South Africa - Govt considering local loop unbundling in urban areas this year to accelerate broadband roll-out

[fin 24] Government could possibly unbundle the local telecommunications loop (last-mile network) only in urban areas, in order to focus on better service delivery in rural areas.

This is according to Communications Minister Roy Padayachie, speaking in discussion with top business executives in the local ICT industry.

This was the first of the minister’s discussions with industry to improve cooperation between the industry and government, as well as negotiate on sticking points.

Open dialogue between the department and the private sector might have previously seemed unlikely. There was a tendency for industry to move in one direction and government in another, said Pa¬dayachie.

The minister told the media that government regarded the unbundling of the local loop as essential.

The local loop is used by Telkom [JSE:TKG] to deliver telephone and internet services to users. Its unbundling will give other companies access to the network, increasing competition and lowering prices.

Government plans to unbundle the loop by the end of this year, after delaying it for a year.

Padayachie reported that government was still in discussions regarding the best unbundling model, but the project would be completed before deadline.

However, there could be surprises in the type of unbundling model adopted, he said.

When Sake24 asked the minister to explain, he said government wanted to assess the impact of the unbundling very carefully. Questions needed to be asked about who would benefit most, and whether unbundling would really give rural areas the best access. It might be suited to urban areas, but not necessarily rural areas.

According to the minister, the department’s first priority was to improve and broaden the country’s telecommunications. It should be more inclusive, and expanding it into rural areas was very important.

Accelerated implementation of broadband was a core issue for the department, he said. The faster the cost of broadband could come down, the better it would be for the country.

Padayachie also stressed government wanted to work with the private sector to expand the industry and develop skills.

The country had to work together to stop the brain drain. Opportunities existed here in South Africa, not overseas, he said. Without skills the industry could not grow.

Government wanted companies to become international businesses and seize opportunities, particularly in Africa. European or American companies could not be allowed to snatch Africa from under South Africa’s nose.

The minister stressed various initiatives to overcome the difficulties, including the establishment of an e-skills institute.

Government and the industry had set up work groups to draw up a programme for the improvement of the country’s telecommunications. These groups comprised some of the foremost business executives, with the minister chairing each group.

A number of these business executives had lauded the minister’s discussions.

Allied Technologies chief executive Craig Venter said that from an industry point of view it was very refreshing to see the minister taking the reins.

Previously there might have been a lack of dialogue, he said, but current initiatives were not mere talk. Things were being done.

Govt to unbundle local loop in 2011