Issued by Ministry of Trade and Industry
15 August 2001
On 8 August 2001, Cabinet examined the Telecommunications Policy Directions and the legislative amendments necessary before submission of the Bill to Parliament for further deliberations and decision-making.
The Cabinet discussion took place within the context of government's objective to ensure that consensus is achieved around key issues before legislation is finalised. Further to consultations with stakeholders, revisions have been made to certain aspects of the policy directions announced on 26 July.
In order to promote universal access, foreign and local direct investment; SMMEs in under-serviced areas and black economic empowerment, Cabinet reiterated its policy decisions of 14 March, and its commitment to the managed liberalisation of the sector. Managed liberalisation in the telecommunications sector will ensure co-ordinated introduction of new operators to enhance economic growth, national development and reconstruction.
The following policies will be reflected in the Bill to be sent to Parliament:
1. Up to 30% ownership of major new operators will be reserved for empowerment purposes.
2.SMMEs, including co-operatives, to be licensed to provide telecommunications services including Voice over Internet Protocol in areas with teledensity of up to 5%.
3.The Universal Service Agency to be restructured and the Universal Service Fund to be increased through a collection of not more than 0.5% of total revenue from each operator for the purposes of providing telecommunications services for the rural poor.
4.Sentech will be licensed to provide international gateway telecommunications and multi-media services. For these purposes, Sentech will operate as a carrier of carriers and will not provide international services directly to consumers or end users. Like other licensees, Sentech will be given universal service obligations.
5. Public emergency centres will be established and operated through a nation-wide accessible public emergency number (112), free of charge.
6. All public schools will be entitled to a 50% discount for Internet connections. A private network will be established to link public schools.
7. A private network will also be established to provide Maritime services for the safety of life at sea.
Following extensive consultations with stakeholders, a decision was taken to revise some aspects of the policy directions announced on 26 July. These revisions are being effected on the understanding that policy directions only signal the intention of government and are not legislation. Government believes that it is crucial to achieve consensus around the key issues before the law is finalised. Accordingly, the revisions represent the outcome of the consultation process, which started at the beginning of this year.
The Cabinet approved that following changes are being effected:
1. A Second National Operator (SNO) will be licensed in 2002 and the decision on which State-owned enterprise is to be included in the SNO is to be determined. Depending on the outcome of a feasibility study, a Third National Operator (TNO) may be introduced in the year 2005. The Bill will provide for the conduct of a feasibility study prior to the licensing of a TNO.
2. There will be no broadband licensing. Broadband services will be available through the licensed telecommunications companies.
3. Carrier pre-selection and Number portability will begin in 2005.
4. There will be no legislative restriction of foreign ownership.
Outstanding issues:
1. The definitions of fixed-mobile is being clarified to reflect that fixed-mobile is not a cellular license.
2. Facilities sharing do not suggest unbundling. The exact details of the interconnection agreement are to be finalised between the parties and the Independent Communication Authority of South Africa (ICASA).
Government believes that these changes will ensure the legislation is finalised before the end of the year. This will pave the way for the development of the regulations, the determination of SMME licences and the issuing of the Invitation to apply by the Minister.
It is our intention that the draft Bill, which carries the support of our Ministries, will be presented to Parliament early next week and addressed as a matter of priority in the forthcoming Parliamentary session.
The conclusion of this phase marks the beginning of the process to amend the Telecommunications Act, for ICASA to develop regulations and for the ministry of communications to issue the Invitation to Apply.
Once more we would like to thank all the local and international stakeholders for their participation since the beginning of the process.
Special thanks to colleagues in government for their unwavering commitment and support during the process.
Thank you.
Contact: Edwin T. Smith at (012) 322-7677, (082) 783-6025