Picture: 123RF/王 安琦
Picture: 123RF/王 安琦

Business Unity SA (Busa), which represents organised business, has urged MPs to review controversial proposed legislation  to regulate infrastructure sharing in the telecommunications sector, saying  it will create uncertainty and probably   put off investors.

One of the contentious proposals in the Electronic Communications Amendment Bill is the establishment of a wireless open-access network (Woan), which the government says is aimed at  driving down   communications costs by facilitating entry of more players.

The government says the bill is also intended to improve competition, regulation and infrastructure sharing in the sector amid a spectrum crunch.

The high cost to communicate in SA has been blamed largely  on lack of competition and the spectrum crunch.

Mobile giants including Vodacom and MTN have previously voiced concern about the proposal to reserve most of the high demand for Woan and the suggestions that the government would take away spectrum already assigned to operators.  The operators are scheduled to table their submissions to the committee this week.

Spectrum, often referred to as the lifeblood of the wireless industry, refers to the radio signals set aside to carry data over the air, including for mobile phones, TV and global positioning systems. This limited resource is largely controlled by the government.

Parliament’s telecommunications and postal services committee is this week holding public hearings on the bill, after it was approved by the cabinet in August.

In his submission to the committee on Monday, Busa’s economic and trade policy director, Olivier Serrao, said that should the bill be passed licensees would no longer have an incentive to invest and innovate to differentiate their networks as they would be subject to open access.

“Nonexclusive use risks harmful interference, limits effective optimisation of spectrum and creates uncertainty over the spectrum rights the licencee has. The Woan will enjoy a disproportionate advantage over other licensees. The amount of spectrum available to existing operators will be limited and will likely exclude some operators. Licensees unable to obtain additional spectrum will be constrained to compete,” said Serrao.

Busa said the proposed law meant the communications minister’s decisions would govern matters such as the spectrum that may be assigned, its fees, trading and   renewal.

“These changes undermine Icasa’s [Independent Communications Authority of South Africa’s] independence and role on critical operational telecommunications spectrum matters that require proper market analysis and independence from political interference. Investment risk would as a result increase which will slow down investment,” said Serrao.

“The existing act provides an appropriate balance between the minister setting policy objectives and Icasa complying with its operational responsibilities; it is consistent with international best practice and should not be changed,” he said.

Serrao said Busa supported the government’s objectives to increase broadband coverage, promote affordable broadband and innovate and transform the sector.

“ In Busa’s view, the bill substantially increases uncertainty and regulatory risk for telecoms operators. This will reduce investment and innovation at exactly the time when significant new investment is needed in the telecoms sector to deliver the services and reach that South Africans require at affordable prices,” said Serrao. He said the bill should be subjected to a socioeconomic-impact study.

phakathib@businesslive.co.za