Telkom CEO Sipho Maseko
Photo by: Duane Daws
After many years of aggressively protecting its “last mile”, telecommunications giant Telkom on Monday opened up 200 exchanges on a trial basis to competitors as it moved to test the waters on “democratising” broadband in South Africa.
CEO Sipho Maseko told delegates at the eighteenth Southern Africa Telecommunication Networks and Applications Conference (Satnac), held near Hermanus, that he expected mobile operators to follow suit and unbundle their wireless local loop.
Local loop unbundling (LLU), which had long been seen as a critical enabler for a competitive market by mobile operators, had been under the scrutiny of the Independent Communications Authority of South Africa (Icasa) for a number of years, with no middle ground being found between the operators that wanted access to Telkom’s last mile of copper cable infrastructure at a wholesale price and the partly State-owned operator’s defiant protection of its multibillion-rand investment.
The regulations governing LLU, which were initially scheduled for finalisation by November 2011, have been delayed several times.
Telkom had previously stated that LLU could be a threat to revenues and the group’s financial viability, which was already under pressure given the increasingly competitive telecommunications market.
Rivals had argued that the introduction of LLU would facilitate fixed-line and wireless competition, as well as contribute positively to economic growth, bolster job creation and investments as companies moved to establish infrastructure complementary to the last mile.
It was also expected to lower broadband service prices and increase innovation around broadband services using copper.
However, now, as Telkom progressed its turnaround, it was reviewing its role in fulfilling its wider socioeconomic responsibilities amid government’s broadband-for-all ambitions.
Telkom called for access to the mobile operators’ local loop as well, a move Maseko deemed an imperative precursor to the democratisation of broadband in South Africa.
“We need to see similar action from the mobile side,” he told delegates.
Early last year, Icasa attracted criticism for its extension of LLU to wireless and fibre access without it having unpacked the decision in the same detailed framework afforded the decade-long copper unbundling debate.
LLU was expected to extend to “all forms” of local loop, with incumbent fixed-line operator Telkom not the only Electronic Communications Network Service licensee expected to make local loop facilities available to other licensees.