The Independent Communications Authority of South Africa (Icasa) on Thursday said it would likely announce the start of a market inquiry into the identified priority markets that may require regulation intervention by the first week of September.

Speaking during a roundtable at the Icasa headquarters, in Sandton, CEO Willington Ngwepe said the review process would likely take about six to eight months; however, potential delays may extend the process by up to 18 months, depending on resources and funding, owing to constraints experienced by the national fiscus, as well as the litigious nature of the telecommunications sector.

Mobile services, upstream infrastructure and wholesale fixed-access were previously identified as the priority markets that may be prone to possible regulatory intervention in future to address any potential market failures and introduce procompetitive remedies.

Working on an expedited process, Icasa lists mobile services, which includes the retail market for mobile services and the wholesale supply of mobile network services, as the highest priority, owing to its material impact on consumers and government policy directives.

This will be followed by the wholesale fixed-access – the provision of last mile connectivity in fixed networks – which includes wholesale supply of asymmetric broadband origination, fixed-access services and relevant facilities.

Wholesale fixed-access is labelled a medium to low priority.

A review of the upstream infrastructure markets, which incorporate national transmission services and metropolitan connectivity and relevant facilities, will follow thereafter as a lower priority.

“We are not in a space where we can do all we want to,” Ngwepe told media, noting that the constraints in funding and people limit the number of targets the authority could “chase”.

The prioritisation of the reviews, however, will provide regulatory predictability and certainty to the market and enable the efficient and effective allocation of resources, with a focus on market reviews that have the potential to yield material impacts in promoting competition, delivering benefits for consumers and achieving government policy objectives.

His comments were also in response to the vastly different views of industry on which markets to target and some disagreements over the contents of the preceding discussion document and at the public hearings earlier this year.

Icasa received eight submissions on the discussion document from interested stakeholders and conducted public hearings, and took into consideration all written and oral submissions.

Last week, Icasa published the findings document on the priority markets inquiry in the electronics sector that forms a part of a three-pronged approach to reducing the high cost of communication, particularly data services.

The cost to communicate programme comprises the call termination market review for the implementation of the new glide path, the End-user and Subscriber Service Charter Regulations, which is currently in limbo pending a court date to mull a delayed implementation, and the reviews on the priority markets.

The priority markets inquiry was undertaken in four phases, namely the market study request for information; the discussion document listing the proposed priority markets, the public hearings and lastly, the publication of the findings document.

The phases and identification of the markets susceptible to ex ante regulation were guided by competition screening measures and market structures, submissions to the market study, guidance from previous national and international cases and complaints received by Icasa and the Competition Commission.

“The above markets were identified on the basis of the screening measures applied, which considered the likelihood of competition concerns, as well as materiality of the market to government policy objectives and consumers,” Icasa explained in the findings document.

Meanwhile, in a separate statement issued post the briefing, Icasa called on stakeholders to actively participate in the consultation process on the new three-year draft call termination rates, as part of the broader programme to reduce the cost to communicate.

The draft regulations, published last week, aim to further reduce mobile termination rates, a process that was last undertaken in 2014.

The deadline for submission of written comments is September 7 and the effective date for the regulations is scheduled for October 1.

“The benefits of the regulation of wholesale call termination rates for consumers has been proven over the past eight years. Since 2010, the termination rates have been reduced by about 90% and this has contributed to the significant decline in retail rates over the years,” Icasa said.

However, despite this, the authority’s recent review of the wholesale call termination market revealed a market still plagued by ineffective competitiveness, characterised by significant market player dominance and in need of pro-competitive remedies in the form of price controls.

The draft regulations suggest a glide path of a 12c and 8c charge on the termination of a call on mobile and fixed line respectively from October 2018 to September 2019; 10c and 5c for the period October 2019 to September 2020; and again down to 9c and 3c from October 2020.

In addition, Icasa proposed asymmetry for small players and new entrants during the three-year glide path, with asymmetry for mobile services at 5c from October 2018 to September 2020 and 4c from October 2020 onwards.

Asymmetry for fixed services is proposed to be 1c from October 2018 to September 2020 and fall away completely from October 2020 onwards.

SPECTRUM LICENSING
Meanwhile, Telecommunications and Postal Services Minister Dr Siyabonga Cwele on Thursday welcomed Cabinet’s decision, this week, to approve the study conducted by the Council for Scientific and Industrial Research (CSIR) to determine the spectrum requirements for the Wireless Open Access Network (WOAN) as envisaged in the Integrated Information and Communications Technology (ICT) Policy White Paper, which was approved by the Cabinet in September 2016.

The CSIR study has confirmed that a portion of the radio frequency spectrum can be allocated to the WOAN, with excess capacity going to the industry.

“The outcome of this process is crucial for the transformation of the ICT sector to inter alia remove entry barriers; encourage investments by black owned, small and large companies; and restructure the market to lower the cost of infrastructure investment thereby contributing to the reduction in the cost of communications,” said Cwele.

The Minister will engage Icasa, as required by law, regarding the finalisation of a policy direction, which will enable the regulator to implement the policy.

The CSIR study will also form part of the policy direction and will be released to the public after consultation with the regulator.

Further, Cabinet also approved the Electronic Communications Amendment Bill for tabling in Parliament. This follows extensive consultations with the industry and the public.

The Bill provides for the introduction and licensing of the WOAN, measures to improve competition regulation and infrastructure sharing in the sector and interventions to strengthen the rapid deployment policy and the approach to the regulation of regional and international roaming.

Cwele said the finalisation of the Bill, after the Parliamentary process, will create clarity and predictability on the policy direction and the regulation of the sector.

The Bill is scheduled to be tabled in Parliament this week for consideration and processing.