorrow morning in the case against ICASA.

“We will still participate in the processes, but we are not really willing to comment at this stage,” he adds.

Hijacking ECNS

Vox Telecom CEO Douglas Reed says: “After years of blaming government for not injecting competition into the market, how can the private sector turn around and do the same thing?”

Conversion to ECNS will allow VANs to operate on a competitive level with the like of Telkom and Neotel, because they will no longer have to lease the infrastructure from them.

Vox is contesting the court action brought forward by Altech and the case is set for 24 July. “We will have to wait and see what happens – until the case is settled, none of the VANs will be converted to ECNS. Obviously we would like a licence.”

However, Reed says Vox has learned how to operate in the current heavily regulated telecommunications environment since its inception. “The whole environment has been a double edged sword, but we have also had time to build up a critical mass.”

He says more important for the company would be the parity on interconnect and the fixed line number portability. “Both of these regulatory aspects will be critical for us, and Telkom will delay number portability for as long as it can.”

Sigh and give up

IDC program manager for communications and networking Richard Hurst says: “You can sense the frustration from the VANs, they have all been building business cases, at the very least in the services layer.”

He says the VANs will either “sigh and give up” or take the issue forward through litigation. The conversion of VANs can only be good for the incumbents, he says. “They may not believe it, but competition will only help them grow their business.”

ICASA has agreed to convert the following operators: Telkom, Neotel, Sentech, Cell C, Mobile Telephone Networks, iBurst, Swiftnet – a company 100% owned by Telkom, Fleetcall, Q-Trunk – also primarily owned by Telkom and Orbicon – owned by MultiChoice.

Altech Autopage vs ICASA

* Altech CEO Craig Venter has instigated legal action against Communications Minister Ivy Matsepe-Casaburri and the industry regulator ICASA, demanding that ICASA cease the current licence conversion process of awarding selected VANS ECNS licenses.
* Venter claims that clarity is needed on the issue of whether private operators will have the right to build networks or will still be forced to lease bandwidth from larger players such as Telkom and Neotel.
* Matsepe-Casaburri issued a policy directive in her 2007 budget vote speech, stating that the regulator should consider whether or not VANS should be issued ECNS licences. The regulator appears to hold the view that only holders of ECNS licences will be permitted to self-provide. Effectively, Autopage wants the court to rule that it does not need to apply for an ECNS licence and that it does not need to take part in a competitive process to gain one in terms of the ECA.
* The case will be heard before the courts on the 29 to 31 July.
* Internet Solutions and Vox Telecom oppose Altech Autopage Cellular's application as they believe it will unnecessarily delay the issuing of ECNS licences.
* The Wireless Application Providers Association (WAPA) has also asked the courts to clarify whether VANs are allowed to self-provide. A legal representative for WAPA said it would seek to have the two cases heard together so as to avoid unnecessary expense and delay.