Abstract
Granting a series of telecommunications licences to new operators in order to provide telephony to under-serviced areas was arguably a major universal access and service innovation. The origins of the model are debatable, but likely drew from several sources. From conceptualisation to implementation, the model was beset by delays, licensing problems and policy disconnect. All of the licensees, bar one, perished in the face of regulatory delays, support failures and a changing market. The causes of the fiasco were multiple, including; withdrawal of asymmetric termination; the failure to establish shared support systems; problems with the subsidy scheme; the failure to award spectrum; the upsurge of mobile in the market; and institutional collapse. In the end, the under-serviced area licensee experiment was thus doomed to failure.
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Notes
- 1.
Legislative certainty was necessary to secure investor confidence for the listing which eventually took place in March 2003.
- 2.
The Department of Communications, under the influence of Telkom and concerned to maximise rent extraction via the IPO, was believed to support a single entrant, while the Department of Trade and Industry, subject to broader economic pressures, wanted a second competitor.
- 3.
The driving force behind this international proselytising, other than in the personality of Marlee Norton, is unclear.
- 4.
The SACF was the successor to the African Telecommunications Forum (ATF), which had brought together a number of entities that had failed to secure stakes in the lucrative mobile licences awarded in 1993.
- 5.
The submission’s co-author, Tina James, had been closely involved with previous IDRC-funded telecentre projects.
- 6.
By the end of 2000, the combined subscriber base of Vodacom and MTN was already 5.4 million, growing rapidly, and poised to overtake Telkom’s fixed-line tally of 5.5 million.
- 7.
Possibly because prepaid mobile was almost non-existent in the US at the time.
- 8.
The formulation in respect of VANS licensees was corrected in the second iteration to specify a “prohibition to carry VoIP and voice” (DoC, 2001b, p. 8).
- 9.
The wording of the interconnection provision was also slightly amended to make ICASA solely responsible for its development (DoC, 2001b, p. 8).
- 10.
A new concept introduced in the Bill as a category of service provision extended to PSTS licensees, it provided for wireless handsets with no or very limited base-station handover.
- 11.
‘Historically disadvantaged’ groups, in the South African context, refer to those subject to historical discrimination, mainly on the grounds of race, gender or disability.
- 12.
Mobile subscriber numbers for 1996 (at which point Telkom had 3.9 million subscribers) are not available, but are likely to have been well under a million.
- 13.
By early 2001, MTN and Vodacom had 8.6 million subscribers, while Telkom’s network had shrunk to 5 million.
- 14.
Bearing in mind these figures were not available to the Minister at the time.
- 15.
Kgalagadi District Municipality, centred on Kuruman, and with a 2001 teledensity of 3.12%, seems an obvious candidate. There were no district municipalities in Western Cape with a teledensity as low as 5%.
- 16.
Thabo Mafutsanyana (Free State) and Central (North West).
- 17.
Both needed to have corrections issued shortly after publication. The interconnection regulations were never finalised.
- 18.
Under the 1996 Telecommunications Act, it was the Minister who issued the ITA and granted the licence, with the regulator doing all the remaining spadework.
- 19.
The draft licence provided for ‘fixed mobility’ which is defined as limited mobility within an undefined “Short Distance Charging Area”. The annual licence fee was set at a low 0.1% of sales revenue.
- 20.
The revisions were largely minor and technical, although the final licence no longer defined ‘fixed mobility’.
- 21.
Joint MD, Simon White was later part of an unsuccessful USAL bid.
- 22.
The SACF also embarked on a roadshow with the Universal Service Agency to create consortia and mobilise bids (USA, 2003b).
- 23.
Bokone Telecomms, Kingdom Communications, Thinta Thinta Telecoms, Ilizwi Telecoms.
- 24.
Amatole Telecoms, Bokamoso Communications, KaraboTel.
- 25.
Only four of the licences had been signed at the time of the first ceremony. Amatole’s licence was issued some months after the second event.
- 26.
Nkangala Telecoms, Northcom, Ukhahlamba Communications.
- 27.
Dinaka Telecommunications, Ilembe Communications, Metsweding Telex, Nyakatho Telecommunications, PlatiTel, ZeroPlus Trading.
- 28.
CH Communications & Ntwasahlobo; Thabo Mafutsanyana Telecom & Maluti Communications; Thanda Telecom, Khula Air Conditioning, Elangeni Communication & Arengo; Vhembe Telecommunications & Kwetedza Telecommunications.
- 29.
Bohlabela District was split between Ehlanzeni (Mpumalanga) and Mopani (Limpopo) District Municipalities on 1 March 2006.
- 30.
The announcement seems to have passed well under the radar of the trade press and only appears in the ICASA Annual Report, with no precise date attached.
- 31.
None of the licences was ever amended to take account of the redrawing of district boundaries or name changes.
- 32.
A draft bill had been released six months after the colloquium to howls of condemnation and ridicule.
- 33.
Most of these were really resale agreements, with rebranding.
- 34.
- 35.
Vodacom’s Tjaart le Roux was the driving force behind this. It is unclear whether this was simply a commercial drive, animated by financial or altruistic motives, or whether it was part of a more cynical business strategy to emasculate the USALs.
- 36.
A mobile virtual network operator (MVNO) sells mobile phone services to customers using infrastructure and facilities leased from a mobile operator.
- 37.
Including the threat of several million SIM cards anticipated from the mobile licensees under the 1800 MHz spectrum quid pro quo.
- 38.
Covering the first 7 USAL licensees.
- 39.
One USAL did manage to secure a test licence in the 850 MHz band.
- 40.
The record suggests several were present, but only Bokamoso is named.
- 41.
Two of the country’s nine provinces had no gazetted under-serviced areas.
- 42.
Equity participation would have required prior written approval from ICASA, but also compliance with the ownership and control regulations.
- 43.
Thanks to holding individual service licences, although they would need to secure roaming rights for customers travelling beyond the reach of their provincially delimited infrastructure licences.
- 44.
The landmark ‘Altech judgement’ had seen VANS licensees gain national infrastructure licences.
- 45.
Several of the shareholdings appear to have been through community savings groups known as ‘stokvels’.
- 46.
‘Urban legend’ or not, it is a meme for how the USALs spelt financial ruin for many of the communities, individuals and small businesses that had invested in them.
- 47.
Emdon had been pivotal in developing and lobbying for the DBSA / IDRC business model for the USALs.
- 48.
At the time Cell C itself was seeking to get a foothold in the market.
- 49.
Respectively, operational and business support systems.
- 50.
The appropriation to the USF in 2003/2004 was a mere R25 million, insufficient to pay a full first tranche to all 7 USALs.
- 51.
- 52.
The data is drawn from the 2006 South African Audience Research Foundation’s All Media Products Survey, which uses a nationally representative sample of personal in-home interviews.
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Lewis, C. (2020). Under-Serviced Area Licences. In: Regulating Telecommunications in South Africa. Information Technology and Global Governance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-43527-1_6
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DOI: https://doi.org/10.1007/978-3-030-43527-1_6
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