Feedback by Ray Webber for CUASA

The industry briefing held at ICASA offices in Sandton on 30 May was chaired by Councillor Marcia Socikwa, the Councillor for Licensing and Conversion. The briefing was attended by ICASA Chairperson, Mr Paris Mashile, other ICASA Councillors, ICASA staff and a large number of representatives from the Telecoms and ICT industries.

What follows are my interpretation and understanding of what was discussed.

ICASA started the briefing indicating that they want to achieve a licensing process which is:

• Non-discriminatory
  
• Objective;
  
• Transparent; and
  
• In accordance with Government Regulation.

They stated that the briefing was limited to the licensing process and that no other matters would be discussed.

They anticipate a 24 month convergence/conversion timeframe.

The following timeframes were given:

• Broadcast Services (BS) licenses would be addressed first, expected the following week (early June).
  
• Then the Electronic Communications Services (ECS) licences conversions (from VAN’s): Draft licenses can be expected in June 2008. Final licences to be issued in August 2008.
  
• Then the Electronic Communications Network Services (ENCS) licenses will be finalised. However, this is subjudice, subject to the court proceedings with Altech Autopage, currently scheduled for finalisation at the end of July 2008. It was stated that no licenses will be issued prior to those court proceedings being finalised. ICASA mentioned that they do however have the authority to extend this for up to 24 months.
  

It is expected that all licenses in each category would be issued at the same time:

• BS and ECS
  
• ECNS
  
• Radio Frequency Spectrum (RFS)

Once the license process has been finalised, the Regulations on Quality of Service, Content, Consumers and Interconnection will apply.

The following Regulations are due within the following timeframes:

• The Terms and Conditions for the various licenses will be issued in June 2008 in the Government Gazette. Submissions after that will be possible. Specific terms and conditions will differ across categories.
  
• The Regulations on licensee obligations will be issued towards the end of the year. As per the ECA, an increase in rights will be linked to an increase in obligations. ICASA said that they cannot issue licenses which carry no obligations.
  
• The most controversial thing mentioned was that License Fee Regulations will only be issued towards the end of the year, which is after the licenses will have been issued. This as ICASA is awaiting policy decisions on this from The Ministry of Communications. If this was not acceptable to the industry, the ECNS license issuing process could be suspended until the fees have been finalised. It was however stated that the fees regime will seek to reduce barriers to entry.

Licenses issued since 19 July 2006 will be recalled and then reissued according to the ECA.

ECS licenses will be valid for 15 years.

ECNS licenses will be valid for 20 years.

Regarding licenses due to expire this year. These include conversion or renewal and will be a separate process.

Regarding Broadcast Services, conversions are expected soon, before existing licenses expire.

If your old license is due to expire, pay renewal fees if you have not yet received your new license.

All VANS are entitled to at least an Individual ECS license. These will all be published at the same time in the Government Gazette, irrespective of the pending ECNS court case.

There is no agreement yet on if Universal Service obligations will be in ECS or ECNS licenses.

Spectrum will only be allocated during conversion if you were previously entitled to spectrum.

By Paulo Froes and Ray Webber

While a milestone for the VANS industry was reached in 2006 with the provision of numbers in the 087 range for network-based voice offerings, many corporate PABX systems may be barring the number range due to a legacy premium call service which operated on the same number range.

The provision of 087 numbers ensures that Telkom and Mobile operators are able to route calls from their networks to a VANS customer operating in this range. In fact, Telkom has been routing 087 numbers from calls originating on the Telkom network for over 2 years now. The industry hailed this as a truly landmark moment and as an interim step towards geographic number portability and carrier pre-selection, both of which are still to be introduced in South Africa. These are some of the final barriers to full competition in the South Africa voice market.

However, it appears that a dragon from the past has surfaced. In the 1990s Telkom launched a Premium Rate Service using the 087 number range and a number of corporate customers asked their PABX suppliers to bar their corporate PABXs from being able to make calls to 087 numbers. Certain PABX suppliers include the 087 barring in the system configuration, prior to shipping a PABX to the customer.

The result therefore is that many PABXs are still programmed to prevent routing calls to the 087 number range. This is further exacerbated by the fact that most PABX manufacturers simply do no load a number range that they do not know is in use – so even without the old 087 debacle, the reality is that PABX manufacturers need to be made aware that 087 is a valid number range and needs to be added as a valid number range of their equipment.

VANS today provide inbound and outbound call services at some large corporate customers and there have been complaints that calls to their newly acquired 087 numbers are not getting through. However, Telkom, Vodacom, MTN and Cell C exchanges have been programmed to route calls to the 087 number range. The end result is that VANS are now at a disadvantage when compared with Telkom’s geographic number ranges. Some customers have even been driven to replace their 087 numbers with geographic numbers, effectively negating much of the good work achieved by introducing this competition in the first place.

SAVA and CUASA have tried to contact what was previously known as the PABX Association, but no formal association seems to exist any longer. ICASA’s role as the regulator which introduced the 087 number range is effectively now over. It therefore appears that the only avenue left to the VANS is for them to contact the PABX suppliers directly, in an attempt to get them to change their barring practises. This while also raising this issue to the general public at large.

By Paulo Froes and Ray Webber

It is clear that in any deregulating telecoms market for voice services, that Carrier Pre-Selection (CPS) and Number Portability (NP) offer a significant advantage to the competing operators and new entrants.

The reason for this is based on what CPS and NP offer – CPS offers the technological capability of a competing operator to utilise the local loop infrastructure of the incumbent/dominant operator(s) for their own customers and NP offers the technological capability for customers to retain their existing numbers, when changing operator. NP also enables an operator to earn income from calls inbound to one of their customers.

The Electronic Communications Act (ECA) ensures that NP will be made available to all Electronic Communication Services (ECS) and Electronic Communication Network Services (ECNS) licensees. Fortunately for the South African consumer, this is expected to include a large majority of the current new entrants and competing operators. However, the regulations that will govern these licenses have not been completed by ICASA and hence the ECA is not in force, as yet. South Africa is effectively still being regulated by the regulations established under the now repealed Telecommunications Act. In terms of this Act, the number portability regulations (geographic number portability - GNP) provide for the porting of 10 000 numbers within two months from the request (provision of service) of the recipient operator. ICASA finalised and published the geographic functional specification in July 2007 and these regulations state clearly the process for GNP.

Therefore, in the absence of new legislation in terms of the ECA, these are applicable. Both Telkom and Neotel have confirmed the implementation of 10 000 geographic number portability and hence Neotel is the only new entrant that is currently believed to have access to GNP.

It is clear that any action that reduces the monopoly of services is a good one, but there is an aspect that is a cause for concern. There are a number of alternative voice operators to Telkom and Neotel that have established significant businesses over the last five years, many having come out of the Least Cost Routing (LCR) stable. These operators are now effectively facing the challenge that they are not able to compete with Neotel, as can offer NP to their customers. This makes Neotel a significant competitor in the market. This until ICASA completes the process of releasing new relevant regulations under the ECA - specifically the conversion of the current VANS, PTNs and other licenses to the ECS or ECNS licenses.

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