DEPARTMENT: COMMUNICATIONS REPUBLIC OF SOUTH AFRICA Private Bag X860, Pretoria, 0001, Tel. +27 12 427 8086 Fax: +27 12 427 8026 Enquiries: donovan @ doc.gov.za URL: http://www.doc.gov.za

POLICY ANNOUNCEMENT BY THE MINISTER OF COMMUNICATIONS, DR IVY MATSEPE-CASABURRI
2 SEPTEMBER 2004

In the past 10 years we have concentrated on reducing the disparity between the rural and the urban areas of our country and eliminating the inequities of our society inherited from the apartheid era. In doing so, we have worked at increasing teledensity and growing the ICT sector of our economy through a process of managed liberalization that we provided for in the Telecommunications Act.

In his State of the Nation Address in May of this year, the President emphasized the need to lower the cost of doing business in South Africa. He also charged us with creating a globally competitive telecommunications sector address the challenges of the 2nd economy.

To meet these challenges, the Information Communications Technology sector needs further change so that South Africa has:

• A more competitive ICT environment.
• Improved access to ICT infrastructure and services.
• Affordable telecommunications services
• A variety of choice in services being provided by the ICT sector to meet both economic social needs of our society.

We concluded the market study required by the Telecommunications Act No 103 of 1996 as amended, in December of last year. Arising from the study is a number of recommendations that address the following three main areas:

• Further liberalisation of the sector.
• Amendment of the various existing laws.
• Determination of a date by the Minister from which various provisions of the Act can be activated so as to stimulate sector growth.

Accordingly, I am announcing a number of policy decisions and a date from which these decisions will come into effect as provided for in the Act.

These provisions are the first of a number of policy interventions designed to further accelerate growth in the sector, remove constraints for such growth, reduce the cost of telecommunications and facilitate appropriate interventions in the 2nd economy.

These provisions are sequential activities in the managed liberalisation of the ICT sector and cover the following areas:

• Self-provision and Greater Choice for Mobile Operators
  Mobile Cellular Operators are not allowed by the existing law to provide their own fixed lines or acquire them from any provider other than Telkom and/or a public switched telecommunications service provider. This has caused mobile operators to be totally reliant on what Telkom charges them for provision of such fixed lines to interconnect. It also is one of the contributors to prevailing high costs. I have now provided that:

  As of 1 February 2005 Mobile operators may utilise any fixed lines that may be required for the provision of the service including fixed lines made available by Telkom or any other person providing a public switched telecommunication service.

• Provision of Public Pay Phones
  Public pay phone services are services whereby providers, be they individuals or entities, purchase pay phones from manufactures, lease lines or purchase airtime to resell to the public on their own. Allowing this to happen in the ICT sector will help promote SMMEs in the sector and promote job creation as well as address the challenges of the second economy. I have now provided that:

  As of 1 February 2005 persons may apply for a licence to provide public pay phone services in any area of the Republic.

  The Department is considering the removal of licensing requirements to provide these services.

• Provision of Voice by Value Added Service Providers
  Because of technological developments there is no longer any difference in the transmission of voice, video and data therefore it is no longer necessary to prohibit the provision of voice by VANS. This provision will allow growth of the VANS sector and promote SMMEs. I have now provided that:

As of 1 February 2005 value added network services may carry voice using any protocol.

• Choice in the Provision of Value Added Network Services
  Currently, value added network services can only be provided through Telkom therefore we need to provide choice. I have now provided that:

As of 1 February 2005 value added network services may also be provided by means of telecommunications facilities other than those provided by Telkom and the Second National Operator or any of them.

• Cession of Telecommunications Services by VANS
  As of now, VANS are restricted from trading their telecommunications facilities in any way. I have now provided that:

1 February 2005 shall be the date from when a person who provides a value added network service shall be entitled to cede or assign the right to use, or to sublet or part with control or otherwise dispose of the telecommunications facilities used for the provision of the value added network service.

• Optimising the Use of Private Telecommunications Network Facilities
  There are many entities in South Africa that have private telecommunications facilities. Such facilities cannot be sublet or re-sold and are therefore under-utilised. Allowing these facilitates to be resold would promote optimal usage of the total telecommunications infrastructure in the country and increase access to communities and consumers. I have now provided that:

As of 1 February 2005 private telecommunications network operators shall be entitled to resell spare capacity and facilities or to cede or assign his or her rights to use such facilities or to sublet or otherwise part with control thereof.

• Preparing our Youth for the Knowledge Economy
  Our economy needs a skilled and informed work force that is equipped, from childhood, to meet the demands of the information society and knowledge economy. Access to ICT’s is critical in the process and enriches the learning environment. However, the cost to access these technologies needs to be minimized and the ability for people to benefit from lower cost structures should be facilitated. I have now provided that:

As of 18 January 2005 public schools and public further education training institutions will be entitled to a 50% discount on:

• all telecommunications calls to an Internet service provider
• any connection or similar fees or charges levied by an Internet service provider for accessing the internet or transmitting and receiving any signals via the internet or for such access and transmission and reception

Further policy announcements will be made in October of this year as I indicated in my budget Vote in May. These announcements will address the issue of service-based licences to be operational by May 2005; the remaining Under-serviced Area Licences, the Second National Operator, the Convergence Bill and the ICT BEE Charter.

ICT is an input sector that contributes considerably to the growth of the country and the closing of the gap between the 1st and 2nd economies.

In the past decade we concentrated on addressing historical imbalances. Within the next decade we expect to have a world class ICT sector that contributes to stimulating development in our country.

We trust that these provisions will play a meaningful role in that regard.

ISSUED BY THE MINISTRY OF COMMUNICATIONS
399 DUNCAN STREET
HATFIELD, PRETORIA 0001
2 September 2004

FOR INFORMATION CONTACT DONOVAN CLOETE ON 083 417 6106