Expert slams communication costs
2010-08-12 14:55
Johannesburg – The cost of communication is still too high in South Africa and is mainly due to a lack of competition in the market, says Steve Song of the Shuttleworth Foundation.
While he acknowledged at the Tech4Africa conference that the cost of internet connectivity has declined significantly in the last year, he lamented that cost of voice communication, even suggesting that it’s gone up.
“You know the cost of communication is still too high and we need to drive it down. Some people may say I’m not doing such a great job, but the solution is simple: Competition everywhere,” Song, a Telecommunications Fellow at the Shuttleworth Foundation, told News24.
He said that the internet market was competitive, but that could not be said for the telecommunications industry, and Icasa (the Independent Communications Authority of South Africa) was to blame.
“There are two barriers to entry into the market: The licence and the spectrum licence. The first fell away, but the second remains. It’s ridiculous. Icasa planned an auction for the other spectrum and we spent $10 000 to bring the top auction expert, but eventually the auction fell through. It was a truly embarrassing cock-up,” Song said.
Incompetence
“The worst thing was that when they explained why it fell through, it was in all the areas where they had received expert advice. It showed us they completely ignored the experts. It’s a combination of incompetence and political influence,” he added.
Song worked at the International Development Research Centre for ten years where he led the Information and Communication Technology for Development (ICT4D) research programme in Africa before joining the Shuttleworth Foundation.
He said he is building a telecom where he is using unlicensed spectrum, but rubbished suggestions that it would be less secure than GSM cellphone networks.
“I’m building the Village Telko using unlicensed spectrum. It’s no more insecure than other technology. You can make it as secure or open as you want,” said Song.
He conceded that change was coming quickly and that the undersea cables would provide the impetus for rapid development of cheaper broadband.
“We are on the cusp, but it’s not a done deal. The undersea cables are going to put huge pressure on the terrestrial infrastructure and hopefully drive costs down,” Song said.
He insisted though, that political leadership is required to allow new players to enter the market.
Tough competition
“Drop the barriers to entry in the market. Make it easy for investors to come into the market. Instead of trying to prevent monopolies’ exploitation, let the market operate and let competition thrive. That way, every competitor becomes a watchdog,” Song said.
He said that the UK experience with British Telecom was instructive for SA.
“We need to separate retail from wholesale. Telkom should have a wholesale division that owns those copper wires that go into people’s homes, and companies should be allowed to compete to provide services on those lines, even Telkom itself. That would generate some transparency,” he said.
He warned that companies in the new digital world would need to be prepared for tough competition.
“We’re in a nimble, agile world and it’s going to be tough for companies who aren’t agile to survive.”
The Tech4Africa conference runs until Friday.
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