MINISTER UNLEASHES MASSIVE TELECOMS LIBERALIZATION

UNCLAS PRETORIA 004028

SIPDIS

DEPT FOR AF/EPS/DKRZYWDA AND AF/S/TCRAID
COMMERCE FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND
TREASURY FOR GCHRISTOPULOS, LSTURM, AND AJEWEL
DEPT PASS USTR FOR PCOLEMAN, WJACKSON AND CHAMILTON

E.O. 12958: N/A
TAGS: ECPS ETRD ECON EINT SF
SUBJECT: MINISTER UNLEASHES MASSIVE TELECOMS LIBERALIZATION



1. (U) SUMMARY. In a surprise announcement, Minister of
Communications Ivy Matsepe-Casaburri announced sweeping
policy decisions to liberalize South Africa's
telecommunications sector by February 2005. Her
announcement benefits Value-Added Network Service (VANS)
providers who will be allowed to carry voice using any
protocol. The Minister said further announcements
liberalizing the industry would be made in October. END
SUMMARY.


2. (U) Over three years ago, Minister of Communications Ivy
Matsepe-Casaburri said that a big bang approach to telecoms
liberalization would not take place in South Africa. On
September 2, however, Casaburri reversed herself as she
revealed a decision to liberalize South Africa's telecoms
sector on a massive scale. Casaburri's announcement had
been in the works since May when President Mbeki emphasized
the need to lower the cost of doing business in South
Africa.


3. (U) Casaburri said that a market study completed in
December 2003 recommended that government address the
following three areas: a) further liberalization of the
telecoms sector; b) amendment of the various existing laws;
and c) determination of a date by the Minister from which
various provisions of the Act could be activated so as to
stimulate sector growth.


4. (U) Casaburri's announcement detailed the following
policy decisions and February 1, 2005 as the date from which
the decisions would come into effect:

- Mobile operators may utilize any fixed lines that may be
required for the provision of the service including fixed
lines made available by Telkom or any other person providing
a public switched telecommunication service;

- Persons may apply for a license to provide public pay
phone services in any area of the Republic;

- Value-added network services may carry voice using any
protocol;

- Value-added network services may also be provided by means
of telecommunications facilities other than those provided
by Telkom and the Second National Operator or any of them;

- A person who provides a value added network service shall
be entitled to cede or assign the right to use, or to sublet
or part with control or otherwise dispose of the
telecommunications facilities used for the provision of the
value added network service; and

- Private telecommunications network operators shall be
entitled to resell spare capacity and facilities or to cede
or assign his or her rights to use such facilities or to
sublet or otherwise part with control thereof.

- Effective January 18, 2005 public schools and public
further education training institutions will be entitled to
a 50% discount on all telecommunications calls to an
Internet service provider and any fees levied by an Internet
service provider for accessing the internet or transmitting
and receiving any signals via the internet.


5. (U) Casaburri said that further policy announcements
would be made in October of this year. Those announcements
will address the issue of service-based licenses to be
operational by May 2005, the remaining Under-Serviced Area
Licenses (USALs),the Second National Operator (SNO),the
Convergence Bill and the ICT BEE Charter.



6. (U) Industry analysts were broadly supportive of the
announcement. Ant Brooks of the Internet Service Providers
Association said, "This is a very positive and very
necessary step and the increased competition is going to be
great for consumers."

FRAZER