Submission on the Telecommunications Amendment Bill 65 of 2001

1. Transtel Submission on the Telecommunications Amendment Bill 65 of 2001 25 September 2001 Parliamentary Portfolio Committee on Communications

2. Presentation Outline • Sectoral Policy Reform and links with National Strategic Objectives • Comments on the Amendment Bill • General Remarks

3. LINKAGES TO NATIONAL OBJECTIVES NATIONAL OBJECTIVES RDP (1994) GEAR (1996) NFA (1996) IMCC (1999) • Meeting basic needs Developing human Resources • Democratising State and society • Improving the quality of life • Budget reform • Fiscal deficit reduction • Stable currency • Limit inflation • Tax incentives • Funding of skills • Infrastructure investment •Economic growth and Employment • Meeting basic needs • Reduce state debt • Finance •growth • Mobilise private capital • Wider participation • Attract FDI • BEE • Globalisation SECTORAL OBJECTIVES Telecoms White Paper (1995) • Needs of disabled • Promote stability • Encourage BEE, women and SMMEs • Promote universal service • Attract FDI • Promote increased competition Source: BMI-TechKnowledge 2001

4. Comments on the Telecommunications Amendment Bill • Fixed-mobile • We fully support the spirit behind which fixed-mobile has been included as part of PSTS offerings • We’ve presented a definition of fixed-mobile in our submission that we feel captures the essence and intent of what fixed-mobile means • Number portability • Essential that it be introduced sooner to ensure empowerment of consumer • Cost of changing numbers by SMMEs and SOHOs will make it difficult for them to switch to the SNO • Interim mechanism of number retention (large corporates can retain their blocks of numbers upon churning) can be implemented • Carrier pre-selection • Carrier pre-selection will bring to SA consumers real choice in the selection of international carrier • Carrier pre-selection on a call-by-call basis will help increase branding of SNO

5. Comments on the Telecommunications Amendment Bill (cont’d) • 3G licences • Wording of section on third generation spectrum licencing needs streamlining • Enough time to get it right • May want to coordinate its introduction with E-commerce legislation because of the convergence of the two • Spectrum and other fees should be commensurate with licence rights • Servitudes and wayleaves • Critical to the maximisation value of SOEs going into the SNO • Exclusive access to PSTS servitude/wayleave rights of SOEs (Transnet, Eskom, SARCC) by Transtel and ESI~TEL, guarantees value for SOEs in SNO • Extent of Transnet and SARCC’s railways combined with Eskom’s electricity grid, increases SNOs time to market by at least 18 months • Environmental point of view, SOEs servitudes/wayleaves minimise the extent to which SNO would have to dig up the earth to lay infrastructure

6. Comments on the Telecommunications Amendment Bill (cont’d) • Lease of Telkom facilities by the SNO • This will help SNO prioritise roll-out of its network • Leasing of facilities will need to be on a non-discriminatory, transparent and fair basis • Leasing of facilities should also include quality of service obligations • No need for statutory time limit – parties should be allowed to negotiate own terms and conditions subject to ICASA’s approval • Symmetrical licensing terms • It is not uncommon to legislate in a manner condusive to competition • To this end, Bill should maintain ICASA’s discretion by allowing it to issue regulations that enable competition: Rate Regime (no price-cap on SNO); USOs proportionate to size of SNO’s network and financial ability; Numbering Plan – introduction of number portability • Fees for 1800 MHz spectrum • Spectrum and other fees should be commensurate with licence rights

7. Comments on the Telecommunications Amendment Bill (cont’d) • Multimedia definition • Essential for definition to include the term uni-directional as such term pertains to broadcasting • This will clarify that any multi-media operator that cannot carry traffic directly to its customers will have to do so via the network of fixed line operator • Interconnection agreements • May not be prudent for fixed line operators to negotiate framework of interconnection agreements for SMMEs without SMMEs having been licensed and having made input into process • Self provision of facilities • In terms of section 44(7), a licensed operator should have to seek facilities from both fixed line operators before being able to self-provide

8. Comments on the Telecommunications Amendment Bill (cont’d) • Local loop unbundling • It would be beneficial to allow ICASA to determine the basis upon which LLU should be introduced, ie in respect of reasonableness within Telkom’s network • Funding of ICASA • Critical to increasing regulatory certainty and thereby investor confidence in the sector and the country’s overall commitment to market liberalisation • Transtel supports a small levy being given by operators to fund ICASA similar to the mandatory contribution to the USA

9. General Remarks • Amendment Bill sets the right framework for managed liberalisation • One additional national operator • Full service licence • Fixed-mobility to increase cellular phone penetration by making more affordable • Technology neutrality to allow operators to deploy appropriate network infrastructure • Amendment Bill looks to the future • Seeks to licence additional service based operator in 2005 • Licensing of SMMEs will increase telecommunications take-up in the country