DoC vs. Telkom

ADSL South Africa (Broadband South Africa), 27 March 2007

Telkom’s biggest shareholder, the Department of Communications (DoC), has recently made it clear in Midrand that they don’t share Telkom’s view in regard to broadband pricing. It’s clear that DoC wants to see a reduction in the pricing of broadband while Telkom is hard pressed not to make any compromises in this regard.
 
Ivy Matsepe-Casaburri, Minister of Communications, has made DoC’s stance on broadband pricing clear in her speech at the SA Communications Forum conference in Midrand: “The first is specific policy directives and the other specific interventions to increase access. It is clear that in order to address – in the long term – the question of cost, access will first have to be taken for granted by all citizens.” “This means that, in addressing the cost of communications, we have to ensure broadband is not a scarce commodity, or a commodity to be enjoyed by a few who are privileged by either income and/or geographic location” (Telkom and DoC in ‘conflict’ about broadband pricing, MyADSL, 24 March 2007).
 
In other words, lower broadband pricing in order to make broadband accessible to all South Africans.
 
Why then have DoC and ICASA miserably failed up to date to ensure lower broadband pricing?
 
DoC’s shareholding in operators such as Neotel and Telkom is clearly holding them back from doing what’s necessary to get the wheels of change rolling. ‘Managed liberalization’ policies are also standing in the way of lower broadband pricing.
 
In other words, it’s clear that DoC will need to sell its stake in Telkom for one before any progress will be made.
 
Is there any hope of Telkom lowering broadband pricing without intervention from DoC and ICASA?
 
Too be honest, not much hope.
 
‘With Telkom holding nearly all the cards in the broadband space and effective interventions like local loop unbundling and a competing international submarine fiber system many years away, not too much will change unless the DoC and ICASA crack down on Telkom and put measures in place to ensure true competition’ (Telkom and DoC in ‘conflict’ about broadband pricing, MyADSL, 24 March 2007).
 
In other words, Telkom’s holding the cards for now.
 
ADSL South Africa (Broadband South Africa) doesn’t take the comments made by Matsepe-Casaburri seriously. Too many times in the past she made similar comments, failing to take the necessary actions to back it up. Talk is cheap.