Telecommunications industry must be radically transformed - deputy communications minister

• Transformation is needed in the telecommunications industry, says Deputy Communications and Digital Technology Minister Philly Mapulane.
• He added a few companies currently dominate the market.
• Mapulane says the policy proposal that is in the works seeks to empower SMMEs in the ICT sector.
• For more stories, visit the Tech and Trends homepage.

The telecommunications industry in South Africa must undergo radical transformation to address the current market domination by a few companies.

So said Deputy Communications and Digital Technology Minister Philly Mapulane at a small, medium and micro enterprise (SMME) event that was hosted by the Independent Communications Authority of South Africa (Icasa) on Tuesday.

Mapulane added current market conditions in the telecommunications industry, where a few companies were dominant to the exclusion of SMMEs, could not continue.

"We need to make sure that we bring in new players in the market.

"We need to make sure there is transformation in the market that largely became what it is post the 1994 democratic transition," he said.

To address this issue, Mapulane added the Department of Communications and Digital Technology was currently putting the final touches to its next-generation spectrum policy.

The policy, if brought into effect, will introduce a range of changes to the sector to support SMMEs in the ICT sector.

Reforms

Mapulane said that spectrum, which is critical for mobile network operators to operate, would be allocated to a state digital infrastructure company that would work with SMMEs to build networks which "bring connectivity to the unconnected". 

Last year, spectrum was auctioned off to big mobile network operators which is being used to create wider and more stable networks by telecommunications companies such as Vodacom, MTN and Telkom.

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Acquiring spectrum has historically been expensive, meaning smaller companies have been priced out of licenced spectrum bands.

Mapulane said most of the spectrum sold in the auction went to MTN and Vodacom, the two biggest telecommunications companies operating in South Africa.

Under the next-generation spectrum policy, he added, a hybrid method for assigning spectrum would be created where some were auctioned off and others "administratively administered".

It is unclear how the administrative allocation will be conducted, as currently there is no state-owned digital infrastructure company in operation.

The proposal for the creation of a state-owned digital infrastructure company was floated for the first time in 2017, but is yet to come to fruition. 

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In addition to the changes being introduced for spectrum allocation, Mapulane said a new regulatory framework would be introduced for SMMEs operating within the ICT sector.

The regulations will change the obligations in place for businesses that access universal services funding.

He added there was currently a high rate of non-compliance with the obligations created for businesses which access universal service funds.

Transformation

Mapulane said these reforms were an attempt to bolster the participation of SMMEs in the telecommunications industry.

Acting Icasa chairperson Yolisa Kedama said it was important to create an open and enabling environment for SMMEs in the ICT industry.

"We want an environment for SMMEs to thrive and become catalysts for innovation and growth."