We will reduce the cost to communicate: Cwele

Minister of Telecommunications and Postal Services, Siyabonga Cwele, has promised to further reduce the cost of communication in the country, through pricing and content reforms.

In his budget vote speech for the department, in which he sought approval for a budget of R1.59 billion, Cwele said the cost of communications was impeding ICT uptake and usage by citizens, businesses and government.

“It contributes a substantial input costs which discourages investment,” the minister said.

“Government seeks to establish an environment in which the cost to communicate is affordable to all South Africans,” Cwele said.

Ironically, the minister also boasted in his speech that it was due to these high prices that the telecoms sector was able to swell to R179 billion in 2011, and is expected to increase to R187 billion by 2016.

According to Cwele, however, the department is now seeking to establish a plan of action to further reduce these costs, looking mainly at forcing more transparent pricing from operators, while also gauging the costs to said operators through a number of studies.

Notably, the Minister also indicated a move to regulate premium content in the sector – pointing to some challenging times ahead for MultiChoice.

The minister highlighted the department’s Cost to Communicate programme, which comprises the following elements:

Broadband market value-chain study

The minister indicated that Icasa has concluded the broadband market value-chain study, which will assist in regulating broadband prices.

National roaming study

The department will undertake a national roaming study to determine the cost implications for mobile operators, particularly looking at discriminatory behaviour affecting new entrants and smaller operators.

Pricing transparency regulations

The minister said he would be directing Icasa to develop regulations on pricing transparency, calling for operators to transform pricing structures “to enable consumers to have a clear understanding of the true costs for the services they pay for”.

“In this manner the true rate for a service will be disclosed upfront to enable the consumers to exercise their choice,” Cwele said.

Premium content regulation

The final element the department wants to tackle is to regulate how broadcasters access premium content services such as sport rights, films and other content.

Opening up the networks

In his speech, the minister pointed out that private and public infrastructure duplication is a “challenge”, noting that high deployment costs are passed onto consumers.

He said that Icasa will be directed to formulate regulations for infrastructure and facility sharing.

Cwele said that the department wants to establish an “open access regime”, looking to level the playing field for all entrants into the market who don’t have access to spectrum, sites and infrastructure.

“For us to have a sustainable and thriving sector, we need to ensure that there is a policy and regulatory environment that is conducive to the entrance and sustainability of new players in the market,” Cwele said.

“It is in our national interest to grow the sector and promote competition in order to drive down costs and create job opportunities.”

The minister said the department would have an Open Access Network plan by October 2014.

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We will reduce the cost to communicate: Cwele