SA must reform ‘dreadful’ telecoms

JOHANNESBURG – Phone and Internet services in South Africa are “dreadful” due to lack of competition, and Africa’s biggest economy must reform fast to avoid falling behind emerging market peers, a consumer group head said on Friday.

Ewan Sutherland, who heads the International Telecommunications Users Group, told Reuters in Johannesburg that Internet access in countries like Morocco and Egypt was better and cheaper than in South Africa, while mobile phone and broadband growth in China and India was ‘staggering’. Meanwhile, limited competition in South Africa had kept phone and Internet prices high, service poor and innovation at bay.”Operators are sitting there living off the earnings of the past instead of innovating,” said Sutherland.”South Africa is just not at the cutting edge …It is delaying the move into an information and knowledge-based economy.”Prices for landline and mobile calls in South Africa are pricier than in most European countries and many emerging markets, and Internet tariffs are hugely expensive.The government and industry experts have blamed high prices for inflating the cost of doing business and deterring much-needed foreign investment.Sutherland said South Africa needed to smash state-owned fixed-line firm Telkom’s virtual monopoly by allowing Internet service providers to build their own infrastructure, and opening the international gateway and local loop to competitors.It should also boost growth in the mobile phone sector by forcing existing operators Vodacom, MTN and Cell C to rent out their infrastructure to virtual mobile phone companies.”No matter how well the main GSM guys do, there are always parts of the market they will not reach.We should be bringing in groups with specific expertise in reaching under-served communities,” he said, adding that could include operators aimed at those speaking indigenous African languages.South Africa partly opened the telecoms market in February by allowing rivals to provide services like voice over Internet, but consumer groups say it must do more to spur competition.Communications regulator ICASA is investigating high prices charged by mobile phone operators and may either set price caps or licence a fourth operator.It also said it may cut broadband Internet prices by banning Telkom from charging an access fee.The companies are resisting both moves.- Nampa-ReutersMeanwhile, limited competition in South Africa had kept phone and Internet prices high, service poor and innovation at bay.”Operators are sitting there living off the earnings of the past instead of innovating,” said Sutherland.”South Africa is just not at the cutting edge …It is delaying the move into an information and knowledge-based economy.”Prices for landline and mobile calls in South Africa are pricier than in most European countries and many emerging markets, and Internet tariffs are hugely expensive.The government and industry experts have blamed high prices for inflating the cost of doing business and deterring much-needed foreign investment.Sutherland said South Africa needed to smash state-owned fixed-line firm Telkom’s virtual monopoly by allowing Internet service providers to build their own infrastructure, and opening the international gateway and local loop to competitors.It should also boost growth in the mobile phone sector by forcing existing operators Vodacom, MTN and Cell C to rent out their infrastructure to virtual mobile phone companies.”No matter how well the main GSM guys do, there are always parts of the market they will not reach.We should be bringing in groups with specific expertise in reaching under-served communities,” he said, adding that could include operators aimed at those speaking indigenous African languages.South Africa partly opened the telecoms market in February by allowing rivals to provide services like voice over Internet, but consumer groups say it must do more to spur competition.Communications regulator ICASA is investigating high prices charged by mobile phone operators and may either set price caps or licence a fourth operator.It also said it may cut broadband Internet prices by banning Telkom from charging an access fee.The companies are resisting both moves.- Nampa-Reuters