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May 08, 2008

SA benchmarks telecoms costs against five other emerging economies

© Reuse this A comparative study into the respective costs, availability, access and usage of telecommunications infrastructure and services between South Africa and five other emerging markets is under way and would be completed by June.

This is the word from the economic, investment and employment cluster, which held a media briefing at Parliament, in Cape Town, on Thursday.

The countries selected for the benchmarking exercise included South Korea, Malaysia, India, Brazil and Chile, and the process to collate the data was "in motion", Public Enterprises Minister Alec Erwin said in a prepared statement.

The study came amidst rising anxiety about the cost of telecoms in South Africa, and against an aspiration by government to materially enlarge the size of the business-process-outsourcing sector.

Indeed, President Thabo Mbeki had raised the issue on several occasions and South Africa's competition authorities were also keen to probe allegations of excessive pricing by Telkom, which previously had a fixed-line monopoly. However, the telecoms group had mounted a court action challenging the Competition Commission's jurisdiction over the industry, given that it had its own economic regulator in the form of the Independent Communications Authority of South Africa.

Erwin also reiterated government's earlier commitment to the establishment of the African West Coast Cable (AWCC), which would involve the laying of a 3 840 Gigabit super cable from the Western Cape to the UK with capacity terminating in London.

"At a design length of 13 000 km, it will have branching units to at least ten countries along the West Coast of Africa. The cable will also support South Africa's science super-projects such as the Square Kilometre Array Telescope for which the country is currently competing against Australia," Erwin reported.

The Presidency had identified the AWCC initiative as a 'lead initiative' for the South African government, which was keen to deploy broadband capacity and create a sustainable competitive international bandwidth market in South Africa.

A State-owned enterprise, known as Broadband Infraco, had been created by to execute interventions that deliver affordable broadband and would take a 26% shareholding in the cable. A broad base of private sector participants, including incumbent communications operators, would own the remaining 74%.

A memorandum of understanding had been agreed with prospective private sector participants and Infraco would announce a selected supplier and enter formal contract negotiations shortly.

Engineering News Online had reported previously that the participants included Telkom, Neotel, Tenet, Tata Communications, Multichoice, Vox Telecom, Internet Solutions, Gateway Communications, Equator Telecom Nigeria, and British Telecom.

But Erwin stressed that government also remained committed to working with other governments on the continent and interested partners in the Africa-wide UHURUnet, which was a New Partnership for Africa's Development-led initiative.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
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