The UK-based data analysis company Ovum has issued a report on South African telecom regulator, Independent Communications Authority of South Africa (ICASA) which states that the Authority has taken a more proactive role in regulating the market in 2009-10 with finalization of several retail and wholesale regulations
In a new report the independent telecoms analyst states that after taking a relatively laid back approach for several years, ICASA has now become quite proactive in finalizing and implementing regulations, which should encourage healthy competition in the industry.
In 2009-10 ICASA finalized several regulations, including framework guidelines on interconnection and carrier pre-selection and quality of service regulation. These decisions have helped in reducing the ambiguity in the market. It has also initiated the implementation of second phase of fixed number portability in the country.
In addition to the already implemented decisions, the ICASA has also proposed many measures like reducing the interconnection rates and introducing LLU in 2011, which when implemented are expected to have a positive impact on the market.
The South African telecoms market is one of the most technologically advanced markets in Africa. However, it is still dominated by two players: in the fixed-line market the incumbent, Telkom South Africa (Telkom), continues to be the dominant player, while Vodacom controls the majority of market share in the mobile market.
Sravan Koka, Ovum analyst and report author, said: “The ICASA’s new positive approach is expected to create a more level playing field for alternative operators. With the implementation of new measures, alternative operators will find it easier to enter and operate in the South African telecoms market, which may help in pulling down the retail prices, benefiting the end users’.
On the mobile services front, South Africa has one of the largest markets in Africa with a subscriber base of 47.3 million, and a penetration rate of 91% as of June 2010. All the major operators already offer 3G services in the country. The ICASA has also proposed the auction of additional spectrum in 2.6GHz and 3.5GHz frequency bands which will enable the operators to offer LTE and mobile broadband services.
However the auction process currently stands suspended, after the government raised its concerns. The ICASA is now in the process of launching fresh consultation on allocation of the spectrum and hopes to complete the auctioning of the spectrum as soon as possible.
Sravan added: “It should be an interesting year ahead for the South African Telecom market considering ICASA’s now more proactive approach. South African telecoms market has lot of potential for growth and the proposed measures, like the auction of the spectrum, are expected to enhance this further. However the key here is how quickly the ICASA is able to implement all these proposed decisions.’