Good week for telecoms

Lindsey McDonald toasts the dawn of a liberalised, more competitive sector.

The South African telecommunications sector has had a good week. Events of the last seven days are going to shape the future of our communications industry and it's been great to watch.

Most people within the industry were excited by the ruling of the High Court to deny the Minister of Communications leave to appeal against the ruling that VANS license holders should be allowed to self provision. This means that these operators will be able to deploy their own telecommunications infrastructure. Under the previous licensing framework, VANS would have had to rely on other providers.

Frost & Sullivan believes that the reason the Minister appealed the initial judgment might be due to concerns that if the market is liberalised it will be glutted by a plethora of service providers vying for a piece of the pie. South Africa's regulatory framework does not permit this however, as there are obligations that license holders must prove they can fulfill before infrastructure is rolled out. The most demanding of these is that nationwide coverage has to be ensured. Most operators are simply unable to meet this requirement due to the significant cost it would involve. An investment close to R1 billion could be needed for an exercise of this nature, which narrows the number of operators with the potential to build their own infrastructure.

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