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Aug 15, 2012

Telkom monopoly a threat to ICT development

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The domination of Telkom in South Africa’s telecommunications backbone and telephony markets is a threat to information and communication technology (ICT) development in the country, the newly released National Development Plan (NDP) 2030 has stated.

The plan warned that Telkom’s monopoly had seen deterioration in fixed-line connections that would further undermine South Africa’s future competitiveness unless it was addressed.

“The dominance has been ineffectually regulated, resulting in high input costs for businesses, which has, in turn, resulted in an increase in the costs of services and products. It has also inhibited investment in growth areas within ICT, such as business-process outsourcing and offshore information-technology-enabled services,” states the plan, which Minister in the Presidency Responsible for the National Planning Commission Trevor Manuel delivered to President Jacob Zuma in Cape Town on Wednesday.

Telkom is, further, cited as being a point of conflict for the State where it had to be both policy maker and player in the ICT market, since it hold a majority share in the group. As a result, the plan suggested that there was a need by 2015 to “assess State-owned enterprise and municipal performance in ICT provision and decide on the future role and configuration of the State's family of ICT enterprises (Broadband Infraco, Sentech and Telkom).”

During the period up until 2015, the NDP 2030 proposes that South Africa needed to focus on developing a more comprehensive and integrated e-strategy that reflected the nature of the ICT sector to affect a spectrum of personal and business needs, as well as addressing policy issues such as the need to adjust market structures and remove legal constraints to enable full competition in services.

From 2015 to 2020, the plan states two main goals should be pursued; firstly, extending broadband penetration in line with the Department of Communications' proposed target of 100% broadband penetration by 2020. In this project, all schools, health facilities and similar social institutions should be connected and individual citizens should have affordable access to information services and voice communication.

Secondly, and again key for both individuals and business, by 2020 strategic investment and regulatory guidance should result in Internet costs falling to match South Africa's peers. More specifically, South Africa should aim to position itself in the top quartile of the International Telecommunications Union's ICT Development Index ranking of middle-income countries and regain the country’s position as the continent's leader in both quality and cost of ICT services.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online

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