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‘This is our mining charter’: Vodacom CEO slams telecoms bill

Warns the legislation is scaring off investors.

The Electronic Communications Amendment Bill is the telecommunications’ industry’s mining charter, Vodacom CEO Shameel Joosub warned at a government workshop on the bill in Pretoria on Tuesday. He was referring to the charter that has led to investor uncertainty and undermined investment in the mineral resources sector.

“This for us is a crisis,” Joosub told representatives from the department of telecoms & postal services, led by director-general Mabuse Nkuna. “This is our mining charter.”

Not mincing his words, Joosub warned government that the bill is already scaring away investors. “The industry lost close to R80bn last year in market cap … purely because there is a lot of uncertainty,” he said. Investors must have certainty, he added.

He said a proposal in the bill that operators be forced to return their existing spectrum is hugely problematic. “The impact of this is investment will slow down. When telcos invest, they invest for the long term. The minute you start to talk about returning spectrum, it makes the entire network useless.

“We have R100 billion invested in our network. If we have to return the spectrum, that’s the same as expropriation, and that would mean the network is dead,” Joosub said. “Clarity in terms of existing spectrum is extremely important for people investing into telcos, but more importantly the investment horizon.”

Joosub said in addition that it is urgent that the mobile operators be granted access to new spectrum. “The industry hasn’t had (new) spectrum in 14 years,” he said. This means operators are having to reallocate spectrum and build additional base stations to increase the density of coverage. Additional spectrum would lessen the need for new sites and drive down the cost to carry network traffic, and hence the price per megabyte paid by consumers, he said.

Read: SA eyes March 2019 for radio spectrum allocation

Woan

On government’s plans to create a private sector-led wholesale open-access network, or Woan, Joosub warned that the amendment bill’s requirement that the new entity must be fully operational before the mobile operators are assigned any additional spectrum is a “big issue” for the industry.

He also said research Vodacom commissioned from Frontier Economics shows that if a “dominant” Woan is created, as proposed in the bill, it will cut South Africa’s GDP by between R22bn and R43bn and have a negative impact on job creation.

The Woan will also be technically difficult to implement and lead to inefficiencies. Technologies such as carrier aggregation, where spectrum is pooled between radio bands, will be impossible to do, Joosub said. Costs will also be higher, and consumers will become reliant on a single network.

However, the Woan does have advantages, he said: it will allow smaller players who don’t have the capital expenditure of Vodacom and MTN to pool resources to build a sustainable network. “The Woan is a good idea, but it has to be an option for the smaller players.”

Joosub also blasted the bill’s plan to force operators to open their networks to rival operators on a cost-based and open-access basis. “That’s like building a house, and then immediately you have to rent out all the rooms at once. Who will want to build a house?”

He said this doesn’t mean Vodacom doesn’t want to share its infrastructure. “The principles of sharing are well entrenched in the Electronic Communications Act. We share all types of facilities today. We all share sites… If there’s a feeling we’re not sharing enough, there are ways to correct that.”  — © 2018 NewsCentral Media

This article was originally published on TechCentral here.

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This criminal government “by the people for the people” is so envious of entrepreneurs, and is so intimidated by the free market, that they would rather dump citizens in unemployment and poverty for the rest of their lives, than to see somebody make a profit.

This is the problem with socialists, they do not comprehend the profit objective and the free market economy. They see the profit objective in the same light as exploitation. So they constantly exploit their voting cattle in an effort to destroy the profit objective.

Your first paragraph is spot on. African governments follow an ethos to give just enough to eat and just enough for dry existence and the majority will remain rural, appreciative and loyal

@Sensei – You seem to have forgotten the many years that the cell companies treated consumers like dirt, charging extortionate rates and making fabulous profits, with virtually no governance to protect consumers or competition. They are bleating now because cell companies are being turned into utilities in a commoditised market with strong downward pressure on prices. I don’t pretend to understand the complexities of the environment, but I can’t imagine ever feeling sorry for Vodacom or MTN.

Of course they had to make fabulous profits. Just how were they going to recover the massive infrastructure investment and provide a good, not adequate, return on capital for shareholders who took the risk.

Junk comment about competition: Cell C and Virgin also played.

We are with MTN and have no complaints and we have NEVER been treated like dirt.

Prices are dropping as they will always do in a mature market.

The complaint from Vodacom is about the theft of spectrum not dropping prices at competition.

Those who complain seem to want someone else to do the work, take the risk of failure and loss and then get a freebie that just happpens to suit their own pockets.

Oh yes and the newbies want to get a free ride on those that were the original pioneers.

Finally who in their right mind would trust this government to do anything correctly. Cancer has squandered 28 years of goodwill.

Shocking

So now government is treating the cell phone companies like the cellphone companies treat their customers! What comes around goes around…

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