Telkom CEO fires broadside at treasury over telecoms plan

Telkom CEO Sipho Maseko has launched an extraordinary attack on national treasury’s discussion paper aimed at growing South Africa’s economy, accusing the department of tossing a grenade into the telecommunications sector.

In a column in the Sunday Times, Maseko described the treasury document, which was published last week, as an “incoherent, ill-thought-out and ultimately chaotic intervention in the area of telecoms and ICT”.

He said the discussion paper contradicts existing ICT policy and the regulatory framework, the outcome of the priority markets investigation by communications regulator Icasa and the preliminary findings of the Competition Commission’s inquiry into the data services market.

Maseko said the paper has an “obsession” with the copper network that “harks back to the 1990s and suggests the authors are not at all familiar with the current state of the ICT market or the technologies driving it” — presumable a reference by Maseko to the paper’s call for the unbundling of Telkom’s “local loop” of infrastructure into homes and businesses.

“In a world where there are over-the-top services, cloud, platforms, the Internet and other technologies, the document is also silent at best and ignorant at worst”.

“This raises a more general and very worrying question: if the authors of the treasury document can get telecoms and ICT so wrong, can their prescriptions for energy, infrastructure, agriculture, tourism or transport be trusted?”

Treasury plan

On telecommunications specifically, the treasury document says:

• Government should release spectrum through an auction with a small set-aside for a government-controlled network, and competition should be allowed in Telkom’s infrastructure that connects the local exchange to residential homes and businesses. “Immediate enforcement will allow multiple providers access, enhancing competition and reducing unnecessary infrastructure duplication,” the document says.
• Rapid deployment guidelines that accelerate the installation of telecoms infrastructure should be finalised, and open-access conditions should be imposed to minimise unnecessary duplication of infrastructure.
• Icasa’s proposed economic regulation component should be independent of line departments and be directly funded from industry levies, as per international best practice.
• The state should leverage private-sector expertise in broadband roll-out, rather than relying exclusively on state-owned companies.

Maseko’s biggest concern appears to be that the treasury document contradicts policy formulation in ICT by other government departments, which, he warned, will result in policy uncertainty and damage investment.

“When one department advocates for a policy which has already been withdrawn — sometimes even by another department entirely — it makes it difficult for business leaders to plan and prepare accordingly,” Maseko said.

“Effective inter- and intra-government co-ordination is crucial for policy certainty. Policy certainty is crucial for investment.”  — (c) 2019 NewsCentral Media