South Africa: The regulator has argued for further government intervention in the sector

[business day] Further government intervention in the telecommunications sector was "absolutely vital" to boost SA's education and research capacity, as the private operators were too focused on fat profits to care about social upliftment, the industry regulator heard yesterday.

Telkom, Neotel and the cellular operators constantly failed to provide enough affordable high-capacity bandwidth to let SA fulfil its economic potential, the Independent Communications Authority of SA (Icasa) heard.

Making the scathing allegations was Geoff Daniell, a consultant with the Council for Scientific and Industrial Research .

The hearings were to establish whether Icasa should license state- owned Broadband Infraco to sell telecoms capacity over the networks built by Transnet and Eskom. Infraco's mandate is to make electronic communications far more available and affordable, particularly in rural or underserved areas.

Its creation has been widely criticised, with industry players calling for the state to step away from the sector rather than tighten its grip.

But unexpected support was voiced by Internet Solutions, which said Infraco could break the duopoly between Telkom and Neotel that had kept prices high.

Internet Solutions chief regulatory officer Siyabonga Madyibi said the state's involvement through Telkom and Sentech had "failed dismally" and wasted taxpayers' money.

Yet Infraco could cut the cost of telecoms if it was licensed as a wholesale supplier to other carriers, and could not sell directly to businesses or consumers. "Icasa could use Infraco to accelerate infrastructure competition and make sure a price war is created so we don't have the duopoly we have now. If your costs of communicating are low you get an economy that delivers on its potential and Icasa can use this opportunity to deal with that," Madyibi said.

In his attack on the incumbent players, Daniell said nationally important science and technology projects depended on high-speed bandwidth, including university networks, the Southern African Large Telescope and SA's bid to host a 1,5bn Square Kilometre Array radio telescope.

"There is no money in the world" available to buy enough capacity at the rates Telkom, Neotel or the cellular operators charged, he said, and they were not interested in finding a solution. Research institutions in SA paid up to R23000 a month for 1MB per second of international bandwidth, compared to a global average of R40, he said.

Operators' inflexible pricing showed their lack of regard for the effect they were having on skills development and training by preventing important projects from getting off the ground, he said.

"They have clung to the old-style pricing model designed to make very large profits, with no regard to what the lack of broadband infrastructure has on the competitiveness of SA and the whole of Africa. Granting Infraco a licence will force the incumbents to join the party," he said.

They have clung to the old-style pricing model designed to make very large profits, with no regard to what the lack of broadband infrastructure has on the competitiveness of SA.

South Africa: 'Vital' for State to Intervene in Telecoms Zone