MTN South Africa CEO, Zunaid Bulbulia has questioned the\u00a0sustainability\u00a0of the South African telecoms market amid increased price cuts.<\/p>\n
Speaking at the MyBroadband 2013 conference in Midrand on Wednesday (9 October),\u00a0Bulbulia suggested that constant pushing down of prices would lead to \u201cmarket failure\u201d.<\/p>\n
Addressing the conference, Bulbulia said it\u2019s clear that through ICT industry the lives of the people could be transformed and bridge the digital divide.<\/p>\n
\u201cBroadband connectivity contributes to economic growth and development, and every 10% incremental broadband penetration will result in a 1.38% point in GDP growth rate,\u201d he said.<\/p>\n
MTN noted that mobile broadband growth can assist the South African Government to reach its target of 100% voice penetration and Internet access and deliver on its 2020 Broadband for all strategy.<\/p>\n
However, Bulbulia warned that these benefits do not come cheap, as the investment needed is immense and needs to be balanced with fair regulatory intervention.<\/p>\n
\u201cThe industry is at a cross road, as regulatory intervention to bring prices down may have unintended consequences of creating an unsustainable environment that could force incumbent operators not to invest in broadband roll out,\u201d he said.<\/p>\n
He cautioned South Africa to follow the US option of less regulatory intervention and avoid the disastrous EU alternative of aggressive regulatory intervention on pricing.<\/p>\n
He warned that in Europe, competition engineered through multi-licensing hasn\u2019t worked and resulted in limiting investment and a number of operators ended up being bankrupt.<\/p>\n
Many in precarious financial positions has resulted in the deployment of LTE infrastructures occurring at a slow pace.<\/p>\n
\u201cMarket performance in the EU is being hampered by the inability of operators to exploit economies of scale and scope, thereby slowing network deployment, impeding innovation, and harming consumer welfare,\u201d said Bulbulia.<\/p>\n
However, in the US, less regulatory environment has resulted in a thriving market with high technology adoption, more infrastructure investments, and early and large blocks of LTE spectrum allocated, and most importantly welfare incentives for the consumer, MTN said.<\/p>\n
\u201cWhich road will South Africa choose \u2013 less or aggressive regulatory intervention? We at MTN believe that investment is key to broadband access,\u201d said Bulbulia.<\/p>\n
\u201cThis will enable us to roll-out long-term evolution or LTE optimally and assist government to deliver on its 2030 Millennium Vision and also assure that broadband is no longer the exclusive purview of the few.\u201d<\/p>\n
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