Telkom CEO Sipho Maseko. Picture: MARTIN RHODES
Telkom CEO Sipho Maseko. Picture: MARTIN RHODES

Proposed regulations aimed at the telecommunications sector are largely backward-looking and would not support the industry’s development, says Telkom CEO Sipho Maseko.

"The industry is changing faster than the regulatory environment can keep up. The changes implore us to look forward, yet, as regulations and policies tend to be developed based on past events, we are faced with protocols that we feel do not support an evolving industry," Maseko said in Telkom’s annual report, without naming any specific regulations.

The information and communications technology (ICT) group and its peers face a swathe of new regulations, including the Electronic Communications Amendment Bill, which proposes that mobile operators share their spectrum and other infrastructure. They must also contend with new data-expiry rules as regulators look to lower the cost to communicate while ensuring broadband coverage is extended.

Maseko said the sector would need to proactively engage policy-makers and regulators to ensure that emerging technologies and changing consumer habits were considered.

There would need to be a review of "outdated approaches to infrastructure, spectrum sharing and the cost to communicate", he said.

Maseko wrote an open letter to SA’s political leaders in June, in which he called for a sharper national focus on the fourth industrial revolution and for the allocation of idle spectrum.

This has led to state departments agreeing to be part of a summit aimed at boosting SA’s competitiveness. JSE-listed Telkom is 40.5% owned by the state but operates with a high degree of independence.

Meanwhile, the African Development Bank said in a document posted on its website that SA’s government planned to review the role that Telkom and other state-owned companies played in economic transformation and inclusive growth.

The bank said it would support the National Planning Commission’s study, which was likely to take nine months to complete from September.

The study would focus on the energy, transport and ICT sectors. In ICT, the focus would be on Telkom, Broadband Infraco and the State Information Technology Agency.

The state would consider what effect the ownership model of these entities had on "effectiveness, efficiency and transparency", and would then make policy recommendations.

Maseko, who earned R27.2m during the year to March, said in May that the government was no longer actively looking to offload some or all of its Telkom shares. His total pay increased by 5%, from R25.9m in the prior year.

Maseko said in the report that Telkom was considering a new operating model that would raise the level of independence afforded to each subsidiary’s underlying business segments. The group was "exploring the benefits of divisionalisation of our subsidiaries".

Telkom had started the review process with the entities under its ICT business, BCX, while "the structure and timing of the possible divisionalisation is yet to be determined", he said.