MINISTER ADDRESSES QUESTIONS SURROUNDING VANS

UNCLAS PRETORIA 000424 SIPDIS DEPT FOR AF/EPS, AF/S/TCRAIG AND KGAITHER, AND EB/CIP COMMERCE FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND TREASURY FOR GCHRISTOPULOS, LSTURM, AND AJEWEL DEPT PASS USTR FOR PCOLEMAN, WJACKSON AND CHAMILTON SENSITIVE E.O. 12958: N/A TAGS: ECPS ETRD ECON EINT SF SUBJECT: MINISTER ADDRESSES QUESTIONS SURROUNDING VANS REGULATIONS REFTEL: A) PRETORIA 389 B) 04 PRETORIA 5555 (U) Sensitive but unclassified. Not for Internet distribution. Please protect accordingly. ¶1. (U) Minister of Communications Ivy Matsepe-Casaburri released a January 30 statement addressing concerns surrounding the interpretation of her Ministerial Determinations that she released September 3, 2004 regarding liberalization. ¶2. (U) Casaburri said, "The issue of self provisioning was issued in the government's policy determinations only in relation to mobile cellular operators in terms of fixed links." She continued that value-added network service (VANS) providers could obtain facilities from "any licensed operator." While Casaburri used the same language in her "clarification" that she used in the original Ministerial Determination, industry analysts understand this to mean that VANS will not be allowed to self-provide their own infrastructure and will need to procure facilities from a licensed operator such as Telkom, the mobile operators, Transtel, and others. Although this is a victory for incumbents who argued that VANS could not self-provide, it likely avoids litigation on the subject that would have delayed implementation of the remaining benefits to VANS. ¶3. (U) The Minister also said that government did not intend "to license every single activity that can be provided by a VANS operator," apparently in response to industry requests for greater detail on what a VANS provider is and what VANS services would require licenses. Casaburri promised that the imminent Convergence Bill would provide certainty to the sector in this regard. ¶4. (SBU) COMMENT. Industry observers are puzzled by the chronology of these events. That the Minister would implement Ministerial Determinations to liberalize certain telecommunications services just weeks prior to the release of Convergence legislation establishing a more liberal legislative and regulatory framework is akin to putting the cart before the donkey. In issuing her clarifying statement, the Minister did so "against the imperative to avoid any delays" and "within the context of regulatory lag" in the event of an amendment to the Telecommunications Act, leading industry observers to speculate about possible delays in the February 1 implementation of her Ministerial Determinations. END COMMENT. FRAZER