MWEB SUBMISSION ON THE CONVERGENCE BILL

Does it cure the limitations imposed on VANS by the 1996 Telecoms Act? WHAT MEASURE DO YOU USE? Does it cure the limitations imposed on VANS by the 1996 Telecoms Act? No self provision of facilities No voice/ No right to interconnect with all the other licencees R

Ministerial influence. Inadequate protection from abuses of dominance. WHAT MEASURE DO YOU USE? Ministerial influence. Inadequate protection from abuses of dominance. Under resourced regulator. R

Since September 04 – uncertainty. CB removes uncertainty – but SELF PROVISION Since September 04 – uncertainty. CB removes uncertainty – but No application for network services until date set by Minister

SELF PROVISION Policy choice – VANS limited to service based rather than facilities based competition. Two major issues No road map for increasing facilities based competition Facilities leasing regulation

Never clear – moving target DEFINITION OF VANS Never clear – moving target Communication service licences /application service Are applications a subset of services?

Are they limited to providing applications only. DEFINITION OF VANS No attempts to license other types of communication services e.g. multimedia Are they limited to providing applications only. Widens the licensing net e.g. e-mail, hosting, security.

VANS uniquely vulnerable – no frequency or network service. COMPETITION VANS uniquely vulnerable – no frequency or network service. Special rules for access, interconnection and leasing required. Network licences with SMP must lease facilities and interconnect at LRIC

COMPETITION Access to essential facilities at LRIC (under sea cable) Adequate accounting separation. Combination of ex ante (eg. bundling) and ex post regulation Additional licence terms during the conversion process.

Service licencees excluded from Ch 7. INTERCONNECTION Service licencees excluded from Ch 7. Section 43 of Telecoms Act requires PSTS to interconnect with VANS. EU directive – general obligation on all players to interconnect.

INTERCONNECTION Peculiar – current draft of interconnection guidelines contradict Ch 7. VANS have right to interconnect. Can interconnect with Telkom at LRIC. Vodacom/MTN???

THE TRADITIONAL POTS NETWORK Telephone User Telephone User Telephone User Telephone User POTS 021-555-5555 011-999-9999 CAPE TOWN GAUTENG Telephone User Telephone User

POTS STATUS QUO 021-555-5555 011-999-9999 Telephone User

POTS POTS versus DATA 021-555-5555 011-999-9999 Telephone User myWireless

POTS EFFECT OF THE CB 021-555-5555 011-999-9999 Telephone User myWireless OTHER

CONCLUSION Telecoms market dominated by 3 players. High disparities in market power. No more artificial distinction between voice/data. ICASA’s performance will determine success/failure. Cannot allow continuation of status quo – SA Inc. will fall further behind. Decisive intervention needed in markets with limited competition.